Oil & Gas:

Pew's Greenwald, Core Energy's Mannes discuss new enhanced oil recovery initiative

Can carbon sequestration for oil recovery reduce emissions and solve the United States' energy dependence concerns? During today's OnPoint, Robert Mannes, president of Core Energy, and Judi Greenwald, vice president for innovative solutions at the Pew Center on Global Climate Change, discuss a new alliance of industry, state and nongovernmental organization leaders working to develop recommendations for enhanced oil recovery.

Transcript

Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today are Judi Greenwald, vice president for Innovative Solutions at the Pew Center on Global Climate Change, and Robert Mannes, president of Core Energy. Bob, Judi, thanks for coming on the show.

Judi Greenwald: Thanks for having us.

Robert Mannes: Hello.

Monica Trauzzi: Judi, Pew and Core are just two groups that are taking part in a new initiative that's pushing enhanced oil recovery in the United States. Why is Pew, an organization that's always been behind reducing carbon emissions, was a big proponent of cap-and-trade legislation, backing a plan that would keep oil relevant in the United States? What are the carbon benefits of a plan like this?

Judi Greenwald: We're very excited about this project because it is an opportunity to actually do some climate protection, but in the context of increasing our domestic oil supply. It's a very interesting technique, carbon dioxide enhanced oil recovery. You actually take carbon dioxide and you inject it underground and then you can produce more oil. So it's a way to get energy security benefits, but also to get climate benefits. Obviously, if you think we were going to completely get off oil tomorrow you might not want to keep on going on this. But as long as you think we're going to be using oil for some time, and we do believe that, you would want to do it in as climate friendly a way as possible. So this is a really great opportunity to get a win-win on both the energy security front and the climate front.

Monica Trauzzi: So Bob, your company has been employing this technology. How does enhanced oil recovery work?

Robert Mannes: We have. And we're in the state of Michigan and with CO2 enhanced oil recovery you have to have a source of CO2, obviously, and CO2 is typically transported via pipeline, to compress it, transport it via pipeline to the wellheads. You have an injection well where you inject the CO2 into an oil reservoir and when you reach a certain pressure in the reservoir, the state of the CO2 becomes almost like a liquid, supercritical they would call it, and the CO2 mixes with the oil which then changes the viscosity. It swells the oil molecules and it allows that oil to flow more smoothly through and more freely through the reservoir to your producing wells. And then you will produce that oil back to the surface, separate the CO2, all in a closed system, reinject the CO2 back into the ground and sweep more oil on then.

Monica Trauzzi: So what kind of infrastructure commitment would the U.S. be looking at to get this on full-scale and throughout the U.S.?

Robert Mannes: There's going to be some additional pipelining, but not much. Some additional wells, but that's the beauty of enhanced oil recovery with CO2, is that you can use a lot of the existing infrastructure to produce a bunch of oil that would otherwise not be produced. And so we go in and use existing wells, a lot of the existing flow lines, existing lease roads and some new pipelines for CO2 supply.

Monica Trauzzi: Bob, one of the concerns that we hear about CCS technology for coal is that it's not economically viable at this point. What's the economic viability of EOS technology?

Robert Mannes: Well, there's a couple of different things there. CO2 enhanced oil recovery is economically viable and we just need more CO2 in this country. As an oil industry we would like more CO2. There is a demand for more CO2 in the oil field. The key is to get a significant enough supply located close enough to oil fields that will respond to CO2. And so there's a lot of things that factor into is it economic or not. The oil industry has been doing CO2 enhanced oil recovery for close to 40 years now and so it is economically viable. But as we look to capture more CO2, some of the sources are going to be further away from the oil fields that are needed. And so to build out that infrastructure there will be different economics for each situation.

Monica Trauzzi: What are the safety concerns associated with it if we're talking about expanding it?

Robert Mannes: There really aren't too many, because this country has tens of thousands of miles of pipelines already in place transporting natural gas and CO2 is a gas and it will sometimes be transported in a liquid phase, but it's an inert gas. You know, it's not flammable and, as an industry and as a country, we know how to transport things through pipeline already.

Monica Trauzzi: But what about when to goes into the ground? Is that concerning at all?

Robert Mannes: It's not, because with enhanced oil recovery we know the geologic setting that it's going into and these are oil fields that have trapped and contained oil and gas for hundreds of millions of years. And so the geology and the rock structure is the same underground that contained the oil and gas. And so as you put CO2 in there, it's going to contain that CO2 as well.

Monica Trauzzi: Judi, how politically viable is this right now? Energy really isn't getting a whole lot of attention this year from Congress. So over the next couple of years, I mean are you expecting that Congress will even discuss this?

Judi Greenwald: We do think this is politically viable. Obviously, this is a difficult time for anything to be politically viable. But in this difficult political time this has a lot of very interesting features, this issue. First of all, if you think about a VIN diagram of climate policy, energy policy and economic policy, this really fits into all three. You can get benefits on all three fronts. So you have the possibility of a very broad coalition of folks who might be interested at different levels in each of those different objectives, but they can come together around this one solution that can meet all three of those objectives. The other thing is that in these tight budgetary times CO2 EOR has the potential of being budget neutral or maybe even bringing more revenue to the federal government. Because if you are able to improve or increase the amount of oil that we produce domestically, we will then also increase the amount of revenues from the oil industry. So you can actually imagine, and this is something that we're going to look at as part of our initiative, you can actually envision that we could have incentives that actually would pay for themselves over time. So it helps on the budget front, it helps on the energy and economic and environmental front. So we think, you know, obviously, it's always politically difficult to do things, but this has a lot of promise.

Monica Trauzzi: So, you already have some congressional backing for the initiative. On top of that, Senators Conrad and Lugar have introduced bills relating to enhanced oil recovery. How can all that be improved?

Judi Greenwald: That's one of the things we're going to be looking at, at the initiative. We're going to be starting with a pretty broad brush. We're going to be looking at the problem and agreeing upon a common definition of what the problem is, what's the challenge, what are the barriers, what incentives are needed, and then we're going to be looking at possible legislative and policy solutions at the state and the federal level and then looking at proposals for different folks have made and seeing if we would actually say that they're just right or they need certain improvements. And so we're going to be looking at that whole, both the problem side and the solution side and finding common ground with the group.

Monica Trauzzi: Any major players from the oil industry participating in this initiative?

Judi Greenwald: Yeah, well, we have Bob, obviously, and we have Dunberry Resources and Chaparral Energy and we actually have a few other imitations out to oil companies, so it may be more.

Robert Mannes: Yeah, and so there's significant interests in the oil and gas industry to see this initiative move forward, because, as I mentioned before, there's a big demand for CO2 and that will increase domestic production. You've got national security issues and the oil production side of this is climate neutral as far as the politics of climate change. We need more production here at home.

Monica Trauzzi: OK, we'll it right there on that note. Thank you both for coming on the show.

Robert Mannes: All right, thank you.

Judi Greenwald: Thank you.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

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