Too good to be true? JRC report highlights techno-economic potential for CO2 oil recovery technology

July 17, 2006

Brussels, 14 Jul 2006

Enhanced Oil Recovery using carbon dioxide (CO2-EOR) could help increase the recovery of European oil resources, while simultaneously reducing the emissions of CO2, and encouraging the development of cleaner and more efficient fossil fuel energy technologies, according to a recent report from the European Commission's Joint Research Centre (JRC).

Annual oil production in selected economically viable projects may reach an additional 180 million barrels (~18% of EU production = €9B savings) with the concomitant avoidance of 60 million tonnes CO2, under favourable oil and CO2 prices and optimal oil recovery rates.

The JRC report 'Enhanced Oil Recovery Using carbon dioxide in the European Energy System' assesses the potential role of CO2-EOR in the European energy infrastructure. CO2-EOR is a method that could increase European oil production beyond what is currently achievable using conventional recovery methods, while utilising oil reservoirs to store CO2. In simple terms, CO2 is injected into an oil reservoir, which then 'interacts' with the oil or surrounding reservoir rock, allowing increased oil recovery. During this process CO2 can be stored in the oil reservoir.

Until now, the barriers to greater use of CO2-EOR technique have been financial rather than technical: the lack of availability of low-cost CO2 and the high cost of offshore projects. However, with changes to the European Energy scene, these barriers may well diminish. For example the urgent need to curb CO2 emissions in line with the Kyoto agreement has created opportunities for improved CO2 capture and storage.

Higher oil prices may render more attractive technologies which maximise oil extraction . It is also a pragmatic time to be considering the use of CO2- EOR techniques, as many North Sea oilfields, which might be considered for dismantling, could be maintained if improved oil recovery methods were available. The report which was well received by key players in the oil world* examines how CO2-EOR could dovetail with the objectives of the European energy, environmental and energy research policies; reviews current knowledge about CO2-EOR, identifies potential barriers for implementation and highlights areas for further research and development.

The region studied in the report is the most important oil-producing area in Europe, producing some 4 million barrels of oil daily, nearly 73% of crude oil production in the European Economic Area (EEA). 15 active North Sea oilfields - which were more than 80% depleted - were analysed and the potential for additional oil recovery using CO2-EOR technology was estimated. This estimate took into account high and low price scenarios for oil and carbon trading prices and high and low oil recovery factors. Access to new CO2 sources was also factored into the estimates.

The results show that CO2-EOR could be economically viable in several of the 15 oilfields studied. However, the report also stresses that there are many potential impediments to CO2-EOR usage, not least the high cost of investing in new technology, uncertainty with regard to eligibility for financial support (e.g. via emissions trading), competition with other less risky oil recovery methods and concerns about the permanence and safety of CO2 storage underground. The report also concludes that existing knowledge about CO2-EOR techniques might not be directly applicable to the specific geological characteristics of European oilfields (oil recovery rates might be lower than those observed in the USA, for example).

The report

* The study was reviewed by the UK's Department of Trade and Industry (DTI) and the Norwegian Petroleum Directorate of the Ministry of Economy. The JRC was invited to present the results of the study to a number of significant events such as (i) the launch of the Zero Emissions Fossil Fuel Power Plant Technology Platform in Brussels, (ii) the IEA workshop on ' Oil and Gas Innovation in the Fossil Fuel Future' in Brussels, (iii) the EU-OPEC Conference on carbon capture and storage technologies in Ryadh, and (iv) the CO2-IOR conference in Oslo. Furthermore, a summary of the study appeared in the annual report of Petoro, the 2nd largest oil company in Norway (www.petoro.no)

Joint Research Centre
http://www.jrc.cec.eu.int/index.asp
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