Do we have the Innovation CHOPS to Succeed?

Written by Sally Dawoud, Technology Enablement @ CRIN*

CHOPS, Cold Heavy Oil Production with Sand, is a method used to extract heavy oil, which is characterized by higher viscosity and density, so that it does not flow easily to the surface using conventional methods. One of the key features of CHOPS is that it intentionally allows sand to be produced along with the oil. The sand helps create channels or wormholes within the reservoir, providing pathways for the oil to flow more easily towards the wellbore.

CHOPS is a more economic and simpler method for extracting heavy oil, making it attractive in certain situations. CHOPS challenges include managing the produced sand and managing the wear and tear on the pumps and tubing due to sand production. It is not suitable for all reservoirs or conditions, but it has been used successfully in various heavy oil reservoirs around Lloydminster.

Early 2023, we asked our CRIN community to help us identify the innovation challenges associated with Enhanced Oil Recovery (EOR) using the Cold Heavy Oil Production with Sand (CHOPS) method. Here are the Top 11 challenges raised and some potential solutions:

TECHNICAL CHALLENGES

Reservoir Impacts of CHOPS Wormholes: The CHOPS recovery process results in wormhole channels in the reservoir that function as high permeability conduits of non-deterministic trajectory. These wormhole networks present significant challenges to flood type EOR schemes relying on sweep conformance and can severely limit the number of EOR options available post-CHOPS. However, there is another alternative. EOR technologies like cyclic solvent or CO₂ injection can take advantage of the wormholes to increase the reservoir contact and become successful.

Cost and Complexity of Field Trials: Lower tolerances for risk and a preference for rapid payback periods can discourage field trials. Collaborative funding models, public-private partnerships, and clear risk-sharing mechanisms can encourage companies to undertake field trials, accelerating the development of EOR technologies.

Inability to Predict Dynamic Performance with Static Data: The challenge of predicting dynamic performance with static data underscores the need for ongoing data collection and analysis. Advanced data analytics and machine learning can help in continuously updating reservoir models, reducing uncertainty in EOR projects.

Production Losses/Deferrals during New Idea Implementation: The initial implementation of innovative EOR techniques often leads to production losses, or more accurately, deferrals. Companies can mitigate this by conducting thorough pilot projects and closely monitoring the performance to optimize the process as quickly as possible.

Legacy Facilities Compatibility: Dealing with legacy facilities that may be incompatible with EOR requirements can be expensive. Innovations in materials science and engineering may help retrofit or upgrade existing infrastructure to accommodate higher pressures, temperatures, and corrosivity.

REGULATORY & POLICY CHALLENGES

Longer Payback of EOR Projects and Lack of Regulatory Policy Certainty: Longer payback periods can deter investment in EOR projects. To address this, industry stakeholders and policymakers need to collaborate on creating a stable regulatory framework that provides long-term certainty. This could involve incentives, tax breaks, or regulatory predictability to encourage EOR investments.

Investment Uncertainty due to Policy Changes: Government policies play a significant role in shaping the EOR landscape. To reduce investment uncertainty, governments should provide clear, long-term energy policies and consider offering incentives for EOR projects that align with environmental and economic goals.

Uncertainty of regulations for CO₂ EOR and the lack of credit for carbon sequestration: Regulatory ambiguity surrounding CO₂ EOR practices and the absence of proper credit mechanisms for carbon sequestration pose substantial challenges; CO₂ EOR is not eligible for Federal Investment Tax Credits. To address these issues, governments should establish clear and consistent regulations for CO₂ EOR operations, along with incentivizing and recognizing the vital role carbon sequestration plays in mitigating greenhouse gas emissions and advancing sustainability goals.

Public Perception on the Need for Hydrocarbons: Public perception regarding the future of hydrocarbons impacts investment decisions in EOR projects. Effective communication campaigns highlighting the role of hydrocarbons in the transition to cleaner energy sources and their continued importance in certain industries can help shape a more positive narrative. Energy security is often assumed until forcibly threatened as in times of war. Energy affordability is often forgotten when discussing different perspectives on the future of hydrocarbon resources.

CHALLENGES OF TRAINING & EDUCATION

Knowledge Retention in Stop-and-Start Funding Environments: To retain critical knowledge in environments with inconsistent funding, collaboration between academia, government, and industry is vital. Establishing knowledge-sharing networks and repositories can help ensure that valuable expertise is preserved during funding gaps and through retirement waves.

Unproven Green Technologies: Green technologies in EOR can appear to be mutually exclusive. While they offer environmental benefits, their unproven nature can deter investment. Encouraging public-private partnerships and government support for green EOR research and development can help bridge this gap.

In addressing these innovation challenges, a multi-stakeholder approach involving industry, government, academia, and environmental groups can pave the way for more sustainable and efficient EOR practices, ultimately benefiting the oil and gas industry and the environment.

*Acknowledgement: This article is a product of the collaborative efforts of CRIN’s Novel Hydrocarbon Extraction community, and the invaluable contributions and careful editing of An Mai, Vicky Qualie, Debbie Burke, Kevin To, Stephen Arseniuk, and Gokhan Coskuner.