More On Norwegian CO2 Sequestration  

Heading Out at "The Oil Drum" has a post today that (amongst other things) mentions a new CO2 sequestration project underway in Norway, which quotes from an article in the Oil and Gas Journal.

Apparently the conclusions about the dubious economic viability of CO2 sequestration the earlier Norwegian report came to have been ignored or found wanting. If the CO2 injection was to enhance oil recovery then I could perhaps believe that the economics of the process are made viable by the extra oil recovered, but that doesn't appear to be the case here.

Could it be that they really believe this is an effective method of disposing of CO2 and they are willing to spend the money to do so ? Given that it's Norway I suppose it could be possible (though pretty much anywhere else I'd remain extremely suspicious).

Statoil ASA is laying a 151-km, 8-in. carbon dioxide injection pipeline from the Melkøya gas terminal in northern Norway to Snøhvit natural gas field in the Barents Sea. The CO2, separated from Snøhvit gas at the terminal, will be injected back to a storage structure beneath the gas-bearing layers on the Statoil-operated field.

The pipelay is being accomplished in five stages. The Skandi Navica pipelay vessel began work on the line in early June, laying 10-20 km/day of pipe, and work is slated for completion by the end of July.

Statoil has been separating CO2 from its Sleipner West natural gas production and storing it in a subsurface formation in the North Sea since 1996. The injection and storage, Statoil said, will reduce total carbon emissions from the two fields by at least 1.7 million tonnes/year, including 700,000 tonnes/year from Snøhvit.

Elsewhere, Yahoo has an article on enhanced oil extraction techniques that talks up some large onshore CO2 injection projects (via Resource Insights) going on in the American west (which brought back some old memories by talking about Silicon Graphics, who I thought were long defunct). It will be interesting to see how long (and how effectivly) all this CO2 remains sequestered.

For now, such technologies aren't in widespread use. Tricks such as boosting underground pressure with down-the-hole injections of carbon dioxide don't come cheap -- some can easily double extraction costs. So in the 1990s, when oil prices were low, major producers had little incentive to adopt such methods. But the recent runup in oil prices has spurred smaller, independent producers to embrace high tech. Overall, though, the industry is still chugging along at "an average recovery of about 30%," says James "Jeb" Blackwell, manager of exploration at Chevron Energy Technology Co.

That may soon change. Tapping the "new" oil is a relative snap, notes William Bartling, head of market strategy for the oil and gas industry at Silicon Graphics Inc., which builds supercomputers for oil-field simulations. "You know where the oil is, the wells are already drilled, and the equipment is amortized," says Bartling. "So getting the extra oil is very margin-rich."

That's why Anadarko is budgeting $684 million for long-term operations at the Salt Creek oil field, which it bought for $265 million in 2003. Salt Creek, north of Casper, Wyo., is dotted with 4,000 wells that have pumped out some 700 million barrels of oil. But Anadarko thinks at least 150 million more barrels can be extracted. By injecting CO2, Anadarko expects to boost output to 28,000 barrels a day, from 2003's level of 5,000 barrels a day.

Obtaining CO2 isn't a major obstacle. About 125 miles away, in Shute Creek, Wyo., Exxon operates a natural gas processing plant that vents tons of CO2 annually. Some of it is now arriving at Salt Creek through a new $45 million pipeline. By 2008 all of Exxon's CO2, and then some, will be pumped down into the earth, permanently disposing of 2 million tons a year of greenhouse gas while unlocking acres of black gold for Anadarko.

Similar schemes are already working in the Southwest. "We have 1,000 miles of CO2 pipeline feeding enhanced-recovery oil wells," says David J. Borns, manager of geotechnology research at Sandia National Laboratories. Some 25 million tons a year of CO2 have helped boost the region's oil production by about 500,000 barrels a day.

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