Out-Law / Your Daily Need-To-Know

Australia: plan to store carbon emissions in oil reservoirs

05 Aug 2020, 9:54 am

Two research organisations in Australia are partnering up to investigate the potential for carbon dioxide enhanced oil recovery (CO₂-EOR) in the nation's vast oil and gas basins.

The federal government's National Energy Resources Australia (NERA) and CO2CRC, an industry-funded carbon capture research organisation, hope that the ground-breaking study will help increase oil recovery by up to 25%, drive down emissions in the energy sector and safeguard Australia's future energy security.

CO₂-EOR involves the injection of captured carbon dioxide to re-pressurise oil reservoirs and increase the recovery of oil. As a solvent, carbon dioxide can also expand oil to improve its flow to production wells.

This technology has the added benefit of allowing large amounts of carbon dioxide to be permanently stored in underground reservoirs. In the US, between 300 and 600 kilograms of carbon dioxide is injected in CO₂-EOR processes per barrel of oil produced.

Perth-based renewable energy expert George Varma of Pinsent Masons, the law firm behind Out-Law, said: "This is a great opportunity to unlock greater efficiency in Australia's energy sector and provide oil producers with another revenue stream through carbon storage. This is an exciting leap forward in technology and sustainability."

The first phase of the study, conducted in collaboration with Geoscience Australia and industry group COAL21, will assess the suitability of oil and gas basins for the implementation of CO₂-EOR. This analysis is due to be completed by the end of the year.

In the second phase of the study, NERA and CO2CRC will evaluate the economic, environmental and technical feasibilities of CO₂-EOR in Australia’s onshore oilfields, such as the Cooper and Surat basins.

Policies, incentives or regulations will also be evaluated as part of the study to "accelerate" the adoption of CO₂-EOR in Australia, according to NERA.

The findings from the study are expected to "help both industry and governments make sustainable and long-term infrastructure investment decisions that meet the public’s expectations for a low carbon future", it said.

Additional contributions from Jesse Chen of Pinsent Masons.