Tuesday, May 6, 2008 2:06 AM MDT Exxon Mobil Corp. plans to...

Tuesday, May 6, 2008 2:06 AM MDT

Exxon Mobil Corp. plans to spend more than $100 million to build a plant in Wyoming to continue developing and testing technology that could make capturing and storing carbon dioxide more affordable and open up vast new sources of natural gas.

The Irving, Texas-based company said Monday it will build the plant near LaBarge beginning this summer. Startup is scheduled for late 2009, and testing is expected to take place over a couple of years.

The plant will employ Exxon Mobil's Controlled Freeze Zone technology, which uses cryogenics to remove carbon dioxide, hydrogen sulfide and other unwanted compounds from methane -- a costly undertaking at present.

Exxon Mobil said CFZ technology involves a single-step removal process, which makes it far more simplistic and, as such, far less costly.

The company has been working on the technology for about 25 years. It would be particularly useful in "sour gas" fields in places including Wyoming where high concentrations of carbon dioxide and hydrogen sulfide make methane recovery an economic challenge.

"This technology will assist in the development of additional gas resources ... and facilitate the application of carbon capture and storage to reduce greenhouse gas emissions," said Exxon Mobil senior vice president Mark Albers.

State officials in Wyoming, which has benefited significantly from a natural gas boom, have been keenly interested in capturing carbon dioxide emissions, which are widely blamed for global warming.

In Exxon Mobil's CFZ process, the carbon dioxide and other components are discharged as a high-pressure liquid stream for injection into underground storage. In some cases, Exxon Mobil will sell the carbon dioxide to oil and gas companies that use it underground to recover fossil fuels that can't be brought to the surface using conventional drilling practices.

The goal, Exxon Mobil said, is to use the Wyoming plant to advance the technology to commercial application. Exxon Mobil operates the Shute Creek natural gas processing plant at LaBarge.

Exxon Mobil spokesman Gantt Walton said it's too early to estimate how many new permanent jobs the plant will create in Wyoming. The company has contracted with URS Corp. to provide detailed engineering and a construction management plan.

"There will be more to come," Walton said Monday.

The CO2 capture technology comes to Wyoming at a time when the oil industry here is scraping for every bit of CO2 available. CO2 can be injected into old oil fields to sweep remaining oil to production wells.

CO2 flooding accounted for 5.7 million barrels of oil in Wyoming in 2007, according to the Wyoming Oil and Gas Conservation Commission.

Walton said the new gas plant, with the controlled freeze zone technology, will give Exxon Mobil access to more CO2. It can either be re-injected underground or possibly sold for enhanced oil recovery.

However, Walton said, the company won't make those decisions until the plant is built.

"At this point, this is just for testing the technology," he said. "If this is a success, the application of this technology on a global scale would greatly increase affordable natural gas resources that currently cannot be produced."

Walton said aspects of the controlled freeze technology could also be applied to CO2 capture from coal-fired power plant smokestacks, although there are no plans to do so in Wyoming.

State regulators in April asked Exxon Mobil to provide evidence that it is currently marketing all the CO2 it can from its existing facilities at Shute Creek. Exxon Mobil sold an average 207 million cubic feet of CO2 per day in 2007 for enhanced oil recovery, but it vented another 181 million cubic feet of CO2 per day into the atmosphere.

Exxon Mobil representatives have indicated that plans call for upgrading the current facility to make 97 million cubic feet of the vented volume available for commercial use in the near future. But members of the Wyoming Oil and Gas Conservation Commission said they needed more information from Exxon Mobil regarding its efforts to market CO2. The board delayed renewing the company's annual permit to vent CO2 until another hearing later this month.