AERA & SHELL WESTCARB Annual Meeting Portland, OR October 2004 Ventura Green Electricity, H 2 and CO 2 EOR Scott L. Wellington, PhD Research Advisor Shell International E&P Representing AERA and SHELL

AERA & SHELL Presentation Outline: Vision Ventura Phase II Project Outline Key Elements Scope, Scaling and Cost Stakeholder Participation Future Technology Improvements Discussion

AERA & SHELL Vision Clean Efficient and Responsible Fossil Fuel Usage  Capture, Reuse and/or Sequester CO 2 and other Contaminants Increase Efficiency and the use of Renewable Energy Sources  Bio, Wind and Wave Include All Stakeholders  Success Depends on Public and Private Support Develop a Real, Transparent and Measurable Plan  “Staircase” the Project to communicate timing and goals Get Going Today on Making the Plan into Reality  Phase II Should Demonstrate a Significant Step Toward the Vision

AERA & SHELL Green power for local use and to grid H2H2 CO 2 Oil to pipeline Gas Hydrogen Unit Separator Com- pressor Ventura Oil Reservoir Gas Turbine Hydrogen to highway CO 2 EOR / storage Green Power, H 2 and Oil minus CO 2

AERA & SHELL Scope, Scaling, Cost and Opportunity: Demonstrate the Integrated Clean Power System Use “Catalogue-Ready”Components The Project Scale must be Credible Large Enough to Confidently Scale Expansions Small Enough that it is Manageable in Phase II Publish (Share) the Project Data Future Technology Improvements to Cut Costs Expand and Apply in US and Beyond

AERA & SHELL Green power for local use and to grid H2H2 CO 2 Oil to pipeline Gas Hydrogen Unit Separator Com- pressor Ventura Oil Reservoir Gas Turbine Hydrogen to highway CO 2 to Storage Power plus H 2 and Oil minus CO 2

AERA & SHELL Scaling Discussion: Fuel Composition & Volume H 2 Purity & Volume H 2 Manufacturing Technology Oil Recovery Volume CO 2 Purity & Volume Power Gen. Capacity H 2 Turbine Availability

AERA & SHELL H 2 Volume to CO 2 Volume Relationship The Majority of H2 is Produced by Steam Methane Reforming CH 4 + 2H 2 O = CO 2 + 4H 2 The method Ideally produces 4 H 2 for every CO 2 Relative Demand Example: ~ 6 Mscf CO 2 / bbl of Light Oil Recovered On a Recovered Oil Basis one obtains: 24 (= 6 X 4) times as much H 2 as CO 2

AERA & SHELL CO 2 Oil Recovery Scaling Example: Assume Oil Production = 15,000 bbl/day  1% CO 2 EOR Increase is Too Small  10% is Probably Acceptable  > 10% more like 30% is Desirable Assume 6 Mscf CO 2 / bbl of Oil  10% Increase ( 1,500 bbl/d ) Requires 9,000 Mscf / day of CO 2 injection

AERA & SHELL Steam Reforming the 5.3 MMscfd of Associated Gas (74% methane, 8% ethane, 8% propane, …)  Yields 17 MMscf/d of Hydrogen  23,000 kWe of “Green” Power  6,600 Mscf/d CO 2 and 1,100 bbl/d Oil  HMU with CO 2 Capture ~ $10 million  H 2 Turbine ~ $10 million  CO 2 Compressor Cost ~ $15 million HMU = Hydrogen Manufacturing Unit

AERA & SHELL Future Improvements Post Phase II: The Ventura Project could be Expandedin the Future using New Technologies:  Less Expensive H 2 /CO 2 Manufacture and Separation – Membrane Air Separation? Hydrogen/CO 2 Membrane Separation?  Less Expensive Compression – “Thermal Compression”?  More Efficient Electrical Generation – Fuels Cells?  Gasification of Bio-Sourced HCs to Produce H 2 and CO 2 ?

AERA & SHELL Green power for local use and to grid H2H2 CO 2 Oil to pipeline Gas Hydrogen Unit Separator Com- pressor Ventura Oil Reservoir Gas Turbine Hydrogen to highway CO 2 EOR / storage Green Power, H 2 and Oil minus CO 2

AERA & SHELL Ventura Phase II Green Power & CO 2 EOR Do we Agree to Proceed?  Refine Equipment List, Cost and Timing  Add Field Implementation Requirements Share Results with all Stakeholders – Proceed?  Appoint Project Manager and Team  Prepare Project Grant/Funding Request Develop Detailed Project Plan – Proceed?  Execute Build Plan with Report Schedule  Operate Project including Periodic Documentation Complete with Final Reports and Recommendations

AERA & SHELL Challenges and Opportunities: Technical  Scope and Scale  Complete Detailed Equipment and Field Engineering Cost Analysis WESTCARB Decision on Phase II Project  Project Leader and Team to Develop Plan  Alignment with DoE  Stakeholder Acceptance  Permitting  Timing