september 2009 issue
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The Keyser File
The Two Faces of Carbon Dioxide 
A company hopes to use CO2 to recover oil from a once-prolific field — and a
partnership looks at storing CO2 in the same formation
by Tom Keyser
Freelance Columnist
Don’t be shocked if word comes down the pipeline that ARC Resources Ltd. is going into the storage business within the next few years. We’re not talking luggage, furniture or RVs, of course.
We’re talking carbon dioxide capture and storage, one of the hottest topics in today’s oilpatch. Nevertheless, the stage is early in this particular game and most of the terms have yet to be defined.
That’s why David Carey, P.Eng., senior vice-president of capital markets for ARC Resources, is really only speculating when he suggests his company could find itself in the business of carbon capture and storage.
“It’s too early to tell. We’re at the embryonic stage of the CO2 industry in Alberta,” says Mr. Carey. Even so, ARC Resources has secured its place at the head of the line, if the industry does take off.
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CARBON DIOXIDE AT WORK |
Getting the Most
Out of Redwater
An oil and gas producer with quality assets throughout Western Canada, ARC got serious about CO2 as a commodity in 2005. That’s when the company purchased an interest in the historic Redwater oilfield. At the time, most experts believed the once-spectacular field, part of the Redwater geological reef, was virtually played out.
But ARC’s management team, led by chief executive John Dielwart, P.Eng., believed that CO2 injection techniques for enhanced oil recovery could eventually enable the company to squeeze daily production of 15,000 barrels of high-quality light oil from its new asset. ARC is still in the process of evaluating the commercial potential of the Redwater pool via a CO2 enhanced oil recovery pilot, currently injecting CO2 and producing oil, gas and water.
While it tests the process, the company is exploring a related field in partnership with another ARC — the Alberta Research Council, which initiated contact in October 2007. “Alberta Research Council approached us because it had been looking at the Redwater reef and had identified it as a perfect candidate for the sequestration of CO2,” Mr. Carey says.
“We thought it made an awful lot of sense to team up with the research council. There’s an obvious synergy.”
So while ARC Resources explores the viability of using carbon dioxide as a production tool in the uppermost, oil-bearing regions of the reservoir, the two ARCs will evaluate the potential of the much larger, water-saturated porous space of the reef for use as a storage cavity for unwanted carbon dioxide emissions.
Known as the Heartland Area Redwater Project, or HARP, the partnership is now poised to complete the first of three planned phases, namely the examination of all the data that’s already known about the reef. It is, by the way, roughly comparable in area to eight Manhattan Islands and is about 250 metres thick.
“We’re studying the hydrogeology and geophysics of the formation. We’ve learned it’s deep enough for the purpose and covered on top with a cap of thick shales,” explains Bill Sawchuk, P.Eng., recruited by ARC Resources a few years ago to manage the company’s CO2 projects.
During the following phase, the partners hope to gather more current data on the geophysical characteristics of the reef.
Pilot Project By 2011?
“After that, we intend to run a one-year pilot project, hopefully starting in 2011, during which we would inject 100,000 tonnes of CO2, in the form of a dense-phase liquid,” Mr. Sawchuk adds. Heartland partners are now in the process of hunting up a source for the CO2 they’ll need to run the pilot.
As Mr. Sawchuk explains, one of the most important considerations will be the effective management of reservoir pressure after the injection of the CO2. “We will be injecting at rates and pressures that should dissipate and won’t compromise the seal that’s in place, but we will be monitoring this in numerous ways to ensure the integrity of the overlay of shale and ensure the safe storage of CO2.”
ARC Resources is bullish on the future of the project, as well as its own ambitions for enhanced oil recovery at Redwater. The location is an important reason why. Large refineries and numerous proposed heavy-oil upgraders in the Fort Saskatchewan region are within a few minutes’ drive of Redwater.
“We have a number of large CO2 emitters right in our backyard, averaging 3,000 tonnes a day,” notes Mr. Carey.
If industry starts capturing these volumes, the efforts of the Heartland Area Redwater Project may yet find a permanent home for them.