Maximizing Asset Value in a Lower-Carbon Economy

“If we really want a lower carbon economy, we need to offer consumers an alternative to gasoline, diesel, jet fuel and bunker fuel.”

That’s according to Christine Ehlig-Economides, professor of petroleum geology at the University of Houston.

One of the ways to do that is to decarbonize the electric grid.

Sounds daunting, but Ehlig-Economides said, the know-how is already there.

“Petroleum engineers understand geology and use of pore space and can lead the way in storing carbon dioxide captured from stationary point sources like power plant stacks,” she said.

It is, as everyone knows, the burning of the aforementioned fuels that is predominantly blamed for greenhouse gas emissions.

“Combustion is the reason for greenhouse gas emissions from well development and hydrocarbon production, mostly related to diesel engines,” she said.

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“If we really want a lower carbon economy, we need to offer consumers an alternative to gasoline, diesel, jet fuel and bunker fuel.”

That’s according to Christine Ehlig-Economides, professor of petroleum geology at the University of Houston.

One of the ways to do that is to decarbonize the electric grid.

Sounds daunting, but Ehlig-Economides said, the know-how is already there.

“Petroleum engineers understand geology and use of pore space and can lead the way in storing carbon dioxide captured from stationary point sources like power plant stacks,” she said.

It is, as everyone knows, the burning of the aforementioned fuels that is predominantly blamed for greenhouse gas emissions.

“Combustion is the reason for greenhouse gas emissions from well development and hydrocarbon production, mostly related to diesel engines,” she said.

Further, she said, tight oil and shale gas require more engines for drilling long wells, for the hydraulic fracturing and for disposing of produced water. And that means more combustion and more greenhouse gases.

Ehlig-Economides, a member of the National Academy of Engineering, said this dynamic isn’t the case everywhere.

Aramco, for instance, maintains the oil produced in Saudi Arabia has low carbon intensity.

“By this they mean that it requires less combustion to produce the oil there. Electric rigs and hydraulic fracture fleets would help if the electric grid were decarbonized, which they are not,” she said.

These frac spreads include all the machinery and equipment in the play. Many industry experts believe counting the number of spreads is a better indicator of how much oil will come online than just counting active rigs.

As for decarbonizing of these fields, we need to take the long view.

“Electrified well drilling and stimulation would not be hugely expensive, but a major hurdle is the capital expenditure to buy the rigs and spreads, and it is also costly to discard the equipment that is currently in use,” she said.

Once purchased, however, such equipment would be less expensive to operate and would result in greatly reduced air and noise pollution.

URTeC Content

Ehlig-Economides will be part of a panel at the Unconventional Resources Technology Conference in Denver this month, “Unconventional Developments Through Energy Transition: Maximizing the Asset Value in a Lower Carbon Economy,” which will discuss the transition to lower carbon and how, specifically, such a move could provide opportunities for the oil and gas industry. Along with Randy Blood, co-founder of Wildlands Research, founder of DRB Geological Consulting, and Higinia Pedregosa, U.S. projects coordinator for CeraPhi Energy, Ehlig-Economides will review – along with an overall dialogue about decarbonizing – two other topics aligned with the sustainability of unconventional assets within the energy transition:

  • The understanding of the wastewater possibilities from the source rock perspective in the Marcellus/Utica Shales, which include more beneficial reuse of produced water: These regions could potentially be sitting on top of significant revenue-generating mineral streams contained in their waste brines. The extraction of lithium from produced water could be lucrative for Marcellus and Utica operators as well as midstream players.
  • The closed-loop geothermal technology in repurposed operations: Geothermal power plants emit 97-percent less acid rain-causing sulfur compounds and about 99-percent less carbon dioxide than fossil fuel power plants of similar size.

Leaning on Hydrogen

Ehlig-Economides, whose expertise includes hydrogen, said, “Electric vehicles can use batteries or hydrogen fuel cells” and while admitting both are pollution free and have low maintenance, batteries charge from a grid that is not decarbonized.”

Fuel cell EVs with carbon-neutral hydrogen, however, generated from natural gas has less carbon footprint than battery EVs and refuels in five minutes.

Batteries take hours to recharge.

“A way to generate hydrogen is from the associated gas because tight oil has a lot of associated gas, some of which is stranded and flared,” she said.

When asked about the reality of this occurring, she said it is doable on a number of levels.

“Blue hydrogen (the hydrogen produced from natural gas and supported by carbon capture and storage) is generated from methane with capture of all carbon dioxide from the generation process. I think it would be cost competitive with gasoline and diesel except for lack of distribution and dispensing infrastructure, at least in some parts of the U.S. (Houston for example),” she said.

One way to enable such an infrastructure might be to blend hydrogen with methane in the existing natural gas pipeline network.

“We are also interested in the prospect of storing hydrogen in existing methane storage facilities, again blended with methane,” she said.

The future of energy, both in the country and worldwide, is a volatile mix on which industry, governments and environmental groups are all looking to put their imprimatur.

“I hope the petroleum industry will take leadership in a shift away from combustion of fossil resources. Natural gas to blue hydrogen provides a path for continued use of natural gas,” she added.

The recipient of the Society of Petroleum Engineers’ Anthony F. Lucas Gold Medal, Ehlig-Economides knows that continued use of crude oil without or with much less combustion will require very different use of hydrocarbon molecules.

“Right now, more than 80 percent of the crude oil is refined into fuels for combustion. Less than 10 percent is used for higher value materials that actually account for more than 70 percent of the crude oil product value,” she said.

Comments (1)

want a lower carbon economy?
The U.S. Department of Energy, Office of Nuclear Energy » Reactor Technologies » Advanced Small Modular Reactors (SMRs), has the best answer: Advanced Small Modular Reactors (SMRs) are a key part of the Department’s goal to develop safe, clean, and affordable nuclear power options. The advanced SMRs currently under development in the United States represent a variety of sizes, technology options, capabilities, and deployment scenarios. These advanced reactors, envisioned to vary in size from tens of megawatts up to hundreds of megawatts, can be used for power generation, process heat, desalination, or other industrial uses. SMR designs may employ light water as a coolant or other non-light water coolants such as a gas, liquid metal, or molten salt. Advanced SMRs offer many advantages, such as relatively small physical footprints, reduced capital investment, ability to be sited in locations not possible for larger nuclear plants, and provisions for incremental power additions. SMRs also offer distinct safeguards, security and nonproliferation advantages.
6/23/2023 9:27:59 AM

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