Low Carbon Oil Is Common Sense For The Climate, Environment And Economy – Ole Gunnar Tveiten, Advisor Geology, AGR

AGR is a Norwegian engineering consultancy and software provider with experience in well management and low carbon solutions like carbon capture and sequestration (CCS) and geothermal energy.

With carbon technology and enhanced oil recovery becoming hot topics, we interviewed the company’s Advisor Geology, Ole Gunnar Tveiten, who brings more than 40 years of knowledge and experience of the geology of North Sea and has recently been involved with assessing CO2 storage sites and certifying CCS projects.

Tell us a bit more about AGR and the services the company offers?

As a multi-disciplinary engineering consultancy and software provider, AGR has been supporting the oil, gas and energy industries for more than 35 years. At the heart of everything we do is our deep understanding of geology, subsurface, well engineering, and digital solutions. Like the energy industry, we have evolved a great deal over that time. We continue to work directly with global operators delivering well management and peer studies, reservoir and asset evaluation, operations geologists, software and energy workforce in addition to plug and abandonment across the world’s oil and gas hubs.

In the last 15 years, our focus has been on facilitating low carbon solutions such as carbon capture and storage (CCS), geothermal, seabed minerals and hydrogen. As the energy transition gathers pace and pressure to abate climate change, the EU expects CCUS (Carbon Capture, Usage and Storage) can accelerate the mission to achieve Paris Agreement ambitions.

We work across the full CCS spectrum by investigating and advising on carbon storage site selection, screening and characterization for both injection and storage. Through dynamic modelling and simulations, we provide the insight needed for uncertainty analysis and risk assessments. This brings together our core disciplines of geoscience, reservoir and drilling, compliance, HSE, facilities and cost engineering.

Can you give us some more details about the AGR low carbon solutions – are you seeing a rise in demand for CCS related geological consultancy support?

We have seen a huge growth in interest for our low carbon solutions from new players entering the market to the conventional oil and gas sector pushing into new frontiers. All are striving to make headway on the energy transition and put net zero strategies into action to combat climate change.

For the past decade, we have supported Gassnova advance the Norwegian government’s carbon storage initiative which includes the Northern Lights storage facility project. In the past, we worked with the Norwegian Petroleum Directorate (NPD) to assess CO₂ storage by simulating injection scenarios for the Norwegian CO₂ Atlas. These days we are building a mega model of different aquifers that can be used for evaluating CO₂ storage, this will be published shortly.

Underground hydrogen storage is certainly an option for the future. We have done some preliminary business development on hydrogen storage in salt caverns in Australia, the UK and Denmark. In the geothermal arena, we provide regional screenings of geothermal resources and geological characterization of potential assets and provide software for drilling time and cost estimation of geothermal wells.

Relevant: Horisont Energi, Neptune Energy, and E.ON To Work On EU-focused Carbon Capture Project

Additionally, we are also working with several clients to strengthen the gas-to-power concept, where gas is used for power generation offshore alongside the capture and storage of CO₂. This is a new concept which may replace some planned electricity from shore in Norway.

AGR has the capabilities to assist operators also in well planning and drilling of carbon storage wells.

What types of companies do you work with most often regarding CCS?

We have worked on screening, selection and qualification of CO₂ storage for various companies and organizations. This includes pilot projects for storing CCS in Northern Europe, relevant studies in Australia related to safe and secure storage of CO₂ in underground reservoirs and aquifers.

In 2020, AGR delivered the first offshore carbon capture sequestration appraisal well offshore Australia as part of a project to investigate the possibility of developing the continent’s first full-scale CCS facility.

Additionally, we advise clients on certification process of potential CO₂ sites and perform pore pressure estimation, well integrity analysis, in-situ stress state analysis and reservoir geomechanics modelling of storage sites.

Using CO₂ to enhance oil recovery (EOR) has both critics and supporters. Why is opinion split?

For many, it is the ethics and logic around “carbon-negative” oil which is contentious and viewed as counterproductive. The International Energy Agency’s (IEA) expects oil consumption to increase to an all-time high in 2023 to 102 mb/d, so we need to keep in mind that the phase-out of oil and gas will take time. Some of this oil could be produced in combination with CCS where the CO₂ is used for profitable EOR. The established infrastructure could then be used for extensive CO₂ storage to support faster deployment of CCS and accelerate development of large volume carbon sites.

CCS could help reduce emissions from heavy industry, for example cement, steel, and chemicals manufacture, and heavy-duty transport such as trucking, shipping, and aviation, which contribute approximately 30% of global emissions: a share that is expected double under business-as-usual scenarios.

Relevant: Norway & France To Collaborate On Carbon Capture Technology

It is important to emphasize that the amount of stored CO₂, as a function of EOR, will be greater than carbon emissions created from the oil extraction.

A recent study shows that, depending on strategic operational choices, the incremental oil produced from CO₂-EOR can achieve a net carbon negative status throughout most of the life of the operation as a large percentage of the injected CO₂ is unavoidably and permanently trapped in the subsurface.

In essence, CO₂-EOR can be used to access more oil for short-term use as renewables upscale, while concurrently storing CO₂ in the reservoir pictured here. Also, continuous production in existing fields may avert new development and environmental disturbances in virgin areas.

The IEA’s global database of EOR projects shows that there are currently around 375 EOR projects operating globally, producing just over 2mb/d, which has remained relatively stable over recent years at around 2% of global oil production. EOR production volumes are expected to grow significantly to more than 4.5mb/d between 2025 and 2040, accounting for around 4% of global production in 2040 as shown below.

Can you tell us a bit more about your solution for tail-end oil and gas production?

By injecting CO₂ at the tertiary, or tail-end phase of crude production, the remaining 30-50% of crude left in the reservoir is mobilized towards production wells. Importantly, a considerable amount of CO₂ will be retained in the pore space or dissolved in water. While some CO₂ will return to the surface, it will be separated and reinjected.

In the US and China, where CO₂ for EOR has been performed since the 1970s, this has become a conventional practice. In the US, CO₂ Is found naturally occurring in reservoirs, which is exploited and transported on land in pipelines to the Permian Basin, Texas for example, and injected as CO₂ for EOR.

SACROC (Scurry Area Canyon Reef Operating Committee) is the most productive CO₂ EOR field in the United States, a key hub for CCUS. As of 2019, the 56,000-acre site has produced more than 28,000 barrels per day of oil via CO2 EOR. It was the first field in the US to achieve commercial production using the production technique. Before SACROC mastered the process, injectants including fire, LPG, nitrogen, and flue gas were used to free up more of the original oil in place.

As oil and gas operators look for ways to reduce their own emissions, offshore CCS is emerging as a competitive alternative. We provide a wide range of expertise across the scientific, technological and operational hurdles they face by offering crucial insight into the regulatory landscape they are entering.

How does it reduce the need for new fields?

Recycling CO₂ for EOR alongside CCS will not only make a positive contribution to reducing emissions; it can radically overhaul the future of the oil and gas sector as it deals with its decline and transition to lower carbon technologies.

Extending the recovery and lifetime of depleted fields, with minimal impact on the environment and climate, may actually reduce the need for new exploration and the development of new oil and gas plays in the most controversial areas while allowing pipelines and installations to be reused. Crucially, it could finance the creation of permanent CO₂ injection facilities. Depending on the nature of the reservoir and oil in a given field, the economics can be substantial.

While the world waits for renewables to overtake fossil fuels, we believe CO₂ for EOR should be included as a classified action in EU sustainable activity taxonomy to mitigate climate change and satisfy energy demand in the short-term.

What are the challenges operators would face with CO₂ storage?

Undoubtedly, finance and preserving public acceptance are the greatest obstacles to overcome. There are already many valid concepts for CO₂ storage that meet environmental requirements and instil long-term confidence in containment in the short and long-term.

With technical criteria being a main factor in evaluating bids, those looking to secure licences will understandably be focused on getting the technology right, but it is imperative that the geological risks are taken into consideration. The right sites must be selected for the right reasons. This demands a critical geological evaluation through the use seismic technology and geomechanical modelling as part of the due diligence and qualification process.

Relevant: Norway Receives Five Applications For Carbon Storage Permits

It is a strategic choice whether to store CO₂ in a trap, similar to an oil and gas accumulation, or to allow the CO₂ to percolate a saline aquifer. Either way, the invasion of CO₂ into hydrocarbon bearing intervals is an area of concern. However, monitoring CO₂ plume migration will control such event. Further to this, injecting CO₂ into a depleted oil field with a proven sealing trap, may have a proven containment, compared to injection in and open aquifer concept.

Based on your experience in the North Sea and Australia, what are some of the other critical challenges CO₂ for EOR projects face?

Despite the fact that the Norwegian Petroleum Directorate (NPD), international academia and major oil companies have carried out studies that indicate EOR through CO₂ injection can be a positive progression, no decisions have been made in any European oil-producing countries to invest in the establishment of CO₂ storage in combination with EOR. There are several reasons for this including the investment needed in infrastructure, especially if government subsidies are limited, and critically, the availability of sufficient CO₂, which is unobtainable in the North Sea basin at the moment.

There are also judicial considerations. For instance, the law on how to treat CO₂ as “garbage” needs to be understood and agreed before carbon bins are packed and loaded ready for international travel. Bi-lateral agreements are needed with the current framework. Moreover, public reluctance may largely be due to EU taxonomy guidelines forcing through a phase-out of fossil energy and not classifying EOR as a climate mitigating action. Due to taxonomy, very little work is done or underway, to demonstrate viability of CO₂ for EOR.

While the challenges exist, the interest and appetite for CCS endeavors, however, is gaining momentum. When the cost of storing huge amounts of CO₂ in the future is placed on public funding, CO₂ for EOR may be a more attractive solution.

How do you see the carbon capture and storage industry developing in the coming years (growth rate, policy support/roadblocks)?

According to the Global CCS Institute, there are 30 CCS projects in operation, with 11 under construction and 153 in development. In 2022 alone, 61 new facilities were added to the project pipeline. While the CO₂ capture ambition of all CCS facilities has grown to 244 million tonnes per annum (mtpa), a rise of 44% over the past 12 months. Modelling by the European Commission shows the EU will need to capture, utilize or store between 300 and 640mtpa of CO₂ over the next three decades if climate neutrality goals are to be achieved.

Technology is constantly being developed for safer and more efficient CCS with both coal and gas-powered electricity now able to trap a significant proportion of CO₂ emissions.

Next year, the European Commission will table a ‘strategic vision’ for CCS and carbon usage technologies, with the aim of clarifying rules and giving certainty to investors. In mid-March, the EU Commission proposed a Net Zero Industry Act which could be a game changer for the future of CCS in Europe. Finally, it should be mentioned that the long term perspective of safe CO₂ storage is very long, AGR simulates 1,000 years forward modelling of CO₂ through absorption, dispersion and transition into calcite minerals.

Understandably, the retention of CO₂ is a concern that most companies have. As a multidisciplinary team, AGR is working closely with industry and environmental scientists, to address the challenges. By running injection profiles and integrity tests and having a rigorous injection well management, survey and monitoring approach, companies can mitigate this concern.