Denbury recognizes that the reduction of carbon emissions is important, and we take the responsibility of protecting our environment seriously. Part of our obligation is to report greenhouse gas (“GHG”) emissions and develop procedures and methods to collect data critical for calculating these emissions. In addition, our operating strategy, which focuses on enhanced oil recovery utilizing carbon dioxide (“CO2 EOR”), has environmental benefits. We are committed to utilizing emerging technologies, where feasible, to capture or reduce emissions and to improve our carbon efficiency.
With our focus on CO2 EOR, we offer environmental benefits not generally associated with oil and gas operations. Perhaps most significantly, CO2 EOR is increasingly being viewed as complementary to reducing carbon emissions from various current and proposed industrial facilities. For example, we are currently utilizing over 3 million metric tons of CO2 annually from industrial sources for our CO2 EOR operations that could have otherwise been released into the atmosphere. Based on information from the EPA’s Greenhouse Gas Equivalencies Calculator, this amount equals the annual greenhouse gas emissions from over 650,000 passenger vehicles. Our CO2 EOR process provides an economical and technically feasible method to develop otherwise stranded oil reserves with the added benefit of associated CO2 storage. Putting CO2 to work as a commodity, rather than as a waste, is just common sense.
As policy makers search for ways to capture CO2 from industrial sources, it is clear that utilizing depleted American oil reservoirs is the best proven opportunity to safely make carbon capture and associated long-term storage a reality in the near-term. Recent federal government research shows that CO2 EOR has the potential to store billions of metric tons of CO2 and produce billions of barrels of American oil that are not recoverable today.
Denbury is advancing our program of CO2 pipeline development to expand our CO2 transportation network capability to reach our network of oil fields. Denbury’s business model is an excellent example of how to combine technology, economics and science to take a proven, safe process to a new level. We believe our investments, experience and acquired knowledge give us a strategic and competitive advantage, and expect to be a leader in this arena for many years.
On October 30, 2009, the EPA finalized the regulation to report GHGs from various sources covered under several industrial sectors. This rule is published in 40 CFR (the Code of Federal Regulations) under Part 98 and is referred to as the Greenhouse Gas Reporting Program (“GHGRP”). The threshold to report GHGs is 25,000 metric tons of CO2 equivalent (CO2e). Denbury has been utilizing applicability determinations, definitions, calculation methodologies, exemptions and monitoring methods that are listed under applicable subparts of GHGRP for reporting purposes. The data reported by Denbury is available to the public via the EPA’s website. Under this program, we report data under Subparts PP (CO2 produced), UU (CO2 injected) and W (CO2 emitted).
Under Subpart PP, we have annually reported the amount of CO2 produced and delivered from our Jackson Dome fields in Mississippi since 2010. Starting in 2014, we reported the amount of CO2 produced at our Riley Ridge gas processing plant in Wyoming, which started up in December 2013. Under Subpart UU, we report the amount of CO2 received at each of our EOR fields via purchase meters before the CO2 is distributed to injection wells in the field and injected underground. Finally, under Subpart W, we report CO2 (carbon dioxide), CH4 (methane) and N2O (nitrous oxide) emissions from various sources and processes, as converted to CO2 equivalent (CO2e) emissions.
Denbury plans to install a natural gas liquids extraction plant at our Delhi Field in Louisiana, which is expected to come into service during the second half of 2016. Recovered methane will be used to power a turbine to generate electricity for the operation of the gas plant and our other field operations. In addition, the improved purity of the carbon dioxide used for re-injection is expected to result in increased CO2 utilization efficiency.
As part of our commitment to increasing energy efficiency, we evaluate our operations on an ongoing basis to ensure we are using the most efficient feasible technology. Denbury implements updates and changes throughout our operations to reduce our carbon footprint and increase our efficiency. Increasing energy efficiency benefits both our economic results as well as our environmental efforts.
Denbury’s initiative to update the technology and processes we use in our facilities and operations has aided in the continued control and monitoring of our carbon emissions. For example, many of our recent EOR facilities have been designed to capture low-pressure gases from our tanks and other processes by incorporating vapor recovery units, preventing the ventilation of those gases into the atmosphere. As a result, all of our EOR facilities capture nearly all of the pressurized CO2 returning from our producing wells by separating the CO2 from produced liquids. The separated CO2 is then re-injected into the oil-bearing reservoir, continuing the repeatable process of enhanced oil recovery and increasing overall production. In addition to capturing CO2, we have also successfully reduced our CO2 emissions to de minimis levels by capturing the low pressure CO2 from tanks in these operations. This control technology is now standard in all of Denbury’s EOR facility designs.
Denbury recognizes national and international greenhouse gas reduction goals. We are committed to seeking out and implementing operational upgrades that are both environmentally and economically responsible. Our intent in doing so is not limited only to improving our operational efficiency, but because we recognize our responsibility to take part in the shared effort to protect and preserve our environment.