Moniz: CO2 could enhance US oil by millions of barrels a day (video)

The future of coal-fired power may lie in still-developing technology to capture the carbon dioxide it produces and put it to work in the oil field, Energy Secretary Ernest Moniz suggested.

In an interview with Platts Energy Week, Moniz talked up the potential not just for capturing and storing the carbon dioxide produced by burning fossil fuels, but using more of it to glean oil from aging fields. Oil and gas companies are already using the method — known as enhanced oil recovery — around the United States, but Moniz sees it ramping up significantly.

“We’re producing about 300,000 barrels per day using carbon dioxide to enhance oil recovery from older fields,” Moniz told the energy news show. “The estimates are that could increase by a factor of 10 to about 3 million barrels a day.”

But that would require a whole lot more carbon dioxide — about 600 megatons per year. And according to Moniz, “we could only get that by capturing it from industrial sources, power plants.”

CBO: Future bleak for carbon-cutting technology

The Energy Department is working to accelerate some enhanced oil recovery technology and operations. For instance, it has provided about $431 million toward a project at Valero’s refinery in Port Arthur, Texas, where carbon dioxide is now being extracted from two steam methane reformers, then dried, compressed and shipped to the West Hastings oil field 20 miles south of Houston.

Pumping the greenhouse gas underground has two benefits: Not only does it help pull more crude out of the site, but it also indefinitely stores the carbon dioxide underground.

The Port Arthur project involves just 1 million metric tons of carbon dioxide a year — which puts the potential scale of future efforts in perspective.

But carbon capture technology is still a long way from being commercially viable. The Energy Department is expected to play a major role in helping develop and commercialize the technology.

Still alive: Don’t eulogize coal yet, energy execs say

Moniz said the Energy Department’s role includes “establishing for the longer term the science, the technology and the regulatory basis for large-scale capture of CO2 and utilization and sequestration of that carbon dioxide.”

Carbon capture technology is seen as key to winnowing the greenhouse gas released by coal-fired power and helping to keep that energy source viable as the U.S. and other countries clamp down on the emissions.

“We are trying to prepare the future of coal in a carbon constrained world by establishing over this next decade the feasibility and the licensibility of large-scale carbon capture and sequestration,” Moniz said.

So far, it’s off to a rocky start. Despite the Port Arthur project, larger, utility-scale operations have proved challenging and expensive.

For example, costs have climbed for Southern Company’s bid to build an integrated gasification combined cycle plant in Mississippi, with the goal of capturing and storing carbon dioxide emissions from the coal used at the facility.

President Barack Obama last week directed his Environmental Protection Agency to propose greenhouse gas emissions limits for new and existing power plants. A previous draft proposal focused on new plants — along with the relatively low price of natural gas — prompted some companies to cancel plans to build new coal-fired facilities.

Coal struggles: Sun sets on two more coal plant projects

Moniz told Platts he expects coal to remain a “substantial” part of the U.S. energy mix “for some time” to come. But he anticipates more power plants will switch to natural gas from coal, based largely on cost considerations.

“There have been a bunch of coal plants that have closed. That’s been market forces. It goes back to natural gas availability at low prices,” Moniz said. “What’s been happening in the power sector over the past few years has been market-driven.”

“There will probably be more of that, with coal being substituted for by gas, as long as prices stay low,” Moniz added.