CCS Seduction IV: A new dawn for the oil industry goes Nova

Though increasingly framed as a key way to slow climate change, for most commercial Carbon Capture and Sequestration (CCS) operations, selling the carbon they capture to produce more fossil fuels through Enhanced Oil Recovery (EOR) production is the only way they can ensure profits for investors. According to a count by the Global CCS Institute, of the 28 currently operable CCS complexes worldwide, 22 rely on EOR as their back end “storage” system. CCS advocates hope that under the right public policy regimes, this profit-making motive will help scale up CCS operations while driving costs down. Getting the public onboard means selling CCS as a way to prevent climate change, but who pays when they fail? L. Michael Buchsbaum reviews one of 2020’s biggest CCS disasters as the fourth part of the on-going Seduction series.

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Meet Enhanced Oil Recovery

Currently the largest industrial use of CO2 is EOR.  Though many different methods exist, most concentrate the CO2 and inject it under pressure deep into existing but declining production fields to squeeze out more oil.

As David Roberts points out in another long series on this subject published by Vox, “EOR holds another distinction: It is also the only current carbon sequestration industry of any scale. It uses a lot of CO2 and leaves a lot of it permanently buried. If there’s any on-ramp for CCS around, this is it.”

And this explains why the oil industry and their allies are pushing so hard for CCS: “More oil, more revenue; its all upside.” But evaluated through a climate crisis perspective, where the overriding goal is stemming the ongoing flood of carbon pollution, there’s cause for skepticism.

Magic soap

When engineers started using it decades ago, something magical happened: Compressed CO₂ acts like soap. It binds to and pulls crude out from within the tiny sedimentary pores of the large underground reservoirs where it lies, and helps float it faster to the surface. As a rule of thumb, about two additional barrels of oil can be extracted for every ton of CO2 injected into the ground.

EOR using CO2 injection is not new. Used worldwide today, operators began using it at a large scale within the US in the early 1970s, particularly within Texas’ Permian Basin—one of the premier oil and gas production zones worldwide.

By the early 2000s, with oil prices rising and domestic crude production falling, and before fracking and other new “unconventional stimulation” methods came along en masse, EOR was a good way to extend the life of aging oil fields. Even with fracking going full bore, prior to the oil crash in early 2020, of the 450,000 barrels per day produced by EOR nationwide, 350,000 came from within the Permian. Throughout the region, thousands of miles of pipeline and infrastructure have been built to transport carbon and inject it into declining oil and gas pockets.

Lacking carbon

However, while EOR methods do successfully produce more fossil fuels, there’s one major catch: until recently, no one really cared about what happened to that buried carbon. After injection, only about half of it remains trapped in the oil formation.

Stanford University Professor Mark Z. Jacobson estimates that 50% of the CO₂ used in EOR leaks back into the air during the process. “And, you’re still pushing up more oil, so that means we’re going to burn more oil,” he adds.

Between the additional emissions from equipment needed for CCS, plus what CO2 returns directly to the surface during EOR, plus what eventually leaks out over time, plus the additional fossil fuels produced in the process, it’s likely there’s no real carbon savings involved.

What stops producers from doing EOR are the costs involved: the additional logistics, additional fuel requirements, and the lack of available CO2 itself.

Ironically, because of the difficulty industry has had capturing carbon dioxide from power plant and refinery exhaust stacks, most EOR operations use carbon dioxide mined from underground formations. Today, only about one-third of the CO2 being pumped into US oil fields — a little more than 1 billion cubic feet a day — comes from man-made sources. The rest — about 2.3 billion cubic feet a day — is harvested from naturally occurring sources primarily in New Mexico, Colorado and Mississippi.

This is something the industry would like to change. Even better, they’d like public money to change it. Hence the framing of CCS as a climate protection solution.

Petra goes Nova

Constructed by NRG Energy and JX Nippon Oil & Gas Exploration, Petra Nova’s CCS equipment is attached to one coal unit of the monster W.A. Parish power facility near Houston, Texas (Parish has eight units total, four gas, four coal). Also owned by NRG, in 2019 Parish was the 9th worst carbon-emitting power plant in the United States, according to E&E News, belching over 13.5 mt of carbon into the atmosphere—and about 185 million tons over the preceding decade.

Hailed from inception as a game-changing solution to greenhouse gas emissions in the fossil fuel industry, NRG promised that Petra Nova’s success would revolutionize it and rescue the futures of both coal- and gas-fired electricity generation. The $1 billion project required millions in tax breaks and subsidies from a slew of Texan and US federal government entities. To win over skeptics, NRG’s website touted Petra Nova’s ability to remove 90% of Parish’s CO2 emissions, the equivalent of taking 350,000 cars off the road each day.

Entering operation in 2017, the real success of the project was never based upon Petra Nova’s ability to capture CO2, but to use that CO2 to produce more oil. Once captured, it was compressed and piped over 80 miles away to the West Ranch oil field. Within the first year of operations, the system helped boost production to more than 4,000 barrels a day from just 300 barrels a day, NRG said.

Petro Crash

But less than three years later, Petra Nova has been mothballed. When oil prices crashed at the end of March 2020, capturing and sequestering CO2 for half of break-even values made no economic sense. At the end of May, NRG shut it down.

While the fossil fuels industry might have the technical know-how to capture CO2, doing so is very expensive, ranging between $40 and $232 a ton depending on the process, according to a European Union analysis. Nevertheless, to many in the industry, Petra Nova was the most successful U.S. carbon capture project yet.

The question is how? As Jacobson related, powering Petra Nova’s CCU equipment required the construction of a dedicated 240 MW gas turbine. And at best, it would only capture 33% of the carbon emitted from the single 654 MW coal-unit it was attached to.

But Reuters reports that even during normal operations, Petra Nova suffered chronic mechanical problems and routinely missed its emissions targets. From its 2017 start-up to mid-March 2020 shutdown, it suffered outages over 367 days. Issues with the CCU equipment accounted for more than a quarter of these, followed by problems with the plant’s dedicated gas unit, according to NRG’s information and DOE studies.

However, when viewed through a climate prism, Petra Nova has been an utter failure. Not only does Jacobson estimate that it captured merely a fraction of what it was supposed to from the coal-unit, there’s no accounting for the CO2 produced by the dedicated gas turbine, nor any of the upstream CO2 or methane leaks from fossil gas production, nor the downstream carbon emissions incurred by shipping that gas for EOR production.

Reviewed holistically, Jacobson calculates that less than 11% of Petra Nova’s promised CO2 savings were actually realized, a far cry from the 90% carbon reductions trumpeted by NRG and industry. All the while, those eight fossil units at W.A. Parish are still pumping out their toxins.

Capturing the future

In the next parts of this on-going series, we’ll discuss how several nations and national actors are framing themselves as climate saviors, promoting geologic CCS to distract from how they’re proving out ways to use captured carbon to produce more oil and gas.

by

L. Michael Buchsbaum

L. Michael Buchsbaum is an energy and mining journalist and industrial photographer based in Germany. Since the mid-1990s, he has covered the social, environmental, economic and political impacts of the transition from fossil fuels towards renewables for dozens of industry magazines, journals, institutions and corporate clients. Born in the U.S., he emigrated to Germany and Europe to better document the Energiewende.

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