Val Verde CO2 Pipeline – Carbon Capture and Storage Eliminates 2 Million Tonnes of CO2 Emissions Each Year
In 1998, Petro Source Carbon Company, a predecessor to Blue Source, entered a partnership with MCNIC and an affiliate of BP to construct an 82 mile, 10-inch CO2 pipeline in West Texas known as the Val Verde Pipeline.
The total initial capital cost of the project was $17.6 million. As recently as 2007, additional incremental investments, totaling to $10 million, have been made to expand the pipeline system. The pipeline enables the capture of CO2 from five natural gas processing plants, avoiding CO2 venting to the atmosphere.
Once gathered, dehydrated and compressed, the CO2 is transported to an existing CO2 distribution system in the Permian Basin of West Texas for eventual delivery to Enhanced Oil Recovery (EOR) markets. EOR projects inject CO2 into mature oil producing fields both to increase the viscosity of the oil and to sweep the oil toward the producing wells. Permian Basin EOR projects typically consume an average of 1.5 billion cubic feet per day (BCFD) of “fresh” CO2, which is primarily sourced from underground supplies.
It is important to recognize that no new or incremental oil is produced as a result of capturing and utilizing anthropogenic CO2, since underground sourced CO2 would have been used in its place anyway. Despite the obvious environmental benefits of utilizing the anthropogenic CO2, in today’s market, the vent stack CO2 does not always win the CO2 sourcing contract from an EOR producer due to unacceptable pricing and delivery interruptions. In such a case, anthropogenic CO2 is then vented to the atmosphere.
When anthropogenic CO2 is utilized, however, emission reductions are created. To date, Blue Source has successfully marketed and sold over 2 million Verified Emission Reductions (VERs) from the Val Verde Pipeline project. The revenue stream from the sale of these VERs is now a significant factor in calculating returns for future project investments.