Release Date: May 12, 2006
Coal Gasification Plant Returns $79 Million to DOE in Revenue-Sharing Gas Sales
Plant Currently Supplies Carbon Dioxide for DOE Sequestration Project
Washington, DC -A coal gasification plant purchased from the U.S. Department of Energy (DOE) in 1988 recently paid millions of dollars to DOE as part of a revenue sharing agreement and continues to be an integral part of a Department project to sequester millions of tons of carbon dioxide while doubling an oil field's recovery rate.
The Dakota Gasification Company (DGC), which purchased the Great Plains Synfuels
Plant near Beulah, N.D., recently announced the payment of more than $79 million
to DOE as part of a revenue-sharing agreement signed in 1988. As the third
such payment from DGC, the revenue share to DOE from gas sales totals more than
$241 million to date.
By employing coal gasification technology, the Great Plains plant reflects the potential for coal polygeneration plants due to the technology's flexibility to produce multiple end products combined with strong environmental and technological performance. As a result of DOE research and development programs, three large-scale coal gasification systems, in addition to Great Plains, are currently in operation: Wabash River, Tampa Electric IGCC, and Eastman Chemicals Kingsport.
The Great Plains Synfuels Plant, however, is the only U.S. commercial-scale coal gasification plant that produces synthetic natural gas from coal. The plant has served as a "pioneer" gasification facility and is paving the way for future applications of coal gasification and coal-to-liquids technologies to further develop and enhance domestic energy supplies, as well as mitigate international pressures on energy prices.
Prior to 2000, the plant produced carbon dioxide (CO2, a greenhouse gas) that had no value and was released to the atmosphere. Since 2000, the CO2 from the plant has been transported via a 200-mile pipeline to the Weyburn Oil Field in southwestern Saskatchewan, Canada, as part of the DOE-funded Weyburn Project. The Weyburn Project has successfully sequestered about five million tons of CO2 into the Weyburn oil field since the start of the project. The project has also doubled the field's oil recovery rate through a process called enhanced oil recovery, whereby CO2 is injected into the reservoir to improve oil recovery, while much of the injected CO2 remains permanently sequestered.
The Weyburn Project was initiated in July 2000 by the Petroleum Technology Research Centre of Regina, Saskatchewan, Canada, and cosponsored by the oil field operator, EnCana Resources of Calgary, Alberta, Canada. The project is funded by at least 15 sponsors from government and industry, such as DOE, Natural Resources Canada, the Alberta Energy Research Institute, Saskatchewan Industry and Resources, the European Community, and 10 industrial sponsors in the United States, Canada, and Japan.
During the first phase of the Weyburn Project, the injection of CO2 into the oil field increased the field's oil production by an additional 10,000 barrels per day, while demonstrating the viability of permanent capture and storage of carbon dioxide in a geologic formation. Estimates indicate that the enhanced oil recovery technique used at Weyburn can increase an oil field's potential recovery up to 60 percent and lengthen its producing life by decades. As it applies to the Weyburn field, enhanced oil recovery is expected to maintain productivity for another 20 years, produce 130 million more barrels of oil, and sequester up to 30 million tons of carbon dioxide that would otherwise escape to the atmosphere.
The Weyburn Project falls within a region of the United States managed by the Plains CO2 Reduction Partnership, one of seven Carbon Sequestration Regional Partnerships established by DOE in September 2003 to begin developing the infrastructure for sequestration should widespread deployment of the technology be necessary in the future. The partnerships encompass over 350 organizations throughout 40 states, four Canadian provinces, and three Indian nations.
The Weyburn Project will now build on first phase successes by entering a second phase of activities. Phase II, which is now underway, is expected to be a $27 million project including a $4 million share by DOE over a four-year period.