1. Bureau of Economic Geology Jackson School of Geosciences The University of Texas at Austin “The Gulf Coast Carbon Center: Exploring Synergies between gasification and CO2 Sequestration” Ian J. Duncan

2. Bureau of Economic Geology Energy, Environment, Education QAd2349x

3. Established in 1909 BUREAU OF ECONOMIC GEOLOGY Oldest research unit of The University of Texas at Austin Geological Survey of Texas

4. Provides extensive advisory, technical, and informational services Conducts basic and applied research –Energy Industrial Associates Basin analysis Reservoir Characterization –Environmental and Earth Systems Airborne Geophysics Coastal and environmental studies Geologic mapping Hydrogeology Geologic sequestration –Education and Outreach Bureau of Economic Geology

6. CO 2 Sequestration CO 2 contributes to climate change Geologic sequestration is one way to reduce atmospheric releases of CO 2 Critical assessment of geologic and engineering aspects of CO 2 sequestration is needed

7. GCCC Vision Statement The GCCC seeks to impact global levels of GHG in the atmosphere by doing science and engineering studies that will support reduction of CO2 and methane emissions and enable the development of an economically viable, multifaceted, CO2 sequestration industry in the Gulf Coast

8. Why the Gulf Coast? Image shows concentrations of stationary sources of CO2 superimposed on the thickness of the subsurface

9. GCCC Industry Partners

10. Other GCCC Collaborators DOE-NETL Southeast Regional Sequestration Partnership (SECarb); Southwest Regional Sequestration Partnership Environmental research, NGO’s –Environmental Defense, National Resources Defense Council Houston Sierra Club Other research teams –National labs, NETL, LBNL,LLNL, ORNL, PNL; USGS; HARC; UT ESI; Louisiana Geological Survey, Australian CO2CRC Mike Moore (Falcon Environmental)– GCCC consultant in carbon credits markets UT Department of Petroleum Engineering, internationally recognized leaders in CO2 enhanced oil recovery (EOR) research.

11. Core Competencies Conducting large scale field projects that demonstrate the viability of geologic sequestration of CO 2 Establishing best practices for CO 2 Monitoring, Measurement and Verification using risk analysis Economic modeling of the future CO 2 value chain for the Gulf Coast Using next generation reservoir characterization to optimize CO 2 EOR

12. Field Demonstration - Monitoring at Frio Pilot Downhole P&T Radial VSP Cross well Seismic, EM Downhole sampling U-tube Gas lift Wireline logging Aquifer wells (4) Gas wells Access tubes, gas sampling Tracers

13. Observation Well Injection Well

14. Main GCCC Results to Date Quantification of CO2 market for EOR in GIS (spatial inventory) Successful field demonstration (Frio I Project) of monitoring and modeling techniques to measure subsurface storage of CO2, assure public and environmental safety and effectiveness of this process Demonstration of significance of two phase trapping in assuring permanence of CO2 storage Development of enhanced screening methodology for EOR prospects

15. Model for Stacked Storage in the Gulf Coast Linked enhanced oil and gas production to offset development cost and speed implementation Very large volume storage in stacked brine formations beneath reservoir footprints Near-term and long-term sources and sinks linked in a regional pipeline network Validation of adequacy of permitting and monitoring protocols

16. Message to Legislatures National Energy supply benefits from applying CO 2 enhanced oil recovery processes in Texas and the Gulf Coast. The Environment benefits from capturing and storing a major greenhouse gas. The Economy benefits from: Enhanced oil recovery (EOR) including wellhead value, taxes, and jobs. Carbon credits from around the world could come to the Gulf Coast owing to a unique association of large volume storage capacity and CO 2 sources Jobs created by infrastructure development associated with a CO2 sequestration industry

17. Future Trends for Fossil Energy Utilization in the US

19. THE US IS THE SAUDI ARABIA OF COAL

20. THE US IS THE SUADI ARABIA OF COAL What are the Implications for the Oil Industry High oil prices and National Security will drive gasification of coal and production of synthetic diesel for DOD Environmental NGO’s driving power companies to decarbonize fuel…. CO 2 sequestration Cheap CO 2 available for EOR

21. GULF COAST CO 2 BASED ENHANCED OIL RECOVERY SCENARIOS

22. CO 2 Miscible Flooding Mechanisms Large density at reservoir conditions makes the CO 2 a good solvent for light hydrocarbons The formation of a single phase diminishes the capillary forces Miscibility with the CO 2 lowers the viscosity of the oil and increases its mobility. Pure CO 2 CO 2 Vaporizing Oil Components CO 2 Condensing Into Oil Original Oil Miscibility Region (CO2 and Oil Form Single Phase) Direction of Displacement

23. CO 2 Flooding under Miscible Conditions

24. Selection of Candidates Suitable for CO 2 Miscible Flooding Minimum Miscibility Pressure (MMP) within an achievable range CO 2 Thermodynamic MMP

25. United States CO 2 EOR 2 Bcf/day (~35 MMTY) of CO 2 currently injected for EOR, largely in the Permian Basin ~ 20% of CO2 for EOR is anthropogenic (~ 7 MMTY) CO 2 annual emissions from all fossil energy is ~ 6 GT Annual U.S. oil consumption is ~7 BSTB and annual oil production is ~3.2 BSTB Current U.S. CO 2 EOR Production ~ 206 MBOPD, 7.5 MMBOPY –4% of U.S. production, 66 active projects, 50 in Permian Basin

26. Source: Beecy (2003), ARI United States CO2 EOR

27. Converging Forces Energy, Environment, Economy Energy supply benefits from applying CO 2 enhanced oil recovery processes in Texas and the Gulf Coast. The Environment benefits from capturing and storing a major greenhouse gas. The Economy benefits from Enhanced oil recovery (EOR) including wellhead value, taxes, and jobs. Net positive carbon credits in Texas and the Gulf Coast owing to large volume storage capacity Jobs created by infrastructure development associated with a CO2 sequestration industry

28. Why the Gulf Coast? The Gulf Coast region accounts for approximately 16% of the U.S. annual CO 2 emissions from fossil fuels. Annual emissions of CO 2 in Texas, Louisiana and Mississippi are ~ 1 billion metric tons (1 GT), and Texas alone emits 667 million metric tons of CO 2. Source-sink proximity “Stacked Sinks”; oil fields and large volume brine aquifers Regional and local geology is well understood Some infrastructure in already in place Economic feedback, whereby State incentives for capture are recovered via taxes on CO 2 EOR

29. Saline Formations Focus on the Gulf Coast Ozone non attainment Sources (dot size =release) Refineries and chemical plants Electric power plants Selected oil field that could benefit from EOR Existing CO 2 pipeline Future CO 2 pipeline Frio Brine Pilot Anthropogenic CO2 stationary source data from Hendriks and others, IEA Greenhouse Gas R&D Program, 2002).

30. Anthropogenic CO 2 The Gulf Coast “Wedge” Historical and Forecast of U.S. and Gulf Coast region CO 2 emissions from fossil fuels (Data from CDIAC and EIA websites). 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 1980198319861989199219951998200120042007201020132016201920222025202820312034203720402043204620492052 Annual Emissions (MM metric tons of CO U.S. others Gulf Coast (TX, LA, MS) HistoricalForecast

31. Converting CO 2 -EOR to Storage Permanently store CO 2 in reservoir after EOR has been completed Reservoir characterization and simulation for long–term storage Long–term measurement, monitoring, and verification (MMV) systems.

32. Optimizing CO 2 Storage 20 25 30 35 40 45 50 05,00010,00015,000 Depth (ft) CO 2 bulk volume residual (kgm/m 3 ) Maximum storage capacity

33. Screening Criteria for CO2 Storage/EOR Minimum miscibility pressure Cumulative and current annual oil production Storage potential (metric tons of CO2) Distance from CO2 source Reservoir Geology Cultural character (Urbanization, Unitization)

34. DECISION TREE FOR SCREENING CANDIDATE RESERVOIRS Oil-reservoir database Has reservoir been waterflooded? Minimum miscibility pressure (depth, temp., pressure, oil character) Does reservoir have water- drive mechanism? No Rejected No Rejected No Rejected No Yes Unknown Yes No Candidate reservoirs Candidate for secondary recovery Reservoir depth > 6000 ft Cumulative production > 1 MMSTB Yes

35. Past Gulf Coast CO 2 EOR Water-alternating gas (WAG) –Example Quarantine Bay, Chevron 1991 –Results 16.9% recovery of OOIP, 188 Mstb recovered –CO2 utilization 2.57 Mcf/stb recovered Gravity stable flood –Example Weeks Island, Shell ( Johnston, 1988) –Results 64% of starting oil volume, 261 Mstb –Design 24 % pore-volume CO2 w/ 6 % CH4 –CO2 utilization 7.9 Mcf/stb with recycle

36. Areas With Miscible CO 2 -EOR Potential

37. Residual Oil Resources in Texas (Non Permian Basin) Total > 38 Billion STB 2,051,290 MSTB 13,580,000 M STB 9,637,000 MSTB 13,105,709 MSTB Gulf Coast Texas Cretaceous Margin East Texas North Central Texas

38. 15% Recovery Total = 5.7 billion STB 2,037,000 307,694 1,965,856 1,445,550 Gulf Coast Texas Cretaceous Shelf Margin East Texas North Central Texas Residual Oil Resources in Texas (Non Permian Basin)

39. Pipelines

40. Coal Resources and Mines

42. Economics Anthropogenic CO 2 -EOR Competes with natural source CO 2, priced at $10-$15/Ton, delivered at pressure. High purity (95+%) CO 2 preferred. Cost of compression and transportation to sinks are significant. Near-term opportunities for low-cost capture and CO 2 -EOR are offered by high concentration CO 2 sources. Production of additional domestic oil is value added benefit. EOR and carbon tax incentives will provide economic incentives for CO 2 -EOR for sequestration.

43. Storage Volumes Annual production in Gulf Coast (37,000 km 3 ) is ~1 GT CO 2 with emissions doubling over 50 years Total EOR CO 2 storage is 0.7 GT Brine filled storage is ~ 222 GT CO 2 in only 1% of brine-filled volume in sandstones from 4000 ft-12,000 ft

44. Technical Advances Since the 1980’s to Improve EOR Results 3D seismic for delineating fault blocks Directional drilling for placing wells Reservoir characterization for designing flood Improved knowledge of CO 2 flooding

45. “The Size of the Prize” State Revenue $/bbl Wellhead TaxesOther Taxes $30$15 billion$11 billion $40$19 billion$14 billion $50$24 billion$19 billion $60 $30 billion $22billion State Incentives for Capture Cost @ $70/ton capture = $51 billion @ $20/ton capture = $15 billion We may be closer than we think!

46. Thanks! For more information: www.gulfcoastcarbon.org

50. Anthropogenic CO 2 in the Gulf Coast Region Historical and forecast U.S. and Gulf Coast CO 2 emissions from fossil fuels Data from CDIAC and EIA websites

51. Selection of Candidates Suitable for Miscible Flooding

52. Temperature gradient non-linear regression used for the Frio Plays 5, 6, 7, and 10 Non-linear regression for the molecular weight of the C 5 + Temp = 0.015Depth + 77.45

53. Selection of Candidates Suitable for Miscible Flooding Non-linear Multiple Regression for the Minimum Miscibility Pressure, MMP