Ethanol plant to sequester CO2 emissions

3/13/2010

By SHAJIA AHMAD

By SHAJIA AHMAD

sahmad@gctelegram.com

The operators of the Bonanza Energy ethanol plant in Garden City say they are working with a Texas oil company to bury gas emissions that aid in the extraction of oil in aging wells, and that the process could start as soon as next year.

The commercial-scale project will be the first in the state to use carbon sequestration technology toward enhanced oil recovery specifically at a Kansas oil field, representatives from Conestoga Energy Partners, which operates the ethanol plant southeast of Garden City, and Houston-based PetroSantander Inc., told local officials Friday.

About 150,000 metric tons of carbon dioxide produced annually by the fuel's fermentation process will be redirected from the atmosphere to the Stewart oil field site, northeast of Garden City, via underground pipe, said Tom Willis, Conestoga's CEO.

William F. Aspinwall, a land manager with PetroSantander Inc., said Friday his company has been operating the Stewart oil field site since the late 1990s. The groups' $17 million to $20 million project is "capital intensive" and risky, he said, but he hopes it will be economically successful on its own. Aspinwall also anticipated a future national market that could put a price on emitting greenhouse gases.

Pressurized carbon dioxide is used to pump out the last oil from aging wells, which would be impossible to extract otherwise, and Aspinwall estimated using the by-product will allow his company to recover 10 to 15 percent more oil from the site.

The small oil field located northeast of Garden City has produced about 10.5 million barrels of oil since its late 1960s discovery, according to the Kansas Geological Survey.

Conestoga's CEO Willis, who touted ethanol as a green fuel — adding ethanol to gasoline oxygenates fuel so that it burns more completely and reduces polluting emissions such as carbon monoxide — said Friday he could not estimate how much more revenue the move to produce ethanol at a lower carbon level would generate for his company. The company plans to market its product to West Coast states, in anticipation of greater carbon-emissions regulations. In addition, construction of the project is expected to take hold in about a year to a year-and-a-half and holds both environmental and economic benefits, the CEO said.

"We live in a time where carbon footprints are important," Willis said Friday. "Whether you buy into (global warming) or you don't, it's definitely a concern."

Conestoga also manages the Arkalon Energy ethanol plant in Hayne, east of Liberal, where carbon is already sequestered and piped to a Texas oil field site, Willis said.

The project also will create a limited number of PetroSantander jobs to operate compression and separation equipment at the plant's site, Aspinwall said, in addition to the ancillary construction jobs, though officials could not yet say how many or when.

Thirty-two individuals are employed at the Bonanza plant, and 46 are employed at the Arkalon plant.

Conestoga's CEO added that his company saw $7.5 million in profits in 2009.

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