State looks at building innovative and environmentally friendly carbon dioxide pipeline         

Pipeline would allow for safe containment and transportation of greenhouse gases released by coal gasification plants

[NOV. 7, 2006]  SPRINGFIELD -- Gov. Rod R. Blagojevich announced Monday that the state would issue a request for information regarding the construction and operation of a carbon dioxide pipeline stretching from the coal gasification plants planned for central and southern Illinois to Illinois Basin oil fields in southeastern Illinois. The request, submitted to companies with expertise in pipeline development, is to determine the best construction and operation practices, the appropriate siting, as well as the interest level within the industry to work with the state to develop a carbon dioxide pipeline system in Illinois. The carbon dioxide pipeline is an integral part of the governor's energy independence plan released earlier this year.

The governor's energy plan calls for the investment of $775 million to help build 10 new coal gasification plants over the next 10 years, which would convert Illinois' coal from a solid to a gas that can be processed into a substitute for natural gas, diesel fuel or electricity. The plants would use Illinois coal to meet 25 percent of the state's diesel fuel needs, 25 percent of natural gas needs and 10 percent of electricity needs. Coal gasification is the cleanest and most efficient way to convert coal to energy, with low emissions of mercury and other air pollutants, and allows carbon dioxide to be captured for permanent underground storage.

"Our energy plan will reduce Illinois' dependence on foreign oil -- allowing us to use Illinois' own natural resources to meet 50 percent of our fuel needs by 2017," Blagojevich said. "Constructing a carbon dioxide pipeline is a big part of our plan because it will allow us to build coal gasification plants and use the carbon dioxide they emit to extract more oil without contributing to global warming."

As part of his energy plan, the governor has proposed building a pipeline from gasification facilities in Illinois to Illinois Basin oil fields in southeastern Illinois. Illinois' oil fields hold about 1 billion untapped barrels of oil resources. Because these oil fields are mature, production cannot increase without using advanced recovery techniques. Enhanced oil recovery, which uses carbon dioxide to extract more oil from existing reserves, could nearly double the amount of petroleum produced by Illinois annually. The 140-mile pipeline would transport the carbon dioxide captured by the coal gasification plants to oil fields and use the pressurized carbon dioxide to extract more oil.

Additionally, the carbon dioxide transported by the pipeline could be used to extract methane from Illinois coal reserves. Illinois coal reserves hold enough methane, a fuel similar to natural gas, to meet all of the state's natural gas needs for seven years. The royalties from the recovered oil and gas would subsidize the infrastructure costs of transporting and permanently storing the carbon dioxide underground.

In an effort to recover residual oil and natural gas from Illinois' vast oil and coal bed methane reserves, the state is seeking expressions of interest from the private sector to build or operate a pipeline "backbone" that will link new coal gasification and biofuels production facilities with mature oil fields amenable to enhanced oil recovery and with potential enhanced coal bed methane resources in Illinois.

The ultimate goal is to ensure that the infrastructure needed to transport sufficient quantities of carbon dioxide to Illinois Basin oil fields and other geological formations is sufficient to extract available oil reserves and permanently store carbon dioxide captured from coal gasification facilities and biofuels plants.

In the event that carbon dioxide becomes a regulated commodity, a carbon dioxide pipeline would assist generators of carbon dioxide to generate revenue from carbon credits they may accrue by transporting carbon dioxide from coal gasification and biofuel plants to sites suitable for permanent storage in deep saline reservoirs, such as in the Mount Simon Sandstone reservoir.

Background of Illinois' potential for enhanced oil recovery and carbon sequestration:

• Recent studies show that Illinois Basin has an original-oil-in-place volume of 14.1 billion.

• The volume of oil amenable to carbon dioxide-enhanced oil recovery in the Illinois Basin is assessed at approximately 860 million to 1.3 billion barrels, and the majority of that resource is concentrated in a limited number of large fields in south central and southeastern Illinois. For example, approximately 340 million barrels of enhanced oil recovery resources resides in three large fields and six nearby smaller fields in southeastern Illinois.

• The state is conducting significant geological carbon sequestration research, supported by the U.S. Department of Energy, that includes new field testing of enhanced oil recovery in Illinois' mature oil fields; the first carbon dioxide is expected to be injected into a mature field in December.

• Potential sources of large quantities of carbon dioxide are now being developed in Illinois. Several well-financed coal gasification projects and ethanol plants are now under development in Illinois that would yield gas streams with high carbon dioxide concentrations suitable not only for enhanced oil recovery, but possibly also for enhanced coal bed methane, in which the adsorption of carbon dioxide on deep coal seams may boost methane production to enhance regional supplies of natural gas.

• The Illinois Basin's primary coal bed methane and enhanced coal bed methane resource is assessed at 6.7 trillion cubic feet, the majority of which is located in southeastern Illinois, coincident with coals that overlie major oil fields in the deeper parts of the Illinois Basin.

Building a carbon dioxide pipeline to permanently trap and store carbon dioxide supports the governor's recently announced Climate Change Initiative, which includes an executive order that created the Illinois Climate Change Advisory Group. The group will consider the full range of policies and strategies to reduce greenhouse gas emissions in Illinois and make recommendations to the governor. The advisory group will have broad representation that will include business leaders, labor unions, the energy and agricultural industries, scientists, economists, and environmental groups from throughout the state. The governor named Illinois Environmental Protection Agency Director Doug Scott as chairman of the advisory group.

The governor also announced that Illinois would join New Mexico to become only the second state in the nation to join the Chicago Climate Exchange, known as CCX. As a CCX member, the state makes a commitment to reduce greenhouse gas emissions from the electricity and fuel needed to operate state facilities and motor vehicles; the reduction target applies only to state government operations.

[News release from the governor's office]