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Enhanced Oil Recovery

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Western Governors’ Association
Policy Resolution 2015-06
Enhanced Oil Recovery

A. BACKGROUND

  1. Enhanced oil recovery (EOR), using carbon dioxide (CO2), when performed appropriately and responsibly offers a safe and commercially proven method of domestic oil production. The U.S. oil and gas industry, which pioneered the CO2 EOR process in West Texas in 1972, is the world leader. Over four decades, the EOR industry has captured, transported, and injected large volumes of CO2 for oil recovery with no major accidents, serious injuries or fatalities reported.
  2. The CO2 EOR process works by injecting CO2 obtained from natural and anthropogenic sources into existing oil fields – often referred to as “brownfields” – to free up additional crude trapped in rock formations. This CO2 “flooding” can result in recovery of about twenty percent of the original oil in place. (1) CO2 flooding utilizes existing assets to recover significant additional resources stimulating the economy and minimizing surface disturbance that new exploration and development projects necessarily entail. In addition, many areas favorable for CO2 application exist where new or continued significant drilling activity is unlikely to occur at a meaningful scale for years, if ever.
  3. As of 2013, EOR using CO2 produced approximately 280,000 barrels of domestic oil per day, or four percent of U.S. crude oil production. (2)
  4. America has an estimated 21.4 billion barrels of oil, requiring 8.9 billion metric tons of CO2, that could be economically recovered with today's EOR technologies. With advances in technology, 63.3 billion barrels of oil, requiring 16.2 billion metric tons of CO2, could be economically recovered, which is roughly double current U.S. proven reserves. (3)
  5. EOR enhances our nation’s energy and fiscal security by reducing dependence on foreign oil, often imported from unstable and hostile regimes. It allows reduction of our trade deficit by keeping dollars now spent on oil imports here at home and at work in the U.S. economy.
  6. Coal and oil production and utilization and other industrial processes are a vital component of many western states’ economies. EOR provides a long-term path for continued low-carbon production and use of our nation’s coal and oil resources and presents an opportunity for state and local governments to stimulate economic activity and realize additional revenue at a time when most governments face significant fiscal challenges.
  7. CO2 is currently limited in availability from high-volume sources needed for EOR – natural sources will not close a supply gap projected to grow. Further, CO2 capture and pipeline transport capacity to oil fields is not sufficient.
  8. CO2 capture equipment, installed on a broad range of industrial processes, has the potential to supply significant volumes of CO2 to the EOR industry enabling the U.S. to achieve significant net carbon reductions through the sequestration of CO2. (4)
  9. The U.S. has the opportunity to provide global leadership in carbon capture research and technology development, hydrocarbon recovery and geologic storage research and technologies, manufacturing, engineering and other services.

B. GOVERNORS’ POLICY STATEMENT

  1. In recognition of the environmental and economic benefits of EOR, Western Governors support policies and incentives that advance investment in EOR projects, infrastructure, technology and research.
  2. Western Governors support efforts to increase the awareness of the many benefits CO2 EOR.
  3. In order to expand deployment of CO2 capture at power plants and other industrial sources, the President and Congress should enact federal incentives to increase CO2 supply available for the oil industry to purchase and use in EOR. Federal incentives have the potential to leverage private and state investment, harness the ingenuity of entrepreneurs and capitalize on billions of dollars’ worth of DOE-sponsored research and development to enable new commercial carbon capture and pipeline projects.
  4. Federal policies aimed to limit CO2 emissions should promote, and not impede, development and deployment of CO2 capture and commoditization. Federal regulations should allow states to create programs tailored to individual state needs, industries and economies and recognize CO2 sequestration that results from EOR in meeting federal regulatory objectives. As such, EPA should abide by principles already established by the Agency in its regulations promulgated to ensure the long-term storage of CO2 in different geologic formations.

C. GOVERNORS’ MANAGEMENT DIRECTIVE

  1. The Governors direct the WGA staff, where appropriate, to work with EPA and other federal agencies, Congressional committees of jurisdiction, and the Executive Branch to achieve the objectives of this resolution including funding, subject to the appropriation process, based on a prioritization of needs.
  2. Additionally the Governors direct the WGA staff to develop, as appropriate and timely, detailed annual work plans to advance the policy positions and goals contained in this resolution. Those work plans shall be presented to, and approved by, Western Governors prior to implementation. WGA staff shall keep the Governors informed, on a regular basis, of their progress in implementing approved annual work plans.

(1) National Energy Technology Laboratory – Untapped Domestic Energy Supply and Long Term Carbon Storage Solution
(2) Energy Information Administration – Annual Energy Outlook 2015
(3) U.S. Department of Energy, National Energy Technology Laboratory
(4) As of 2014, approximately 13.6 million metric tons of CO2 was captured that would otherwise be released into the atmosphere has been sequestered as a result of EOR (U.S. Department of Energy – Quadrennial Energy Review). Over the life of a project, for every 2.5 barrels of oil produced, it is estimated that a typical commercial EOR project can safely prevent one metric ton of CO2 from entering the atmosphere (Kuuskraa, Godec, Dipietro – Energy Procedia). Further, the volume that could be captured and sequestered from industrial facilities and power plants to support economically recoverable EOR reserves could be 8.9 to 16.2 billion metric tons of CO2. This is equal to the total U.S. CO2 production from fossil fuel electricity generation for approximately 4 to 8 years (EPA 2015 Green House Gas Inventory).

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