SBI Energy: Market Insights, Opportunities &Trends

Why aren’t alternative fuels taking off more quickly? It’s a valid question given the large quantity of proposals for massive solar and wind turbine installations in the U.S and around the globe this year.  Meanwhile, we hear little news of new alternative fuels projects.  The answer, according to a new market study, Specialty Pipelines for Renewable and Alternative Energy Substances, lies in the transportation logistics.

Crude oil, finished fuels, and natural gas pipelines crisscross the United States and the globe. But in many cases, these existing pipelines are not suitable for the transport of sensitive biofuels. The chemical disposition of biofuels is substantially different from conventional fossil fuels.  For example, the corrosiveness and water solubility of ethanol makes it incompatible with most existing pipelines. 

Industry concerns also persist regarding the contamination of jet fuel, which has strict quality control, by residual biodiesel left in the pipeline. Current pipeline deliveries of biodiesel remain limited to B5 blends through pipelines that do not traffic jet fuel. 

An additional inhibiter to immediate alternative fuel success resides in the lack of existing pipelines in remote regions where Biomethane and biogas are produced. As a result, biofuels are largely transport by truck or rail, which drives up costs and limits how effectively biofuels can be brought to market.

In order to support current and future alternative fuels development, producers and investors are looking towards specialty pipelines for their distribution needs. As a result research publisher SBI Energy forecasts that the market for specialty pipelines is expected to increase nearly 4-fold between 2010 and 2015.   Substances carried in specialty pipelines - carbon dioxide, ethanol, biodiesel, and biomethane/biogas - have found market growth due to high petroleum prices, the development of enhanced oil recovery methods using carbon dioxide injection, carbon capture and sequestration system development, the presence or potential for carbon emissions penalties in several world markets.  The fastest growing segment, Ethanol, will expand significantly as construction proceeds on dedicated ethanol pipelines, creating a market in excess of $1,000 million by 2014. The projected 2011-2015 CAGR for this market is 27.2%.

(Source: sbienergy.com)

The oil industry is paying close attention to the success of EOR schemes worldwide. Many companies are learning from the mistakes and benefiting from the technological improvements of others and having much success with their EOR schemes. Success stories are piling up.

DOE Sponsored Project Hits 1.0 Million-Ton Milestone for Injected CO2

The Cranfield site in Southwestern Mississippi is sponsored by the U.S. Department of Energy’s (DOE) Office of Fossil Energy (FE), is led by the Southeast Regional Carbon Sequestration Partnerships Program (RCSP) and is managed by the Office of Fossil Energy’s National Energy Technology Laboratory (NETL). The Cranfield site has been the host of a large-scale CO2-EOR project and in November of 2009, it had sequestered 1 million tons of CO2. Researchers at Cranfield are monitoring the injected CO2 two miles beneath the earth’s surface to ensure its storage permanency.

Saskatchewan’s Largest Full Scale Study of CO2 Storage

Saskatchewan, Canada’s Weyburn-Midale CO2 Project field is possibly the world’s largest full-scale, field study of CO2-EOR. EnCana Corp.’s Weyburn portion is about 70 square miles and contains about 1.4 billion barrels of original oil in place, while Apache’s Midale field is nearly 40 miles square and contains about 515 million barrels of original oil in place. This eight-year, $80 million project was launched in 2000. CO2 for the oil field comes from the Great Plains Synfuels Plant in Beulah, North Dakota. About 60.0% of the plant’s industrial emissions are captured for use in CO2-EOR and transported via a 180-mile pipeline to the Weyburn field. The project is a host site for an international study on CO2 sequestration, specifically referred to as the Weyburn-Midale CO2 Monitoring and Storage project. Darcy Cretin, Operations Superintendent at Midale reported to Basin Electric Power Corporation in 2009, in an on-site interview, that the use of CO2 in its Weyburn field was increasing oil production by 300.0%. By 2008 the complex had already stored about ten million tons of CO2.

In the first phase of the project, running from 2000 to 2004, a comprehensive data set for CO2 geological storage, touted as the most complete in the world, was created. A 320-mile pipeline was also built with “tap points” for future delivery of CO2 to other fields. The goal in the second phase of the project, extending from 2005 to 2009, was to compile a Best Practices Manual to guide all aspects of future CO2 storage projects including any technical
and policy components.

In personal communications with Norm Sacuta, Communications Manager for the project, February 2010, he stated that the Weyburn-Midale project had stored 17 million metric tons of CO2 as of January 1, 2010 (15 million in the Weyburn and 2 million in the Midale). He also reported that at the time of our correspondence the Weyburn portion alone was producing about 28,000 barrels of oil per day – 18,000 more per day than was being produced prior to the introduction of CO2-EOR.

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