Carbon Capture & Sequestration
The technical staff at INEXS have analyzed dozens of CO2 miscible gas flood investment opportunities for oil companies, banks, and private equity and private debt capital providers across the United States, and our team believes that the potential for combining CO2 floods for EOR with Carbon Capture and Sequestration (CCS) presents a significant game changing opportunity to secure the best of both traditional and new energy sources as the world continues this energy transition.
As we focus our efforts on building alternative sustainable energy sources, the reality is that our society will need to continue to rely on every energy source – including oil and gas – for many more decades as we complete this extensive energy transition. Perhaps the crossroads of more efficiently extracting additional oil from known producing wells and the desire for Carbon Capture and Sequestering (CCS) is the use and injection of captured CO2 into those older wellbores as a miscible gas flood, which can dramatically increase the percentage of oil recovered from those existing reservoirs.
- The use of CO2 as a miscible (forming a homogenous mixture) flood agent – often alternating injection of CO2 followed by water – in oil recovery has been successfully established in hundreds of oil fields around the world for more than 40 years; however, most of the CO2 used for flooding comes from below-ground gas reservoirs, where CO2 is extracted, transported via pipeline, and reinjected into the oil reservoir. This process, therefore, does nothing to reduce the overall CO2 level in the environment, which is of concern to many today.
- The cost of building specialized steel CO2 pipelines for long-distance transportation can be prohibitive, whereas capturing local industrial CO2 and sequestering it locally in older oil reservoirs offers the benefits of lower transportation costs, significant carbon capture tax credits, and dramatically improved revenues from enhanced oil production. Determining the effectiveness of flooding an oil reservoir with CO2 using Water Alternating Gas (WAG) requires a detailed analysis of the depth, pressure, porosity, permeability, and water saturation of the target reservoir, as well as, if possible, the direct comparison with an analogous CO2 flood in a nearby reservoir to better determine the cost/benefit of this Enhanced Oil Recovery (EOR) methodology, using a full financial model.
- There are several CCS sites being proposed or in the planning stage along the Gulf Coast, including Exxon’s massive proposed $100+ billion hub that would capture CO2 from the petrochemical, refining, and power generation facilities all along the Gulf Coast, and sequester that CO2 subsalt under the Gulf of Mexico. The facility is targeted to store 50 million tonnes (one metric tonne = 1000 kilograms) of CO2 per year by 2030 and 100 million tonnes per year by 2040.
