New technology could revive dormant local oil fields

LIMA, Dec 08, 2007 (The Lima News - McClatchy-Tribune Information Services via COMTEX) The state last year passed over a Lima group's application for a $60 million grant to help establish an energy megacenter. Even so, more of that proposal is taking shape.
Global Energy and Hydrogen Technologies Corp., or HTC Purenergy, this week announced they had signed a memorandum of understanding to form a new company for carbon dioxide management, sequestration and enhanced oil recovery. In layman's terms, Carbon Management Technologies would catch and store the carbon dioxide that will be a byproduct of Global's converting coal and petroleum coke into synthetic gas. It also would use that carbon dioxide to force previously unreachable oil to the surface.
"What we're looking at with Global is to take some of the CO2 off the new plant there that they're building in Lima," HTC Senior Vice President Jeff Allison said. "That new company will take that CO2 and then market it to the various oil fields around your state. We'll also do some work with regards to helping those oil companies set up enhanced oil recovery programs in that area.
"That's sort of based on the technology that's been successful in Canada with EnCana and Apache."
Global Energy will own 70 percent of Carbon Management Technologies and HTC Purenergy will own 30 percent. In return for HTC's technology services and licensing, Global Energy will issue 41,666 common voting shares to the Canadian energy technology company. The companies expect to complete the deal, subject to regulatory approval, Jan. 11.
Ultimately, the new venture could mean more jobs and more investment in Lima to complement the 550-megawatt plant Global is building on the site of the former Lima Loco Works.
"It's hard to say how much more," Global Group Vice President Dwight Lockwood said. "You'd expect that process would add some, but there's no way for me to speculate how much or where. Capture and compressing (the gas) at the Lima facility is one thing, but moving the gas to the other end of the state or even 20 or 30 miles north or whatever, that's going to take a lot of work to figure out the best way to proceed or the pace of it. ...
"It takes time to figure out the best place and it takes time to negotiate a deal and it takes time to go forward so it's successful and not rushed."
When a group that included the city of Lima and Global Energy applied last year to the Ohio Department of Development for the megacenter grant, the group had enhanced oil recovery and carbon capture as one of the business lines it intended to research and pursue.
"What HTC and Global have decided is that they're not going to wait on grant funding," Lima Mayor David Berger said. "They apparently concluded there's a real business opportunity. Moving ahead with that is part of the project development here in Lima."
Initially, the enhanced oil recovery services would be marketed to the east side of Ohio. The oil there is deeper than in this area. The depth affects its usefulness.
Global Energy's gasification process will leave the carbon dioxide pressured and in liquid form, Berger said. Carbon Management Technologies would pipe it in liquid form, and it would be pumped into the ground that way. On the east side of Ohio, the oil field is between 2,500 and 3,000 feet below the surface, a level at which the carbon dioxide stays in the liquid form that lets it more easily lift the oil, Berger said. In Northwest Ohio, where the oil is only 1,200 feet down, the carbon dioxide would return to gas form, requiring more of it to lift the oil.
"Long term, their intent would be to continue to research the opportunities for Northwest Ohio, recognizing there are some challenges on the northwest side that don't exist on the east side," Berger said.
With uncertainty about whether holes drilled for oil on this side of the state were properly capped, there's also concern that both the carbon dioxide and oil would come out places it wasn't wanted.
HTC stores the carbon dioxide in the ground, using saline aquifers, unmineable coal beds and retired oil and gas fields. It escaping into the atmosphere would eliminate the carbon credits the company would earn for the reduction of carbon emissions.
Global has always intended to do carbon capture and sequestration, Lockwood said. The memorandum of understanding allows Cincinnatibased Global to use HTC's expertise in those areas and enhanced oil recovery more fully.
Source: tradingmarkets.com