The Big Burp

Sparking up tired oilfields

Carbon dioxide is a clear gas that puts the bubbles in pop and beer and makes drinkers burp. The fact that it can do as much for tired oil wells, and thereby rejuvenate them, has made CO2 one of the most promising ingredients in the U.S. energy mix. Indeed, oil firms are now sinking more than $1.5 billion into a pair of pipelines to deliver CO2 from southern Colorado to declining Texas oilfields, even though falling oil prices threaten to squeeze the ventures' profits.

The two efforts are the largest CO2 projects ever. In one, Exxon Corp. and Atlantic Richfield Co. are the major investors in a $350 million, 405-mile underground line that is to begin piping the gas this spring. In the second, Shell Oil Co. and Mobil Oil Corp. are building a 500-mile system that will cost a total of about $1.2 billion. That system, in which Continental Resources Co. also has an interest, is to be finished in the third quarter of next year. The Shell-Mobil project alone could coax out an extra 280 million bbl. and boost output by about 13%.

The energy firms remain confident that the lines will pay off, despite dropping oil prices, which now average about $30 per bbl. from Texas fields. The profit outlook is enhanced by provisions in the windfall profits legislation that include a 30% tax rate on oil recovered through the new method, compared with 70% on most oil discovered before 1979.

Carbon-dioxide injections are just one of a panoply of methods for pepping up senescent wells. All have arisen because conventional pumping can extract only about one-third of the contents of a field before the flow stops. When oil prices were still rising, experts predicted that enhancing techniques could more than double U.S. recoverable reserves, which now stand at about 30 billion bbl. But some current projections are for an increase in reserves of closer to 50%. That would still be enough to keep U.S. wells flowing into the middle of the 21st century. This file is automatically generated by a robot program, so viewer discretion is required.