Starting in late 2012, we began purchasing and utilizing CO2 from industrial sources in our tertiary operations in the Gulf Coast region. These projects illustrate our unique ability to use captured CO2 that would otherwise be released into the atmosphere.
Denbury is currently party to several contracts to purchase carbon dioxide (“CO2”) from industrial sources (CO2 from these sources is also known as anthropogenic or man-made CO2) to use in our enhanced oil recovery (“EOR”) operations. We currently purchase CO2 from an industrial facility in Port Arthur, Texas, an ammonia plant in Geismar, Louisiana and the Lost Cabin gas plant in Wyoming. These three sources currently supply, on average, over 100 MMcf/d of CO2 for our EOR operations. Denbury also owns an interest in the CO2 at LaBarge Field in Wyoming, which is captured from the Shute Creek Plant. The CO2 captured from these industrial sources could otherwise be released into the atmosphere. Additionally, we are working to take deliveries from a coal-fired power plant in Mississippi and are in ongoing discussions with other parties who have plans to construct plants near the Green Pipeline.
We continue to have ongoing discussions with owners of existing plants of various types that emit CO2 that we may be able to purchase and/or transport. In order to capture such volumes, we (or the plant owner) would need to install additional equipment, which includes, at a minimum, compression and dehydration facilities. Most of these existing plants emit relatively small volumes of CO2, generally less than our contracted sources, but such volumes may be attractive if the source is located near CO2 pipelines. The capture of CO2 could also be influenced by potential federal legislation, which could impose economic penalties for atmospheric CO2 emissions. We believe that we are a likely purchaser of CO2 captured in our areas of operation because of the scale of our tertiary operations and our CO2 pipeline infrastructure.