CAHONE – Coy Bryant had to raise his voice over the din of construction humming away behind him. Welders threw sparks in the air as they worked near the new compressor that will soon rev up to pressurize millions of cubic feet of carbon dioxide flowing from underground reservoirs here and push it along to a 500-mile pipe to Texas.
Bryant is the carbon dioxide production manager for Kinder Morgan, the $115 billion pipeline company that is also the largest producer and transporter of carbon dioxide in the nation. In southwest Colorado, the company extracts and pumps 1.4 billion cubic feet of the gas per day from reservoirs in Montezuma and Dolores counties to oil fields in Texas and Utah.
These days Bryant’s job also includes overseeing a multimillion-dollar set of infrastructure upgrades and new construction that will allow the company to increase and prolong its carbon dioxide extraction locally.
A booming oil market is driving strong demand for the gas, which serves a unique function in the oil extraction industry. Injecting carbon dioxide underground into certain types of aging oil fields serves to prolong oil production, lubricating and loosening viscous oil so it flows more easily. The process has attracted growing interest from policy groups, legislators and those in the energy industry as another way to capitalize on high oil prices and quench the nation’s ever-expanding thirst for oil from within the United State’s borders.
Called carbon flooding, the technology is a way to breath new life into oil fields that have been producing for decades. The concept is a compelling prospect as oil prices remain at near-record highs and has driven increased demand for carbon dioxide, which has in turn propelled Kinder Morgan’s flurry of construction activity.
The buzzing construction sites of new compressor stations and towering silhouettes of the company’s drill rigs are a sight that has become rare in this natural gas-dominated end of the San Juan Basin. They serve as a striking visual of the local repercussions felt by a booming oil market and a sagging natural gas one.
The technology of using carbon dioxide in aging oil fields was pioneered in West Texas in 1972. Current estimates for the potential of carbon dioxide to boost oil production are impressive.
The limited number of natural and industrial sources of carbon dioxide around the nation also means that demand for carbon dioxide consistently exceeds supply, incentive for Kinder Morgan to ramp up efforts to maximize production from current wells and drill new exploratory wells.
“We’re looking for anything to get us more CO₂,” Bryant said.
Yet in the race to supply more carbon dioxide to thirsty oil fields in Texas and Utah, the company has racked up dozens of environmental violations. In February and March Colorado Oil and Gas Conservation Commission, which regulates drilling in the state, issued the company four notices of alleged rule violations outlining problems ranging from inadequate storage of drill cuttings to drill pad sizes that exceeded their permitted area. And there were indications that the problems were more widespread than the notices indicated.
“The operator was not hitting on all cylinders with regards to enforcement compliance,” Peter Gowen, an enforcement officer for the COGCC, said at a hearing this week about Kinder Morgan’s violations.
The gas’ promise
The U.S. Energy Information Association estimates the country has 25 billion barrels of proven crude oil reserves. Carbon dioxide enhanced oil recovery has the potential to unlock 24 billion barrels of technically recoverable U.S. oil in the lower 48 states, potentially doubling U.S. reserves, according to a screening analysis by the U.S. Department of Energy’s National Energy Technology Laboratory. The estimate still must be proven through field testing, but the number has caused heads to turn.
“It’s potentially a really big deal,” said Judi Greenwald, vice president technology and innovation with the Center for Climate and Energy Solutions, a nonprofit working on issues of energy and climate change.
Carbon dioxide enhanced oil recovery currently makes up about 281,000 barrels of oil per day in the United States, equal to 6 percent of total crude oil production, according to the U.S. Department of Energy’s National Energy Technology Laboratory.
In Southwest Colorado, companies have been extracting carbon dioxide from underground reservoirs for almost 30 years. Kinder Morgan took over the two producing carbon dioxide units in Montezuma and Dolores counties in 2000. Together the units encompass almost 100 wells, about 50 of which are drilled in the Canyon of the Ancients National Monument.
The 200,000-acre McElmo Dome Unit in Montezuma County is one of the largest known carbon dioxide supplies in the United States, with more than 10 trillion cubic feet of gas. The 50,000-acre Doe Canyon Unit six miles to the north in Dolores County is estimated to contain 1.5 trillion cubic feet of the gas.
The carbon dioxide coming from both units is more than 95 percent pure, which is the case in only a handful of other reservoirs in the nation, Bryant said.
The goal to enhance and prolong production in the Doe Canyon Unit is driving the company to invest more than $250 million over the next decade on new drilling and flow lines and new compressor stations. Two hulking 20,000 square foot buildings near Cahone are the most visible evidence of that investment. The buildings house compressors that are needed to squeeze the gas into a pressure high enough to push through pipelines to Utah and Texas. Together, the machines use 50 megawatts of power.
The company is also spending $6 million to perform 3D seismic testing to better map the underground geography, helping the company pinpoint new drilling locations in both units.
“We’re looking for anything to get us more CO₂,” Bryant said.
Problems with compliance
On its website, Kinder Morgan proudly advertises its progress on a Target Zero initiative – zero safety, health and environmental incidents company-wide.
Recent environmental violations suggest the company’s Southwest Colorado operations are still far from that goal. The Colorado Oil and Gas Conservation Commission found 30 alleged violations of state regulations at four well sites, but the pattern of issues suggested the problems extended to other well sites as well, said Karen Spray, the COGCC’s southwest environmental protection specialist.
In a hearing Monday, COGCC enforcement officer Peter Gowen confirmed Kinder Morgan’s negligence was on a larger scale.
“I guess I would characterize their operations prior to the notice of alleged violation as not being particularly diligent to compliance issues,” Gowen said. Commissioners approved a $220,000 fine for the violations.
In response to the violations, Kinder Morgan is hiring five new employees to oversee environmental compliance, drilling engineering and regulatory compliance. It has also implemented new pre- and post-drilling meetings, permitting meetings, new drilling and spill procedures and weekly rig inspections. The company added that several violations reflected temporary site conditions that were a result of moving to a closed-loop drilling system.
However, Bryant acknowledged that many of the notices of alleged violation identified areas where the company needs to improve.
“As in anything there is always room for improvement,” he said. “We’re adding more oversight and more manpower. These things are not taken lightly.”
ecowan@durangoherald.com