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The race for landmark CCS project: North Dakota approves Class VI well for Red Trail Energy

Thanks to the North Dakota Industrial Commission (NDIC) blessings, Red Trail Energy LLC (RTE) is now able to commercially capture, compress, and inject 180,000 tons of carbon dioxide per year into the Broom Creek Formation on its property for permanent geologic CO2 storage.

Watchdog work at Flickertail State on geologic sequestration of CO2 is unrivaled in the country. As of 2018, North Dakota was the first state to receive primacy for Class VI wells from the United States Environmental Protection Agency (EPA), followed by Wyoming only in 2020.

And now a breakthrough was achieved: RTE may geologically store CO2 at its ethanol facility near Richardton after approval from the Department of Mineral Resources (DMR) on October 19. In addition to deciding the financial obligations, the orders confirm the creation of the required pore space for the reservoir storage required to operate the facility.

RTE's initial construction was as a coal-fired ethanol plant, but in 2016 it was converted to natural gas. On an annual basis, RTE produces 59-64 million gallons of ethanol using 21-23 million bushels of corn. The resulting fermentation process at RTE releases approximately 180,000 metric tons of high-purity CO2 every year during ethanol production. Accordingly, RTE has received approval to commercially capture (dehydrate and compress) and inject 185,000 metric tonnes of CO2 into the Broom Creek Formation on its property for permanent geologic CO2 storage.

A project developed by Red Trail in conjunction with the Energy & Environmental Research Center ensures that carbon dioxide can be stored safely for generations to come. In response to such a policy, the company's innovative and rigorous approach was commended by the watchdog for setting the standard for future carbon capture applications.

The EPA classifies wells into various categories. Geologic sequestration refers to injecting CO2 deep into rock formations for long-term storage - Class VI well is used to do this. The goal of geologic carbon sequestration is to reduce or eliminate the release of carbon dioxide into the atmosphere by storing the gas in deep geologic formations.

It is possible to capture carbon dioxide from stationary sources such as power plants and other large industrial facilities, compress it, and inject it into porous, permeable geologic layers, where it will remain relatively isolated. A layer of impermeable rock must be deposited over the geologic formation where the CO2 is stored to keep it in.

The state's geological resources were first evaluated 18 years ago, and North Dakota policymakers developed the legal and regulatory framework for geological storage 12 years ago. As North Dakota continues to develop its abundant geological resources, the approval of the RTE permits represents a major milestone.

Additionally to the permits, RTE received a $25 million loan from the USDA under the Rural Energy for American Program in September 2021 for its carbon capture and storage project (CCS). Simultaneously, a $500,000 matching grant from the NDIC was awarded to the Energy and Environment Research Center for the development of the RTE CCS project back in June.

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The Hunting Season Is Not Over Yet: Exxon Mobil makes a $400 million commitment to Wyoming's carbon capture

Carbon footprint reduction is a new hot trend: Exxon Mobil makes a $400 million investment into its LaBarge facility to expand its carbon capture and storage capabilities by another million metric tons of CO2. Operational activities could begin as early as 2025 after a final investment decision is made in 2022. At present, about 20% of all CO2 captured worldwide each year is captured at the LaBarge. However, as one of the largest of the world's Big Oil companies, it is not the only project in Exxon's pipeline: aside from CCS capabilities, the LaBarge is one of the world's largest sources of helium, producing approximately 20% of global supply

The investment will happen in the next 2 years. The project intends to capture CO2 from ethanol plants and other sources in Iowa, Nebraska, Minnesota, North Dakota, and South Dakota. Upon aggregation, CO2 will be transported via pipeline to North Dakota, where it will be stored in subsurface geologic formations. The formations will be in the Williston Basin, where Continental Resources has been a dominant producer for more than half a century. At the moment it’s the world's most ambitious carboncapture venture of its kind. The sequestration itself should be underway by spring 2024.

Oil output in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. Additionally, gas productivity in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Given that this growth has been expected, recent global market changes make forecasting the output even more challenging. Learning how production will change is easier with early activity tracking, a new service recently launched by Rextag – Pad Activity Monitor. With the help of PAM, you are able to monitor well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days. Additionally, it cuts down activity reporting lag times by at least 98%, from 120-180 days down to just 5-8 days. In order to access reports, charts, tables, and mapping visualizations via Rextag’s Energy DataLink use a web-based application allowing users to filter, download and identify activity on a map or data table. Moreover, customers will be able to set up daily, weekly, and monthly email report notifications.

The EIA forecasts that total output in the main U.S. shale oil basins will increase 142,000 bbl/d to 8.761 million bbl/d in June, the most since March 2020. Oil productivity in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. In the largest shale gas basin, the productivity in Appalachia in Pennsylvania, Ohio and West Virginia will grow up to 35.7 Bcf/d in June, its highest since beating a record 36 Bcf/d in December 2021. Gas output in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Speaking of the Permian future output, putting hands on upcoming changes in production has recently been made easier with the new Rextag's service - Pad Activity Monitor. Thanks to satellite imagery and artificial intelligence, customers are able to monitor the oil and gas wells and are provided with near real-time activity reports related to drilling operations. However, it is noticed that productivity in the largest oil and gas basins has decreased every month since setting records of new oil well production per rig of 1,544 bbl/d in December 2020 in the Permian Basin, and new gas well production per rig of 33.3 MMcf/d in March 2021 in Appalachia.

No sooner had the crude prices soared above $100/bbl than the industry professionals believed in an incredible growth of drilling activity in North America’s largest shale patch. Analysts speculate that additional output of 500,000 barrels of oil daily would become a significant part (4%) of overall U.S. daily production. That is going to flatter oil and gasoline prices. Drilling permits in the Permian Basin are persistently growing, averaging approximately 210 at the beginning of April. Moreover, the permits trend is noticed as an all-time high as a total of 904 horizontal drilling permits were awarded last month. Nowadays, learning and analysing the current situation and predicting the future development become easier with early activity tracking, a new service recently launched by Rextag. Rextag's Pad Activity monitor (PAM) allows you to see well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days with the help of satellite imagery and artificial intelligence. While the increase in drilling will result in higher production, U.S. shale producers will have to overcome several hurdles including labor shortages and supply constraints.

2022 blog posts