By CHRIS MERRILL Star-Tribune staff writer Thursday, August 14, 2008 7:58 AM MDT
RIVERTON -- In a sandy meadow just south of Riverton, Devon Energy Corp. is finishing construction on a $100 million carbon dioxide pipeline and injection facility, which company officials say will revive an aging oil field and help the environment at the same time.
Devon is buying carbon dioxide from the Exxon Mobil Corp. and is injecting it, in liquid form, into 50- to 70-year-old oil wells. The process will boost production in the field from 380 barrels of crude per day to up to 5,000 barrels per day within a couple of years, said Don DeCarlo, vice president and general manager of Devon's western division.
The CO2 that is being used is a byproduct from Exxon Mobil's Shute Creek natural gas processing plant near LaBarge. In the past that CO2 was either sold to other similar operations or vented, DeCarlo said.
The infusion of CO2 should extend the life of the field for at least another 20 years, he said, and the increased production should eventually create the need for 20 to 30 more employees in the central Wyoming field.
There are other similar projects in the Cowboy State, but this is the first of its kind in Fremont County, said Jim Linville, a regional engineering supervisor with the company.
Called carbon dioxide enhanced oil recovery, the technology has been available for decades, but most energy companies have only started using it in recent years, as the rising cost of oil has made it worthwhile for oil companies to invest in CO2 injection.
DeCarlo said Devon began to seriously consider using the process in certain fields when oil reached the $50 to $60 dollar per barrel range. As of Wednesday, crude oil was trading at over $116 per barrel.
In aging oil fields, reservoir pressure drops off over time, and so does the rate of oil production.
Carbon dioxide, in liquid form, mixes with the oil, making it less thick and helping it flow into production wells. The CO2 can then be separated from the oil and reused, or stored underground, in the empty oil reservoirs, so it is not released into the atmosphere.
DeCarlo said in this particular field it's almost certain the CO2 will remain underground forever, once the wells are sealed and the field abandoned.
The first well in this field was drilled in 1938, and most of the rest of the wells have been in operation for more than 50 years, according to the company.
DeCarlo said field oil production had reached such a state of decline that the company had to either start shutting down operations or start injecting CO2.
Gov. Dave Freudenthal joined about three dozen Devon employees and area residents at an open house at the facility Wednesday. The governor spoke in support of Devon's investment, calling it a positive for Wyoming's economy and something that will help "extend the life of robust oil production in the state."
"We have talked for a long time about expanding the reach of CO2, and I appreciate Devon taking this step," Freudenthal said. "It's a good project, and I'm happy to support them."
The use of CO2 has helped turn around statewide oil production after years of decline. The state has actually increased its oil output for the past two years.
Devon spent more than $86 million on the new facility, and another $18.5 million to install a 45-mile carbon dioxide pipeline to the Beaver Creek oil station.
Workers started injecting CO2 into the wells on July 1, and the company expects to see ramped-up production probably at the beginning of October, said Ed Pearson, a company official who led one of Wednesday's tours of the facility.
Construction should also be completed by the start of October, he said, as much of the facility and its components still need to be enclosed in buildings before the harsh winter arrives.
Linville said on top of the investment in the pipeline and facility, Devon expects to spend about $20 million on carbon dioxide this year.
It's all worth it, DeCarlo said, because it should help produce 10 million to 12 million barrels of oil over the next two decades, which otherwise would have been too difficult to get out of the ground.
"We're putting greenhouse gases in the ground, and we're producing a heck of a lot of oil that never would have been produced," DeCarlo said. "It's a win for everybody."
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