International Journal of Greenhouse Gas Control 37 (2015) 170–181

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International Journal of Greenhouse Gas Control

journal homepage: www.elsevier.com/locate/ijggc

Economic evaluation on CO2 -EOR of onshore oil fields in China

Ning Wei a,∗ , Xiaochun Li a,∗ , Robert T. Dahowski b , Casie L. Davidson b ,
Shengnan Liu a , Yongjin Zha c
a
State Key Laboratory for Geo-Mechanics and Geo-Technical Engineering, Institute of Rock and Soil Mechanics,
Chinese Academy of Sciences, Wuhan 430071, China
b
Pacific Northwest National Laboratory, Richland, WA, USA
c
Drilling Research Institute, China National Petroleum Corporation, Beijing 100195, China

a r t i c l e i n f o a b s t r a c t

Article history: Carbon dioxide enhanced oil recovery (CO2 -EOR) and sequestration in depleted oil reservoirs is a plau-
Received 28 September 2014 sible option for utilizing anthropogenic CO2 to increase oil production while storing CO2 underground.
Received in revised form 22 January 2015 Evaluation of the storage resources and cost of potential CO2 -EOR projects is an essential step before the
Accepted 26 January 2015
commencement of large-scale deployment of such activities. In this paper, a hybrid techno-economic
Available online 25 March 2015
evaluation method, including a performance model and cost model for onshore CO2 -EOR projects, has
been developed based on previous studies. Total 296 onshore oil fields, accounting for about 70% of total
Keywords:
mature onshore oil fields in China, were evaluated by the techno-economic method. The key findings of
CO2 -EOR
Performance model
this study are summarized as follows: (1) deterministic analysis shows there are approximately 1.1 bil-
Cost model lion tons (7.7 billion barrels) of incremental crude oil and 2.2 billion tons CO2 storage resource for onshore
CO2 storage resource CO2 -EOR at net positive revenue within the Chinese oil fields reviewed under the given operating strat-
Onshore oil fields egy and economic assumptions. (2) Sensitivity study highlights that the cumulative oil production and
cumulative CO2 storage resource are very sensitive to crude oil price, CO2 cost, project lifetime, discount
rate and tax policy. High oil price, short project lifetime, low discount rate, low CO2 cost, and low tax
policy can greatly increase the net income of the oil enterprise, incremental oil recovery and CO2 storage
resource. (3) From this techno-economic evaluation, the major barriers to large-scale deployment of CO2 -
EOR include complex geological conditions, low API of crude oil, high tax policy, and lack of incentives
for the CO2 -EOR project.
© 2015 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND
license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

1. Introduction many are beginning to experience production decline. Therefore,

Carbon dioxide enhanced oil recovery (CO2 -EOR) has received
increased attention for CO2 utilization, mitigation, and economic
benefit resulting from stimulating declining oil field production
(Godec et al., 2011; Holt et al., 2005; Jing, 2003). CO2 -EOR technol-
ogy has been applied for decades in the oil industry; more than 169
CO2 -EOR projects have been undertaken worldwide with both nat-
ural and anthropogenic CO2 , most of which are in the United States
and Canada (Al Adasani and Bai, 2011). This history of projects
provides a significant experiential knowledge base regarding the
technical and commercial viability of CO2 -EOR practices as well as
the potential for CO2 capture and geological sequestration (CCS).
After many years of secondary production, most existing oil-
fields in China have entered mature stages of their lifecycles, and
∗ Corresponding authors. Tel.: +86 139 95659295; fax: +86 027 87198967.
E-mail addresses: nwei@whrsm.ac.cn (N. Wei), xcli@whrsm.ac.cn (X. Li).
there is an urgent need to find ways for stabilizing and even increas-
ing oil production in China’s oil fields (Zhang, 2012). Meanwhile,
CO2 capture and geological storage (CCS) technologies are particu-
larly important to China due to its large and rapidly rising emissions
and high dependence on fossil fuel, and large remaining coal
reserves. CO2 -EOR technology can beneficially use anthropogenic
CO2 to stimulate additional crude oil production, and is considered
as an important option for diffusion and scaling-up to commer-
cial CCS projects. Therefore, CO2 -EOR technology may provide an
important option for both oil recovery and CO2 mitigation.
Assessment of the oil recovery, CO2 storage resource and eco-
nomic factors of CO2 -EOR projects is the first step in the strategic
deployment of CO2 -EOR activities. Many researchers have devel-
oped various techno-economic models for assessing the potential
of CO2 -EOR and for providing support for the strategy of car-
bon emission reduction (Bock et al., 2003; Dahowski et al., 2005;
Davidson et al., 2011; Hall, 2012; Holt et al., 2005, 2009; Holtz et al.,
1999, 2001; Khorshidi et al., 2011; King et al., 2011; Klins, 1984;

http://dx.doi.org/10.1016/j.ijggc.2015.01.014
1750-5836/© 2015 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
 N. Wei et al. / International Journal of Greenhouse Gas Control 37 (2015) 170–181 171

Nomenclature
CCO2 CO2 purchase cost-related [USD/t]
OOIP original oil in place, calculated by standard oil indus- t
Taxannual annual royalties for CO2 -EOR project [USD/a]
try method [m3 ] t evaluation year for economic evaluation [−]
A area of oil field [m2 ] Ct annual income from crude oil sale [USD/a]
hn net thickness of oil pay zone [m] NPV net present value [USD]
ϕe average effective porosity of pay zone [−] RLev net income or CO2 mitigation cost [USD/bbl or
Swi initial water saturation, expressed as a fraction [−] USD/t]
Er overall recovery efficiency, Er = Em · Ea · Ev · Ed [−] CostLev levelized cost of CO2 or crude oil [USD/t or USD/bbl]
Em mobility efficiency [−]
Ea areal sweep efficiency [−]
Ev vertical sweep efficiency [−] McCollum and Ogden, 2006; McCoy, 2008; McCoy and Rubin, 2009;
Ed displacement efficiency; the iterative method fol- Rubin et al., 2013; van Bergen et al., 2004). The techno-economic
lows the method presented by McCoy (2008) [−] evaluation is data dependent. With more data, the evaluation can
(Fi )BT hydrocarbon pore volume (HCPV) of CO2 injected at be performed more reliably and with higher resolution. The CO2
the point where CO2 breaks through the production storage resource in some mature oil reservoirs in China have been
wells [−] assessed using various methods (Dahowski et al., 2012; Li et al.,
Fi HCPV fraction of injected CO2 [−] 2009; Liang et al., 2009; Shen et al., 2009; Zhang et al., 2011), and
Bo initial oil formation volume factor [−] the economics of CO2 -EOR in China have also been evaluated using
CO2 res CO2 density at reservoir temperature and pressure the first-order economic method (Dahowski et al., 2012). However,
conditions [t/m3 ] further economics assessment need to be conducted to enhance the
Roil/CO2 net displacement ratio between oil and CO2 [t/bbl] understanding of CO2 -EOR in China using more detailed geological
Clease cost of leasing equipment [USD] data and economic coefficients.
D well depth [m] This study aims to develop an improved techno-economic
CD&C drilling and completion capital cost of new wells model for estimating the CO2 storage resource and economics
[USD] of CO2 -EOR based on limited site-specific reservoir data, provide
Nwell number of wells [−] preliminary techno-economic insight regarding the potential for
Nwell,IE the total number of injection wells [−] onshore CO2 -EOR in China, and identify the major technical-
Nwell,pattern the total number of well patterns [−] economic barriers to deployment of CO2 -EOR in China.
Nwell,sub number of wells [−]; sub means the type of well,
such as new, production, or injection well 2. Methodology for techno-economic evaluation
a1 and a2 regression coefficients for production/injection
equipment and lease equipment The evaluation of the techno-economic aspects of onshore CO2 -
Cpattern cost for well pattern equipment [USD] EOR can be accomplished using a technical-economic model with
CPE cost of production equipment [USD] input from available oil fields data, and guided by the CO2 -EOR pro-
CIE cost of injection equipment [USD] cess workflow according to typical operating strategy (Holt et al.,
CWO capital cost of well workover [USD] 2009; McCoy and Rubin, 2009).
CFL capital cost of flowlines and field connections [USD]
Cannual annual investment cost for EOR [USD/a] 2.1. Operating strategy of CO2 -EOR
CRF capital recovery factor [−/a]
r discount rate [−] CO2 -EOR technologies currently include gravity stabilizing gas
T lifetime of single phase CO2 -EOR project [−] injection (GSGI), continuous injection (miscible/immiscible flood-
O & Mannual annual operation and maintenance cost [USD/a] ing), water alternating gas (WAG), and several next-generation
O & Mdaily daily expenditures in operation and maintenance CO2 -EOR technologies reviewed by Kuuskraa et al. (2009). Cur-
[USD/a] rently, the CO2 -EOR industry continues to use WAG as the main
O & Mcons consumables’ cost in operation and maintenance technology for controlling CO2 mobility and flood performance
[USD/a] by increasing microscopic/macroscopic displacement efficiency
O & Msur surface operation and maintenance cost in opera- (Christensen et al., 2001; IEA-GHG, 2000). Fig. 1 shows a typical
tion and maintenance [USD/a] flow diagram of WAG technology used in a CO2 -EOR project, in
O & Msubsur subsurface maintenance cost in operation and which CO2 is transported, compressed, and injected, alternatively
maintenance [USD/a] with water, into the injection wells of an oil field. In the reservoir,
mtCO annual CO2 flow amount in year t [t/a] CO2 mobilizes oil by miscible or immiscible displacement. Part of
2
MCO2 total CO2 stored [t] the CO2 is stored in immobile oil, residue water and empty pores,
EOR total incremental oil production [bbl] and the rest is produced at production wells with oil, water, and nat-
Crecycling levelized cost of CO2 recycling [USD/t] ural gas. The CO2 from production wells is separated, compressed,
CM&V total monitoring and verification cost [USD] and re-injected with new CO2 into the reservoir.
Q annual mass flow rate of CO2 in CO2 recycling pro- In the CO2 -EOR design, we assume that the field has undergone
cess [t/a] primary and secondary flooding and that the CO2 flood uses WAG
Costt annual total cost for CO2 -EOR project in year t injection (Bock et al., 2003). Because reworking an existing well
[USD/a] field is much cheaper than drilling new wells for CO2 -EOR (McCoy,
t
Coil oil revenue in year t [USD] 2008), it is reasonable to assume that the CO2 -EOR projects are
t
O&Mannual the total cost of operating expenses (OPEX) in year based on current well fields with significant infrastructure already
t [USD] in place. Costs therefore consider conversion of water injection
CF capacity efficient [−] wells to CO2 injection wells, reworking of injection and production
wells, upgrades to production facilities, establishment of surface
172 N. Wei et al. / International Journal of Greenhouse Gas Control 37 (2015) 170–181
Fig. 1. Flow diagram of typical WAG technology in CO2 -EOR project, modified from Bock et al. (2003).
facilities, manifolds, CO2 surface processing facilities, and drilling
relatively small numbers of injection wells to refine well spacing,
and replace abandoned wells.
2.2. Hybrid performance model
The technical-economic models always include two parts: a per-
formance model and a cost model (McCoy and Rubin, 2009). The
performance model takes inputs that describe reservoir and oil
properties, and estimates the amount of incremental oil recovered
as a function of the gross amount of CO2 injected and stored. How-
ever, available data on CO2 -EOR project performance are scarce and
site-specific, and numerous methods are applied to project pro-
duction curves of the CO2 -EOR process. These methods include, in
order of both increasing complexity and data requirements, empir-
ical models; semi-analytical models, such as the fractional flow
method and CO2 -Prophet; reservoir modeling, such as ECLIPSE,
GEM/STARS, TOUGH2, et al. Without access to sufficient reservoir
data, a history-matched model and production data, the empirical
estimates and semi-analytical models are preferred because they
require relatively limited data and can provide reasonable preci-
sion for quick assessment at large scale, such as national-scale. So
the production curve of the well pattern is calculated using the frac-
tional flow method presented in McCoy (2008) thesis. However, the
fractional flow method misses many important mechanisms of the
CO2 -EOR process, such as miscible displacement, multiphase solu-
bility, three-phase flow, oil viscosity reduction, rock–brine–oil–CO2
interaction, and others. The fractional flow method can therefore
underestimate the CO2 storage resource greatly and it is necessary
to apply additional criteria and methods to remedy the limita-
tions of the fractional flow method, especially for the CO2 storage
resource evaluation and site screening process. A hybrid perfor-
mance model has therefore been developed based on a combination
of available site-screening criteria, fractional flow method and CO2
resource evaluation method of CO2 -EOR.
After reviewing current screening criteria for selecting candi-
dates for CO2 -EOR (Bachu, 2002; NETL, 2012; Shaw and Bachu,
2002; Shen, 2010), we recommend the following criteria:
- Oil reservoir depth must be greater than 760 m and a reservoir
temperature less than 121 ◦ C to reach CO2 minimum miscibility
pressure (MMP);
- Ideally the oil gravity should be greater than 27◦ API with an oil
viscosity less than 20 centipoise (cp) at reservoir conditions to
use miscible or near miscible displacement; and
- Residual oil saturation should be greater than 0.2 to allow more
oil fields to be assessed.
The suitable reservoirs, selected by these screening criteria, are
then processed for further assessment by fractional flow method
and CO2 resource evaluation method.
The incremental oil recovery of oil fields is expressed in terms of
the production of original oil in place (OOIP) and overall recovery
efficiency (Goodman et al., 2011; McCoy and Rubin, 2008), which
is calculated by fractional flow method:
EOR = OOIP · Er (1)
OOIP = A · hn · ϕe · (1 − Swi ) (2)
Er = Em · Ea · Ev · Ed (3)
Em , Ea , Ed , and Ev mainly follow the fractional flow and iterative
method recommended by Claridge (1972) and McCoy and Rubin
(2008); further details on this method and its implementation can
be found in McCoy (2008) thesis.
The oil production curve calculated by McCoy and Rubin (2008)
method matches well with the curves determined by reservoir
modeling; however, this method always underestimates the ulti-
mate CO2 storage resource without considering many important
mechanisms, such as, miscible displacement, CO2 solubility in oil
and residual water. The CO2 storage resource in oil fields should
be assessed by additional method, such as, volumetric-based or
 N. Wei et al. / International Journal of Greenhouse Gas Control 37 (2015) 170–181 173

Table 1
Spreadsheet of the economic model including key parameters (see text for citations).

Items Equation for evaluation Cost unit

1. Capital cost
2
1.1 Site characterization Csite = 30, 000 USD/km (6) USD/km2
Csub = Nwell,sub · a1 · ea2 or Csub = Nwell,sub · a1 · ea2
1.2 Well pattern capital cost (7) USD/pattern
sub is the representative of IE, PE, lease and others cost components
1.3 Workover cost CWO = Nwell,sub · (0.48 · CD&C + 0.50 · CPE ) (8) USD/well
1.4 Well drilling and completion capital cost CD&C = 1, 000, 000 · 0.1271 e0.0008z + 530.7 (9) USD/well
0.5
1.5 Flow lines cost CFL = Nwell · 43, 600 · (7389/(280 · Nwell )) (10) USD
1.6 Other cost for CO2 -related equipment 10% of the total well pattern capital cost (11) USD
Ctotal = Csite + Clease + CIE + CPE + Cpattern + CD&C + CWO + CFL
Amortized capital cost T
(12) USD
Cannual = Ctotal · CRF and CRF = 1 − (1/(1 + r) )/r
2. Operation and maintenance cost (O&M) USD/a
O&Mdaily = Nwell · 7596
O&Mcons = Nwell · 20, 295
2.1 O&M cost of well fields 0.5
(13) USD/a
O&Msur = Nwell · 15420 · [(m/(280 × Nwell )) + 5000]
O&Msubsur = Nwell · [5669 · (d/1219)]
2.2 CO2 compression cost Average cost is set as 13 USD/t CO2 for 1Bar CO2 and 1 USD/t for high pressure USD/t CO2
CO2 from pipeline terminal.
2.3 CO2 recycling cost Crecycling = 23.66 · Q (14) USD/t CO2
2.4 Purchased/new CO2 cost CCO2 × MCO2 (15) USD
2.5 Fluid pumping 1 USD/STB for water and oil pumping in production well USD/STB
2.6 Water compression 1 USD/m3 for WAG process regardless of difference pressure
2.7 Monitoring and verification cost CM&V = 0.1 · MCO2 (16) USD
t t t t t t t t
Total annual O&M cost O&Mannual = O&Mdaily + O&Mcons + O&Msur + O&Msubsur + Crecycling + CCO + CM&V USD/a
2
(17)

3. Revenue from crude oil sale t

Coil = first purchase price of crude oil × annual oil production
t
4. Annual tax for crude oil production Taxannual is calculated by tax model, which shown in Table3 (18) USD/bbl
Annual cost for CO2 -EOR Cost t = Cannual
t t
+ O&Mannual (19) USD
T
t t
Net present value of the CO2 -EOR NPV = (Coil − Cost t − Taxannual
t
)/(1 + r) (20) USD
t=1
Net income or CO2 mitigation cost (USD/bbl or RLev = NPV/EOR or RLev = NPV/MCO2 (21) USD/t CO2 USD/bbl
USD/t CO2 )
T T
Levelized cost CostLev = Cost t /MCO2 or CostLev = Cost t /EOR (22)
t=1 t=1

production-based resource methods. If good production data are
unavailable, volumetric-based CO2 storage resource may be pre-
ferred (Goodman et al., 2011). The methods suggested by Bachu
et al. (2004) were used to estimate CO2 storage resource for a series
of assumed slug sizes (hydrocarbon pore volume, HCPV) under a
five-spot WAG strategy. This method predicted the fraction of oil
produced, as well as the actual fraction of pore volumes of solvent
or CO2 injected at breakthrough and at any other fraction of HCPV.
Assuming that 40% of the injected CO2 is recovered at the surface
and re-injected into the reservoir (Dahowski and Bachu, 2007), the
CO2 storage amount for any injected CO2 is calculated as Eqs. (4)
and (5). The major coefficients are also calculated by McCoy and
Rubin (2006) method and McCoy (2008) thesis. The utilization rate
is the net CO2 injection versus oil production (Roil/CO2 = EOR/MCO2 ).
at breakthrough (BT ) : MCO2 = CO2 res · (Fi )BT · OOIP · B0
at any HCPV injection : MCO2
= CO2 res · [(Fi )BT + 0.6 · (Fi –(Fi )BT )] · OOIP · B0
2.3. Economic model for CO2 -EOR
Cost models include amortized capital costs, operating and
maintenance costs, and other costs. There are many methods to
assess CO2 -EOR project costs, including, in order of increasing com-
plexity and data requirement, empirical model, budget model, and
final accounts. Investment decisions on CO2 -flooding projects rely
on budget models, which depend on project design and market
price. However, without a detailed project design and market price,
the empirical model and statistics data are preferred for quick cost
assessments. An example of the economic model applied to one oil
field evaluated in this study is shown in Table 1. The major cost com-
ponents comprising the economic evaluation will now be discussed
further.
2.3.1. Capital costs
The capital cost of each project is estimated based on the
requirements of conversion of water flooding technology to
CO2 flooding technology, including re-working of existing wells,
field production equipment, CO2 processing equipment, pat-
tern/injection/production equipment, and drilling and completion
(D&C) costs of additional new wells. These capital costs are amor-
tized over the lifecycle of the field by using the project discount
(4) rate (McCoy and Rubin, 2009).
Site characterization technologies include at minimum well log-
ging and 3D seismic investigation. For oil fields that already have
seismic investigation data and well logging data, site characteri-
(5) zation cost will be significantly less. Although the costs for these
activities are extremely diverse in China, it is reasonable to assume
the average cost for this study, as shown in Eq. (6) in Table 1.
Pattern equipment includes production-related equipment,
such as rods, pumps, and wellheads; injection-related equipment,
such as injection skids and wellheads; and lease equipment, such as
manifolds, pumps, separators, and compressors. Depleted oil fields
may need additional wells to reduce well spacing and improve pat-
tern uniformity, besides optimizing the displacement profiles and
economic benefits (Bock et al., 2003). The lease cost of well pattern
equipment, production equipment, and injection equipment is in
power or exponential form as Eq. (7). The regression coefficients, a1
174 N. Wei et al. / International Journal of Greenhouse Gas Control 37 (2015) 170–181
Table 2
Associated regression coefficient estimates for capital cost categories of the model.
Region or country Drilling and completion equipment Production well
Exponential Power
a1 a2 a1
China USD100,100 8.00 × 10−4 USD3200
and a2 , for production/injection equipment and lease equipment in
China are shown in Table 2.
For wells that are already in place and require only a well
workover, such as tubing and down-hole equipment replacement,
which is prior to CO2 -flooding, the cost is expressed as a fraction of
production/injection equipment cost, shown as Eq. (8) in Table 1,
depending on whether the well is a producer or injector. The well
drilling and completion cost of new wells is shown in Eq. (9).
The costs associated with flow lines and connections to move
CO2 and any derivative hydrocarbon around the field were esti-
mated using Eq. (10) given by Dahowski et al. (2012). The other
cost for CO2 -related equipment, such as the three-phase separator,
manifolds, and brine pump, is assumed as a fraction of total well
pattern capital cost.
2.3.2. Operation and maintenance cost (O&M)
Operation and maintenance cost of well fields includes the
t
normal daily expenses (O&Mdaily t
), consumables (O&Mcons ), surface
equipment maintenance (O&Msur t ), and subsurface maintenance
t
(O&Msubsur ), which are shown in Eq. (13). The equations are based
on McCollum and Ogden (2006) cost model for annual O&M,
which include the same parameters. The costs associated with
the re-compression of CO2 recovered from production wells were
assessed using McCollum and Ogden (2006) method. This approach
assumes a combination of five-stage compression and one-stage
pumping for CO2 from the recycling process and one stage pumping
for high-pressure CO2 from the terminals of the pipeline to a
final injection pressure (about 1.25–1.80 times the initial reservoir
pressure). These equations form the basis for estimating CO2 com-
pression costs, including capital cost and O&M cost on a levelized
USD/t CO2 basis.
A cost estimate for CO2 compression from atmospheric pressure
to injection pressure ranges from 7.20 to 19.50 USD/t CO2 in China
because electricity rates vary greatly among industry sectors and
regions (Dahowski et al., 2012). An average cost of 13 USD/t CO2
is used for compressing recycled CO2 , and an average compression
cost of 1.0 USD/t CO2 is used for compressing CO2 at pipeline out-
lets to injection wellheads. The estimation of costs associated with
water pumping during WAG processing is much smaller than that
of CO2 compression; thus, the cost of water pumping was set as
1.0 USD/m3 in this evaluation. The unit cost of lifting liquids to the
surface follows ARI estimates, which are 0.25 USD per stock tank
barrel (STB) of fluid for lifting (McCoy, 2008).
After CO2 breakthrough, the CO2 from the production well is
then purified and recycled with purchased CO2 into the injection
wells. Therefore, for a given well pattern, the total amount of pur-
chased CO2 to the field is reduced over time. The recycling plant
should be sized to the maximum annual CO2 recycling rate of well
pattern or EOR phase, and annual O&M cost was assumed to be 16%
of the capital costs (Dahowski et al., 2012). The resulting estimates
for the recycling cost for CO2 -EOR projects evaluated in this study
is shown in Eq. (14).
Under an assumption of sufficient CO2 from industrial
processing and high-purity CO2 sources, the capture, compression
and transportation costs can reach in some instances as low as
30 USD/t CO2 , which is similar to or only moderately higher than the
price of 25–30 USD/t CO2 reported for recent CO2 -EOR projects in
Lease equipment Injection well equipment
Power Exponential
a2 a1 a2 a1 a2
9.75 × 10−1 USD32,000 2.99 × 10−2 USD29,000 2.81 × 10−4
Songliao Basin of China (Shen, 2010). Therefore, it is reasonable to
assume that the price of CO2 for CO2 -EOR will generally range from
30 USD/t to 70 USD/t, which is the maximum cost of CCS assessed
by Dahowski et al. (2012). The lowest cost sources are CO2 sources
from depleted gas fields and high-purity CO2 sources represent-
ing a mix of small hydrogen, ammonia oxide, and coal chemical
factories, and other high-purity CO2 sources (Li et al., 2011).
Monitoring and verification (M&V) requirements of CO2 -EOR
projects are still unclear, and the M&V technology suites employed
at each project are highly site-specific. However, Benson et al.
(2005) estimated the cost for an enhanced monitoring package at
0.05–0.10 USD/t CO2 . The enhanced package included all elements
of the basic package, in addition to periodic well logging, 3D seismic
investigation, surface CO2 flux monitoring, and other monitoring
technologies. This case has the highest cost and is most inclusive
of monitoring approaches assumed for the current analysis. There-
fore, 0.10 USD/t CO2 was applied as a constant levelized M&V cost
for commercial scale CO2 -EOR projects.
2.3.3. Revenue from crude oil production
With the annual oil production estimates, annual revenues can
be estimated. In the Annual Energy Outlook (AEO) 2013 reference
case, the Brent spot oil price increased from USD111 per barrel (in
2011 dollars) in 2011 to USD163 per barrel in 2040 (EIA, 2012).
However, the crude oil price drops dramatically for several rea-
sons, so the low price 30 USD/bbl should be the low limitation for
crude oil price. To estimate the economics, 90 USD/bbl, which is
average crude oil price between 2015 and 2040, at 2010 was used
as for deterministic analysis, and 30–150 USD/bbl, which reflects
the price fluctuation of crude oil, for sensitivity analysis as the first
purchase price without consideration of oil quality.
2.3.4. Tax for CO2 -EOR
The tax policy regarding crude oil in China is very complex
and tax rates are relatively high. Table 3 shows the overt high
tax case and low tax case in China. The tax components include
mining resource compensation fees, resource tax, oil special rev-
enue tax (windfall tax), site investigation taxes, and income taxes
(Wang, 2012; Zhou et al., 2012). Most enterprises pay the aver-
age tax ratio in China, which ranges from 35 to 40% of total crude
oil incomes. The experts at the Natural Resources Defense Council
(NRDC) provided the typical U.S. oil production taxes as an exam-
ple in Table 3 for comparison (Qian, 2012). The basic tax scenarios
in the United States incorporate royalties, 17.5%; production and
ad valorem taxes, 4%; and federal and state income taxes, 35%. The
total tax rate is about 22% of total crude oil incomes under a no
incentive policy scenario.
However, the federal government in United States also enacted
an additional tax credit for CO2 sequestration, providing USD10
per ton for CO2 stored in the process of CO2 -EOR by Section 45Q
tax credit (Dooley et al., 2010), 15% tax-credit applies to all costs
associated with installing the CO2 -flood, CO2 purchase cost, and
CO2 operating costs for injection (NEORI, 2012). The federal govern-
ment in U.S. also provides severance tax reduction and/or extension
of existing severance tax reduction for oil produced with CO2 from
anthropogenic sources (e.g., in North Dakota, Wyoming and Okla-
homa) (ADB, 2014). There is no similar tax incentive policy for
 N. Wei et al. / International Journal of Greenhouse Gas Control 37 (2015) 170–181 175

Table 3
Tax policy and incentives for CO2 -EOR.

No. Content Oil industry Context U.S. case Low case (CN) High case (CN) Description

(1) Wellhead oil price USD/bbl 100.0 100.0 100.0 Predicted by IEA report
(2) Less: royalties (3) + (4) + (5) USD/bbl 17.5 21.7 21.7
(3) Mineral compensation 1.2 1.2 About 1.2% of oil price
tax
(4) Resource tax (1) × 5–10% USD/bbl 5.0 5.0 Changed to 5–10% in 2011 in China; 5%
is used in cost analysis
(5) Oil special revenue tax [(1) − 55] × f − a USD/bbl f, a 15.5 15.5 Current tax policy
or windfall tax
0%, 0.0 0.0 Wellhead oil price (1) less than
55 USD/bbl
20%, 0.0 0.0 Oil price (1) ranges from 55 to
60 USD/bbl
25%, 0.25 0.0 Oil price (1) ranges from 60 to
65 USD/bbl
30%, 0.75 0.0 Oil price (1) ranges from 65 to
70 USD/bbl
35%, 1.5 0.0 Oil price (1) ranges from 70 to
75 USD/bbl
40%, 2.5 15.5 15.5 Oil price (1) greater than 75
(6) Production tax or ad 5.0 2.0 12.5 About 2–12.5% of total oil price in
valorem tax China
(7) Total tax (2) + (6) USD/bbl 22.5 23.7 34.2
(8) CO2 purchase costs USD/tCO2 17.5 17.5 17.5
(9) CO2 recycling costs USD/tCO2 12.0 12.0 12.0 Calculated by NRDC group (Qian, 2012)
(10) Other O&M costs USD/bbl 8.0 8.0 8.0 Calculated by NRDC group (Qian, 2012)
(11) Amortized CAPEX USD/bbl 4.0 4.0 4.0 Calculated by NRDC group (Qian, 2012)
(12) Total costs and tax (7) + (8) + (9) + (10) USD/bbl 64.0 65.2 75.7
(13) Net cash margin (1) − (12) USD/bbl 36.0 34.8 24.3
(14) Income taxes ((1) − (12)) × 25% USD/bbl 12.6 8.7 6.1 35% of net cash margin in U.S. and 25%
in China
(15) Net income (13) − (14) + (16) + (17) + (18) USD/bbl >26.9 26.1 18.2
(16) Additional incentives USD/t CO2 3.5 0.0 0.0 Additional tax credit for storage of
anthropogenic CO2 in U.S.
(17) Severance tax USD/bbl Yes No No There is no incentives for EOR in China
reduction/extension
(18) Other EOR tax and Yes No No
incentive

CO2 -EOR projects in China currently, except Xinjiang province with
an incentive, 30% of resource tax or 1.5% total oil income, for EOR
development (Zhou et al., 2012). As a result, there are currently
greater financial incentives for CO2 -EOR development in the United
States than in China. All else being equal, when the crude oil price
goes higher, the rate of return is greater for U.S. CO2 -EOR projects
than China. As such, the higher tax policy and lack of incentives are
major barriers to large-scale deployment of CO2 -EOR in China.
2.3.5. Net income and CO2 mitigation cost for CO2 -EOR
The economic model comprising the above-described cost com-
ponents, has been developed in order to evaluate the economics of
CO2 -EOR in selected oil fields passing the site screening criteria.
The net present value of net income and the CO2 mitigation cost
for CO2 -EOR projects in a given year can be calculated using Eqs.
(6)–(21), shown in Table 1.
2.4. Evaluation procedure of the techno-economic model
Based on previous models, available site-specific data, the eval-
uation stage, consultations with industry and government experts,
and expert’s inputs from NRDC, CNPC, and CAS, a techno-economic
model was established based on the semi-analytical performance
model and an empirical economic model, which can assess the
effect of CO2 price, crude oil price, royalty policy, and geological
settings. The evaluation framework and methodology mainly fol-
lows the workflow presented by McCoy (2008), as shown in Fig. 2.
Then the completely site-specific data and techno-economic model
were integrated in to a spreadsheet of model that allows CO2 -EOR
projects to be evaluated by this techno-economic methodology in
China.
Most CO2 -EOR projects tend to be planned in several phases
over several decades, which spreads out capital investments in CO2
infrastructure at the field and requires funds for CO2 supplies. This
results in a more level demand for CO2 at the oil field than that in
an individual (single-phase) CO2 -EOR project or a longer period of
peak production for the EOR project. Further multiphase evaluation
should be carried out for more detailed evaluation.
3. Economics evaluation of onshore CO2 -EOR in China
The evaluation procedure for onshore CO2 -EOR in China is pre-
sented here. Note that due to significant differences in technologies,
equipment, and related costs required for offshore CO2 -EOR, this
present study focuses exclusively on onshore CO2 -EOR in China.
The techno-economic evaluation follows the three steps: evalua-
tion methodology, data compilation, and evaluation. With available
oilfield data, the economic model can be applied.
3.1. Database of onshore oilfields
The oilfield database evaluated in this study contains 296
onshore oil fields in China, accounting for 70% of the total
number of oil fields expected to be ultimately produced in
China by primary and secondary oil recovery processes (Zhang,
2011). The database on individual oil fields was obtained
mainly from the Atlas of Oil and Gas Basins in China (Li
and Lv, 1988, 2002), the geology database, Petroleum Geology
of China (Chinese Petroleum Geology Editorial Committee, 1992;
Zhai, 1987), and some other oil field data (Wei et al., 2013). The oil
fields omitted in this study are likely to be similar with these oil
fields evaluated.
176 N. Wei et al. / International Journal of Greenhouse Gas Control 37 (2015) 170–181

Fig. 2. Workflow for technical-economic evaluation of CO2 -EOR patterns.

3.2. Basic features of onshore oil fields in China

These petroliferous provinces are polycyclic superimposed and

composite basins, with complex traps of various origins and mega-
structural oil-gas belts (Li, 1996; Liu, 2007). Most oil fields in
China belong to the river-deltaic sedimentary system with very
high historical tectonic activity. All formations exhibit appar-
ent multi-cyclicity and fractures. Compared with marine deposit
basins (the origin of many oilfields in the U.S. and elsewhere
in the world), sedimentary basins with continental facies exhibit
unique characteristics of reservoirs and hydrocarbons, such as
high heterogeneity, thin pay zone, high density of fractures,
high viscosity, and high wax resin content (Zhang et al., 2011).
Therefore, CO2 -EOR activities in China face many technical chal-
lenges, including miscible states, low sweep efficiency, low oil
recovery rate, and low CO2 storage efficiency (Zhao and Liao, Fig. 3. Net income of crude oil production changes with cumulative oil production.
2011).
Shen (2010) also stated that an average of only 20–40% of in situ
oil is recovered with primary or secondary production methods 3.3. Deterministic evaluation of CO2 -EOR
in China, and suggest an average recovery of 33% can be used
for national scale evaluation. Therefore, it was assumed that 35% CO2 -EOR systems that have been presented apply to the forty
of the original oil in place (OOIP) has been recovered prior to years. In this study, an attempt is made to estimate costs in terms
the CO2 -EOR process. For well patterns benefitting incremental of what projects may face in China. The major parameters in the
oil recovery slightly at the same CO2 injection rates (Evans and above economic model of CO2 -EOR projects, listed in Table 4, were
Fischer, 2012), the five-spot pattern is assumed as the basic well used for economic evaluation of onshore oil fields in China.
pattern in this evaluation. Well spacing, the distance between In the past, operators used small-volume CO2 injections (0.4–0.5
wells and the acreage they cover, shows a distribution range of HCPV) to maximize profitability. With higher oil prices, CO2 -EOR
22,500–122,500 m2 /production well for most oil fields in China economics increasingly favor the use of considerably higher CO2
(Han et al., 1999). Given a certain oil block, well pattern type and volumes. Although the evolution toward this change is illustrated
well spacing, the well pattern number and well number can be by oil production experience (IEA-GHG, 2000), the same 0.5 HCPV
calculated for techno-economic evaluation. (including new and recycled CO2 ) as that reported by Dahowski
 N. Wei et al. / International Journal of Greenhouse Gas Control 37 (2015) 170–181 177

100 and Bachu (2007) was assumed to estimate incremental oil recov-
80 ery and CO2 storage due to CO2 -EOR for comparison of previous
research and the present study. In addition, according to the hybrid
60
SWAG technologies, the ratio of CO2 to water is set as 1:1. Other
CO2 Mitigation cost (USD/bbl)

40
cost coefficients are from cost parameter of feasibility study in
20 Sinopec report by Zhou et al. (2012), and revised by consultants
0 from National Petroleum Corporation (CNPC).
0 500 1000 1500 2000 2500 3000
-20
3.3.1. Net oil recovery cost and CO2 storage costs
-40
After site suitability screening by multi-criteria method, there
-60 are 165 out of 296 onshore oil fields remain as priorities for
-80 further techno-economic evaluation. The economics of potential
CO2 -EOR projects in onshore oil fields were assessed by the eco-
-100
Cumulative CO2 storage capacity (Mt) nomic method described in Table 1 under the low tax policy case of
Table 3. The net income of crude oil production changes with cumu-
Fig. 4. CO2 storage cost curve for onshore CO2 -EOR projects in oil fields.
lative oil production as shown in Fig. 3. The cost effective amount
of incremental oil production is about 1.1 billion tons (7.7 billion
Table 4
barrels). The net income of oil production ranges from 25 USD/t
Major parameters for deterministic economic evaluation.
to 0 USD/t. The economic amount of CO2 stored in the oil reser-
Project parameter Deterministic value voirs is approximately about 2.2 billion tons, as shown in Fig. 4.
First purchase oil price (USD/STB) 90.0 The net CO2 storage costs range from −100 USD/t to higher than
CO2 purchase price (USD/t) 50.0 0 USD/t. Prospects on the low end of this range are mostly oil fields
CO2 recycling costs (USD/t) 23.66
with promising oil recovery rates, low oil viscosity, thick payzone,
Discount rate (%) 12
Ratio of new wells to original wells (%) 15
high residue oil saturation, and other favorable characteristics. Con-
EOR project lifetime (year) 12 versely, the high cost end of the curve includes small and deep fields
CO2 injected (HCPV) 0.5 with thin pay zones, low residue oil saturation, low-recovery rates,
Ratio of CO2 to water 1:1 and very high CO2 cost and recycling costs.
Closure cost (USD) 0
Overall, the deterministic results show a great potential for
Tax model Low case in Table 3
Escalation factor 0 deploying CO2 -EOR projects in onshore oil fields in China; the net
income distribution of these projects is shown in Fig. 5. Under

Fig. 5. Distribution of net income for onshore CO2 -EOR projects.

178 N. Wei et al. / International Journal of Greenhouse Gas Control 37 (2015) 170–181

60 40
Daqing Oilfield
Gaosheng Oilfield 30
40
Zhaoyuan Oilfield
Tahe Oilfield 20
Cost or Revenue

20

Net Income (USD/bbl)

10
0
0
(USD/bbl) (USD/bbl) (USD/bbl) (USD/bbl) (USD/tone)
0 200 400 600 800 1000 1200
-20 Total Cost Gross Income Royalties Net Income CO2 Mitigation -10
Cost
-20 30USD/bbl
-40 60USD/bbl
-30 90USD/bbl
-60 120USD/bbl
Components of Economic Evaluation -40
150USD/bbl
Fig. 6. Cost distribution for typical oil fields with low tax policy by deterministic -50
Cumulative Oil Production (Mt)
analysis.
Fig. 7. Net income changes with cumulative oil production and crude oil price for
the method and assumptions employed in this evaluation, many onshore CO2 -EOR in China.
CO2 -EOR projects appear technically and economically feasible
in oil fields throughout China. These oil fields include Daqing, 80
Zhongyuan, Jianghan, Kelamayi, Liaohe, Jilin, Jiangsu, Dagang, and
40
Yumen oil fields, among others.

Mitigation cost (USD/bbl)

0
3.3.2. Cost distribution for case study 0 500 1000 1500 2000 2500
Fig. 6 shows the royalties and cost distribution for four example -40
oil fields with low tax policy. The four examples were selected to
-80
represent different sedimentary basins, and having the potential to 30USD/bbl
deploy large-scale CO2 -EOR projects, with each having proved OOIP -120 60USD/bbl
greater than 700 million barrels and exhibiting some of the highest 90USD/bbl
120USD/bbl
estimated net CO2 -EOR incomes. These oil fields have the potential -160
150USD/bbl
to deploy large-scale CO2 -EOR projects. The results show the cost,
-200
accounting for the largest part of the CO2 -EOR project, in addition Cumulative CO2 storage capacity (Mt)
to the royalties and income, accounting for the smallest part of the
CO2 -EOR process. The main factors which may negatively impact Fig. 8. Mitigation cost changes with cumulative CO2 storage resource and crude oil
price.
the benefits of EOR projects are low recovery rate, the high cost of
CO2 -EOR projects, and high tax policy in China.
The sensitivity study shows that the cumulative economic oil
Complex properties of reservoir, which are characteristic of EOR
production and cumulative economic CO2 storage resource are also
projects on the low end of this range, include thin pay-zone, deep
sensitive to the CO2 price. The cumulative amount of incremen-
reservoir, low residual oil saturation, high viscosity of crude oil, and
tal oil production varies between 1.0 and 1.1 billion tons with net
low permeability. The complex properties of oil reservoirs increase
income ranges from 25 USD/bbl to 0 USD/bbl, for CO2 prices varies
cost by requiring more well-reworking, underground equipment,
between 30 USD/t and 70 USD/t (shown in Fig. 9). The cumulative
and surface equipment to inject CO2 and produce crude oil. These
amount of CO2 stored in the oil reservoirs varies between 2.2 and
complexities also result in lower oil recovery rates by WAG tech-
2.3 billion tons with CO2 mitigation cost from −110 USD/t to 0 USD/t
nologies. The very high tax rate certainly decreases the net income
(shown in Fig. 10).
of enterprises dramatically as well as the motivation of enterprises
The sensitivity study shows that the cumulative economic oil
to carry out CO2 -EOR projects in China.
production is also sensitive to project lifetime, discount rate and
Many CO2 -EOR projects show early opportunities for CO2 -EOR
tax policy. The cumulative amount of incremental oil production
deployment, which is very important for diffusion and scaling-up
varies between 0.9 and 1.1 billion tons with net income ranges from
of CO2 -EOR projects. The cost distribution also provides us with
30 USD/bbl to 0 USD/bbl, for project lifetime varies between 6 years
some way to solve the net income problem of CO2 -EOR projects:
and 15 years (shown in Fig. 11). The cumulative amount of incre-
i.e. how can tax policies and new technologies make the economics
mental oil production varies between 1.0 and 1.1 billion tons with
of CO2 -EOR more attractive.
30
3.4. Sensitivity evaluation of CO2 -EOR
25 CO2 Price 30USD/t
CO2 Price 50USD/t
The economic oil recovery and storage potential for CO2 -EOR 20
CO2 Price 70USD/t
can be affected significantly by differences in CO2 and oil prices and
Net Income (USD/bbl)

15
tax policy (NETL, 2012). Sensitivity analyses have been conducted 10
for the scenario where the oil price and CO2 price for enhanced oil 5
recovery are varied.
0
The sensitivity study shows that the cumulative economic oil 0 200 400 600 800 1000 1200
-5
production and related cumulative CO2 storage resource are very
sensitive to the crude oil price. The cumulative amount of incre- -10
mental oil production varies between 0.3 and 1.1 billion tons with -15
net income ranging from 35 USD/bbl to 0 USD/bbl, for the various oil -20
Cumulative Oil Production (Mt)
prices (shown in Fig. 7). The amount of CO2 stored in the oil reser-
voirs varies between 0.6 and 2.4 billion tons with incomes from CO2 Fig. 9. Net income changes with cumulative oil production and CO2 price for
mitigation, for the various oil prices (shown in Fig. 8). onshore CO2 -EOR in China.
 N. Wei et al. / International Journal of Greenhouse Gas Control 37 (2015) 170–181 179

CO2 Price 30USD/t 30

40
CO2 Price 50USD/t
20 CO2 Price 70USD/t
Low Tax Case
20
0 High Tax Case
Mitigation cost(USD/bbl)

0 500 1000 1500 2000 2500

Net Income (USD/bbl)

-20
10
-40

-60 0
0 200 400 600 800 1000 1200 1400 1600
-80

-100 -10

-120
Cumulative CO2 storage capacity (Mt)
-20
Cumulative Oil Production (Mt)
Fig. 10. Mitigation cost changes with cumulative CO2 storage resource and CO2
price for onshore CO2 -EOR in China. Fig. 13. Relationship between net income and cumulative oil production under
different tax policy.

40 Lifetime 6a
Lifetime 9a curve is nearly flat, with gentle slope; this suggests that the net
30 Lifetime 12a
Lifetime 15a
income of enterprises and tax for government could be increased
20 dramatically, and the deployment of CO2 -EOR technology could be
Net Income (USD/bbl)

accelerated significantly through some combination of high crude

10
oil price, short project lifetime, low discount rate, low CO2 price
0 and low tax policy.
0 200 400 600 800 1000 1200 In this study, the total CO2 storage resource with estimated
-10
positive net income is approximately 0.6–2.3 billion tons with
-20 associated oil recovery between 0.3 and 1.3 billion tons (2.1 and
9.1 billion barrels). This cost effective CO2 storage resource is less
-30
than half the theoretical resource evaluated by previous studies
-40 (Dahowski et al., 2009; Li et al., 2009), indicating that while many
Cumulative Oil Production (Mt)
challenges remain, prospects are high for CO2 -EOR in China.
Fig. 11. Net income changes with cumulative oil production and project lifetime for
onshore CO2 -EOR in China. 3.5. Limitation of this techno-economic evaluation

net income ranges from 30 USD/bbl to 0 USD/bbl, for discount rate
varies between 6% and 14% (shown in Fig. 12). The amount of incre-
mental oil production varies between 0.9 and 1.1 billion tons with
net income ranges from 25 USD/bbl to 0 USD/bbl, for high tax case
and low tax case (Fig. 13). This figure also shows that the high tax
case tax policy decreases the revenue of EOR projects significantly.
Both the deterministic and the sensitivity analysis show that
there is a high potential for deploying CO2 -EOR projects with posi-
tive net incomes within onshore oil fields in China. The net income
of single EOR project is very sensitive to the crude oil price, CO2
price, project lifetime, discount rate, and tax policy. Therefore,
any incentives, price variation or technological improvement can
change the cost curve greatly. The largest part of CO2 -EOR cost
40
30
Net Income (USD/bbl)
Discount rate 6%
Discount rate 8%
Discount rate 10%
Discount rate 12%
Discount rate 14%
The model described and applied in this study accomplishes
the evaluation of CO2 -EOR prospects in China based on limited
reservoir properties and statistical economic parameters, enabling
a larger quantity of reservoirs to be rapidly evaluated. With fur-
ther site characterization, reservoir modeling, detailed equipment
inventory and cost parameters, the economics of the high-priority
reservoirs can be further assessed at higher resolution at site-scales.
However, the precision of the techno-economic model is limited
by the precision of the hybrid performance model, caused by the
limitation of available data. The core of the technical model uses
a hybrid performance model, including fractional flow method,
empirical CO2 resource evaluation method, and empirical site
screening criteria, limiting the resolution of this evaluation. Mean-
while, the techno-economic evaluation, using a given operating
strategy and average properties of oil fields, might overestimate or
underestimate the income of oil enterprises and total incremental
crude oil production. The total number of oil fields in this evalua-
tion is only 70% of total number of onshore oil fields expected to
be ultimately produced by primary and secondary oil recovery pro-
cesses in China, so the estimated storage resource and incremental

20
oil recovery represent only part of the potential EOR picture for
onshore oilfields in China.
10

3.6. Analysis and discussion

0
0 200 400 600 800 1000 1200
The results from this study show that a large number of China’s
-10 onshore oilfields appear technically and economically amenable for
deploying CO2 -EOR technology. There are several pilot-scale and
-20 demo-scale CO2 -EOR projects in operation or under planning, such
Cumulative Oil Production (Mt)
as those in Daqing, Shengli, Caose, Yanchang and other oil fields.
Fig. 12. Net income changes with cumulative oil production and discount rate for The economic viability for large-scale deployment of CO2 -EOR tech-
onshore CO2 -EOR in China. nology have already been proven in these fields (Wang, 2012). The
180 N. Wei et al. / International Journal of Greenhouse Gas Control 37 (2015) 170–181
question is why the CO2 -EOR technology has not been more widely
applied in China. Our investigation reconfirms that the major bar-
riers to large-scale deployment of CO2 -EOR in China are basically
cost related:
1) The high cost and non-availability of adequate volumes of CO2
near suitable oil fields is a major barrier to large-scale CO2 -EOR
deployment (Zhao and Liao, 2011). There is a need for lower-
ing CO2 prices and having low-cost CO2 pipeline transportation
infrastructure.
2) The high total costs of CO2 -EOR projects can be addressed
through refining technologies and practices geared toward the
challenging characteristics of Chinese oilfields. The economic
aspect of CO2 -EOR technologies can be improved by offering a
lower recycling ratio, higher sweep-efficient CO2 -EOR technolo-
gies, higher recovery ratio of OOIP and CO2 storage with more
incentives (Enick and Olsen, 2011; Kuuskraa et al., 2011).
3) The high capital investment in the early phase of a CO2 -
EOR project presents another main barrier. CO2 -EOR is highly
dependent on capital investment in the early phases of a CO2 -
EOR project. Financial incentives and support, such as tax
reduction, low-interest loans, and grants, are important to help
scale up CO2 -EOR projects. Because the internal rate returns are
set as 13% in SINOPEC, such support is even necessary for those
oil fields with high net income potential.
4. Conclusion
Evaluation of the resource and cost potential of CO2 -EOR is an
essential step before the commencement of large-scale deployment
of such activities. In this study, a techno-economic method with a
hybrid performance model and a statistical cost model has been
developed based on a previous techno-economic model for CO2 -
EOR projects and consultation from experts. 296 onshore oilfields
in China were evaluated using our technical-economic model with
a given operational strategy. The preliminary results are indicated
as follows:
1) Our deterministic analysis shows that approximately 1.1 bil-
lion tons (7.7 billion barrels) of incremental crude oil can be
potentially recovered through CO2 -EOR from China’s available
oilfields under the modeled given operating strategy and eco-
nomic assumptions. The corresponding CO2 storage resource
could reach 2.2 billion tons.
2) Sensitivity studies show that the cumulative oil production,
cumulative CO2 storage resource, and net income of enterprises
are very sensitive to crude oil prices, CO2 costs and tax policy.
Higher prices of crude oil, lower prices of CO2 , and lower tax
rates can greatly increase the total crude oil recovery potential,
along with CO2 storage resource and net income for enterprises.
The cumulative cost effective oil production varied between 0.3
and 1.3 billion tons (2.1 and 9.1 billion barrels) and correspond-
ing CO2 storage resource varied between 0.6 and 2.3 billion
tons under varying crude oil price, project lifetimes, discount
rates, CO2 prices, and tax ratio. High oil price, short project life-
time, low discount rate, low CO2 cost, and low tax policy can
greatly increase the net income of EOR processes and encourage
enterprises to deploy CO2 -EOR projects; consequently, this will
increase the incremental oil recovery and CO2 storage resource
during CO2 -EOR process.
3) The main factors negatively impacting the economics of onshore
CO2 -EOR include complex geological properties, high viscosity
of crude oil, high royalty rates, technology limitations, and the
lack of incentives for CO2 -EOR projects.
This research provides an improved overview of the techno-
economic potential of onshore CO2 -EOR in China and answers some
initial techno-economic questions regarding the future of large-
scale deployment of onshore CO2 -EOR projects. Further research
should be carried out to refine the work and related findings.
Acknowledgements
The authors gratefully acknowledge the financial support to this
study by the Chinese Academy of Sciences through its Strategic Pri-
ority Research Program (Grant no. XDA07040300: Demonstration of
Key Technologies for Clean and Efficient Utilization of Low-Rank Coal,
Research and Demonstration on Key Technologies of CO2 Geological
Storage) and by the Energy Foundation China (Grant no. G-1211-
17275: Economic Evaluation on CO2 -EOR Deployment in China), as
well as the collaborative project between the Chinese Academy
of Science, Pacific Northwest National Laboratory, and National
Energy Technology Laboratory under the framework of US–China
Fossil Energy Protocol, Annex VI-Advanced Coal-Based Energy Sys-
tems Research. We also kindly acknowledge the assistance and
encouragement from the Natural Resources Defense Council, as
well as the reviewers for their thoughtful and helpful comments.
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