Shell-backed Scottish energy report calls for renewables to work with oil and gas sectors to develop win-win N. Sea carbon storage projects


A heavy-weight new academic report from leading energy experts at Scottish university – with funding from oil giant Shell –  has called for the renewables industry to work hand-in-glove with the N. Sea oil and gas sector to exploit the benefits of large-scale carbon capture in mined-out wells.

This would have major economic and environmental benefits to the UK, according to Professor Stuart Haszeldine, Director of the university’s Scottish Carbon Capture and Storage project, whose report is being published today (Tues) at an Aberdeen oil and gas conference.

He said:

“The North Sea oil and gas energy sector is facing an existential cost-challenge, and at the same time the UK is struggling to fund its electricity decarbonisation clean-up.

“The beauty of this new analysis is that it shows how to help develop big projects in the power industry, while also supporting a transition of the abilities and profits from offshore hydrocarbons into new, sustainable jobs.”

Key findings of the Joint Industry Project on methods of injecting carbon dioxide (CO2) derived from low-carbon electricity production and industry to enhance oil recovery (OER) from existing North Sea fields include: –

CO2-EOR can be economic if the CO2 is provided to at a near zero transfer price, and if fiscal structures are introduced that are similar to existing brownfield and cluster allowances. This can encourage further development of existing fields, by ensuring that CO2-EOR projects surpass international “hurdle rates” of profitability to successfully compete for funding by oil and gas companies.

Financial leverage into the whole-UK economy is conventionally measured as GDP or by an Economic Multiplier (EM), which measure the ratio of economic return to Government Input. Calculation of illustrative returns show, for UK Government input into CCS linked to CO2-EOR, this ratio = 7.2 EM; compared against simple CCS fitted on coal = 2.6 EM; compared to offshore wind = 3.3EM.

Thus every £1 invested in CO2-EOR could generate a return of up to £7.20 – which is 2.2 to 3.2 times larger than rival clean energies.

This approach could also provide the most cost-effective way to accelerate an energy transition between 2018 and 2030 to meet UK Committee on Climate Change decarbonisation pathways, say the authors.

The project was led by the Scottish Carbon Capture and Storage (SCCS) centre and funding has been provided by the Scottish Government, 2Co Energy, Nexen and Shell.

The Scottish Carbon Capture and Storage centre is an independent academic and applied research partnership of British Geological Survey and Heriot-Watt, Aberdeen, Edinburgh and Strathclyde universities. Its researchers are engaged in high-level CCS research as well as joint projects with industry to support the development and commercialisation of CCS as a climate mitigation technology

This report also shows that synergy between Capture and Storage and EOR could be the driver for developing both technologies in the N. Sea.

CO2-Enhanced Oil Recovery is a tried-and-tested technology, which uses CO2 to increase the recovery of oil from depleted reservoirs by up to 10-15%. The technique has been used onshore in the USA for 30 years. In the UK, CO2 captured at large emitters, such as energy-intensive industries and power plants, could be used in CO2-EOR operations.

Part of the CO2 that would otherwise go directly to dedicated storage in CCS projects could be used to drive CO2-EOR, bringing significant benefits to the wider UK economy – including extending the producing life of the North Sea, reducing imports of oil, maintaining employment, developing new capability to drive exports, and additional direct and indirect taxation revenues.

CO2-EOR is a proven technology to increase oil recovery, and simultaneously stores CO2 permanently in the subsurface. Two technically similar projects have been commercially successful in the North Sea offshore since 1998 and 2002, by injecting miscible methane gas.

This gives high confidence that CO2-EOR is achievable in North Sea oilfields. Detailed computational simulations of CO2 injection to oil reservoirs has confirmed viability of injection and oil production. Measurements from existing CO2-EOR operations demonstrate secure CO2 storage into the far future.

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