Laundering captured carbon: how CCS produces more oil

Despite so much attention being paid to carbon capture and sequestration (CCS), worldwide less than 45 million tons of human-produced carbon dioxide (CO₂) is actually being captured annually worldwide. That equates to less than 0.1% of all the far too rapidly increasing amounts of emissions billowing into our atmosphere.

To eventually evolve into a climate solutions technology, CCS backers – mostly from the fossil fuels sector and steel and concrete firms – repeatedly state that capture capacities will need to scale up between 100 to 200 times over the next few decades to effectively create deep emissions reductions.

As part of their campaign to win acceptance, CCS proponents have co-opted the language of climate campaigners by championing the position that ‘time is not on our side’ – affectively using the fears of ever shrinking carbon budgets as arguments for burying vast amounts of CO₂ under the earth for thousands of years.

Over the last few years, industry has successfully inserted language about the need to ramp up capture rates into various Intergovernmental Panel on Climate Change (IPCC) reports and convinced the International Energy Agency (IEA) to state that upwards of 14pc of cumulative emission reductions must be derived from CCS technologies.

These wins follow industry proponents’ success at steering massive CCS subsidies into President Joe Biden’s signature climate legislation, the Inflation Reduction Act, which is sharply ramping up CCS deployment within the United States.

Industry lobbyists then convinced the European Commission to list CCS as one of the key technologies under the European Green Deal Industrial Plan, which specifies the political and legislative framework for how the Bloc will achieve carbon neutrality by 2050.

With carbon capture already central to evolving “clean” hydrogen plans in Europe, in March, as part of its Net-Zero Industry Act, the European Commission (EC) set a target of having 50 million tonnes of annual CCS capacity by 2030.

Through the EU Innovation Fund, Brussels is now investing billions of euros in multiple CCS projects over the next decade.

All of this has also put CCS back on the table in CCS-sceptical Germany as its government develops a new Carbon Management Strategy.

The EU’s rather sudden pivot towards widespread CCS adoption is sowing confusion about this still maturing technology.

As they attempt to help shape emerging European policies, climate NGOs, think tanks and campaigners are struggling to find common ground around where to best apply carbon capture, given how little is really known about its potential benefits or the longer-term problems which could ensure from broad deployment.

Yet what’s rarely highlighted in this debate is the ‘S’ or ‘storage’ side of this equation.

Though many authors write that captured CO₂ can and is being safely buried deep underground in geologic formations or depleted oil and gas reservoirs, most articles fail to mention that the overwhelmingly single biggest use of all captured CO₂ is to directly produce more oil.

Your CO₂ pollution is oil industry feedstock

According to the Global Carbon Capture and Storage Institute’s (GCCSI) most-recent survey of CCS operations released in November of 2023, of the 43 projects in operation worldwide, at least 30 are using the CO₂ they capture for ‘EOR storage’, the industry’s term for ‘enhanced oil recovery’.

Far and away, most operating CCS units are attached to natural gas refining operations where, as raw fossil methane is processed into pipeline grade, excess CO₂ is stripped out and re-buried underground.

Though all operating CCS facilities on the GCCSI’s list plus the recently re-started Petra Nova plant in Texas have a theoretical combined capacity to capture approximately 52 million tons of CO₂ per year, at least 40.5 million tons of this is being used for EOR.

Currently Exxon proudly claims the mantle of ‘low carbon’ CCS leadership. Matt Crocker, senior vice president of strategy and business development at ExxonMobil’s Low Carbon Solutions, recently boasted to industry publication Upstream that ‘We actually account for 40% globally of man-made carbon dioxide that’s being captured’.

The secret sauce that petroleum geologists discovered is that when CO₂ reaches below 800m, it transforms into a liquid where it can be used to displace remaining oil resources in otherwise ‘declining’ or ‘depleted’ reservoirs.

Injected CO₂ both rebuilds reservoir pressure and chemically reacts with the crude, improving its mobility and enabling it to flow towards gathering wells.

Though many of the world’s older oilfields have entered the late stage of development, they still retain significant reserves of residual oil, which averages 55–75% of the oil originally in place upon discovery.

For decades, fossil fuel majors have applied various types of EOR, including injected methane, water mixed with polymers and other strategies, to increase and extend production from developed oilfields.

In this crucial way, EOR enables producers to get the most out of tail-end production and helps negate the need to develop expensive new fields.

While far less than half the injected CO₂ remains in the reservoir’s pore spaces, on average each injected ton of CO₂ in turn brings up between two to four barrels of crude oil, depending on field geology.

This is not spin or fear-mongering, it’s simply physics.

Whether EOR actually is, or can be, carbon-negative is the subject of a much larger debate.

But it is important to note that when producers began using CO₂ for EOR in the 1970s, they were neither doing this out of climate concerns, nor were they using ‘captured’ carbon. Instead, they used naturally occurring deposits, which were first mined and then pipelined and re-injected underground for EOR. To this day, one of the main challenges to conducting more EOR is the lack of available, cheap CO₂.

As calculated by Friends of the Earth Scotland and the Tyndall Centre for Climate Change Research, as of early 2021, ‘81% of carbon captured to date has been used to extract more oil via EOR’.

Since 2021, both the largest CCS facilities that have come online, as well as the biggest projects announced to date, plan to use captured CO₂ to extract what wouldn’t have otherwise been possible.

A EU/ropean dilemma

 As existing operations expand, 2022 also saw the largest number of new project announcements worldwide so far, at least 66 according to decarbonization intelligence company Decarbonfuse.

Looking ahead, BloombergNEF projects global CO₂ capture capacity will rise sixfold by 2030, to 279 million tons.

Aware of the growing potential of its future captured CO₂ being misused for oil production, the EU’s Net-Zero Industry Act specifically prohibits EU CCS funds to be used for storage ‘combined with Enhanced Hydrocarbon Recovery (EHR)’ within the EU through 2030.

But using CO₂ to produce more oil within Europe is not only possible, it’s been happening for decades. Classified as the world’s fourth longest continually operated CCS facility, Hungary’s Mol Szank Field CO₂-EOR facility has been “storing” captured CO₂ to produce more oil since the early 1990s.

Additionally, the International Association of Oil & Gas Producers lists the aptly named ‘CO₂ EOR Project Croatia’ as one of their existing and planned CCS operations across the continent. Planned to operate through 2039, in certain situations injected CO₂ boosted production in their declining fields by over 100%.

While there is language within draft CCS legislation restricting EOR from taking place within the Bloc, there is nothing yet ruling out EOR operations with EU-originated CO₂ that take place outside its territory.

Nor does the Net-Zero Industry Act specifically prohibit EOR operations from taking place after 2030 as CO₂ capture rates rise precipitously from an already massive 300 million tons per year to up to 550 million captured tons of CO₂ to meet the EC’s net zero objective by 2050.

While most of EU civil society seems unaware of the growing threat of CCS + EOR, many within the oil and gas industry are salivating as it helps solve one of their biggest challenges: ‘insufficient supplies’ of available CO₂.

In a report on advanced extraction methods, the Norwegian Petroleum Directorate (NPD) stated that the remaining oil resources on the Norwegian continental shelf that are technically recoverable require advanced EOR methods to be fully exploited. Their IOR (“Improved” oil recovery) Centre reports that across 27 fields, there is an overall technical EOR potential to unlock another five billion barrels. And that was before Norway opened up more oil reserves.

Likewise, the UK’s roadmap foresees 20 to 30 million tons per year of installed CCS capacity by 2030. This follows upon established EOR plans to unlock several hundred million metric tons of oil using captured CO₂, as well as other means.

This year, Danish and German companies INEOS Oil & Gas Denmark, Maersk Drilling, GEUS and Wintershall Dea have also begun operations to permanently store eight million tonnes of CO₂ per year in depleted oil and gas reservoirs in the Danish North Sea.

‘Project Greensand’ will transport CO₂ captured from onshore facilities to offshore injection and storage sites beneath the seabed. Not only is the targeted area interspersed with old wells, which could leak once pressure and acid are used, but there is no available information as how any petro-carbons that may be, or have already been, “incidentally” produced in the process of CO₂ storage will be classified.

However managing all this captured CO₂ pollution at such scales will create another oil revenue boom.

In an April investor presentation, Exxon CEO Darren Woods and the company’s president of Low Carbon Solutions, Dan Ammann, said the company’s ‘decarbonization’ arm has the potential to surpass Exxon’s existing oil and gas revenue as developing ‘carbon management’ services worldwide could create a potential $6 trillion market by 2050.

‘The world’s climate challenge is immense, and the opportunity it creates is equally immense,’ said Woods during the presentation.

The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the views or positions of the Heinrich-Böll-Stiftung.