It costs about the same to force out hard-to-get oil with carbon dioxide injections as it does to get oil in more common ways from North Dakota’s booming oil patch, says the president of a company with big plans for the process in Wyoming and Montana.
That’s good news for Wyoming’s economy, where the injections of CO2, a process known as enhanced oil recovery, has boosted production from oil fields with declining totals and spurred investment from companies that see the process as a new frontier in profits.
Tracy Evans, president and chief operating officer of Denbury Resources Inc., told people at a conference in Casper on Wednesday his company is building assets in Wyoming and other places because the production costs make sense in financial terms.
Production costs of injecting carbon dioxide to force out hard-to-get oil produces about the same energy per dollar as more common oil drilling methods such as those used in North Dakota’s Bakken formation, when the costs are spread out over nearly two decades, he said.
“The potential of it is very high,” he said. “The returns on these two curves are nearly identical.”
Injecting the greenhouse gas underground could produce 40 billion barrels of oil in the United States, Evans said. That’s double the most optimistic estimate for the oil in the productive Bakken play, which some say could hold 20 billion barrels of oil, although many estimates are much lower.
Denbury is aggressively expanding its operations in Wyoming. The Plano, Texas-based company just announced plans to buy full interest in the Riley Ridge methane and helium production plant in western Wyoming, interest in the Grieve oil field west of Casper, and carbon dioxide purchase rights from a number of sources in the state. It will shortly begin construction of a pipeline to ship CO2 from Wyoming to oil fields in the state and in Montana.
Evans said he’s received requests from around the world, but the No. 1 problem is finding sources of carbon dioxide for use in oil fields.
“We have been contacted by three or four Middle Eastern countries,” he said. “We’ve talked to China, been contacted by China. So people around the world are looking at this, but the issue is CO2 supply, at the end of the day.”
He said Denbury is content for now to continue work on its properties and with partners in the United States and will search for more projects in the Rockies and on the Gulf Coast.
Evans was the keynote speaker at the annual Wyoming CO2 Conference in Casper on Wednesday. The conference, which concludes today, is hosted by the University of Wyoming’s Enhanced Oil Recovery Institute.