American Oil and Gas Reporter - PBIOS 2014 Official Program Guide - 157

More Potential
With all the activity in growing available CO2 supplies, one might think the
supply/demand picture for Permian Basin
EOR was in close balance. However, several developments have changed that perception.
The Permian Basin industry has learned
that EOR is not limited to formerly waterflooded fields, but can be extended
deeper into intervals that have been dubbed
"mother nature's waterfloods." Fourteen
such projects are under way, making an
estimated 12,000 barrels of oil a day
from intervals beneath main pay zones
that would have made no oil under either
primary or secondary production.
These intervals are called residual oil
zones (ROZs), and only recently have
been shown to exist in large areas adjacent
to oil fields in what have been termed
ROZ fairways. A study by the University
of Texas of the Permian Basin, Melzer
Consulting, and the Advanced Resources
International Company estimates that, in
one four-county area, ROZs contain more
than 120 billion barrels of oil in place,
and of that, approximately half can be
considered high quality and available for
commercial exploitation, if sufficient CO2
supplies are available.
To place this in perspective, one could

say conservatively that the EOR industry
would be able to get at least one-fourth
of the high quality oil in place, making
the producible oil resource from the fourcounty area as great as 15 billion barrels.
That is about half of all the oil produced
in the Permian Basin's 90-year life.
At a CO2-to-EOR ratio efficiency of
10 Mcf per barrel, it would take 150
trillion cubic feet of CO2 to accomplish
that task! That is roughly 10 times the
cumulative 15 Tcf of CO2 the Permian
Basin EOR industry has purchased to
date to produce 2.1 billion barrels of oil.
The Permian Basin is one very rich
oil basin-clearly a world class resource.
When one considers the new understanding
of using CO2 EOR to exploit residual oil
zones, it is evident that enormous petroleum resources are yet available. Developing that oil resource will require huge
volumes of CO2 that, if policies are supportive, could come from capturing CO2
emitted by coal and natural gas power
plants along with other industrial plant
CO2 sources such as cement kilns, ethanol,
olefins, and hydrogen plants.
When EOR oil opportunities are coupled with the unconventional resources
that have been shown to be commercial
in the Permian Basin and elsewhere, any
claim that the oil industry is in decline
either in the Permian Basin or around
the world, obviously is being made because
of competition from alternative energies,
and not as a result of the oil resources
available.
❒

L. STEPHEN MELZER is a consulting engineer in Midland, specializing in carbon dioxide injection and
enhanced oil recovery projects. With
27 years of industry experience, he
formed Melzer Consulting in 1997 to
advise clients on multifaceted business
issues in CO2 EOR, and carbon-capture and storage markets. Before establishing Melzer Consulting, Melzer
operated a small independent oil and
gas company. He is director of the
annual CO2 Flooding Conference, codirector of the annual EOR Carbon
Management Workshop, and was on
the advisory board for the FutureGen
Project for Texas. Melzer also is a
past president of the Applied Petroleum
Technology Academy, and served as
director of the University of Texas of
the Permian Basin's Petroleum Industry
Alliance and as co-chairman of the
University of Texas School of Law's
continuing education conferences on
carbon and climate change.

MORE OIL,
LESS COST
CnF® Foam Conformance Modifier
Bbls.

CBT Oil Production Daily Total 2012

1200
®
CnF Foamer Pumped

1000

800

600

400

200

0
1/1
1/8
1/15
1/22
1/29
2/5
2/12
2/19
2/26
3/4
3/11
3/18
3/25
4/1
4/8
4/15
4/22
4/29
5/6
5/13
5/20
5/27
6/3
6/10
6/17
6/24
7/1
7/8

Oxy, along with increasing demand and
better pricing for CO2, has kept the field
producing at about 20 MMcf/d. The
nearby La Veta project (10 MMcf/d) has
supplemented Sheep Mountain volumes
and helped keep the pipeline profitable.
New wells are forecast for the area in the
coming months.
Aggregate CO2 supplies to the Permian
Basin EOR industry as of midyear 2014
are shown in Table 1.
Not all the supply upgrade activity is
devoted to geologic CO2 source fields.
Summit Power is working to close on a
new power plant (Texas Clean Energy
Project) that would gasify coal to make
400 megawatts of electricity, produce
urea, and provide byproduct CO2 to Permian Basin EOR companies. The plant
is to be constructed near pipelines in
western Ector County, Tx., and produce
125 MMcf/d of CO2.
Funding for the $2.5 billion plant is
coming from U.S. investors, foreign national oil companies, and loan guarantees
from the U.S. Department of Energy.
Groundbreaking could occur as early as
late 2014 or early 2015.
It is interesting to note that the business
model prioritizes the location for the
plant for access to the electricity and
EOR markets, and not the source of the
coal fuel.

The field in the above graph
was under a CO2 flood and
the project was not meeting
expectations. With the addition of
CESI's CnF® foam conformance
modifier product, the Operator
deemed the project a success after
90 days with an incremental
increase of approximately 14,000
barrels of oil at a relative value
of less than $0.60 per barrel...
and this increase continued
through 150 days.

FL RIDA

CHEMICAL

For more information contact
cesimkt@flotekind.com
or call
832-308-CESI (2374)

OCTOBER PBIOS 2014 157

American Oil and Gas Reporter - PBIOS 2014 Official Program Guide

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