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Vol. 13, No. 29 Week of July 20, 2008
Providing coverage of Alaska and northern Canada's oil and gas industry

Alberta company moving on CCS pipeline

Project to use industrial carbon emissions to enhance oil recovery; comes as government unveils C$2 billion fund for CCS projects

Eric Lidji

Petroleum News

A Canadian company recently announced plans to build a system for capturing carbon dioxide emissions and storing them underground.

Alberta-based Enhance Energy Inc. said the Enhance CO2 Pipeline System would be able to move more than 27,500 tons of carbon dioxide every day from industrial facilities to aging oil and gas fields, where it would be used to increase production.

In addition to the increased recovery of oil and gas, Enhance believes the pipeline system will cause a significant reduction in greenhouse gas emissions in Alberta.

The pipeline system would initially pick up carbon dioxide produced at Agrium and North West Upgrading facilities north of Edmonton and process it in new facilities east of Fort Saskatchewan.

From there, the gas would be shipped south along a high vapor pressure pipeline to conventional oil and gas fields around the city of Clive.

Enhance Energy hopes to finish regulatory work on the project by next spring and start construction by the end of 2009, with the goal of starting the project up in 2011.

CCS key to Alberta plan

This kind of carbon capture and storage, or CCS, technology has become a centerpiece of Canadian efforts to regulate the carbon emissions from oil sands development and other fossil fuel production in the Western part of the country.

Alberta Premier Ed Stelmach favors CCS over government set limits and allowances on carbon emissions, known as cap-and-trade, which he believes would push businesses out of the province to areas with looser regulations.

Just days before Enhance Energy announced its new pipeline system, Stelmach and the Alberta government unveiled a C$2-billion fund to promote several CCS projects, which Enhance sees as an accelerating factor.

“This week’s climate change announcement to support Carbon Capture and Storage will provide tremendous momentum for this project,” Susan Cole, president of Enhance Energy, said in a statement.

The fund is one part of a larger plan to cut greenhouse gas emissions in half by 2050, and the Alberta government believes CCS could account for 70 percent of those reductions.

The money would not only go toward enhanced oil recovery operations, like the Enhance Energy system, but also toward storage projects where carbon dioxide is pumped into empty reservoirs nearly a mile underground and permanently sealed off.

Through the new fund, the Alberta government hopes to store more than 5.5 million tons of carbon dioxide each year by 2015, the equivalent of taking 1 million cars off the road.

Limited large-scale tests

Although the various and complex pieces of technology required for CCS have been proven, large-scale applications have been rare to date.

One of the oldest and largest test projects for CCS began at a depleted oil field near Weyburn, Saskatchewan, in 2000, when EnCana began injecting 5,500 tons of nearly pure carbon dioxide a day into an empty reservoir.

As that test approaches the end of its final phase, nearly 8 million tons of carbon dioxide have been injected into the field to date without major adverse effects, and the information gathered about the project will likely serve as the model for future projects.

While CCS is generally seen in a positive light, some wonder if the technology is cost efficient, while others have expressed concern about possible leaks that could make storage irrelevant in the best case, or contaminate drinking water in the worst.

Because similar procedures are used for enhanced oil recovery today, information exists about carbon storage, and the International Panel on Climate Change estimated storage should be more than 99 percent reliable over 1,000 years.

While carbon dioxide isn’t currently regulated in the United States, the U.S. Environmental Protection Agency on July 15 proposed a rule governing wells used for carbon storage. The rule would regulate how well sites are chosen, as well as set out guidelines for testing, monitoring and operating those injection wells.

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