Just consider the following:
• Louisiana spews more industrial carbon dioxide into the atmosphere than any other state in the nation, which equates to roughly 36 million metric tons of CO2. In fact, a study released earlier this year by the federal government found that the Bayou State surpassed refinery-rich Texas in this area back in 2002.
• As Congress crows about foreign energy dependence, it’s estimated that more than 1 trillion barrels of oil are still under ground domestically, leftover from drilling and missed by conventional efforts. The Louisiana Oil and Gas Association has also found that oilmen leave 70 percent of the black gold in the dirt because their operations just aren’t that efficient.
On the page, these two nuggets of information don’t have much in common. But thanks to advancements in oil exploration during the past decade, CO2 and increased production are more intertwined than ever.
That’s because lawmakers and industry groups like LOGA are getting behind tertiary recovery projects, or what are more commonly known as enhanced oil recoveries.
The process involves the injection of certain gases or chemicals — in Louisiana’s case, carbon dioxide — into a reservoir, at which point it expands and pushes up the oil that was missed by a previous operation.
During its spring regular session, the Louisiana Legislature adopted a new law that eliminates the sales and use tax on any carbon dioxide sold for such enhanced oil recovery projects — as long as the project has been approved by the state Department of Natural Resources.
Not only do the tax credits allow producers to regenerate some their older sites, but it also places Louisiana ahead of the curve, since neighboring states like Texas have yet to address the technology through legislation.
“The CO2 process is one of those things that could prompt more drilling in south Louisiana,” says DNR Secretary Scott Angelle.
Michael Hecht, CEO of Greater New Orleans Inc., supported the tax incentive earlier this year and hailed the impact of the process on eliminating CO2 — one of the leading causes of greenhouse gas emissions — from the atmosphere.
“As U.S. citizens, we must become good stewards of our environment and energy resources,” says Hecht. “[The new law] allows us to bring environmental solutions to the table, and, at the same tame, create tremendous additional revenue and jobs for Louisiana.”
There are a few working examples of tertiary recovery in the southern U.S., and Canada only recently saw its first oilfield established using the technique. Yet there are strides to point to already in Louisiana.
For instance, Denbury Onshore LLC is installing a 24-inch pipeline originating from Donaldsonville and leading to Hastings Field, just south of Houston.
Denbury has also entered into agreements to purchase man-made CO2 from four proposed “coal to liquid” plants, like the planned Faustina Plant near Donaldsonville, where its pipeline begins.
Gov. Bobby Jindal, a vocal supporter of the new technology, said Denbury’s so-called “green pipeline” will have a total capital investment of $750 million and is expected to create up to 800 jobs during construction.
“This a first of its kind project here in Louisiana, and it ties together two critical areas for our state: economic development and energy exploration,” Jindal says. “Louisiana is at the forefront of the energy industry, and there is no doubt that this new pipeline will boost our economy and strengthen our state and nation’s energy development.”
LOGA President Don Briggs says he can see a day where operations like this are sprouting up all over the Bayou State. Louisiana plants would actually capture carbon dioxide before it enters the atmosphere and run it directly to an oil site.
“That’s the ‘green’ element in all of this,” Briggs notes. “Everyone is complaining about CO2 emissions, but this would give companies a reason to capture it before it gets into the environment.”
The Intergovernmental Panel on Climate Change, which was established by the World Meteorological Organization and the United Nations’ Environment Program, has also endorsed the use of CO2 in declining oilfields as a means of reducing greenhouse-based emissions.
Still, environmental groups argue that some CO2 could still make its way to the surface, albeit in minimal amounts and far less than would have been emitted under normal circumstances.