World pricing for carbon dioxide?
posted at 7/19/2012 7:25 AM EDT
For years now, almost all publicity about carbon dioxide pricing in popular news media has focused on speculation about "emission credits," a form of indirect tax actually being implemented in Europe but only a political pastime in the U.S. In the meantime, a business in buying and selling carbon dioxide--the real stuff--has quietly prospered. For many years the fastest growing market has been tertiary oil recovery.
In the mid-1950s, the former Oil Recovery Corporation (ORCO) of Tulsa, Oklahoma, developed injection of liquefied carbon dioxide as an adjunct to waterflooding of production oil fields--a means of increasing the amounts of oil recovered after primary production began to decline. The ORCO process was disparaged by many petroleum geologists then, who contended any extra oil would be marginal and could never justify the costs.
Time proved doubters partly right but mostly wrong. ORCO lost its way, financially, because results from the field were erratic--sometimes strong but sometimes nil. The ORCO process generally fails with high-viscosity crudes and can backfire in carbonate-rich sands, plugging rather than opening pores. It works best with low-viscosity crudes in carbonate-lean formations.
Over the last 40 years, carbon dioxide-enhanced tertiary oil recovery has emerged from a backwater to a mainstream, worldwide business. Indonesian and west Texas oilfields routinely use carbon dioxide for tertiary recovery. In the 1960s, Shell Oil drillers in Mississippi discovered a huge natural carbon dioxide reservoir, produced by an extinct volcano and now called Jackson Dome. It is currently estimated to contain between 150 and 500 million tons of carbon dioxide, now being tapped at about 15 million tons/year to support tertiary oil recovery in Louisiana and Mississippi.
Jackson Dome and similar carbon dioxide reservoirs in Southwest and Mountain states will be tapped out well before long-term oilfield demand for carbon dioxide is satisfied. Already, some tertiary recovery operations are recapturing part of their injected carbon dioxide and reusing it, so a search is on for new sources. One of them, obviously, is recovery of carbon dioxide from fossil-fired power plants.
The largest development of that kind so far is the controversial power-plant under construction by Southern Company in Kemper County, Mississippi, about 20 miles north of Meridian. using integrated gasification, combined-cycle technology. Despite the advanced technology, overall Kemper is a relatively low-efficiency plant. However, it will be burning lignite, strip-mined from adjacent land, for which there is hardly any other economic use. [ Southern Company, Kemper County IGCC, National Energy Technology Laboratory, 2011, at http://www.netl.doe.gov/publications/proceedings/11/co2capture/presentations/4-Thursday/25Aug11-%20Nelson-Kemper-Capture%20at%20Kemper%20IGCC.pdf ]
The 580 MWe Kemper plant will be a chemical factory, producing industrial quantities of sulfuric acid and ammonia and shipping liquefied carbon dioxide by pipeline. The costly project, now about a third finished, is opposed by Sierra Club on environmental grounds, but so far Mississippi Power, a Southern subsidiary, has maintained majority support on the state Public Service Commission. [ Eileen O'Grady, Reuters, Mississippi allows Southern Co. to keep building $2.8 billion coal plant, Chicago Tribune, March 30, 2012, at http://articles.chicagotribune.com/2012-03-30/news/sns-rt-us-utilities-southern-kemperbre82t1cm-20120330_1_coal-plant-power-plant-mississippi-public-service-commission ]