bigger potential than i thought

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By DUSTIN BLEIZEFFER
Star-Tribune energy reporter
Wednesday, June 27, 2007 10:26 AM MDT

Wyoming oil producers desperately want to divert streams of greenhouse gas currently being vented into the atmosphere and pump them into aging oil fields for permanent storage.

The producers' main goal may not be rooted in concerns over climate change. Nonetheless, the capture and storage of carbon dioxide -- the main greenhouse gas contributing to climate change -- is key to reviving oil production for the next 30 years and beyond in Wyoming.

The Wyoming Enhanced Oil Recovery Institute estimates that some 20 trillion cubic feet of CO2 could be sequestered in Wyoming's oil basins. The institute held a forum in Casper Tuesday, bringing together those who produce CO2 and those who want CO2 for enhanced oil recovery.

"CO2 is deathly expensive here," said John Dobitz, senior vice president of Rancher Energy Corp.

Rancher Energy will embark on a CO2 enhanced oil recovery project in the Big Muddy and South Glenrock fields just east of Casper, where it expects to recover an additional 10 percent to 15 percent of the original oil in place.

Oil production in Wyoming has declined at an annual rate of about 5.4 percent since 1991, according to the Wyoming Oil and Gas Conservation Commission. Some 58 million barrels of oil were produced in the state in 2000, marking the state's lowest level of oil production since 1954.

In many oil fields, as much as 60 percent of the original oil reserve remains unproduced after conventional, low-pressure recovery methods. In enhanced oil recovery, alternate flows of water and CO2 are pumped into an oil reservoir, sweeping additional volumes of oil to production wells.

After several years of "CO2 flooding" at the Salt Creek field in central Wyoming, Anadarko Petroleum helped stop Wyoming's annual 5 percent decline in oil production in 2006.

But there are hundreds of old oil fields that don't yet have access to CO2.

Dobitz said Rancher has a contract in place to receive CO2 for the project. But the producer is among many that want to see a wider network of CO2 pipeline delivery in Wyoming from sustainable resources.

ExxonMobil's Shute Creek natural gas processing plant in southwest Wyoming provides about 250 million cubic feet of CO2 annually to the Rangely oil field in Colorado for enhance oil recovery. It provides an additional 230 million cubic feet of CO2 per day for about a dozen smaller projects in Wyoming.

Yet ExxonMobil still vents about 100 million cubic feet of CO2 per day into the atmosphere. ConocoPhillips vents about 50 million cubic feet of CO2 per day from its Madden gas plant in central Wyoming, and will continue to vent that volume until about 2012, according to the company.

ConocoPhillips' Madden gas plant manager Brent Lohnes told oil producers there's no concrete plan yet to market that CO2 for enhanced oil recovery, but said internal discussions about it continue at the company.

ExxonMobil said it is "moving forward" with plans to add compression to a CO2 pipeline to central Wyoming which would boost delivery capacity 48 percent to 340 million cubic feet per day.

Capacity on the pipeline today is about 230 million cubic feet per day. Anadarko Petroleum taps much of that Shute Creek CO2 for its enhanced oil recovery project at Salt Creek. Anadarko also owns marketing rights for some volumes.

Several more producers in the southern Powder River Basin have indicated interest in buying CO2 if pipelines are linked further north and east. If it doesn't come from natural gas processing plants, it may come from coal-based processes in Wyoming.

Ian Andrews, manager of resource development for PacifiCorp Energy, said his company has the distinction as Wyoming's largest producer of CO2. Problem is, none of it is currently captured.

PacifiCorp, which operates as Rocky Mountain Power in Wyoming, still intends to rely on coal to meet most of its projected 2,500-megawatt increase in demand in its Western service territory by 2016. Although it prefers coal, PacifiCorp also realizes public policy is moving toward a more carbon-constrained energy regime. So it's vying for federal funds to demonstrate integrated gasification combined cycle, or IGCC -- a process that generates electricity with the potential for CO2 capture -- at its Jim Bridger power plant near Rock Springs.

Andrews noted that Jim Bridger is only 17 miles from ExxonMobil's CO2 pipeline to Bairoil. This summer, PacifiCorp will formally invite oil producers to express interest in CO2, should the IGCC project come to fruition.

Similarly, DKRW Advanced Fuels is seeking customers for its estimated 120 million cubic feet of CO2 per day that would be captured from its planned coal-to-liquids plant at Medicine Bow. DKRW chief operating officer Jon Doyle said permitting is already under way for the plant, and the CO2 could be available in 2011.

http://www.casperstartribune.net/articles/2007/06/27/news/wyoming/71316abbe8af57ff872573060082b601.txt