The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO...
Transcript of The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO...
![Page 1: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/1.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
The Economics of CombiningCO2-EOR with Storage
Klaas van ’t Veld
University of Wyoming
Department of Economics & FinanceCenter for Energy Economics and Public Policy
![Page 2: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/2.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Outline
• Engineering-economics studies
• Economic study
• Effect of oil prices and CO2-storagesubsidies
• Common misconception
• Optimal policy
![Page 3: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/3.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Outline
• Engineering-economics studies
• Economic study
• Effect of oil prices and CO2-storagesubsidies
• Common misconception
• Optimal policy
![Page 4: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/4.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Outline
• Engineering-economics studies
• Economic study
• Effect of oil prices and CO2-storagesubsidies
• Common misconception
• Optimal policy
![Page 5: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/5.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Outline
• Engineering-economics studies
• Economic study
• Effect of oil prices and CO2-storagesubsidies
• Common misconception
• Optimal policy
![Page 6: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/6.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Outline
• Engineering-economics studies
• Economic study
• Effect of oil prices and CO2-storagesubsidies
• Common misconception
• Optimal policy
![Page 7: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/7.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Outline
• Engineering-economics studies
• Economic study
• Effect of oil prices and CO2-storagesubsidies
• Common misconception
• Optimal policy
![Page 8: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/8.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Engineering-Economics Studies• Ashgari, K., A. Al-Dliwe (2004) “Optimization of carbon dioxide sequestration and
improved oil recovery in oil reservoirs,” GHGT-7 Proceedings
• Babadagli, T. (2006) “Optimization of CO2 injection for sequestrationenhanced oilrecovery and current status in Canada,” In Lombardi et al., eds. Advances in theGeological Storage of Carbon Dioxide
• Forooghi, A., Hamouda, A.A. (2009) “Co-optimization of CO2 EOR andsequestration in a North Sea chalk reservoir,” SPE 125550
• Ghomian, Y. et al. (2010) “Efficient investigation of uncertainties in flood designparameters for coupled CO2 sequestration and enhanced oil recovery,” SPE139738
• Jahangiri, H.R., Zhang, D. (2011) “Optimization of the net present value of carbondioxide sequestration and enhanced oil recovery,” OTC 21985
• Jessen, K. et al. (2005) “Increasing CO2 storage in oil recovery,” EnergyConversion and Management 46: 293–311
• Kovscek, A.R., Cakici, M.D. (2005) “Geologic storage of carbon dioxide andenhanced oil recovery. II. Cooptimization of storage and recovery,” EnergyConversion and Management 46: 1941–1956
• Pamucku, Y.Z., Gumrah, F. (2009) “A numerical simulation study ofcarbon-dioxide sequestration into a depleted oil reservoir,” Energy Sources, PartA 31: 1348–1367
![Page 9: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/9.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Engineering-Economics Studies• Ashgari, K., A. Al-Dliwe (2004) “Optimization of carbon dioxide sequestration and
improved oil recovery in oil reservoirs,” GHGT-7 Proceedings
• Babadagli, T. (2006) “Optimization of CO2 injection for sequestrationenhanced oilrecovery and current status in Canada,” In Lombardi et al., eds. Advances in theGeological Storage of Carbon Dioxide
• Forooghi, A., Hamouda, A.A. (2009) “Co-optimization of CO2 EOR andsequestration in a North Sea chalk reservoir,” SPE 125550
• Ghomian, Y. et al. (2010) “Efficient investigation of uncertainties in flood designparameters for coupled CO2 sequestration and enhanced oil recovery,” SPE139738
• Jahangiri, H.R., Zhang, D. (2011) “Optimization of the net present value of carbondioxide sequestration and enhanced oil recovery,” OTC 21985
• Jessen, K. et al. (2005) “Increasing CO2 storage in oil recovery,” EnergyConversion and Management 46: 293–311
• Kovscek, A.R., Cakici, M.D. (2005) “Geologic storage of carbon dioxide andenhanced oil recovery. II. Cooptimization of storage and recovery,” EnergyConversion and Management 46: 1941–1956
• Pamucku, Y.Z., Gumrah, F. (2009) “A numerical simulation study ofcarbon-dioxide sequestration into a depleted oil reservoir,” Energy Sources, PartA 31: 1348–1367
![Page 10: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/10.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Problem: ad hoc economic assumption
Assumption: The producer’s goal, or “objective function,” is aweighted sum of oil production and CO2 storage
E.g., Kovscek and Cakici (2005):
w1 ×N∗
p
OIP︸︷︷︸Net oil
production
+ w2 ×V R
CO2
V R︸ ︷︷ ︸CO2
storage
with weights w1 = w2 = 0.5.
![Page 11: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/11.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Problem: ad hoc economic assumption
Assumption: The producer’s goal, or “objective function,” is aweighted sum of oil production and CO2 storage
E.g., Kovscek and Cakici (2005):
w1 ×N∗
p
OIP︸︷︷︸Net oil
production
+ w2 ×V R
CO2
V R︸ ︷︷ ︸CO2
storage
with weights w1 = w2 = 0.5.
![Page 12: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/12.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Problem: ad hoc economic assumption
Assumption: The producer’s goal, or “objective function,” is aweighted sum of oil production and CO2 storage
E.g., Kovscek and Cakici (2005):
w1 ×N∗
p
OIP︸︷︷︸Net oil
production
+ w2 ×V R
CO2
V R︸ ︷︷ ︸CO2
storage
with weights w1 = w2 = 0.5.
![Page 13: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/13.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Problem: ad hoc economic assumption
Assumption: The producer’s goal, or “objective function,” is aweighted sum of oil production and CO2 storage
E.g., Kovscek and Cakici (2005):
w1 ×N∗
p
OIP︸︷︷︸Net oil
production
+ w2 ×V R
CO2
V R︸ ︷︷ ︸CO2
storage
with weights w1 = w2 = 0.5.
![Page 14: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/14.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Problem: ad hoc economic assumption
Assumption: The producer’s goal, or “objective function,” is aweighted sum of oil production and CO2 storage
E.g., Kovscek and Cakici (2005):
w1 ×N∗
p
OIP︸︷︷︸Net oil
production
+ w2 ×V R
CO2
V R︸ ︷︷ ︸CO2
storage
with weights w1 = w2 = 0.5.
![Page 15: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/15.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qpurCO2
= qseqCO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
− pCO2qpurCO2︸ ︷︷ ︸
CO2purchase
costs
− crecqrecCO2︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 16: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/16.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qpurCO2
= qseqCO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
− pCO2qpurCO2︸ ︷︷ ︸
CO2purchase
costs
− crecqrecCO2︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 17: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/17.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qpurCO2
= qseqCO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
− pCO2qpurCO2︸ ︷︷ ︸
CO2purchase
costs
− crecqrecCO2︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 18: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/18.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qpurCO2
= qseqCO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
− pCO2qpurCO2︸ ︷︷ ︸
CO2purchase
costs
− crecqrecCO2︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 19: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/19.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qpurCO2
= qseqCO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
− pCO2qpurCO2︸ ︷︷ ︸
CO2purchase
costs
− crecqrecCO2︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 20: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/20.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qpurCO2
= qseqCO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
− pCO2qpurCO2︸ ︷︷ ︸
CO2purchase
costs
− crecqrecCO2︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 21: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/21.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qpurCO2
= qseqCO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ sCO2qseqCO2︸ ︷︷ ︸
CO2sequestration
subsidies
− pCO2qpurCO2︸ ︷︷ ︸
CO2purchase
costs
− crecqrecCO2︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 22: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/22.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qpurCO2
= qseqCO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ sCO2qseqCO2︸ ︷︷ ︸
CO2sequestration
subsidies
− pCO2qpurCO2︸ ︷︷ ︸
CO2purchase
costs
− crecqrecCO2︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 23: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/23.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qpurCO2
= qseqCO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ sCO2qseqCO2︸ ︷︷ ︸
CO2sequestration
subsidies
− pCO2qpurCO2︸ ︷︷ ︸
CO2purchase
costs
− crecqrecCO2︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 24: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/24.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qpurCO2
= qseqCO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ sCO2qseqCO2︸ ︷︷ ︸
CO2sequestration
subsidies
− pCO2qpurCO2︸ ︷︷ ︸
CO2purchase
costs
− crecqrecCO2︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 25: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/25.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qpurCO2
= qseqCO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ sCO2qseqCO2︸ ︷︷ ︸
CO2sequestration
subsidies
− pCO2qseqCO2︸ ︷︷ ︸
CO2purchase
costs
− crecqrecCO2︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 26: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/26.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qpurCO2
= qseqCO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ sCO2qseqCO2︸ ︷︷ ︸
CO2sequestration
subsidies
− pCO2qseqCO2︸ ︷︷ ︸
CO2purchase
costs
− crecqrecCO2︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 27: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/27.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qpurCO2
= qseqCO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crecqrecCO2︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 28: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/28.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qpurCO2
= qseqCO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crecqrecCO2︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 29: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/29.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qrecCO2
= q injCO2− qseq
CO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crecqrecCO2︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 30: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/30.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qrecCO2
= q injCO2− qseq
CO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crecqrecCO2︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 31: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/31.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qrecCO2
= q injCO2− qseq
CO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crec(q injCO2− qseq
CO2)︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 32: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/32.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qrecCO2
= q injCO2− qseq
CO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crec(q injCO2− qseq
CO2)︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 33: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/33.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qrecCO2
= q injCO2− qseq
CO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crec(q injCO2− qseq
CO2)︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 34: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/34.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qrecCO2
= q injCO2− qseq
CO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crec(q injCO2− qseq
CO2)︸ ︷︷ ︸
CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 35: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/35.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qrecCO2
= q injCO2− qseq
CO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2 + crec)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crecq injCO2︸ ︷︷ ︸
gross CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 36: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/36.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qrecCO2
= q injCO2− qseq
CO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2 + crec)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crecq injCO2︸ ︷︷ ︸
gross CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 37: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/37.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qrecCO2
= q injCO2− qseq
CO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2 + crec)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crecq injCO2︸ ︷︷ ︸
gross CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 38: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/38.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qrecCO2
= q injCO2− qseq
CO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2 + crec)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crecq injCO2︸ ︷︷ ︸
gross CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 39: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/39.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qrecCO2
= q injCO2− qseq
CO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2 + crec)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crecq injCO2︸ ︷︷ ︸
gross CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 40: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/40.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qrecCO2
= q injCO2− qseq
CO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2 + crec)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crecq injCO2︸ ︷︷ ︸
gross CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 41: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/41.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
qrecCO2
= q injCO2− qseq
CO2
↓
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2 + crec)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crecq injCO2︸ ︷︷ ︸
gross CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 42: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/42.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2 + crec)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crecq injCO2︸ ︷︷ ︸
gross CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 43: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/43.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2 + crec)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crecq injCO2︸ ︷︷ ︸
gross CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 44: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/44.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
Benefits of CO2 injection
fall over time↙ ↘
Costs
constant?↓ ↘
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2 + crec)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crecq injCO2︸ ︷︷ ︸
gross CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 45: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/45.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
Benefits of CO2 injection
fall over time↙ ↘
Costs
constant?↓ ↘
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2 + crec)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crecq injCO2︸ ︷︷ ︸
gross CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 46: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/46.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
Benefits of CO2 injection
fall over time↙ ↘
Costs
constant?↓ ↘
profit = poilqprdoil︸ ︷︷ ︸
oilrevenues
+ (sCO2 − pCO2 + crec)qseqCO2︸ ︷︷ ︸
net CO2sequestration
revenues
− crecq injCO2︸ ︷︷ ︸
gross CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 47: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/47.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
Benefits of CO2 injection
fall over time↙ ↘
Costs
constant?↓ ↘
profit = poil︸︷︷︸weighton oilproduction
qprdoil + (sCO2 − pCO2 + crec)qseq
CO2︸ ︷︷ ︸net CO2
sequestrationrevenues
− crecq injCO2︸ ︷︷ ︸
gross CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 48: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/48.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
Benefits of CO2 injection
fall over time↙ ↘
Costs
constant?↓ ↘
profit = poil︸︷︷︸weighton oilproduction
qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
qseqCO2− crecq inj
CO2︸ ︷︷ ︸gross CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 49: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/49.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
Benefits of CO2 injection
fall over time↙ ↘
Costs
constant?↓ ↘
profit = poil︸︷︷︸weighton oilproduction
qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
qseqCO2− crecq inj
CO2︸ ︷︷ ︸gross CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 50: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/50.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
Benefits of CO2 injection
fall over time↙ ↘
Costs
↓
profit = poil︸︷︷︸weighton oilproduction
qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
qseqCO2− crecq inj
CO2︸ ︷︷ ︸gross CO2recycling
costs
− coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 51: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/51.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
Benefits of CO2 injection
fall over time↙ ↘
Costs
↓
Profit = poil︸︷︷︸weighton oilproduction
Qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crecQ inj
CO2︸ ︷︷ ︸gross CO2recycling
costs
− Coth︸︷︷︸othercosts
= profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 52: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/52.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
Benefits of CO2 injection
fall over time↙ ↘
Costs
↓
Profit = poil︸︷︷︸weighton oilproduction
Qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crecQ inj
CO2︸ ︷︷ ︸gross CO2recycling
costs
− Coth︸︷︷︸othercosts
Profit = profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 53: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/53.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
Benefits of CO2 injection
fall over time↙ ↘
Costs
↓
Profit = poil︸︷︷︸weighton oilproduction
Qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crecQ inj
CO2︸ ︷︷ ︸gross CO2recycling
costs
− Coth︸︷︷︸othercosts
Profit = profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 54: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/54.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
Benefits of CO2 injection
fall over time↙ ↘
Costs
↓
profit = poil︸︷︷︸weighton oilproduction
qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
qseqCO2− crecq inj
CO2︸ ︷︷ ︸gross CO2recycling
costs
− coth︸︷︷︸othercosts
Profit = profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 55: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/55.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
Benefits of CO2 injection
fall over time↙ ↘
Costs
↓
profit = poil︸︷︷︸weighton oilproduction
qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
qseqCO2− crecq inj
CO2︸ ︷︷ ︸gross CO2recycling
costs
− coth︸︷︷︸othercosts
Profit = profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 56: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/56.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
Benefits of CO2 injection
fall over time↙ ↘
Costs
constant?↓
profit = poil︸︷︷︸weighton oilproduction
qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
qseqCO2− crecq inj
CO2︸ ︷︷ ︸gross CO2recycling
costs
− coth︸︷︷︸othercosts
Profit = profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 57: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/57.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
Benefits of CO2 injection
fall over time↙ ↘
Costs
constant?↓
profit = poil︸︷︷︸weighton oilproduction
qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
qseqCO2− crecq inj
CO2︸ ︷︷ ︸gross CO2recycling
costs
− coth︸︷︷︸othercosts
Profit = profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 58: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/58.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
Benefits of CO2 injection
fall over time↙ ↘
Costs
constant?↓
profit = poil︸︷︷︸weighton oilproduction
qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
qseqCO2− crecq inj
CO2︸ ︷︷ ︸gross CO2recycling
costs
− coth︸︷︷︸othercosts
Profit = profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 59: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/59.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
Benefits of CO2 injection
fall over time↙ ↘
Costs
constant?↓
profit = poil︸︷︷︸weighton oilproduction
qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
qseqCO2− crecq inj
CO2︸ ︷︷ ︸gross CO2recycling
costs
− coth︸︷︷︸othercosts
Profit = profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 60: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/60.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
Benefits of CO2 injection
fall over time↙ ↘
Costs
must fall over time↓
profit = poil︸︷︷︸weighton oilproduction
qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
qseqCO2− crecq inj
CO2︸ ︷︷ ︸gross CO2recycling
costs
− coth︸︷︷︸othercosts
Profit = profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 61: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/61.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
Benefits of CO2 injection
fall over time↙ ↘
Costs
must fall over time↓
profit = poil︸︷︷︸weighton oilproduction
qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
qseqCO2− crecq inj
CO2︸ ︷︷ ︸gross CO2recycling
costs
− coth︸︷︷︸othercosts
Profit = profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 62: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/62.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
profit = poil︸︷︷︸weighton oilproduction
qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
qseqCO2− crecq inj
CO2︸ ︷︷ ︸gross CO2recycling
costs
− coth︸︷︷︸othercosts
Profit = profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 63: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/63.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
profit = poil︸︷︷︸weighton oilproduction
qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
qseqCO2− crec︸︷︷︸
weighton CO2recycling
q injCO2− coth︸︷︷︸
othercosts
Profit = profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 64: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/64.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
profit = poil︸︷︷︸weighton oilproduction
qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
qseqCO2− crec︸︷︷︸
weighton CO2recycling
q injCO2− coth︸︷︷︸
othercosts
Profit = profit1 +
δ
profit2 +
δ2
profit3 + . . . +
δT
profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 65: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/65.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
profit = poil︸︷︷︸weighton oilproduction
qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
qseqCO2− crec︸︷︷︸
weighton CO2recycling
q injCO2− coth︸︷︷︸
othercosts
Profit = profit1 + δprofit2 + δ2profit3 + . . . + δT profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 66: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/66.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
profit = poil︸︷︷︸weighton oilproduction
qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
qseqCO2− crec︸︷︷︸
weighton CO2recycling
q injCO2− coth︸︷︷︸
othercosts
NPV = profit1 + δprofit2 + δ2profit3 + . . . + δT profitT
Qprdoil = qprd
oil,1 +
δ
qprdoil,2 +
δ2
qprdoil,3 + . . . +
δT
qprdoil,T
QseqCO2
= qseqCO2,1
+
δ
qseqCO2,2
+
δ2
qseqCO2,3
+ . . . +
δT
qseqCO2,T
etc.
![Page 67: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/67.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
profit = poil︸︷︷︸weighton oilproduction
qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
qseqCO2− crec︸︷︷︸
weighton CO2recycling
q injCO2− coth︸︷︷︸
othercosts
NPV = profit1 + δprofit2 + δ2profit3 + . . . + δT profitT
Qprdoil = qprd
oil,1 + δqprdoil,2 + δ2qprd
oil,3 + . . . + δT qprdoil,T
QseqCO2
= qseqCO2,1
+ δqseqCO2,2
+ δ2qseqCO2,3
+ . . . + δT qseqCO2,T
etc.
![Page 68: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/68.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
NPV = poil︸︷︷︸weighton oilproduction
Qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
NPV = profit1 + δprofit2 + δ2profit3 + . . . + δT profitT
Qprdoil = qprd
oil,1 + δqprdoil,2 + δ2qprd
oil,3 + . . . + δT qprdoil,T
QseqCO2
= qseqCO2,1
+ δqseqCO2,2
+ δ2qseqCO2,3
+ . . . + δT qseqCO2,T
etc.
![Page 69: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/69.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
NPV = poil︸︷︷︸weighton oilproduction
Qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
NPV = profit1 + δprofit2 + δ2profit3 + . . . + δT profitT
Qprdoil = qprd
oil,1 + δqprdoil,2 + δ2qprd
oil,3 + . . . + δT qprdoil,T
QseqCO2
= qseqCO2,1
+ δqseqCO2,2
+ δ2qseqCO2,3
+ . . . + δT qseqCO2,T
etc.
![Page 70: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/70.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Economic Study
Leach, A., Mason, C.F., van ’t Veld, K. (2011) “Co-optimizationof enhanced oil recovery and carbon sequestration,” Resourceand Energy Economics 33: 893–912
![Page 71: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/71.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Problem: ad hoc engineering assumptions
Assumption 1: Oil production is an inverse U-shaped function ofthe CO2 injection fraction q inj
CO2/(q inj
CO2+ q inj
wat).
Assumption 2: CO2 sequestration is the product of the CO2injection fraction and oil production:
qseqCO2
=q inj
CO2
q injCO2
+ q injwat
× qprdoil
︸ ︷︷ ︸0.5
![Page 72: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/72.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Problem: ad hoc engineering assumptions
Assumption 1: Oil production is an inverse U-shaped function ofthe CO2 injection fraction q inj
CO2/(q inj
CO2+ q inj
wat).
Assumption 2: CO2 sequestration is the product of the CO2injection fraction and oil production:
qseqCO2
=q inj
CO2
q injCO2
+ q injwat
× qprdoil
︸ ︷︷ ︸0.5
![Page 73: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/73.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 0.1 0.2 0.3 0.4 0.5 0.625 0.7 0.8 0.9 10
0.02
0.04
0.06
0.08
0.1
0.1225
0.14
Flow rates as function of CO2 injection fraction
CO2 injection fraction
Ra
tes (
fra
ctio
n o
f re
ma
inin
g r
ese
rve
s/y
ea
r)
oil production
![Page 74: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/74.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Problem: ad hoc engineering assumptions
Assumption 1: Oil production is an inverse U-shaped function ofthe CO2 injection fraction q inj
CO2/(q inj
CO2+ q inj
wat).
Assumption 2: CO2 sequestration is the product of the CO2injection fraction and oil production:
qseqCO2
=q inj
CO2
q injCO2
+ q injwat
× qprdoil
︸ ︷︷ ︸0.5
![Page 75: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/75.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Problem: ad hoc engineering assumptions
Assumption 1: Oil production is an inverse U-shaped function ofthe CO2 injection fraction q inj
CO2/(q inj
CO2+ q inj
wat).
Assumption 2: CO2 sequestration is the product of the CO2injection fraction and oil production:
qseqCO2
=q inj
CO2
q injCO2
+ q injwat
× qprdoil
︸ ︷︷ ︸0.5
![Page 76: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/76.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Problem: ad hoc engineering assumptions
Assumption 1: Oil production is an inverse U-shaped function ofthe CO2 injection fraction q inj
CO2/(q inj
CO2+ q inj
wat).
Assumption 2: CO2 sequestration is the product of the CO2injection fraction and oil production:
qseqCO2
=q inj
CO2
q injCO2
+ q injwat
× qprdoil︸ ︷︷ ︸
0.5
![Page 77: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/77.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 0.1 0.2 0.3 0.4 0.5 0.625 0.7 0.8 0.9 10
0.02
0.04
0.06
0.08
0.1
0.1225
0.14
Flow rates as function of CO2 injection fraction
CO2 injection fraction
Ra
tes (
fra
ctio
n o
f re
ma
inin
g r
ese
rve
s/y
ea
r)
oil production
![Page 78: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/78.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 0.1 0.2 0.3 0.4 0.5 0.625 0.7 0.8 0.9 10
0.02
0.04
0.06
0.08
0.1
0.1225
0.14
Flow rates as function of CO2 injection fraction
CO2 injection fraction
Ra
tes (
fra
ctio
n o
f re
ma
inin
g r
ese
rve
s/y
ea
r)
oil production
CO2 sequestration
![Page 79: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/79.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Profit objective function
Benefits of CO2 injection
fall over time↙ ↘
Costs
must fall over time↓
profit = poil︸︷︷︸weighton oilproduction
qprdoil +(sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
qseqCO2− crec︸︷︷︸
weighton CO2recycling
q injCO2− coth︸︷︷︸
othercosts
= profit1 + δprofit2 + δ2profit3 + . . . + δT profitT
Qprdoil = qprd
oil,1 + δqprdoil,2 + δ2qprd
oil,3 + . . . + δT qprdoil,T
QseqCO2
= qseqCO2,1
+ δqseqCO2,2
+ δ2qseqCO2,3
+ . . . + δT qseqCO2,T
etc.
![Page 80: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/80.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 10 20 30 40 50
0
0.1
0.2
0.3
0.4
0.5
0.6
Baseline case
Time (years)
Flo
ws (
mill
ion b
l/year)
CO2 injection
![Page 81: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/81.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 10 20 30 40 50
0
0.1
0.2
0.3
0.4
0.5
0.6
Baseline case
Time (years)
Flo
ws (
mill
ion b
l/year)
CO2 injection
oil production
![Page 82: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/82.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 10 20 30 40 50
0
0.1
0.2
0.3
0.4
0.5
0.6
Baseline case
Time (years)
Flo
ws (
mill
ion b
l/year)
CO2 injection
oil production
CO2 sequestration
![Page 83: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/83.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Source: Davidson, C.L. et al. (2011) “A quantitative comparison of the cost of employing EOR-coupled CCS supplemented with
secondary DSF storage for two large CO2point sources,” Energy Procedia 4: 2361–2368
![Page 84: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/84.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
CO2-EOR profits
NPV = poil︸︷︷︸weighton oilproduction
Qprdoil + (sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
≈ $100→ $200 ≈ $1→ $5
![Page 85: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/85.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.1
0.2
0.3
0.4
0.5
0.6
Time (years)
Rate
(m
illio
n b
l/year)
Flow CO2 injection
p $50/bl
![Page 86: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/86.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.1
0.2
0.3
0.4
0.5
0.6
Time (years)
Rate
(m
illio
n b
l/year)
Flow CO2 injection
p $50/bl
p $100/bl
![Page 87: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/87.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.1
0.2
0.3
0.4
0.5
0.6
Time (years)
Rate
(m
illio
n b
l/year)
Flow CO2 injection
p $50/bl
p $100/blp $150/bl
![Page 88: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/88.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.1
0.2
0.3
0.4
0.5
0.6
Time (years)
Rate
(m
illio
n b
l/year)
Flow CO2 injection
p $50/blp $100/blp $150/blp $200/bl
![Page 89: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/89.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
Time (years)
Qu
an
tity
(m
illio
n b
l)
Cumulative CO2 sequestration
p $50/bl
![Page 90: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/90.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
Time (years)
Qu
an
tity
(m
illio
n b
l)
Cumulative CO2 sequestration
p $50/bl
p $100/bl
![Page 91: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/91.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
Time (years)
Qu
an
tity
(m
illio
n b
l)
Cumulative CO2 sequestration
p $50/bl
p $100/blp $150/bl
![Page 92: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/92.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
Time (years)
Qu
an
tity
(m
illio
n b
l)
Cumulative CO2 sequestration
p $50/blp $100/blp $150/blp $200/bl
![Page 93: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/93.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.02
0.04
0.06
0.08
0.1
0.12
Time (years)
Ra
te (
mill
ion
bl/ye
ar)
Flow oil production
waterflood
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Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
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Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
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waterfloodp $50/blp $100/blp $150/blp $200/bl
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Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
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waterflood
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Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
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Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
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waterfloodp $50/blp $100/blp $150/bl
![Page 100: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/100.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
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(m
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waterfloodp $50/blp $100/blp $150/blp $200/bl
![Page 101: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/101.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 0.1 0.2 0.3 0.4 0.5 0.625 0.7 0.8 0.9 10
0.02
0.04
0.06
0.08
0.1
0.1225
0.14
Flow rates as function of CO2 injection fraction
CO2 injection fraction
Ra
tes (
fra
ctio
n o
f re
ma
inin
g r
ese
rve
s/y
ea
r)
oil production
CO2 sequestration
![Page 102: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/102.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.1
0.2
0.3
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0.6
Time (years)
Rate
(m
illio
n b
l/year)
Flow CO2 injection
subsidy $0/tCO2
![Page 103: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/103.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
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subsidy $0/tCO2
subsidy $40/tCO2
![Page 104: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/104.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
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(m
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subsidy $0/tCO2
subsidy $40/tCO2subsidy $80/tCO2
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Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
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(m
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n b
l/year)
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subsidy $0/tCO2subsidy $40/tCO2subsidy $80/tCO2subsidy $120/tCO2
![Page 106: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/106.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
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n b
l)
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subsidy $0/tCO2
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Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
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subsidy $0/tCO2
subsidy $40/tCO2
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Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
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subsidy $0/tCO2
subsidy $40/tCO2subsidy $80/tCO2
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Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
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subsidy $0/tCO2subsidy $40/tCO2subsidy $80/tCO2subsidy $120/tCO2
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Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
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te (
mill
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bl/ye
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waterflood
subsidy $0/tCO2
![Page 111: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/111.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
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subsidy $0/tCO2subsidy $40/tCO2
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Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
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waterfloodsubsidy $0/tCO2subsidy $40/tCO2subsidy $80/tCO2
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Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
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waterfloodsubsidy $0/tCO2subsidy $40/tCO2subsidy $80/tCO2subsidy $120/tCO2
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Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
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waterflood
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Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
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waterflood
subsidy $0/tCO2subsidy $40/tCO2
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Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
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waterfloodsubsidy $0/tCO2subsidy $40/tCO2subsidy $80/tCO2
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Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
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(m
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waterfloodsubsidy $0/tCO2subsidy $40/tCO2subsidy $80/tCO2subsidy $120/tCO2
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Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
CO2-EOR profits
NPV = poil︸︷︷︸weighton oilproduction
Qprdoil + (sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
≈ $100→ $200 ≈ $1→ $5
![Page 119: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/119.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
CO2-EOR profits
NPV = poil︸︷︷︸weighton oilproduction
Qprdoil + (sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
≈ $100→ $200
≈ $1→ $5
![Page 120: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/120.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
CO2-EOR profits
NPV = poil︸︷︷︸weighton oilproduction
Qprdoil + (sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
≈ $100→ $200
≈ $1→ $5
![Page 121: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/121.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
CO2-EOR profits
NPV = poil︸︷︷︸weighton oilproduction
Qprdoil + (sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
≈ $100→ $200 ≈ $1→ $5
![Page 122: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/122.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
CO2-EOR profits
NPV = poil︸︷︷︸weighton oilproduction
Qprdoil + (sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
≈ $100→ $200 ≈ $1→ $5
![Page 123: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/123.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 0.1 0.2 0.3 0.4 0.5 0.625 0.7 0.8 0.9 10
0.02
0.04
0.06
0.08
0.1
0.1225
0.14
Flow rates as function of CO2 injection fraction
CO2 injection fraction
Ra
tes (
fra
ctio
n o
f re
ma
inin
g r
ese
rve
s/y
ea
r)
oil production
CO2 sequestration
![Page 124: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/124.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.1
0.2
0.3
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Time (years)
Rate
(m
illio
n b
l/year)
Flow CO2 injection
p $100/bl, tax $40/tCO2
![Page 125: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/125.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
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(m
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p $100/bl, tax $40/tCO2
p $200/bl, tax $40/tCO2
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Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.1
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Time (years)
Rate
(m
illio
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Flow CO2 injection
p $100/bl, tax $40/tCO2
p $200/bl, tax $40/tCO2p $100/bl, tax $80/tCO2
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Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.05
0.1
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0.2
0.25
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0.35
0.4
0.45
0.5
Time (years)
Qu
an
tity
(m
illio
n b
l)
Cumulative CO2 sequestration
p $100/bl, tax $40/tCO2
![Page 128: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/128.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
Time (years)
Qu
an
tity
(m
illio
n b
l)
Cumulative CO2 sequestration
p $100/bl, tax $40/tCO2
p $200/bl, tax $40/tCO2
![Page 129: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/129.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
Time (years)
Qu
an
tity
(m
illio
n b
l)
Cumulative CO2 sequestration
p $100/bl, tax $40/tCO2
p $200/bl, tax $40/tCO2p $100/bl, tax $80/tCO2
![Page 130: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/130.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
So . . .
. . . are high oil prices the environmentalist’s best friend?
• On the demand side: discourage oil use
• On the supply side: promote CO2 storage through EOR
Not necessarily, for two reasons:
• Increasing oil prices may reduce CO2 storage through EOR
• Promoting CO2-EOR may increase net CO2 emissions
![Page 131: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/131.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
So . . .
. . . are high oil prices the environmentalist’s best friend?
• On the demand side: discourage oil use
• On the supply side: promote CO2 storage through EOR
Not necessarily, for two reasons:
• Increasing oil prices may reduce CO2 storage through EOR
• Promoting CO2-EOR may increase net CO2 emissions
![Page 132: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/132.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
So . . .
. . . are high oil prices the environmentalist’s best friend?
• On the demand side: discourage oil use
• On the supply side: promote CO2 storage through EOR
Not necessarily, for two reasons:
• Increasing oil prices may reduce CO2 storage through EOR
• Promoting CO2-EOR may increase net CO2 emissions
![Page 133: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/133.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
So . . .
. . . are high oil prices the environmentalist’s best friend?
• On the demand side: discourage oil use
• On the supply side: promote CO2 storage through EOR
Not necessarily, for two reasons:
• Increasing oil prices may reduce CO2 storage through EOR
• Promoting CO2-EOR may increase net CO2 emissions
![Page 134: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/134.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
So . . .
. . . are high oil prices the environmentalist’s best friend?
• On the demand side: discourage oil use
• On the supply side: promote CO2 storage through EOR
Not necessarily, for two reasons:
• Increasing oil prices may reduce CO2 storage through EOR
• Promoting CO2-EOR may increase net CO2 emissions
![Page 135: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/135.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
So . . .
. . . are high oil prices the environmentalist’s best friend?
• On the demand side: discourage oil use
• On the supply side: promote CO2 storage through EOR
Not necessarily, for two reasons:
• Increasing oil prices may reduce CO2 storage through EOR
• Promoting CO2-EOR may increase net CO2 emissions
![Page 136: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/136.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
CO2-EOR profits
NPV = poil︸︷︷︸weighton oilproduction
Qprdoil + (sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
![Page 137: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/137.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
CO2-EOR profits
NPV =
poil︸︷︷︸weighton oilproduction
Qprdoil + (sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
![Page 138: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/138.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
CO2-EOR profits
NPV = − I︸︷︷︸up-front
investmentcost
+ poil︸︷︷︸weighton oilproduction
Qprdoil + (sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
![Page 139: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/139.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
CO2-EOR profits
NPV = − I︸︷︷︸up-front
investmentcost
+ poil︸︷︷︸weighton oilproduction
Qprdoil + (sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
![Page 140: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/140.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
CO2-EOR profits
NPV = − I︸︷︷︸up-front
investmentcost
+ poil︸︷︷︸weighton oilproduction
Qprdoil + (sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
![Page 141: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/141.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
Time (years)
Ra
te (
mill
ion
bl/ye
ar)
Flow CO2 injection
p growth 0%
![Page 142: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/142.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
Time (years)
Ra
te (
mill
ion
bl/ye
ar)
Flow CO2 injection
p growth 0%
p growth 2.5%
![Page 143: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/143.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
Time (years)
Ra
te (
mill
ion
bl/ye
ar)
Flow CO2 injection
p growth 0%
p growth 2.5%
p growth 5%
![Page 144: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/144.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
Time (years)
Ra
te (
mill
ion
bl/ye
ar)
Flow CO2 injection
p growth 0%
p growth 2.5%
p growth 5%
p growth 7.5%
![Page 145: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/145.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.02
0.04
0.06
0.08
0.1
0.12
Time (years)
Ra
te (
mill
ion
bl/ye
ar)
Flow oil production
waterflood
p growth 0%
![Page 146: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/146.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.02
0.04
0.06
0.08
0.1
0.12
Time (years)
Ra
te (
mill
ion
bl/ye
ar)
Flow oil production
waterflood
p growth 0%
p growth 2.5%
![Page 147: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/147.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.02
0.04
0.06
0.08
0.1
0.12
Time (years)
Ra
te (
mill
ion
bl/ye
ar)
Flow oil production
waterflood
p growth 0%
p growth 2.5%
p growth 5%
![Page 148: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/148.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.02
0.04
0.06
0.08
0.1
0.12
Time (years)
Ra
te (
mill
ion
bl/ye
ar)
Flow oil production
waterflood
p growth 0%
p growth 2.5%
p growth 5%
p growth 7.5%
![Page 149: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/149.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
Time (years)
Qu
an
tity
(m
illio
n b
l)
Cumulative CO2 sequestration
p growth 0%
![Page 150: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/150.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
Time (years)
Qu
an
tity
(m
illio
n b
l)
Cumulative CO2 sequestration
p growth 0%
p growth 2.5%
![Page 151: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/151.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
Time (years)
Qu
an
tity
(m
illio
n b
l)
Cumulative CO2 sequestration
p growth 0%
p growth 2.5%
p growth 5%
![Page 152: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/152.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
0 5 10 15 20 25 30 35 40 45
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
Time (years)
Qu
an
tity
(m
illio
n b
l)
Cumulative CO2 sequestration
p growth 0%
p growth 2.5%
p growth 5%
p growth 7.5%
![Page 153: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/153.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
So . . .
. . . are high oil prices the environmentalist’s best friend?
• On the demand side: discourage oil use
• On the supply side: promote CO2 storage through EOR
Not necessarily, for two reasons:
• Increasing oil prices may reduce CO2 storage through EOR
• Promoting CO2-EOR may increase net CO2 emissions
![Page 154: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/154.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
So . . .
. . . are high oil prices the environmentalist’s best friend?
• On the demand side: discourage oil use
• On the supply side: promote CO2 storage through EOR
Not necessarily, for two reasons:
• Increasing oil prices may reduce CO2 storage through EOR
• Promoting CO2-EOR may increase net CO2 emissions
![Page 155: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/155.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Common misconception
Emissions from incremental oil produced with CO2-EOR don’t matter.
“World oil production is determined by world oil demand andif CO2-EOR projects were not undertaken, some othersource of oil would step forward and fill the gap. Therefore,executing CO2-EOR projects will not result in incrementalaggregate refining and consumption emissions.”
Faltinson, J. and Gunter, B. (2011). “Net CO2 Stored in North American EOR Projects.” J. Can. Pet.
Technol. 50 (7/8): pp. 55–60.
![Page 156: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/156.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Common misconception
Emissions from incremental oil produced with CO2-EOR don’t matter.
“World oil production is determined by world oil demand andif CO2-EOR projects were not undertaken, some othersource of oil would step forward and fill the gap. Therefore,executing CO2-EOR projects will not result in incrementalaggregate refining and consumption emissions.”
Faltinson, J. and Gunter, B. (2011). “Net CO2 Stored in North American EOR Projects.” J. Can. Pet.
Technol. 50 (7/8): pp. 55–60.
![Page 157: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/157.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Common misconception
Emissions from incremental oil produced with CO2-EOR don’t matter.
“World oil production is determined by world oil demand andif CO2-EOR projects were not undertaken, some othersource of oil would step forward and fill the gap. Therefore,executing CO2-EOR projects will not result in incrementalaggregate refining and consumption emissions.”
Faltinson, J. and Gunter, B. (2011). “Net CO2 Stored in North American EOR Projects.” J. Can. Pet.
Technol. 50 (7/8): pp. 55–60.
![Page 158: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/158.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Demand
Supply
p∗
Q∗Qoil
poilOil market
x
x
![Page 159: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/159.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Demand
p∗
Q∗
Supply
Qoil
poilOil market
x
x
![Page 160: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/160.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Demand
p∗∗
p∗
Q∗
Supply
Qoil
poilOil market
x
x
![Page 161: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/161.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Demand
p∗∗
p∗
Q∗
Conventional
Conventional EOR
Supply
Qoil
poilOil market
x
x
![Page 162: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/162.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Demand
Supply
p∗
Q∗Qoil
poilOil market
x
x
![Page 163: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/163.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Demand
p∗
Q∗
Supply
Qoil
poilOil market
x
x
![Page 164: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/164.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Demand
p∗∗
Q∗∗
p∗
Q∗
Supply
Qoil
poilOil market
x
x
![Page 165: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/165.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Demand
p∗∗
Q∗∗
p∗
Q∗
Conventional
Conventional EORSupply
Qoil
poilOil market
x
x
![Page 166: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/166.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Common misconception
So displacement of conventional oil is not one-for-one
Moreover, . . .• wind• solar• ethanol• nuclear• etc.
also “displace” conventional oil
Does that make their net CO2 emissions negative?
![Page 167: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/167.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Common misconception
So displacement of conventional oil is not one-for-one
Moreover, . . .
• wind• solar• ethanol• nuclear• etc.
also “displace” conventional oil
Does that make their net CO2 emissions negative?
![Page 168: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/168.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Common misconception
So displacement of conventional oil is not one-for-one
Moreover, . . .• wind• solar• ethanol• nuclear• etc.
also “displace” conventional oil
Does that make their net CO2 emissions negative?
![Page 169: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/169.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Common misconception
So displacement of conventional oil is not one-for-one
Moreover, . . .• wind• solar• ethanol• nuclear• etc.
also “displace” conventional oil
Does that make their net CO2 emissions negative?
![Page 170: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/170.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Optimal policy
But if some CO2-EOR projects generate positive net emissions, whileothers generate negative net emissions, what then is the optimal wayof promoting it?
Do we need taxes for some, and subsidies for others?
![Page 171: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/171.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Optimal policy
But if some CO2-EOR projects generate positive net emissions, whileothers generate negative net emissions, what then is the optimal wayof promoting it?
Do we need taxes for some, and subsidies for others?
![Page 172: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/172.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Optimal policy
But if some CO2-EOR projects generate positive net emissions, whileothers generate negative net emissions, what then is the optimal wayof promoting it?
Do we need taxes for some, and subsidies for others?
![Page 173: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/173.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Optimal policy
The optimal policy to promote CO2-EOR is quite simply
• a tax on CO2 emissions
(equal to the per-unit emission damages)
which for CO2-EOR producers acts exactly like
• a subsidy on CO2 sequestration
(i.e., on avoided CO2 emissions)
![Page 174: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/174.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Optimal policy
The optimal policy to promote CO2-EOR is quite simply
• a tax on CO2 emissions
(equal to the per-unit emission damages)
which for CO2-EOR producers acts exactly like
• a subsidy on CO2 sequestration
(i.e., on avoided CO2 emissions)
![Page 175: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/175.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Optimal policy
The optimal policy to promote CO2-EOR is quite simply
• a tax on CO2 emissions
(equal to the per-unit emission damages)
which for CO2-EOR producers acts exactly like
• a subsidy on CO2 sequestration
(i.e., on avoided CO2 emissions)
![Page 176: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/176.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Optimal policy
The optimal policy to promote CO2-EOR is quite simply
• a tax on CO2 emissions
(equal to the per-unit emission damages)
which for CO2-EOR producers acts exactly like
• a subsidy on CO2 sequestration
(i.e., on avoided CO2 emissions)
![Page 177: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/177.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Optimal policy
The optimal policy to promote CO2-EOR is quite simply
• a tax on CO2 emissions
(equal to the per-unit emission damages)
which for CO2-EOR producers acts exactly like
• a subsidy on CO2 sequestration
(i.e., on avoided CO2 emissions)
![Page 178: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/178.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Optimal policy
The optimal policy to promote CO2-EOR is quite simply
• a tax on CO2 emissions
(equal to the per-unit emission damages)
which for CO2-EOR producers acts exactly like
• a subsidy on CO2 sequestration
(i.e., on avoided CO2 emissions)
![Page 179: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/179.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Optimal policy
The optimal policy to promote CO2-EOR is quite simply
• a tax on CO2 emissions
(equal to the per-unit emission damages)
which for CO2-EOR producers acts exactly like
• a subsidy on CO2 sequestration
(i.e., on avoided CO2 emissions)
![Page 180: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/180.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
CO2-EOR profits
NPV = − I︸︷︷︸up-front
investmentcost
+ poil︸︷︷︸weighton oilproduction
Qprdoil + (sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
![Page 181: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/181.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
CO2-EOR profits
NPV = − I︸︷︷︸up-front
investmentcost
+ poil︸︷︷︸weighton oilproduction
Qprdoil + (sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
![Page 182: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/182.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
CO2-EOR profits
NPV = − I︸︷︷︸up-front
investmentcost
+ poil︸︷︷︸weighton oilproduction
Qprdoil + ( tCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
![Page 183: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/183.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Numerical example
Without a tax on its CO2 emissions, an ammonia plant can either
{vent its CO2
⇒ lose nothingcapture it at cost of $1/mcf and sell at $1/mcf
⇒ lose nothing
︸ ︷︷ ︸pCO2
With a $60/tCO2 ≈ $3/mcf emissions tax, the plant can either
{vent its CO2
⇒ lose $3/mcfcapture it at cost of $1/mcf and sell at $−2/mcf
⇒ lose $3/mcf
︸ ︷︷ ︸pCO2 − tCO2
![Page 184: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/184.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Numerical example
Without a tax on its CO2 emissions, an ammonia plant can either{vent its CO2
⇒ lose nothingcapture it at cost of $1/mcf and sell at $1/mcf
⇒ lose nothing
︸ ︷︷ ︸pCO2
With a $60/tCO2 ≈ $3/mcf emissions tax, the plant can either
{vent its CO2
⇒ lose $3/mcfcapture it at cost of $1/mcf and sell at $−2/mcf
⇒ lose $3/mcf
︸ ︷︷ ︸pCO2 − tCO2
![Page 185: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/185.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Numerical example
Without a tax on its CO2 emissions, an ammonia plant can either{vent its CO2 ⇒ lose nothing
capture it at cost of $1/mcf and sell at $1/mcf
⇒ lose nothing
︸ ︷︷ ︸pCO2
With a $60/tCO2 ≈ $3/mcf emissions tax, the plant can either
{vent its CO2
⇒ lose $3/mcfcapture it at cost of $1/mcf and sell at $−2/mcf
⇒ lose $3/mcf
︸ ︷︷ ︸pCO2 − tCO2
![Page 186: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/186.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Numerical example
Without a tax on its CO2 emissions, an ammonia plant can either{vent its CO2 ⇒ lose nothingcapture it at cost of $1/mcf and sell at $1/mcf
⇒ lose nothing︸ ︷︷ ︸pCO2
With a $60/tCO2 ≈ $3/mcf emissions tax, the plant can either
{vent its CO2
⇒ lose $3/mcfcapture it at cost of $1/mcf and sell at $−2/mcf
⇒ lose $3/mcf
︸ ︷︷ ︸pCO2 − tCO2
![Page 187: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/187.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Numerical example
Without a tax on its CO2 emissions, an ammonia plant can either{vent its CO2 ⇒ lose nothingcapture it at cost of $1/mcf and sell at $1/mcf⇒ lose nothing
︸ ︷︷ ︸pCO2
With a $60/tCO2 ≈ $3/mcf emissions tax, the plant can either
{vent its CO2
⇒ lose $3/mcfcapture it at cost of $1/mcf and sell at $−2/mcf
⇒ lose $3/mcf
︸ ︷︷ ︸pCO2 − tCO2
![Page 188: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/188.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Numerical example
Without a tax on its CO2 emissions, an ammonia plant can either{vent its CO2 ⇒ lose nothingcapture it at cost of $1/mcf and sell at $1/mcf⇒ lose nothing︸ ︷︷ ︸
pCO2
With a $60/tCO2 ≈ $3/mcf emissions tax, the plant can either
{vent its CO2
⇒ lose $3/mcfcapture it at cost of $1/mcf and sell at $−2/mcf
⇒ lose $3/mcf
︸ ︷︷ ︸pCO2 − tCO2
![Page 189: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/189.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Numerical example
Without a tax on its CO2 emissions, an ammonia plant can either{vent its CO2 ⇒ lose nothingcapture it at cost of $1/mcf and sell at $1/mcf⇒ lose nothing︸ ︷︷ ︸
pCO2
With a $60/tCO2 ≈ $3/mcf emissions tax, the plant can either
{vent its CO2 ⇒ lose $3/mcf
capture it at cost of $1/mcf and sell at $−2/mcf
⇒ lose $3/mcf
︸ ︷︷ ︸pCO2 − tCO2
![Page 190: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/190.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Numerical example
Without a tax on its CO2 emissions, an ammonia plant can either{vent its CO2 ⇒ lose nothingcapture it at cost of $1/mcf and sell at $1/mcf⇒ lose nothing︸ ︷︷ ︸
pCO2
With a $60/tCO2 ≈ $3/mcf emissions tax, the plant can either{vent its CO2 ⇒ lose $3/mcf
capture it at cost of $1/mcf and sell at $−2/mcf
⇒ lose $3/mcf
︸ ︷︷ ︸pCO2 − tCO2
![Page 191: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/191.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Numerical example
Without a tax on its CO2 emissions, an ammonia plant can either{vent its CO2 ⇒ lose nothingcapture it at cost of $1/mcf and sell at $1/mcf⇒ lose nothing︸ ︷︷ ︸
pCO2
With a $60/tCO2 ≈ $3/mcf emissions tax, the plant can either{vent its CO2 ⇒ lose $3/mcfcapture it at cost of $1/mcf and sell at $−2/mcf
⇒ lose $3/mcf︸ ︷︷ ︸pCO2 − tCO2
![Page 192: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/192.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Numerical example
Without a tax on its CO2 emissions, an ammonia plant can either{vent its CO2 ⇒ lose nothingcapture it at cost of $1/mcf and sell at $1/mcf⇒ lose nothing︸ ︷︷ ︸
pCO2
With a $60/tCO2 ≈ $3/mcf emissions tax, the plant can either{vent its CO2 ⇒ lose $3/mcfcapture it at cost of $1/mcf and sell at $−2/mcf⇒ lose $3/mcf
︸ ︷︷ ︸pCO2 − tCO2
![Page 193: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/193.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Numerical example
Without a tax on its CO2 emissions, an ammonia plant can either{vent its CO2 ⇒ lose nothingcapture it at cost of $1/mcf and sell at $1/mcf⇒ lose nothing︸ ︷︷ ︸
pCO2
With a $60/tCO2 ≈ $3/mcf emissions tax, the plant can either{vent its CO2 ⇒ lose $3/mcfcapture it at cost of $1/mcf and sell at $−2/mcf⇒ lose $3/mcf
︸ ︷︷ ︸pCO2 − tCO2
![Page 194: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/194.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Numerical example
Without a tax on its CO2 emissions, an ammonia plant can either{vent its CO2 ⇒ lose nothingcapture it at cost of $1/mcf and sell at $1/mcf⇒ lose nothing︸ ︷︷ ︸
pCO2
With a $60/tCO2 ≈ $3/mcf emissions tax, the plant can either{vent its CO2 ⇒ lose $3/mcfcapture it at cost of $1/mcf and sell at $−2/mcf⇒ lose $3/mcf︸ ︷︷ ︸
pCO2 − tCO2
![Page 195: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/195.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
CO2-EOR profits
NPV = − I︸︷︷︸up-front
investmentcost
+ poil︸︷︷︸weighton oilproduction
Qprdoil + (−
[
pCO2
− tCO2 ]
+ crec)︸ ︷︷ ︸weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
![Page 196: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/196.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
CO2-EOR profits
NPV = − I︸︷︷︸up-front
investmentcost
+ poil︸︷︷︸weighton oilproduction
Qprdoil + (−[pCO2 − tCO2 ] + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
![Page 197: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/197.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
CO2-EOR profits
NPV = − I︸︷︷︸up-front
investmentcost
+ poil︸︷︷︸weighton oilproduction
Qprdoil + ( tCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
![Page 198: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/198.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
CO2-EOR profits
NPV = − I︸︷︷︸up-front
investmentcost
+ poil︸︷︷︸weighton oilproduction
Qprdoil + (sCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
![Page 199: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/199.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
CO2-EOR profits
NPV = − I︸︷︷︸up-front
investmentcost
+ poil︸︷︷︸weighton oilproduction
Qprdoil + ( tCO2 − pCO2 + crec)︸ ︷︷ ︸
weighton CO2
sequestration
QseqCO2− crec︸︷︷︸
weighton CO2recycling
Q injCO2− Coth︸︷︷︸
othercosts
![Page 200: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/200.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Summary
• Engineers and economists need to collaborate
• NPV-maximizing CO2-injection rates tend to fall over time
• Oil prices drive CO2 storage more than storage subsidies do
– but not necessarily positively
• Emissions from consumption of incremental EOR barrels domatter
• The optimal policy to promote CO2-EOR is a tax on CO2emissions
– but producers may not benefit from such a tax
![Page 201: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/201.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Summary
• Engineers and economists need to collaborate
• NPV-maximizing CO2-injection rates tend to fall over time
• Oil prices drive CO2 storage more than storage subsidies do
– but not necessarily positively
• Emissions from consumption of incremental EOR barrels domatter
• The optimal policy to promote CO2-EOR is a tax on CO2emissions
– but producers may not benefit from such a tax
![Page 202: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/202.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Summary
• Engineers and economists need to collaborate
• NPV-maximizing CO2-injection rates tend to fall over time
• Oil prices drive CO2 storage more than storage subsidies do
– but not necessarily positively
• Emissions from consumption of incremental EOR barrels domatter
• The optimal policy to promote CO2-EOR is a tax on CO2emissions
– but producers may not benefit from such a tax
![Page 203: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/203.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Summary
• Engineers and economists need to collaborate
• NPV-maximizing CO2-injection rates tend to fall over time
• Oil prices drive CO2 storage more than storage subsidies do
– but not necessarily positively
• Emissions from consumption of incremental EOR barrels domatter
• The optimal policy to promote CO2-EOR is a tax on CO2emissions
– but producers may not benefit from such a tax
![Page 204: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/204.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Summary
• Engineers and economists need to collaborate
• NPV-maximizing CO2-injection rates tend to fall over time
• Oil prices drive CO2 storage more than storage subsidies do– but not necessarily positively
• Emissions from consumption of incremental EOR barrels domatter
• The optimal policy to promote CO2-EOR is a tax on CO2emissions
– but producers may not benefit from such a tax
![Page 205: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/205.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Summary
• Engineers and economists need to collaborate
• NPV-maximizing CO2-injection rates tend to fall over time
• Oil prices drive CO2 storage more than storage subsidies do– but not necessarily positively
• Emissions from consumption of incremental EOR barrels domatter
• The optimal policy to promote CO2-EOR is a tax on CO2emissions
– but producers may not benefit from such a tax
![Page 206: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/206.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Summary
• Engineers and economists need to collaborate
• NPV-maximizing CO2-injection rates tend to fall over time
• Oil prices drive CO2 storage more than storage subsidies do– but not necessarily positively
• Emissions from consumption of incremental EOR barrels domatter
• The optimal policy to promote CO2-EOR is a tax on CO2emissions
– but producers may not benefit from such a tax
![Page 207: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/207.jpg)
Engineering studies Economic study Effect of oil prices and CO2-storage subsidies Common misconception Optimal policy
Summary
• Engineers and economists need to collaborate
• NPV-maximizing CO2-injection rates tend to fall over time
• Oil prices drive CO2 storage more than storage subsidies do– but not necessarily positively
• Emissions from consumption of incremental EOR barrels domatter
• The optimal policy to promote CO2-EOR is a tax on CO2emissions
– but producers may not benefit from such a tax
![Page 208: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/208.jpg)
Oil market CO2 market Flow schematic
Supply
Demand
p∗
Q∗Qoil
poilOil market
x
x
![Page 209: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/209.jpg)
Oil market CO2 market Flow schematic
Supply
Demand
Q∗
p∗∗cons
p∗∗prod = p∗
Q∗∗
carbon tax
Qoil
poilOil market
x
x
![Page 210: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/210.jpg)
Oil market CO2 market Flow schematic
Supply
Demand
Q∗
p∗∗cons
p∗∗prod = p∗
Q∗∗
carbon tax
Qoil
poilOil market
x
x
![Page 211: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/211.jpg)
Oil market CO2 market Flow schematic
Supply
Demand
Q∗
p∗∗cons
p∗∗prod = p∗
Q∗∗
carbon tax
Qoil
poilOil market
x
x
![Page 212: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/212.jpg)
Oil market CO2 market Flow schematic
Demand
Supply
p∗
Q∗Qoil
poilOil market
x
x
![Page 213: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/213.jpg)
Oil market CO2 market Flow schematic
Demand
Supplyp∗∗cons
p∗∗prod = p∗
Q∗∗ = Q∗
carbon tax
Qoil
poilOil market
x
x
![Page 214: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/214.jpg)
Oil market CO2 market Flow schematic
Demand
Supplyp∗∗cons
p∗∗prod = p∗
Q∗∗ = Q∗
carbon tax
Qoil
poilOil market
x
x
![Page 215: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/215.jpg)
Oil market CO2 market Flow schematic
Demand
Supplyp∗∗cons
p∗∗prod = p∗
Q∗∗ = Q∗
carbon tax
Qoil
poilOil market
x
x
![Page 216: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/216.jpg)
Oil market CO2 market Flow schematic
Demand
Supply
p∗
Q∗Qoil
poilOil market
x
x
![Page 217: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/217.jpg)
Oil market CO2 market Flow schematic
Demand
Supply
Q∗
p∗∗cons = p∗
p∗∗prod
Q∗∗
carbon tax
Qoil
poilOil market
x
x
![Page 218: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/218.jpg)
Oil market CO2 market Flow schematic
Demand
Supply
Q∗
p∗∗cons = p∗
p∗∗prod
Q∗∗
carbon tax
Qoil
poilOil market
x
x
![Page 219: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/219.jpg)
Oil market CO2 market Flow schematic
Demand
Supply
Q∗
p∗∗cons = p∗
p∗∗prod
Q∗∗
carbon tax
Qoil
poilOil market
x
x
![Page 220: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/220.jpg)
Oil market CO2 market Flow schematic
Demand
Supply
p∗
Q∗Qoil
poilOil market
x
x
![Page 221: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/221.jpg)
Oil market CO2 market Flow schematic
Demand
Supply
p∗
Q∗
p∗∗cons
p∗∗prod
Q∗∗
carbon tax
Qoil
poilOil market
x
x
![Page 222: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/222.jpg)
Oil market CO2 market Flow schematic
Demand
Supply
p∗
Q∗
p∗∗cons
p∗∗prod
Q∗∗
carbon tax
Qoil
poilOil market
x
x
![Page 223: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/223.jpg)
Oil market CO2 market Flow schematic
Demand
Supply
p∗
Q∗
p∗∗cons
p∗∗prod
Q∗∗
carbon tax
Qoil
poilOil market
x
x
![Page 224: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/224.jpg)
Oil market CO2 market Flow schematic
Demand
Supplyp∗
Q∗
p∗∗cons
p∗∗prod
Q∗∗
carbon tax
Qoil
poilOil market
x
x
![Page 225: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/225.jpg)
Oil market CO2 market Flow schematic
Demand
Supplyp∗
Q∗
p∗∗cons
p∗∗prod
Q∗∗
carbon tax
Qoil
poilOil market
x
x
![Page 226: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/226.jpg)
Oil market CO2 market Flow schematic
Demand
Supplyp∗
Q∗
p∗∗cons
p∗∗prod
Q∗∗
carbon tax
Qoil
poilOil market
x
x
![Page 227: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/227.jpg)
Oil market CO2 market Flow schematic
Demand
Supply
p∗
Q∗
p∗∗cons
p∗∗prod
Q∗∗
carbon tax
Qoil
poilOil market
x
x
![Page 228: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/228.jpg)
Oil market CO2 market Flow schematic
Demand
Supply
p∗
Q∗
p∗∗cons
p∗∗prod
Q∗∗
carbon tax
Qoil
poilOil market
x
x
![Page 229: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/229.jpg)
Oil market CO2 market Flow schematic
Demand
Supply
p∗
Q∗
p∗∗cons
p∗∗prod
Q∗∗
carbon tax
Qoil
poilOil market
x
x
![Page 230: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/230.jpg)
Oil market CO2 market Flow schematic
0
EOR
demand
QCO2
pCO2CO2 market
x
x
![Page 231: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/231.jpg)
Oil market CO2 market Flow schematic
0
EOR
demand
Aquifer
demand
QCO2
pCO2CO2 market
x
x
![Page 232: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/232.jpg)
Oil market CO2 market Flow schematic
0
EOR
demand
Aquifer
demand
Supplyp∗
Q∗QCO2
pCO2CO2 market
x
x
![Page 233: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/233.jpg)
Oil market CO2 market Flow schematic
0
EOR
demand
Aquifer
demand
Supply
Q∗
p∗∗prod = p∗
p∗∗cons
Q∗∗
carbon tax
QCO2
pCO2CO2 market
x
x
![Page 234: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/234.jpg)
Oil market CO2 market Flow schematic
0
EOR
demand
Aquifer
demand
Supply
Q∗
p∗∗prod = p∗
p∗∗cons
Q∗∗
carbon tax
QCO2
pCO2CO2 market
x
x
![Page 235: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/235.jpg)
Oil market CO2 market Flow schematic
0
EOR
demand
Aquifer
demand
Supply
Q∗
p∗∗prod = p∗
p∗∗cons
Q∗∗
carbon tax
QCO2
pCO2CO2 market
x
x
![Page 236: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/236.jpg)
Oil market CO2 market Flow schematic
0
EOR
demand
Aquifer
demand
Supply
p∗
Q∗QCO2
pCO2CO2 market
x
x
![Page 237: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/237.jpg)
Oil market CO2 market Flow schematic
0
EOR
demand
Aquifer
demand
Supply
p∗
Q∗
p∗∗prod
p∗∗cons
Q∗∗
carbon tax
QCO2
pCO2CO2 market
x
x
![Page 238: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/238.jpg)
Oil market CO2 market Flow schematic
0
EOR
demand
Aquifer
demand
Supply
p∗
Q∗
p∗∗prod
p∗∗cons
Q∗∗
carbon tax
QCO2
pCO2CO2 market
x
x
![Page 239: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/239.jpg)
Oil market CO2 market Flow schematic
0
EOR
demand
Aquifer
demand
Supply
p∗
Q∗
p∗∗prod
p∗∗cons
Q∗∗
carbon tax
QCO2
pCO2CO2 market
x
x
![Page 240: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/240.jpg)
Oil market CO2 market Flow schematic
CO2-EOR Flows
xx
xx
![Page 241: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/241.jpg)
Oil market CO2 market Flow schematic
q injwat qinjCO2
↓↓
CO2-EOR Flows
xx
xx
![Page 242: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/242.jpg)
Oil market CO2 market Flow schematic
q injwat qinjCO2
↓↓
qprdoil
CO2-EOR Flows
xx
xx
![Page 243: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/243.jpg)
Oil market CO2 market Flow schematic
q injCO2↓
qprdoil
CO2-EOR Flows
xx
xx
![Page 244: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/244.jpg)
Oil market CO2 market Flow schematic
q injCO2↓
qprdoil
→
↑
qrecCO2 ←←
CO2-EOR Flows
xx
xx
![Page 245: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/245.jpg)
Oil market CO2 market Flow schematic
q injCO2↓
qprdoil
→
↑
qrecCO2 ←← CO2recycling
plant
CO2-EOR Flows
xx
xx
![Page 246: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/246.jpg)
Oil market CO2 market Flow schematic
q injCO2↓
qprdoil
→
↑
qrecCO2 ←←
CO2-EOR Flows
xx
xx
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Oil market CO2 market Flow schematic
q injCO2↓
qprdoil
→
↑
qrecCO2 ←←
qseqCO2
CO2-EOR Flows
xx
xx
![Page 248: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/248.jpg)
Oil market CO2 market Flow schematic
q injCO2↓
qprdoil
→
↑
qrecCO2 ←←
qseqCO2
qpurCO2
CO2-EOR Flows
xx
xx
![Page 249: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/249.jpg)
Oil market CO2 market Flow schematic
q injCO2↓
qprdoil
→
↑
qrecCO2 ←←
qseqCO2
qpurCO2
qpurCO2 = qseqCO2
CO2-EOR Flows
xx
xx
![Page 250: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/250.jpg)
Oil market CO2 market Flow schematic
q injCO2↓
qprdoil
→
↑
qrecCO2 ←←
qseqCO2
qpurCO2
CO2-EOR Flows
xx
xx
![Page 251: The Economics of Combining CO2-EOR with Storage Klaas van ...€¦ · The Economics of Combining CO 2-EOR with Storage Klaas van ’t Veld University of Wyoming Department of Economics](https://reader035.fdocuments.us/reader035/viewer/2022071022/5fd73d551f8484287344b5b6/html5/thumbnails/251.jpg)
Oil market CO2 market Flow schematic
q injCO2↓
qprdoil
→
↑
qrecCO2 ←←
qseqCO2
qpurCO2
qrecCO2 = qinjCO2 − qseqCO2
CO2-EOR Flows
xx
xx