Obama's Words on Carbon Dioxide, Drilling Contradict His Actions

Obama's Words on Carbon Dioxide, Drilling Contradict His Actions
June 27, 2013

Paul Chesser

Paul Chesser is an associate fellow for the National Legal and Policy Center and publishes ... (read full bio)

In his much-hyped speech Tuesday, President Obama promised executive action – including greater regulations on the coal industry and approval of the Keystone Pipeline only if its “net effect on our climate” is not significant – to reduce the emissions of carbon dioxide that he alleges is the cause of global warming. He also called for the elimination of tax breaks for “big oil.”

“We can’t drill our way out of the energy and climate challenges that we face,” he said at Georgetown University.

If he really believes that, then why has his administration authorized billions of dollars in new projects to capture carbon dioxide (photo courtesy American Oil and Gas Reporter) and use it for “enhanced oil recovery?”

Take, for instance, the stimulus-funded “W. A. Parish Post Combustion CO2 Capture and Sequestration” project in Texas, in which the Department of Energy awarded $163 million to NRG Energy (and has yielded 3.38 “green job” equivalents so far!). The purpose of the so-called “Clean Coal Power Initiative” is to determine the feasibility and economic viability of extracting carbon dioxide from the flue gas of an existing coal-fired power plant, and sequestering it geologically “via an enhanced oil recovery process” (EOR).

That last phrase is the key – it is not addressing “enhanced oil,” as though it was cleaner burning or less polluting, but instead “enhanced recovery.” It means that the carbon dioxide is injected into the ground so that drillers can extract far more oil from the ground than they would otherwise. As the World Resource Institute explains:

“Only a small percentage of the petroleum in most oil fields can be recovered economically. One option to increase oil recovery is to pump CO2 into the reservoir to improve the flow of remaining oil through the pore space. After the oil-CO2 mixture reaches the surface, the CO2 is separated from the oil and recycled back to the reservoir.”

The Department of Energy says advanced CO2-EOR processes can extend the life of many oil fields by decades. The practice is not new; naturally occurring CO2 from New Mexico and Colorado has been piped into the Permian Basin of Texas for 30 years to access difficult-to-reach oil from those fields.

But there has never before been an economically viable way to produce sufficient amounts of carbon dioxide and transport it to the oil fields where it would be useful for EOR. But now CO2 – essentially for all life on the planet – has been demonized as a primary cause of catastrophic global warming, despite that fact there has been no such phenomena since 2002 (or longer).

Nevertheless President Obama is firmly on the record with the belief that CO2 created with the combustion of fossil fuels is bad for the planet, and that his agenda was to do everything within his power (avoiding an inert Congress as much as possible) to limit those emissions.

So what gives with all the carbon capture and storage projects that are accompanied by plans for enhanced oil recovery, which would create far more CO2? Besides the aforementioned W.A. Parish project in Texas, Obama’s Department of Energy has also funded (based on February 2012 information):

  • Air Products-Texas ($284 million)·      Archer Daniels Midland-Illinois ($141 million)·      FutureGen 2.0-Illinois ($1.05 billion)·      Hydrogen Energy-California (HECA) ($408 million)·      Leucadia-Indiana ($1.6 billion)·      Leucadia Energy-Louisiana ($261 million)·      Leucadia-Mississippi ($1.7 billion)·      NRG/W.A. Parish-Texas ($167 million)·     Southern Company-Mississippi ($270 million)·      Summit-Texas ($450 million)·      Taylorville-Illinois ($2.6 billion)

That’s $9.2 billion dedicated to the incredibly complex and expensive effort to sequester CO2 ultimately for the purpose of getting more oil out of the ground. Other projects exist as well, including some funded by DOE, which were said to be in preliminary or earlier stages of development.

The costs seem staggering and not worthwhile, unless you review the oil recovery potential side of the ledger. That was examined in a June 2008hearing – titled “Spinning Straw Into Black Gold” – before the Subcommittee on Energy and Mineral Resources under the House Committee on Natural Resources. The chairman of the subcommittee at the time, Democrat Rep. Jim Costa of California, explained how many old oil fields that were developed at the turn of the century in his district (which runs from Fresno to Bakersfield) were scrutinized for the potential of EOR with other technologies. He said the use of CO2 showed great promise.

“The Department of Energy has estimated that there are over 80 billion barrels of oil in the United States that is amenable to carbon dioxide-enhanced oil recovery, using current technology,” Costa said. “Advances in EOR technology, that number could double, it is believed by some to be as much as 160 billion barrels of domestic oil production.”

Estimates vary widely about the amount of oil recoverable from the Arctic National Wildlife Refuge, mostly because exploratory drilling has been prohibited. In 1998 the U.S. Geological Survey provided a mean estimate of 10.4 billion barrels in ANWR, which is often cited as the most promising location for new resources. Yet the Obama administration will not allow drilling in ANWR, even under political compromises such as therecent offer to fund research for cleaner automotive technology.

“ANWR’s off the table,” said Heather Zichal, deputy assistant to the president on energy and climate change, at the National Press Club in March.

But when it comes to a project that would extract far more oil, and potentially be more environmentally impactful, it’s full-steam ahead for Obama. In fact, contradictory to the president’s “war on coal” (which he iswaging), the demand for anthropogenically generated carbon dioxide for oil is great.

“The problem for EOR, ironically, is a lack of carbon dioxide,” Rep. Costa said at the 2008 hearing. “While there are billion of tons of CO2 coming out of our power plants each year, we simply do not have the infrastructure in place to capture and direct it to oil fields.”

So while the president regularly demonizes CO2 and “Big Oil” with his lips, his actions have directed something entirely different. Corporations such as Occidental Petroleum and Denbury Resources have practiced CO2 capture and EOR since the mid 1980s by utilizing naturally occurring carbon dioxide. But to fully exploit the resources they already have, but are more difficult to access, they need far more CO2 than they can access easily from the earth. The challenge for capturing and transporting it for EOR so far has been its capital expense. That is now changing with Obama’s Clean Coal Power Initiative, which heavily subsidizes the infrastructure costs for the capture of carbon dioxide for EOR. And…

“…those costs for energy production would be passed along to the consumers,” Rep. Costa said in 2008.

Remember then-Senator Obama said in January 2008 that under his cap and trade plan coal companies would be bankrupted, and that electricity prices would “necessarily skyrocket?” Apparently there was much more to that warning than the simple replacement of coal-fired power plants with wind turbines and solar panels. More to come.

 

[First published by the National Legal and Policy Center]

Paul Chesser

Paul Chesser is an associate fellow for the National Legal and Policy Center and publishes ... (read full bio)