The Potential and Economics of Enhanced Oil Recovery

Abstract

Potential production from enhanced oil recovery (EOR) is projected as Potential production from enhanced oil recovery (EOR) is projected as a function of federal pricing and research policy. A combination of increased economic incentives and vigorous public and private research and development collaborations are required if the full potential of EOR is to be realized. This potential could offset substantially, although not completely, the current decline in production using conventional technology. Introduction More than two-thirds of the oil discovered in the U.S. remains unrecovered using conventional (primary and secondary) production technology. This is more than 300 billion bbl left in the ground, according to estimates by the American Petroleum Institute. Additional recovery of even relatively modest portions of this oil could reduce the nation's projected dependence on imports significantly. Producing some portion of this remaining oil is the purpose of enhanced oil recovery (EOR) - the application of advanced technology to crude oil production. The federal government encourages the development and application of EOR because these techniques promise to accelerate domestic production through 1995, promise to accelerate domestic production through 1995, before nonpetroleum substitutes are developed completely. Two major policy options are available for this goal - increased economic incentives and sponsored research and development. A series of studies was undertaken by the U.S. DOE to answer these questions:* What are the most critical barriers to widespread application of EOR? Which of these barriers could be removed with federal programs or policies?* How much can EOR supplement domestic petroleum production? When can this production be expected?* How much will EOR cost? Can we afford EOR in the future?* What portion of EOR's total potential will industry develop with varying economic incentives?* What research and development (R and D) achievements will stimulate industry to produce more enhanced oil and to produce it faster?* What are the trade-offs between economic incentives and public research and development? Will one option or the other exhaust EOR opportunities or is a combination needed? This paper summarizes the results of more than 2 years of study focused on these and other questions concerning the potential of enhanced oil recovery. Domestic Supply and Demand of Petroleum Petroleum products provide almost one-half of the Petroleum products provide almost one-half of the nation's total domestic energy consumption and almost all its transportation requirements. Demand for these products increased at an average rate of about 5% products increased at an average rate of about 5% annually from WW II until demand peaked in 1973 at 17 million B/D. The Arab embargo, along with higher prices and a slowed economy, arrested this trend; consumption in 1974-75 dropped to about 1972 levels. The revival of the economy and increased sales of larger automobiles indicate a return of the growth trend. Estimates for the next 15 years predict rising demand, with an average growth of 2.7 to 4.4%, depending on the assumptions used. Even at the lower growth rate, demand for petroleum could reach 25 million B/D in the early 1990's. petroleum could reach 25 million B/D in the early 1990's. While demand has risen, domestic supply has not kept pace. Current production capacity is about 8 million B/D pace. Current production capacity is about 8 million B/D and declining. JPT P. 1231