Inside the Dirty, Dangerous World of Carbon Flooding |
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Inside the Dirty, Dangerous World of Carbon Flooding

Energy companies use a greenhouse gas to force out more oil in a little-known process that can bring headaches to rural communities.

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Photo: WildEarth Guardians

Around the world, scientists and advocates call for keeping carbon in the ground as a means of staving off climate change. But in the Southwestern United States — mainly in Colorado and New Mexico — a mainstay of obtaining more oil is facilitated by doing the exact opposite: drilling pure reserves of carbon dioxide out of the ground.

Co-published in The Wire

After it’s extracted from these natural-source underground fields, the gas then gets piped to the Permian Basin, the nation’s top-producing oil fields of West Texas and southeastern New Mexico. There, oil companies use the CO2 to flood their wells, forcing the last dregs of crude to the surface in a process also known as enhanced oil recovery, or EOR.

Carbon flooding is often described as a way of helping recover available oil, providing power while the energy sector transitions away from fossil fuels altogether. Sometimes, oil companies mention it alongside questionable carbon capture technology, suggesting that pulling CO2 from the atmosphere and pumping it underground into oil wells for permanent storage — and to loosen up remaining crude for extraction — would facilitate “carbon neutral” oil production.

However, that picture of carbon flooding is a futuristic fallacy. The first barrel of so-called carbon neutral oil was produced only earlier this year by Occidental Petroleum. And it relied on carbon offsets, rather than direct capture of CO2 and injection into wells.
 


With carbon storage, “At best, you’re just not changing the status quo,” said Jeremy Nichols, program director for WildEarth Guardians. “Inevitably, the CO2 will enter the atmosphere.
It will be released.”


 
The reality is that this little-known process uses mostly CO2 extracted from natural sources where it would’ve otherwise remained safely underground — not risking emission into the atmosphere nor furthering the use of planet-warming fossil fuels.

While the industry remains out of view of even many dedicated observers and watchdogs, it has existed for four decades and its scale is massive.

Occidental Petroleum — a Houston-based corporation that recently rebranded itself as a “carbon management” enterprise, despite being one of the top greenhouse gas emitters in history — says that it injects 2.6 billion cubic feet of CO2 per day into its Permian fields. The company is the largest leaseholder and one of the top producers in the Permian in both New Mexico and Texas. It drilled 13% of the basin’s production in 2015 and has said it foresees billions more in oil production from future CO2 floods.

A Kinder Morgan tank farm in Arizona. (Photo by Alan Staats/Getty Images)

Kinder Morgan, another major player in this sector, claims it transports 1.3 billion cubic feet of CO2 every day, aiding the extraction of 50,000 barrels of crude daily.

Carbon flooding and drilling have occurred in the U.S. for decades, and they’re likely to grow in prominence. On this front, oil companies have support from both major parties as well as President Joe Biden.

And tucked into the nearly 5,600-page coronavirus relief bill passed late last year are more tax credits for CCUS (carbon capture, utilization and storage) — a suite of processes that includes carbon flooding as the most-prominent “utilization” piece. In addition, the legislation fast-tracks permitting of CO2 pipelines and other CCUS infrastructure. Since then, congressional lawmakers in the current session have introduced more legislation along similar lines, including the recently introduced SCALE Act.

However, carbon flooding isn’t the innocuous technology that energy companies and politicians hope it to be. An exploration of the industry reveals it poses significant environmental harms, existential climate threats and health risks.

In addition, carbon drilling companies have a pattern of creating local economies that depend on their existence while simultaneously trying to undercut tax and royalty payments to town governments and residents.

How it works

Though the Permian is widely known for companies’ usage of hydraulic fracturing, or fracking, for oil, it’s also where companies use carbon dioxide extracted from underground fields known as domes in Colorado and New Mexico to flood oil wells, forcing 8%-20% of additional original oil in place to the surface.

An industry engineer with experience doing carbon drilling, who requested anonymity for fear of professional retribution, told Capital & Main that drilling for CO2 is in many ways similar to drilling for oil and natural gas.

“It’s really the same tools, the same equipment, the same calculation going on. It’s just using different types of numbers,” the engineer explained. “But you find a CO2 source field, which obviously can be several thousand feet underground, and you move a drilling rig in and you drill for it.”

Nearly 80% of all oil extracted via carbon flooding in the United States is done with gas obtained from the domes in New Mexico and Colorado, according to a 2015 U.S. Department of Energy report. While the amount varies from year to year, 2.9% of daily domestic oil production came from carbon flooding in 2018, according to a report from Denbury Resources, a player in the industry.

Carbon flooding could help oil companies recover up to 284 additional billion barrels of oil, a 2020 presentation given by industry consultancy Advanced Resources International concluded.

Canyons of the Ancients Monument, located in Montezuma and Dolores counties, Colorado. (Photo: Nationalparks)

Today, carbon flooding is touted as a potential climate solution due to the fact that a portion of the carbon dioxide used during the enhanced oil recovery process gets sent back underground, keeping it out of the atmosphere, where it would contribute to global warming. However, the oil companies have viewed the drilling process as a way to extend the duration of their wells. As Kinder Morgan put it in a 2003 ad, “Thanks to something invisible, the Permian’s future is solid,” adding that “CO2 flooding breathes new life” into oil fields.

However, carbon flooding furthers the climate crisis by facilitating both more fossil fuel use and leakage of natural-source CO2 into the atmosphere.

“At best, you’re just not changing the status quo,” said Jeremy Nichols, climate and energy program director for WildEarth Guardians. “Inevitably, the CO2 will enter the atmosphere. … It will be released.”

A long list of safety and environmental threats

From day one, carbon extraction has proven an environmental risk and sometimes a deadly one.

One of the byproducts of drilling for and then flooding wells with carbon dioxide is the potential release of a toxic, corrosive gas called hydrogen sulfide, or H2S. It and other gases can surface during the venting of carbon wells. And in some cases, the chemical compound has proven deadly.

One such incident occurred in the central hub for carbon flooding, Denver City, Texas — once dubbed the “Carbon Dioxide Capital of the World.” After gas escaped from an injection well in 1975, nine people died from H2S exposure, most of them residents living nearby. In total, 17 people died from exposure in that area within a four month period.
 


President Biden has long favored CCUS. He has promised to “double down on research investments and tax incentives for technology that captures carbon and then permanently sequesters or utilizes that captured carbon.”


 
An Environmental Protection Agency report points to 10 other H2S leaks from oil and gas extraction between 1974 and 1993. None of the incidents killed humans, but they did kill jackrabbits and blackbirds, a coyote, groups of moose and cows, a horse and other animals.

Some people living near carbon extraction sites cite H2S as a threat to their communities.

In southwestern Colorado’s Montezuma County — home to one of the world’s largest natural CO2 sources, the McElmo Dome — these wells are rampant. Kinder Morgan, the main stakeholder in McElmo Dome, must keep a H2S contingency plan on public file with the county.

“Where they’re drilling and the H2S might be there, you need to have a [respirator] mask,” said Jimbo Buickerood of the San Juan Citizens Alliance, an advocacy group that has worked on CO2 drilling issues in Montezuma County and elsewhere. “It’ll just kill you.”

On top of noise complaints and other disruptions related to the drilling, citizens have reported smelling mystery gases coming from the wells from which CO2 is extracted.

Tom Hayden filed a complaint with Colorado’s oil and gas commission in 2019 after he said Kinder Morgan had been venting a CO2 well about 1,000 feet from his home. He had the company check an air-quality monitor for anything dangerous, but the alarm wasn’t functioning, according to the complaint.

Knowing the potential danger, Hayden wrote that Kinder Morgan seemed “lawless” and that he didn’t feel safe in his home, fearing he “could be killed at any time.” Hayden’s complaint led to the state suspending Kinder Morgan’s well later that year.

CO2 leakage, too, has proven a persistent issue around extraction sites. Many are relatively low stakes, such as the 2017 leak of 1 million cubic feet of CO2 at an Oxy USA facility in New Mexico’s Bravo Dome — another major drilling site.

Others are more devastating. Also in 2017, a CO2 pipeline in West Texas’ Scurry County blew and hurt at least eight people. One man was hit by shrapnel in his leg and back, the Snyder News reported. And in 1982, Colorado’s Sheep Mountain Unit CO2 extraction site was the source of one of the largest CO2 leakages and the largest recorded industrial release in human history.

Carbon flooding has likely caused small earthquakes in Texas, one study found, after researchers correlated shakes with the underground injection of CO2 for oil recovery over a five-year period.

Another carbon flooding byproduct — dirty “produced water” — is another potential source of leaks that can contaminate the soil and groundwater. Environmental advocacy group Clean Water Action calls carbon flooding “one of the most water intensive forms of oil production,” one that demands freshwater drawn from the drought stricken Permian regions of Texas and New Mexico.

Climate peril and carbon flooding’s politics

Carbon flooding is often billed as a solution to climate change. The pitch from its proponents is that carbon can be captured at an emissions source, like a power plant, and piped safely away to an oil field. There, it can help recover available oil and provide power while the energy sector transitions away from fossil fuels altogether.

But while some of the gas used in carbon flooding comes from capturing CO2 at emissions sources, such capture technology remains unproven and too costly for widespread use — leaving much of the oil recovery to CO2 drilled from places where it otherwise would’ve stayed underground.
 


Carbon drilling companies have a pattern of creating local economies that depend on their existence while simultaneously trying to undercut tax and royalty payments
to town governments and residents.


 
The carbon flooding process ends with between 3.7 and 4.7 metric tons of CO2 emitted for every metric ton of CO2 injected into the earth, according to a 2009 study. Less than 0.2 metric tons of CO2 gets sequestered underground for each barrel of oil produced.

A 2020 study further concluded that the CO2 capture and storage process leaks between 0.43 and 0.94 kilograms of carbon for each kilogram of CO2 that gets stored. Carbon flooding using natural CO2 sources like the McElmo or Bravo domes, the study concludes, “cannot contribute to reductions in anthropogenic CO2 emissions into the atmosphere.”

Despite these studies, the EPA statutorily mandates that CO2 drilling sites self-report their emissions data to the EPA only if the site emits over 25,000 metric tons of CO2 per year. Asked if the agency had ever brought an enforcement action against any CO2 dome operators, an EPA spokeswoman instead pointed a Capital & Main researcher toward a factsheet that didn’t answer the question.

(Update: On April 10 the EPA responded by stating, “EPA has not brought any enforcement actions against any companies in there [sic] carbon drilling space.”)

Despite their flaws and little regulation, carbon flooding and CCUS have powerful political allies.

President Biden has long favored CCUS. His climate platform says he “will double down on research investments and tax incentives for technology that captures carbon and then permanently sequesters or utilizes that captured carbon.”

His energy secretary, Jennifer Granholm, has also endorsed CCUS. “If confirmed, I fully plan to commit resources to carbon management across the fuel and technology spectrum,” Granholm wrote to senators after her Jan. 27 confirmation hearing. “I am particularly excited by the opportunities for game-changing advances in carbon capture.”

An unreliable ally for local communities

Money is the driver for both carbon companies and the localities that allow such work on their land. But in many instances, energy companies do just about everything in their power to keep their money out of locals’ pockets.

Extracted CO2 helps energy companies get more oil to sell, and creating a market for carbon dioxide allows them to profit from a greenhouse gas.

Drilling operations primarily sit in rural areas that depend on their existence. New Mexico’s Harding County, one of three counties housing the Bravo Dome, gets 70%-80% of its tax revenue from carbon drilling operations. Neighboring Union County takes more than 20% of its tax base from them.

In addition, governments and individual landowners are often due royalties from the entities working their land. But to get the money they’re owed, they often wind up in court, fighting the energy companies. The state of New Mexico once sued Occidental companies for underpaid CO2 royalties. They settled in 2006 for $11.6 million.

The Department of the Interior is involved in an ongoing lawsuit against Oxy USA over royalties, with a U.S. District Court ruling in December 2020 that the company owes the agency $1.82 million in royalty payments. Occidental has appealed the ruling.

Dolores County, Colorado, home of the Doe Canyon CO2 source field operated by Kinder Morgan, raises an estimated 64% of its tax revenue from carbon extraction. Colorado’s Montezuma County depends on carbon drilling for more than half of its tax base. They’ve had to file suit to get their dues, too, winning a case against Kinder Morgan for more than $2 million in underpaid taxes.

“That gives money to our fire departments, our cemeteries, our roads — the whole county is based on the taxes,” said Leslie Bugg, the county assessor. Without the taxes, she said, “We wouldn’t even be able to have employees anymore in the offices.”

While lucrative for the county’s tax base, there’s a glaring issue in Montezuma County: The carbon dioxide will likely run out in the coming decades. A 2011 Energy Department paper predicted that the current commercially produced CO2 sources, at the current production rate, could run dry by about 2050.

Just like an oil town before its crude dries up, the county must prepare for a major economic blow. County Commissioner Jim Candelaria said he hopes the logging industry there can have a resurgence, but building it up will take a while.

“I hope we have some time before that (carbon) runs out,” he said, “but it will run out.”

Additional reporting and research by Steve Horn.


Copyright 2021 Capital & Main

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