Typical EOR Evolution - North Dakota Legislative Branch |

North Dakota Carbon Capture and Enhanced Oil Recovery Economic Impact Study

North Dakota Legislative Management Taxation Committee Meeting

Bismarck, ND September 10, 2015

John A. Harju Vice President for Strategic Partnerships

Typical EOR Evolution

Conventional Oil Field

• Primary oil extraction

• Secondary oil extraction -waterflood

• Tertiary oil extraction C02 EOR Other EOR methods

~Note: Successful waterflood often indicates high C02 EOR potential.

Oil Production: Weyburn Field

2 Fir;urt' : lnl p.~ctofinlorlllOitiontt'chnolotyonEaPihtytlrrashOow.

\ouru• : The Di&ilill OH F~ld · 01 & Ws lnYPstor, Apr loo.t

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CQ2 ~~R Economics . ·. . · Req~ir~ Long .. Term Visi.Qn i j. i: dt• )· .. :1 . ·

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Project Costs vs Pre·TI IC lnc.ome Pr'aj.:rt i.tf.:(JiSl .S ~<!'llfl .IIRR z '·jgj~J

r [ l f l h t.C•pit•l h::jt~o:tlif~ ?rcj«tl>rt!' Otr.Nfl rai t .:t Cost~.& RovMtie~ & C02 l:ff'~UilitlJ

~;n•nc:~t Ta~~ ;l~,orcnu~~ Com

Cumull tlve Profit & Net Cash Flow L ~·:tii:'I•J• • : i vt i'ro':a j ! MMj --·'•: Calli ;It~ ~ Siolio4j

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C~o~m~.~ltt illt

ilt t·T•• ~~«<lllf'

2 million barrels per day.

Bulk of it uses water.

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Increasing expansion of C02 to more fields (350,000 bbl/day).

Vast majority of C02 EOR is in West Texas.

EIA predicts 650,000 bbl/day from C02 nationwide by 2032.

Net Present Value of Pre-Tn Cesh flows

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• ~ "'-$¥-.""'~ ... ~~v .... ~"'"" ..P ProJact Toum(Y• •ml

""'' HIGH PRESSURE CO, INJECTION

""""' 1-4-4-&-13

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Conventional vs. Tight Oil Reservoir

Muddy Fm Sandstone (Bell Creek) (250x)

U1$11-------------'""-;;::---/ uw

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Conventional Clastic Reservoir , Dominant pore sizes fall within

.'~. =,;:_, =::.,:=:,:=:,:c .• 'C,::I, expectations of traditional F::=''::"'':':"':':"~=':'! Conventional·"··~·~

petroleum reservoirs.

Bakken PORe rHRo"r stzeH•srooRAM

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PORE THROAT SIZE HISTOGRAM

"Poor-Quality'' Reservoir/Lower Seal • Pore sizes considered to be a

geologic barrier to injected fluids, including C02, because of increasing capillary forces.

PORE THROAT SIZE HIS TOOR.-.M

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Bakken EOR Injection Test Locations

A Injection Test Well

Mlno*

Bakken EOR Is in the Learning Phase

Five North Dakota Bakken in 'ection tests are known:

1. NDIC Well #9660: Water, tested March- April1994

2. NDIC Well #16713: C02, tested September- October 2008

3. NDIC Well #17170: Water. tested April- May 201 2

4. NDIC Well #16986: Waterflood followed by field gas injection - April 201 2 to August 2014

5. NDIC Well #24779: Vertical C02• test began February 11 . 2014 (duration unknown)

Water and gas injectivity into the Bakken has been demonstrated.

Production responses to injection were observed , which indicates that fluid mobilization can be influenced.

Laboratory results suggest potential for high mobilization under the right conditions.

• It's early in the game, but Bakken EOR potential needs to be considered.

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Leveraging Extensive Expertise

....._ ,.... ~---- ·----Lynn Helms

North Dakota Industrial CommiSSion 011 and Gas

Div1s1on

-----------------Vicky Steiner North Dakota

Association of Oil and Gas Producmg Count1es

Dr. Dean Bangsund, NDSU

NDSU NORTH DAKOTA STATE UNIVERSITY

I'C' t rnl e um Jnclus t r y's Economi c Con l 1· i but i on to Nonh ll"lwt u in :20 l :l

'-•H l~ l'.t~•·l~ :-\t <I~ I otil<·(;; i \ } rH~ ·' · ~ ~nh 11~L , ., .. ss;t,~

Williston Basin 2012: Projections of Future

Employment and Population North Dakota Sdmmary

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Cory Fong, Odney

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Dr. Benjamin Cook, UW-EORI

Enhanced Oil Recovery Institute

UNIVERSITY Of WYOMING

The Economic C'onnllmtion of COl Euhnuced Oil RecovHy in Wyoming 's E conomy

Benjamm R. Cook , PhD "T

Unfwn·sity of Wrom ing

D~pdrtmcm of Economics & Fhltu/Cd

Et1banccd Oil Recov~JI~' llistiflltt1

June 20 12

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Dr. Nick Azzolina, CETER

International journal of Greenhouse Gas Con trol

jo,.rnal flomtplfl . www t b e vler .eo ml lo,l ta ' l]g ; c

C02 storage associ,lted with C02 enhanced oil recovery: A st,nistical analysis of historical oper,uions Nicholas A. AzzolinJ J· 11 · .David V. Nakll's .J·C! . Charles D. Gorecki ~"~ . Wt'slcy D. Peck b.

SLon·C. AyJsh b. L Stt'phcn Melzer ' . Somon ChJ t tNjc-t' <~ · , .. ,nt~c • ...:p.h.:_ ~ ~.:.:o..u ..... )..• l¥ ., .;;.~ro~ .... rA r!Q.U, U:V~ • U r11i'>"fd.IO\I_,..,.,.,.jJ!: ""'''*V .. rr, u.. ... .,.,w ,..4H.ott· IW..~ l$/root1 lt!lrJ .•.=~rt. 'i!.,,J~~ C.:.:>t"~f·,;.,, loll~ !.tl:lr.,l~ lld:ac • ..,.....,.~ -li S I'I~;, IV•-.S.u~ Jll)o;,Urll..•( U: ~101 . (IS(

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The GETER Group , Inc. . . . , •,

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James Sorensen, EERC

EERC Entrjy & Emlif'Offmtntal ~rch CrntN'W

Puttiug Research i11to Practice

SdenceOiroct Procedia

UlJ Mon:tg..: nnd utiliz.11 ion in tight hydroc::arbnn-lxwin£, limn<.~thm~: a ..:a.\C study 11fth1! llakk.:n F11rmati110 in the \Yilhsllm

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DEVELOPMENT ~~~t:~~~~~~~~!':~~~ At:>en<;o'~ Ab.rnd..,:

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Ron Ness, North Dakota Petroleum Council

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Vicky Steiner, North Dakota Association of Oil and Gas Producing Counties

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Dr. Michael Jones, North Dakota Lignite Energy Council

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Lynn Helms, North Dakota Industrial Commission Oil and Gas Division

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Continuous Successful Management of C02 and EOR Projects

• Over 150 private and public sector members representing fossil energy stakeholders locally, regionally, nationally, and globally.

- Plains C02 Reduction (PCOR) Partnership (2003)

- Partnership for C02 Capture (PC02C) Technology Development (2008)

- Bakken C02 Storage and Enhanced Recovery Program (2012)

- Bakken Production Optimization Program (2013)

PcQR Partnership

Scientific Study -Building on Previous Work

• The scientific study will continue building on findings from EERC studies for determining long-term EOR potential in North Dakota.

2005 EERC PCOR Partnership study showing the Top 22 candidate fields for C02 EOR in North Dakota.

Applied local knowledge derived from NDIC DMR and industry partner input.

Potential CO, Sources for North Dakota CO, Enhanced Oil Recovery

• ·- ~- ·- - L..gand

· Con\inental Ralro.s MMcf C021day &tk-Noted 0011" (•toc:k '-"k b;m • b) '!. I • 0-30 l..,.i, 3, 103,578•.l2,.500,(XX)

~------~~-- it 31 -100 . 32,500.001·62,00(1,000 ! • 101-200 - (!;2,000,001·116,000,000

1 • 201- soo • ,,,,000.001 _ 216,000,000

PCCiR I .! :; ::: .. • "'·""·"' ..... 000.000

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Advanced Resources International (2006) Study­Williston Basin Oil Fields that Screen for C02 EOR

Willi~ ton &3/n Oil Fl~d!

e OHield c...~u. Sta l.ft

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90 90 180 270 360 Miles HE

High-level, regional assessment.

Snapshot in time based on publicly available 2004 data.

In some cases, this study did not take into account local knowledge of field performance.

EERC 2014 Evaluation for KLJ's "North Dakota Oil and Gas Industry Impacts Study"

Wil!iSIOfl

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North Dakota Units

.. ..-t ....... Top Ten R.cmked Umls

OlherUMS

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EIKinC U~-ty , .... &ouru Slu (tons CO.tyur}

.. .' 6.000,000-10,&00,0Dtl

- 3,000,000-e,OOO.OOO 1,000,00D-3,000,000

lnd~SIIll l c: ,,OOO.OOO PRtroteum llfldNtllni GU

- DGCCO,P!pelit>e

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Economic Study -Building on Team Work

• The economic study will build on existing project team models and methods, modified and/or updated for determining long­term EOR potent ial in North Dakota.

- The UW C02Scope TM model will be employed to estimate annual economic impacts for C02 EOR within the oil and gas industry.

- NDSU will use findings from recent studies to provide inputs to the model for applicability to North Dakota as well as use model outputs to update projections and impacts within related industries and affected communities .

- The GETER Group C02 LCA model will also be modified to investigate potential environmental benefits (i .e., net carbon storage) with C02 EOR in North Dakota.

Odney will provide insight into the effectiveness of past and existing tax incentives on industry development and stability of North Dakota revenue to further assess potential alternative tax incentives.

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Project Results

r.n Enhanced Oil ~ Recovery Institute LINlVI:R,tTV Ut WVOM I :-.:c;

The GETER Group , Inc . ,•,'

EOR Scientific Study EOR Economic Study

• Long-term potential (up to 20 years) for C02 EOR in North Dakota

• Long-term potential for C02 supply

• Alternative EOR methods: thermal , chemical, and gaseous

Long-term incremental oil production estimates for studied techniques

• Applicability to individual North Dakota oil formations

• Technically feasible EOR techniques and time lines for greatest benefit to North Dakota

• Estimated economical oil production , C02 demand, and cash flows for a range of oil prices

Impacts for population, potential revenue from state-level taxes, and community infrastructure needs (housing, roads, etc.)

Effects of existing and alternative tax incentives on EOR economics

• Impacts to state/regional/local government expenditures, C02 LCA, and related industries (oil refineries, electricity generation, pipelines, rail , etc.)

Top tax incent ive options for encouraging C02 EOR in North Dakota as well as providing the greatest benefit to affected North Dakota industries, communities, etc.

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Project Budget

• The cost to perform the project as proposed is $399,772.

EERC

$225,130

Project Summary

NDSU / $49,697

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·._,__~ • A scientific and economic study of oil and gas enhanced recovery techniques for a plicability 1n North Dakota

- r•-J· •. . ..;.."' ':,;..""-"~ ___,._ --- -- -

Highly expenenced project team: ·--c. - Energy & Environmental Research Center (EERC) - North Dakota State University (NDSU) - Odney, Public Affairs & Government Relations - The University of W;roming_Enhanced OiLRecovery Institute (UW-EORI)

The GETER Group, Inc.

• The technical advisory board-consists of North Dakota leaders in the fossil energy industry. _ ., .

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Progress will be co r:nunicat~,to t.he T<!xatiqn Committee. withca final report by FndCjY. August 1 !:), . <;:;o. _ _,_,

~-- - . ~ . ·- ~- ..:·· =

• Cost to perform project as proposed : $399,772 .

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Contact Information

Energy & Environmental Research Center University of North Dakota 15 North 23rd Street, Stop 9018 Grand Forks, ND 58202-9018

World Wide Web: www.undeerc.org Telephone No. (701) 777-5157 Fax No. (701) 777-5181

John Harju Vice President for Strategic Partnerships [email protected]