Denbury

From Global Energy Monitor
This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.
Sub-articles:

Denbury Resources is an oil exploration and development company that specializes in injecting sequestered carbon dioxide (CO2) into old oil wells to decrease oil viscosity, increase flow rate, and help pump out difficult-to-reach oil. The company is looking to incorporate proposed coal plant carbon capture and storage technologies into their operations.[1] It is a member of the Carbon Capture and Storage Association.[2]

In November 2009, the company acquired another oil exploration company, Encore. Chief executive officer (CEO) Phil Rykhoek forecast that the company's $4.5 billion purchase of oil producer Encore would double the potential of its enhanced oil recovery (EOR) assets to almost 650 million barrels of "undeveloped" oil reserves, as Encore holds extensive acreage in the Williston and Powder River Basin of southeastern Montana and northwestern Dakota. These areas may yield oil from both primary and EOR fields, a project that would require significant supplies of carbon dioxide to pump through the fields.[1]

As of 2021, Denbury owned proved CO2 reserves of approximately 4.6 trillion cubic feet (TCF), extracted principally from the Jackson Dome CO2 source field, the most significant and only source of natural CO2 in the U.S. east of the Mississippi River. Most of these supplies, over 78%, are used to facilitate CO2 enhanced oil recovery (CO2 EOR). The CO2 is transported via pipelines, and Denbury spent almost $1 billion to construct its Green Pipeline to tap into oil fields in southeast Texas.[1]

As of April 2010, there is limited pipeline infrastructure to support the company's planned CO2-EOR operations in the Rockies. Encore management proposed to build compression facilities adjacent to a gas plant in Freemont County, Wyoming, and construct a 206-mile pipeline to transport the compressed CO2 to tertiary recovery projects at its Bell Creek Field in southeastern Montana, but this never expanded beyond the planning stage due to funding issues. Denbury is continuing to try and secure CO2 sequestered from coal-fired power plants or ethanol facilities, through government-funded carbon capture and storage tax credits.[1]

Jackson Dome

Jackson Dome is a natural carbon source field located in Rankin County and Madison County, Mississippi, operated primarily by Denbury.

Sitting about 25 miles northeast of Jackson, Mississippi, it is one of the largest natural CO2 fields in the United States and the largest and only one east of the Mississippi River. It is one of the five major carbon fields in the U.S., the country which is the top producer of natural CO2 in the world. Tectonically an ancient volcano site called the Jackson Volcano, drilling for carbon in the field facilitates carbon dioxide enhanced oil recovery (CO2 EOR) in Mississippi, Louisiana, and Texas.

Denbury acquired the Jackson Dome from Airgas in 2001 for $42 million.[3] Drilling at the field began in 1977 after discovery efforts began in the early-1970's, initially by Shell. A 98% pure CO2 basin,[4] Denbury used 78% of the CO2 it produced from the Jackson Dome in 2020 for CO2 EOR, with the rest sent to third-party industrial users.[5] The carbon is sent via pipelines to 14 different oil fields, in which the produced carbon is injected under the ground to free up an additional 8-20% of oil in legacy oil fields, or residual oil zones (ROZs). CO2 EOR is also sometimes called "carbon flooding" or "tertiary recovery."[6] Denbury is both the owner of all of those pipelines and the CO2 EOR fields.[7][8]

Natural carbon dioxide is currently the source of 78.7% of the CO2 for CO2 EOR in the United States[9] and CO2 EOR currently is the final carbon sink for nine of the ten biggest U.S.-based Carbon Capture and Storage (CCS) projects currently commercially operational.[10] Traditionally known as CCS, CO2 EOR is a central proponent of a rebranding effort which began in 2012 known as CCUS, or carbon capture utilization and storage. The "U" in CCUS, in this case, is using carbon to drill for more oil.[11]

Location

Loading map...

Field Details

  • Start Year: 1977[12]
  • Operator: Denbury
  • Controller: Denbury
  • Location: Rankin County and Madison County, Mississippi, United States
  • Proved reserves: 4.6 Trillion Cubic Feet[13] 28 active wells.
  • Production: 145.1 Million Cubic Feet in 2020, 198.37 Million Cubic Feet in 2019, 182.78 Million Cubic Feet in 2018, 183.03 Million Cubic Feet in 2017, 176.52 Million Cubic Feet in 2016, 117.39 Million Cubic Feet in 2015[14]
  • Status: Operating
2020 production at the Jackson Dome; Chart Credit: Mississippi Oil and Gas Board

History/Background

Exploratory drilling began at the Jackson Dome in the early-1950's and commercial leasing began in 1973. Shell viewed the CO2 fields of Colorado (McElmo Dome, Sheep Mountain and Doe Canyon) and New Mexico (Bravo Dome), and the CO2 EOR production facilitated drilling carbon from those fields at Texas' Permian Basin, as a parallel. Commercial production of the CO2 began in 1977 and CO2 EOR using the Jackson Dome's carbon began in 1982 at the Little Creek Field.[15]

"Development of enhanced oil recovery techniques using (carbon dioxide) provides a major boost for our efforts to get more oil out of those oil fields," an executive for Shell told The Clarion-Ledger in 1985 of its CO2 EOR efforts using carbon drilled from the Jackson Dome. "It allows us to produce oil that cannot be recovered economically with any other known technology."[16]

Shell was the dominant CO2 producer in the field during the first quarter century of the Jackson Dome's production era, but with oil prices dropping, the company shed its Jackson Dome assets and sold the field to Airgas in 1997. Denbury then purchased Airgas' Jackson Dome assets in 2001, a $42 million acquisition.[17]

Production

According to its 2020 annual report filed with the U.S. Securities and Exchange Commission, Denbury has 910.1 BCF (billion cubic feet) in probable reserves of CO2 at the Jackson Dome. In 2020, the company produced 4.6 million cubic feet (MCF) of CO2.[18] Production rates have fallen consistently at the field over the past decade.

Historic production levels at the Jackson Dome. Image Credit: Mississippi Oil and Gas Board

Pipeline Connections

Denbury has five pipelines connected to the Jackson Dome. They include the 183-mile Northeast Jackson Dome Pipeline,[19] the Free State Pipeline (90 miles), Delta Pipeline (110 miles), Green Pipeline Texas (120 miles), and Green Pipeline Louisiana (200 miles).[20]

CO2 EOR Field Connections

The CO2 produced at the Jackson Dome is sent via pipelines to the Delhi Field east of Monroe, Louisiana; the Hastings Field in Alvin, Texas; the Heidelberg Field in Jasper County, Mississippi; the Oyster Bayou Field in Chambers County, Texas; the Tinsley Field in Yazoo County, Mississippi; the West Yellow Creek and Eucutta Fields in Wayne County, Mississippi; the Little Creek, Mallalieu, and Brookhaven Fields in Lincoln County, Mississippi; the Cranfield Field in Natchez, Mississippi; Martinville Oil Field in Simpson County, Mississippi; McComb Oil Field in Pike County, Mississippi; and the Soso Oil Field in Jasper County, Mississippi.

Of those fields, the Hastings Field is the most prolific, producing 4,755 barrels of oil per day from CO2 EOR, or about 17.8% of the total oil produced in the Gulf region for the company in 2020.[21]

Loading map...

Hastings Oil Field in Alvin, Texas[22]

2020 Pipeline Explosions

In February 2020, the 24-inch Green Pipeline—which sends CO2 from the Jackson Dome to the Hastings Field in Alvin, Texas—exploded in Yazoo County, Mississippi.

Aftermath of Feb. 2020 CO2 pipeline explosion in Yazoo County, MS. Credit: Mississippi Emergency Management Agency

An on-scene investigator described a “green fog” of both H2S and CO2 leaking into the atmosphere across the highway from the ruptured pipeline at the scene of the incident. Though no one died, 46 people were hospitalized and 300 were evacuated from their homes.[23] Three men passed out in their cars at the scene of the pipeline rupture, knocked unconcious.[24]

A sheriff’s investigator stated that those rescued during the incident were acting “like zombies” and some were “foaming at the mouth.” The sheriff deputy called to the scene also had to be hospitalized.[25]

The class action plaintiffs law firm Morgan & Morgan is representing victims of the pipeline blowout, saying in a February statement, "Our hope is to uncover all the facts that led to this incident and hold those responsible accountable for their actions or omissions."[26] In October 2020, near the same area in Yazoo County, the same pipeline had another CO2 leak. It led officials to temporarily shut down State Highway 3.[27]

Politics, Lobbying

At the federal level, Denbury has deployed well-connected lobbyists to ensure more federal dollars for its Carbon Capture and Storage endeavors.

One of those lobbyists is Kyle Simpson,[28] a long-time lobbyist for the Gas Technology Institute and the former Associate Deputy Secretary of the Department of Energy during the Clinton Administration.[29] In 2005, Simpson successfully lobbied to get a provision tucked into the Energy Act of 2005, which created the "Halliburton Loophole," to grant $1.5 billion toward research and development efforts at universities which promoted fracking for natural gas and some of which became a part of frackademia scandals.[30]

Another is Adam Bramwell, a former senior aide to U.S. Sen. Chris Coons (D-DE).[31] Coons is the author of legislation, called the SCALE Act (S. 799), which would provide just under $300 million over a five-year period for Carbon Capture and Storage projects and $80 million over a four-year period for a carbon pipeline loan guarantee program.[32] The SCALE Act is endorsed within President Joe Biden's American Jobs Plan, the proposed infrastructure package.[33]

According to data compiled by OpenSecrets.org, Denbury gave at least $2,500 and as much as $5,000 to all four Mississippi Republican candidates for the U.S. House of Representatives during the 2020 campaign cycle, with the state being the home base of the Jackson Dome. Three of them are currently seated members.[34] At-large, the company gave over $52,819 for federal candidates during the 2020 cycle.[35]

"Carbon Negative" Oil

Denbury stated in its 2019 Corporate Responsibility Report that it complies with a few different U.S. Environmental Protection Agency regulatory measures pertaining to Carbon Capture and Storage. Those include Subparts PP, UU and W of the U.S. Environmental Protection Agency's Greenhouse Gas Reporting Program. The company called its operations "carbon negative" in that same report, noting that we more than offset those emissions by annually injecting over three million tons of industrial-sourced CO2 into the ground as part of our CO2 EOR process." The company further claims it will additionally beet up its "carbon negative" efforts by 2030 via the implementation of an offsets program for oil sold downstream after CO2 EOR production takes place.[36]

But a March 2020 issue brief by Food & Water Watch[37]—citing a 2015 study[38]—concluded that CO2 EOR "operators were unable to account for 22 to 96 percent of the CO2 they injected after a short period," pointing to CO2 EOR production done at Denbury's Cranfield oil field in Natchez, Mississippi. That field utilizes carbon extracted from the Jackson Dome.[39] Another 2017 study found levels of CO2 in the soil at the Cranfield production site at concentrations of 44%.[40]

Regulatory Enforcement Actions

According to a 2019 lawsuit brought jointly by the U.S. Environmental Protection Agency and the Mississippi Department of Environmental Quality, Denbury was responsible for 25 oil spills between 2008 and 2014, including spilling "5,000 barrels of oil and water mixture in the Tinsley field in central Mississippi’s Yazoo County after a pipe shifted because of ground settlement and erosion," the Associated Press reported.[41] The Tinsley Field is one of Denbury's CO2 EOR fields connected to the Jackson Dome.[42] The lawsuit was brought concurrently with a consent decree, with Denbury paying out $3.5 million in fines to both the EPA and MDEQ.[43][44]

Denbury also paid a $662,500 fine to the Mississippi Department of Environmental Quality in 2013 after another CO2 blowout at the Tinsley Field. "So much carbon dioxide came out that it settled in some hollows, suffocating deer and other animals, Mississippi officials said," the Associated Press reported. "The company ultimately drilled a new well to plug the old one, and removed 27,000 tons of drilling mud and contaminated soil and 32,000 barrels of liquids from the site."

That same year, Denbury also had an underground CO2 EOR well blowout at its Delhi Field in Louisiana.

After a "monitor showed unsafe concentrations of methane in the air...authorities suspected a natural gas pipeline, but Louisiana Department of Natural Resources spokesman Patrick Courreges said it now appears two or more plugged wells gave way underground," the AP further reported. "Methane, carbon dioxide, oil, water, brine and sands pushed up through the earth in a sparsely populated, marshy area. Concentrations of carbon dioxide were so high initially that Courreges said responders wore breathing apparatus to keep from suffocating."[45]

Carbon Capture Projects

Leucadia

Denbury's Green pipeline will transport captured CO2 from Leucadia's Indiana Gasification SNG project and Mississippi Gasification SNG project, both syngas plants financed by the US Department of Energy.[46]

Rentech Natchez Project

In 2009, synfuels manufacturer Rentech contracted to sell all of the carbon dioxide to be captured at its proposed coal gasification facility, Belwood Coal-to-Liquids, to Denbury Onshore, LLC, a wholly owned subsidiary of Denbury. Carbon dioxide purchased under the contract would be used for enhanced oil recovery at Denbury's Cranfield oil field in Southwest Mississippi, as well as at the company's oil fields within the greater Gulf Coast area. The Cranfield oil field is currently hosting a U.S. Department of Energy-sponsored carbon capture and sequestration project to inject more than 1 million tons of carbon dioxide into an underground rock formation, followed by additional injections into the saline portion of the reservoir more than 10,000 feet below the surface.[2]

Taylorville Energy Center

On March 3, 2010 Tenaska announced that its proposed Taylorville Energy Center would cost $3.5 billion and would go on-line in 2014. The plant will burn coal to produce syngas. The U.S. Department of Energy agreed to give the project a $2.6 billion loan guarantee.[47] The plant will sell its captured CO2 to Denbury for "enhanced oil recovery" in west Texas oil fields.[48]

Carbon Dioxide Injections

The company is injecting CO2 in 14 oil fields in Mississippi, Louisiana, and Texas. Companywide oil production is expected to average 28,500 b/d of oil equivalent in 2010, including a contribution from the Bakken in the Williston basin.[49]

In June 2010, Denbury started carbon dioxide injection in Oyster Bayou field in eastern Chambers County, TX, and hopes to begin injecting at Hastings field south of Houston by the end of 2010. Three rigs are drilling in Oyster Bayou, and the company is working on the remaining 60 miles of pipeline across Galveston Bay and the Houston Ship Channel. Denbury is running five rigs at Hastings field in northeastern Brazoria County, preparing wells for injection.[49]

The Green Pipeline is transporting 44 MMcfd 260 miles from the Jackson Dome in Mississippi to Oyster Bayou for injection into three wells. Denbury said it will be about a year until an oil production response can be expected from the high-permeability formation. Denbury averaged 768 MMcfd of CO2 production at [[Jackson Dome] in the quarter ended June 30 and is running two rigs in Gluckstadt field in Madison County, Miss., in hope of finding multiple fault blocks that would expand its carbon dioxide reserves.[49]

Denbury is also advancing with right-of-way work on Green Core, a planned 230-mile, 20-in. carbon dioxide pipeline from the Lost Cabin gas treatment plant in Fremont County, Wyo., to Bell Creek field in Montana. It has surveyed 95% and acquired 41% of the right-of-way. Denbury has converted 17 idle former Bell Creek water injection wells for carbon dioxide injection and will convert another 12 by the end of 2010. Pipeline construction is to start in August 2010, and injection is planned for late 2012 or early 2013. The company is negotiating with CO2 suppliers.[49]


Hydraulic Fracturing

Diesel in Fracking

From 2010 to July 2014 drillers in the state of Texas reported using 924.07 gallons of diesel injected into one well. The Environmental Integrity Project extensively researched diesel in fracking. The environmental research organization argues that diesel use in fracking is widely under reported.

The Environmental Integrity Project 2014 study "Fracking Beyond The Law, Despite Industry Denials Investigation Reveals Continued Use of Diesel Fuels in Hydraulic Fracturing," found that hydraulic fracturing with diesel fuel can pose a risk to drinking water and human health because diesel contains benzene, toluene, xylene, and other chemicals that have been linked to cancer and other health problems. The Environmental Integrity Project identified numerous fracking fluids with high amounts of diesel, including additives, friction reducers, emulsifiers, solvents sold by Halliburton.[50]

Articles and resources

Related GEM.wiki articles

References

  1. 1.0 1.1 1.2 1.3 David Phillips,"Denbury Resources: No Rocky Mountain High From Depleted Oil Fields" bnet, April 2, 2010.
  2. 2.0 2.1 "15 Airlines Take Groundbreaking Step in Alternative Fuel Deployment, Sign Comprehensive MOUs to Negotiate Purchase of Fuel from AltAir & Rentech" Air Transport Association News Release, December 15, 2009
  3. "Airgas enters $42 million reserve deal," Philadelphia Business Journal, Jan. 18, 2001
  4. "Naturally Occurring CO2 Sources," Denbury Resources, accessed April 2021
  5. "Denbury - 2020 SEC Form 10K," U.S. Securities and Exchange Commission, filed March 5, 2021
  6. Nelson, Cody, "Inside the Dirty, Dangerous World of Carbon Flooding," Capital & Main, April 5, 2021
  7. "Operations Overview," Denbury Resources, accessed April 2021
  8. Horn, Steve,"How A Fossil-Fuel-Friendly Policy Made Its Way Into The Biden Campaign’s Climate Plans," Drilled News, Sept. 23, 2020
  9. Nelson, Cody, "Inside the Dirty, Dangerous World of Carbon Flooding," Capital & Main, April 5, 2021
  10. Horn, Steve,"How A Fossil-Fuel-Friendly Policy Made Its Way Into The Biden Campaign’s Climate Plans," Drilled News, Sept. 23, 2020
  11. Endres, Cozen, Et Al, "Putting the U in carbon capture and storage: rhetorical boundary negotiation within the CCS/ CCUS scientific community," Journal of Applied Communication Research, Sept. 7, 2016
  12. Studlick, Shew, Et Al, "Carbon Dioxide Source Development, Northeast Jackson Dome, Mississippi," American Association of Petroleum Geologists, 1987 AAPG Annual Convention, Los Angeles, California, June 7-10, 1987
  13. "Denbury - 2020 SEC Form 10K," U.S. Securities and Exchange Commission, filed March 5, 2021
  14. "CO2 Production Fate," Mississippi State Oil & Gas Board, accessed May 2021
  15. Bowman, Bowman, "The History of Central Mississippi's Naturally Occurring CO₂ Fields," American Association of Petroleum Geologists Explorer, March 2016
  16. McCall, Mike, "Shell hopes to revive wells with carbon dioxide," The Clarion-Ledger, Dec. 29, 1985
  17. Bowman, Bowman, "The History of Central Mississippi's Naturally Occurring CO₂ Fields," American Association of Petroleum Geologists Explorer, March 2016
  18. "Denbury - 2020 SEC Form 10K," U.S. Securities and Exchange Commission, filed March 5, 2021
  19. "Denbury Reacquires the NEJD and Free State CO2 Pipelines," Denbury Resources, Nov. 4, 2020
  20. "Denbury - 2020 SEC Form 10K," U.S. Securities and Exchange Commission, filed March 5, 2021
  21. "Denbury - 2020 SEC Form 10K," U.S. Securities and Exchange Commission, filed March 5, 2021
  22. Daniels, Gary, "Hastings Oilfield", Texas State Historical Association, accessed May 2021
  23. "Pipeline Ruptures in Yazoo County, Dozens Rushed to the Hospital," Mississippi Emergency Management Agency, Feb. 23, 2020
  24. Kenney, David, "3 men were rescued after passing out in their car during Yazoo Co. gas leak," WLBT, Feb. 25, 2020
  25. Fowler, Sarah, "'Foaming at the mouth': First responders describe scene after pipeline rupture, gas leak," The Clarion-Ledger, Feb. 27, 2020
  26. Morgan & Morgan Facebook Press Release, Feb. 25, 2020
  27. Day, David, "CO2 leak closes Highway 3 near Satartia," Vicksburg Daily News, Oct. 7, 2020
  28. "Lobbyist Profile: C Kyle Simpson," OpenSecrets.org, accessed May 2021
  29. "Kyle Simpson," Thompson Coburn LLP, accessed May 2021
  30. Horn, Steve, "Labor Helps Obama Energy Secretary Push and Profit from 'Net Zero' Fossil Fuels," DeSmog.com, May 24, 2020
  31. "Lobbyist Profile: Adam Bramwell," OpenSecrets.org, accessed May 2021
  32. "S.799, SCALE Act," Congress.gov, accessed May 2021
  33. "FACT SHEET: The American Jobs Plan," WhiteHouse.gov, March 31, 2021
  34. "Recipients - Denbury Inc.," OpenSecrets.org, accessed May 2021
  35. "Recipients - Denbury Inc.," OpenSecrets.org, accessed May 2021
  36. "Denbury 2019 Corporate Responsibility Report," Denbury Resources, accessed May 2021
  37. Issue Brief, "The Case Against Carbon Capture: False Claims and New Pollution,", Food & Water Watch, March 2020
  38. Györe, Stuart, Et Al, "Tracing injected CO2 in the Cranfield enhanced oil recovery field (MS, USA) using He, Ne and Ar isotopes," International Journal of Greenhouse Gas Control, Volume 42, Nov. 2015, pp. 554-561,
  39. "Cranfield Fact Sheet: Carbon Dioxide Capture and Storage Project," MIT CC&ST Program, accessed May 2021
  40. Anderson, Romanek, Et Al"Gas source attribution techniques for assessing leakage at geologic CO2 storage sites: Evaluating a CO2 and CH4 soil gas anomaly at the Cranfield CO2-EOR site," Chemical Geology, Volume 454, April 5, 2017, pp. 93-104
  41. Amy, Jeff"Company to pay $3.5M after Mississippi, Alabama oil spills," Associated Press, April 29, 2019
  42. "Denbury plans CO2 injection in three fields," Oil & Gas Journal, Nov. 28th, 2005
  43. U.S. District Court for the Southern District of Mississippi, "USA and State of Mississippi v. Denbury Onshore, LLC - Complaint," April 25, 2019
  44. U.S. District Court for the Southern District of Mississippi, "USA and State of Mississippi v. Denbury Onshore, LLC - Consent Decree," April 25, 2019
  45. "Denbury pays big fine for 2011 oil well blowout," Associated Press, July 25, 2013
  46. "DOE Announces Projects to Receive CCS Funding" Coal Gasification News, January 2, 2010.
  47. "Taylorville plant to cost $3.5 bln" Reuters, March 3, 2010
  48. "Company ties 2 planned power plants to emissions bill, financing" EE News, April 21, 2009.
  49. 49.0 49.1 49.2 49.3 "Denbury presses Gulf Coast EOR projects" Oil and Gas Journal, August 6, 2010.
  50. "Fracking Beyond The Law, Despite Industry Denials Investigation Reveals Continued Use of Diesel Fuels in Hydraulic Fracturing," The Environmental Integrity Project, August 13, 2014.

External resources

External articles