Geologic sequestration through EOR: Policy and regulatory considerations for greenhouse gas accounting

The objective of carbon capture and sequestration (CCS) is to reduce emissions to the atmosphere through the sequestration of carbon dioxide (CO2) in deep geologic formations. Recent studies of life-cycle emissions from CCS projects that sequester CO2 captured from coal-fired power generation through EOR show that net emissions from this process are positive due to the CO2 emissions embodied in produced oil. For geologic sequestration through enhanced oil recovery (GS-EOR) to be effective, life cycle GHG emissions from the system must be small and consumption of the energy produced should not result in larger emissions than would otherwise happen in the absence of the GS-EOR project. In the best case, where relatively high emissions intensity oil and electrical generation are being displaced, the emissions reduction potential is greater than the amount of CO2 purchased by the project; however, where a relatively light crude and carbon free marginal generation is being displaced, the GS-EOR project results in an emissions increase. As a matter of public policy, if reducing emissions of CO2 is of great importance, encouraging GS-EOR will not be as effective as geologic sequestration in deep saline aquifers, or other means of reducing emissions that do not result in increased production of fossil fuels. Nonetheless, it is likely that GS-EOR projects will happen in the absence of emissions reduction incentives because they bring other benefits. The nature and scope of a GHG reduction program will determine the accounting approach needed to accurately estimate the emissions from GS-EOR, but in general, components that do not fall under an emissions cap will need to be accounted for via life cycle assessment. While further study is needed, it appears that allocating the emissions reduction to an electric power generator would be less complex and more effective that allocating it to the oil or fuels producer.