|
Hopes build for Alberta EOR project
Doubt persists over the prospects of using carbon dioxide in enhanced oil recovery projects, but new environmental legislation is brightening the outlook, ARC Energy Trust Chief Executive Officer John Dielwart said.
He told the trust’s annual meeting that ARC is strongly placed to take advantage of any legislative moves to improve the economics of injecting CO2 on a large scale.
He conceded there is still “considerable uncertainty” over if and when those projects might be able to proceed, “but we certainly believe they are much more likely to happen today than they were before governments” started enacting climate-change legislation.
Dielwart said the key changes recently have involved the willingness of governments to start regulating greenhouse gas emissions and the openness among CO2 emitters to discuss providing a cost-effective supply of CO2 to the point where ARC has held “some meaningful dialogue” with potential CO2 sources.
Large economic gap remains However, there remains a large economic gap between the cost of capturing CO2 and what ARC is willing to pay for the supplies to inject the gas and enhance oil recovery by rebuilding reservoir pressures, Dielwart said.
He said ARC is hopeful it will apply to regulators later this year for a CO2 pilot project at the Redwater field near Edmonton and start the pilot in the first half of 2008.
Redwater, which has produced 830 million barrels of the 1.3 billion barrels of original oil in place, has the advantage of being close to planned refinery upgraders, providing a relatively easy access to CO2 and the area’s geology is conducive to CO2 injection and storage, he said.
But Dielwart said ARC has no intention of participating in the construction of a pipeline costing hundreds of millions of dollars from the oil sands region of northeastern Alberta.
He did not want “to mislead anyone by suggesting this is … money in the bank,” but if the Redwater scheme did work ARC could derive a net benefit of 40 million to 130 million barrels of oil by boosting its production from a current 4,000 barrels per day to 20,000-25,000 bpd.
“The prize is large and that’s why we’re focused on trying to work something out with a CO2 supplier,” he said.
—Gary Park
| 