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Denbury Resources is an oil exploration and development company that specializes in injecting sequestered carbon dioxide (CO2) into old oil wells to decrease oil viscosity, increase flow rate, and help pump out difficult-to-reach oil. The company is looking to incorporate proposed coal plant carbon capture technologies into their operations.[1] It is a member of the Carbon Capture and Storage Association.[2]

In November 2009, the company acquired another oil exploration company, Encore. Chief executive officer (CEO) Phil Rykhoek forecast that the company's $4.5 billion purchase of oil producer Encore would double the potential of its enhanced oil recovery (EOR) assets to almost 650 million barrels of "undeveloped" oil reserves, as Encore holds extensive acreage in the Williston and Powder River Basin of southeastern Montana and northwestern Dakota. These areas may yield oil from both primary and EOR fields, a project that would require significant supplies of carbon dioxide to pump through the fields.[1]

As of 2009, Denbury owned proved CO2 reserves of approximately 6.3 trillion cubic feet (Tcf), extracted principally from volcanic structural traps in salt basins and from the company-owned mine Jackson Dome, the most significant source of natural CO2 in the U.S. east of the Mississippi. However, most of these supplies are pledged to existing EOR operations. The CO2 is transported via pipelines, and Denbury spent almost $1 billion to construct its Green Pipeline to tap into oil fields in southeast Texas.[1]

As of April 2010, there is limited pipeline infrastructure to support the company's planned CO2-EOR operations in the Rockies. Encore management proposed to build compression facilities adjacent to a gas plant in Freemont County, Wyoming, and construct a 206-mile pipeline to transport the compressed CO2 to tertiary recovery projects at its Bell Creek Field in southeastern Montana, but this never expanded beyond the planning stage due to funding issues. Denbury is continuing to try and secure CO2 sequestered from coal-fired power plants or ethanol facilities, through government-funded carbon capture tax credits.[1]

"Carbon Capture" Projects


Denbury's Green pipeline will transport captured CO2 from Leucadia's Indiana Gasification SNG project and Mississippi Gasification SNG project, both syngas plants financed by the US Department of Energy.[3]

Rentech Natchez Project

In 2009, synfuels manufacturer Rentech contracted to sell all of the carbon dioxide to be captured at its proposed coal gasification facility, Belwood Coal-to-Liquids, to Denbury Onshore, LLC, a wholly owned subsidiary of Denbury. Carbon dioxide purchased under the contract would be used for enhanced oil recovery at Denbury's Cranfield oil field in Southwest Mississippi, as well as at the company's oil fields within the greater Gulf Coast area. The Cranfield oil field is currently hosting a U.S. Department of Energy-sponsored carbon sequestration project to inject more than 1 million tons of carbon dioxide into an underground rock formation, followed by additional injections into the saline portion of the reservoir more than 10,000 feet below the surface.[2]

Taylorville Energy Center

On March 3, 2010 Tenaska announced that its proposed Taylorville Energy Center would cost $3.5 billion and would go on-line in 2014. The plant will burn coal to produce syngas. The U.S. Department of Energy agreed to give the project a $2.6 billion loan guarantee.[4] The plant will sell its captured CO2 to Denbury for "enhanced oil recovery" in west Texas oil fields.[5]

Carbon Dioxide Injections

The company is injecting CO2 in 14 oil fields in Mississippi, Louisiana, and Texas. Companywide oil production is expected to average 28,500 b/d of oil equivalent in 2010, including a contribution from the Bakken in the Williston basin.[6]

In June 2010, Denbury started carbon dioxide injection in Oyster Bayou field in eastern Chambers County, TX, and hopes to begin injecting at Hastings field south of Houston by the end of 2010. Three rigs are drilling in Oyster Bayou, and the company is working on the remaining 60 miles of pipeline across Galveston Bay and the Houston Ship Channel. Denbury is running five rigs at Hastings field in northeastern Brazoria County, preparing wells for injection.[6]

The Green Pipeline is transporting 44 MMcfd 260 miles from Jackson Dome, Miss., to Oyster Bayou for injection into three wells. Denbury said it will be about a year until an oil production response can be expected from the high-permeability formation. Denbury averaged 768 MMcfd of CO2 production at Jackson Dome in the quarter ended June 30 and is running two rigs in Gluckstadt field in Madison County, Miss., in hope of finding multiple fault blocks that would expand its carbon dioxide reserves.[6]

Denbury is also advancing with right-of-way work on Green Core, a planned 230-mile, 20-in. carbon dioxide pipeline from the Lost Cabin gas treatment plant in Fremont County, Wyo., to Bell Creek field in Montana. It has surveyed 95% and acquired 41% of the right-of-way. Denbury has converted 17 idle former Bell Creek water injection wells for carbon dioxide injection and will convert another 12 by the end of 2010. Pipeline construction is to start in August 2010, and injection is planned for late 2012 or early 2013. The company is negotiating with CO2 suppliers.[6]

Hydraulic Fracturing

Diesel in Fracking

From 2010 to July 2014 drillers in the state of Texas reported using 924.07 gallons of diesel injected into one well. The Environmental Integrity Project extensively researched diesel in fracking. The environmental research organization argues that diesel use in fracking is widely under reported.

The Environmental Integrity Project 2014 study "Fracking Beyond The Law, Despite Industry Denials Investigation Reveals Continued Use of Diesel Fuels in Hydraulic Fracturing," found that hydraulic fracturing with diesel fuel can pose a risk to drinking water and human health because diesel contains benzene, toluene, xylene, and other chemicals that have been linked to cancer and other health problems. The Environmental Integrity Project identified numerous fracking fluids with high amounts of diesel, including additives, friction reducers, emulsifiers, solvents sold by Halliburton.[7]

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