Linking the development of enhanced oil recovery in the North Sea to low-carbon electricity can bring significant benefits to the wider UK economy while accelerating carbon storage and providing the most cost-effective pathway to UK decarbonisation targets, a new report proposes.
This comprehensive new analysis by an SCCS-led Joint Industry Project has been made of injecting carbon dioxide (CO₂) derived from low-carbon electricity production and industry to enhance oil recovery from existing North Sea fields (CO₂-EOR).
The report, launched today in London, shows that a synergy between CO₂-EOR and Carbon Capture and Storage (CCS) could be the driver for developing both technologies in the UK Continental Shelf. 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.
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 launch event, held at the Royal Institute of Chartered Surveyors, began with a short introduction by Angus MacNeil MP, the new Chair of the Energy and Climate Change Committee. This was followed by presentations from some of the researchers involved in the study. The report's findings will also be shared at meetings in Brussels and Aberdeen later this week.
Professor Stuart Haszeldine, SCCS Director at the University of Edinburgh, said:
North Sea oil and gas are 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.
The project analysis suggests that this CO₂-EOR route achieves two desirable UK objectives. Firstly, a business demand is created, which drives the sequential construction of CO₂ capture projects – reducing the costs associated with CO₂ supply and enabling cheaper low-carbon electricity. CCS by this route, with secure CO₂ storage already proven, would develop more rapidly and protect the onshore UK economy and industry from increasing carbon prices.
Secondly, through accelerated CCS deployment more CO₂ is abated more quickly than by any other route, and this includes emissions from the additional oil produced. Public subsidy towards the cost of a low-carbon transition would be greatly reduced, and CO₂-EOR may even be profitable across the whole economy. Investment in CO₂-EOR has a national return of up to 7.2x, which is much larger than rival energy opportunities, according to the project’s findings.
However, the report points to a lack of clear supportive legislation and fiscal regimes for CO₂-EOR in the UK. New supportive regimes are needed for CO₂-EOR projects, similar to existing brown field or development allowances, and these must make investing in CO₂-EOR in the UK competitive with the alternative global investment opportunities.
|The project partners with Angus MacNeil MP, Chair of the Energy and Climate Change Committee, at the report launch in London on 16 June 2015. From left to right: Richard Crossick (Shell), David Mirkin (2Co Energy), Stuart Haszeldine (SCCS), Angus MacNeil MP, Stephen Goodyear (Shell), Frank Knight (Nexen), Julien Hailstone (Nexen) and Kath Mansfield (Nexen). Photo: Matt Ball|
This short report was published by Scottish Enterprise in early 2015. Incorporating new economic modelling, it shows how the UK is leading Europe when it comes to funding the development of CCS. And why Scotland, with its unique proximity to significant offshore storage site and 40 years of oil and gas expertise, is an almost ready-made infrastructure for a CCS industry.
Also download Element Energy-led report, Economic Impacts of CO₂ Enhanced Oil Recovery for Scotland.
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