Oil companies "catch carbon and change oil" is just "looking beautiful"?

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Under the goal of carbon peaking and carbon neutrality, domestic oil and gas enterprises have accelerated the pace of low-carbon transformation, and actively carried out research and development and innovation of key technologies for carbon emission reduction. In addition to improving energy utilization and developing clean and renewable energy, oil companies have changed their roles as "catchers" and actively laid out CCUS (carbon dioxide capture, utilization and storage) business.

At present, Sinopec has started China's first million-ton CCUS project construction - Qilu Petrochemical - Shengli Oilfield CCUS project; CNOOC and China Huaneng Group have cooperated pragmatically on CCUS cutting-edge technologies and other fields; and the Xinjiang CCUS Center, led by PetroChina, has become one of the first five CCUS industry promotion centers deployed by the Oil and Gas Industry Climate Initiative (OGCI) around the world.

"With the potential to reduce overall emission reduction costs and increase flexibility in achieving greenhouse gas emission reductions, CCUS is not only one of the main ways to reduce carbon emissions today, but also an important technology to achieve carbon peaking and carbon neutrality by 2060." Peng Bo, a professor at China University of Petroleum (Beijing), said, "However, at present, the technology still has the limitations of many technical units, long routes and high costs, and it is urgent to need more policy support and technology research and development and optimization." ”

Carbon reduction and production kill two birds with one stone

Oil companies generate carbon dioxide from every production and operation activity, so to achieve carbon reduction targets, it is necessary to offset the carbon dioxide emitted and achieve green production.

In order to cope with the impact of energy transition on the oil industry and adapt to the trend of green and low-carbon development, international oil companies are exploring the low-carbon transformation of existing businesses, attaching importance to and developing related technologies such as carbon capture and storage, with a particular focus on creating economies of scale and reducing costs. At present, there are 26 CCS/CCUS projects in operation worldwide, with a carbon dioxide capture and storage capacity of 43 million tons/year, and nearly 20 projects under construction.

While domestic oil companies are looking for new points of strength and contributing to the realization of carbon reduction goals, they are also facing the dual pressure of increasing reserves and production and ensuring energy security.

According to the data provided by the China Petroleum and Chemical Industry Federation, In 2020, China's oil and gas dependence on foreign countries will reach 73.5% and 42.0% respectively, and the newly proven oil and gas geological reserves will fall to the lowest point in the past 10 years.

Is carbon reduction contrary to production? "Carbon neutrality puts enormous pressure and challenges on oil companies, but it also presents new growth opportunities for traditional energy companies." Peng Bo said.

Peng Bo pointed out that the carbon dioxide flooding technology in CCUS technology will become an "accelerator" to achieve carbon peaking and carbon neutrality goals, and will also realize the integrated treatment of carbon dioxide utilization and storage in the oil production process.

According to the assessment of major national basic research projects, about 13 billion tons of crude oil geological reserves in China are suitable for carbon dioxide flooding, which can increase the recovery rate by 15%, increase the recoverable oil reserves by 1.92 billion tons, and seal about 4.7-55 billion tons of carbon dioxide. CCUS is not only conducive to improving the economic efficiency of the oil and gas industry, but also helps to alleviate the energy security challenges brought about by the rising dependence of oil on foreign countries.

"At present, most of the newly discovered oil reservoirs in China are low-permeability reservoirs, which are difficult to develop, and the oil fields are sleeping in fine rocks, 'no water can be injected, no oil can be produced'. The special properties of carbon dioxide are ideal for low-permeability reservoir development and are the 'key' to turning hard-to-use reserves into high-quality reserves, increasing oilfield recovery by 10 to 20 percent. Peng Bo pointed out.

There are many projects but limited in scale

CCUS is an important breakthrough in the green and low-carbon transformation of the oil and gas industry, oil companies obtain carbon dioxide from refineries or captive power plants, and apply it to upstream oilfield development, which can be "self-digested" in their systems.

In the past ten years, the relevant departments have continuously increased the support for the development of CCUS technology, and have set up two phases of the national 973 project, the 863 project and the third phase of the national science and technology major special project, of which carbon dioxide flooding technology has been applied.

For example, Shengli Oilfield has carried out technical applications in 5 blocks, accumulatively injecting 360,000 tons of carbon dioxide and sealing 330,000 tons, with a storage rate of 92%. At present, the reserves of low-permeability oil reservoir suitable for carbon dioxide flooding in Shengli Oilfield reach 912 million tons, which can be increased by 90 million tons and sequester 150 million tons of carbon dioxide according to only 10% recovery rate.

Jilin Oilfield plans to produce more than 500,000 tons of oil at the end of the "14th Five-Year Plan". At present, Jilin Oilfield has successively built five carbon dioxide flooding and burial demonstration areas for original oil reservoirs, medium and high water-content reservoirs, high-water content small well spacing, water-sensitive reservoirs, and industrial applications, with a total of 1.42 million tons of buried carbon dioxide and 131,000 tons of crude oil production.

However, compared with water flooding oil and polymer oil flooding technology, there are not many enterprises that use carbon dioxide flooding oil at present, and the scale is very limited.

Peng Bo pointed out that under the carbon reduction target, low-carbon transformation has become an action that enterprises must practice, and in this context, how to choose between "expensive or survival" is not difficult for oil companies.

Lin Boqiang, dean of the China Energy Policy Research Institute of Xiamen University, expects that there will be great progress in CCUS technology in the future, and deep decarbonization will begin around 2045-2050, based on the previous technology accumulation and innovation, when the unit emission reduction cost of CCUS can be greatly reduced.

The "pocket bottom" technology still needs to be upgraded

Even if there are more mature technologies to learn from in the links of capture, transportation, utilization and burial, CCUS is still a new industry, and as far as the entire industrial chain is concerned, it is still in the stage of research and development and demonstration. High cost and lack of mechanism are important constraints to the development of CCUS, and also directly limit the application scale of CARBON dioxide flooding technology.

Under the existing technical conditions, carbon capture utilization and storage will increase the operating cost of carbon dioxide emission reduction by an additional 140-600 yuan / ton. "Under current conditions, the cost-sharing rules between different industries are not clear. In the entire industrial chain of CCUS, the responsibilities, rights and obligations of emission reduction between various industrial links need to be further sorted out and clarified, and the cost sharing mechanism of CCUS and the sharing mechanism of emission reduction benefits need to be guided by the government and regulated by the market. Peng Bo said.

At present, the 45Q clause final regulation (carbon capture and storage tax incentive policy) issued by the United States is a preferential corporate income tax policy for carbon capture and storage. "The policy gives subsidies from the catcher end, that is, a credit is calculated according to the amount of carbon oxides captured and sealed, allowing taxpayers to deduct from the tax payable on corporate income tax. But there are no similar unified standards and norms in our country. Peng Bo said.

On the other hand, although carbon dioxide flooding is currently a relatively good CCUS use, 2/3 of the carbon dioxide used in oil flooding will still return to the surface and be released back into the air, and CCUS technology still needs to be upgraded.

Industry insiders suggest that domestic oil companies can give priority to providing a market for captured carbon dioxide and improve their transportation, use and storage infrastructure, including infrastructure such as carbon dioxide transmission pipelines necessary for oilfields to improve oil recovery and geological storage, so as to promote large-scale demonstration and optimization of CCUS. In addition, full-chain CCUS clusters should be developed in key areas near the "source" and "sink" of carbon dioxide at the edge of the basin, rewarding projects with strategic energy security and climate benefits that are deployed first.

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