Kinder Morgan is expanding its CO2 drilling operations onto private land in the Cow Canyon area of Montezuma County.
Fifty residents were served sandwiches and coffee at the Cahone service center and listened to a presentation by Kinder Morgan on the project.
The company produces 1.3 billion cubic feet per day of CO2 from two fields, the McElmo Dome in Montezuma County and the Doe Canyon Field in Dolores County.
The CO2 is piped to west Texas and southern Utah oil fields, where it is pumped into near-depleted wells to extract more oil. Known as enhanced oil recovery, the process relies on CO2 from Southwest Colorado.
But current production is not enough to meet oil-field demand, explained Val Brock, an energy developer for Kinder Morgan.
The solution is to expand development into Cow Canyon, on the northern portion of the McElmo Dome.
"That area has not been developed for the CO2 that is underground," Brock said. "We expect to add an additional 200 million cubic feet per day to our production with this project."
The project is in the pre-development phase, but major construction will occur this spring. Seismic studies are underway, and one appraisal well has been drilled.
"We're gathering more data to confirm that the Cow Canyon area is a good area to develop," he said. There are 98 CO2 wells currently within the McElmo Dome field.
The project is a $350 million investment, Brock said. It will include 14 new wells, 30 miles of additional well-gathering pipelines, and a new central-facility plant at CR BB and CR 8. The McElmo Dome unit boundary will not be expanded as a result of the project, officials said.
Full build-out and ramped up production is expected by the end of 2015.
Kinder Morgan has legal rights to access and extract CO2 under private and public lands. Agreements are made with private landowners to provide access for constructing wells and pipelines. Royalties are paid out to owners of the mineral rights, which can be private or held by the federal government.
Wells draw up the CO2 from the Leadville Formation, 8,000 feet underground. Directional drilling allows wells to take a 90-degree turn vertically for 2,000 feet, reducing the amount of well sites, Brock said.
C02 collected from three to four wells are piped to a cluster site where water is extracted, or "dropped out," from the gas. From there, the CO2 is delivered to the main compression stations, vaporized, and pumped into the Cortez Pipeline to Texas and southern Utah.
The water that is dropped out of the CO2 is known as "produced water." It is brackish (salty), and not fit for agricultural or domestic use. Kinder Morgan utilizes a disposal injection well, where the produced water is piped to and forced back to the Leadville Formation where it came from.
"Disposal wells go back into the Leadville formation, 8,000 feet, where the water was produced from," Brock said, adding if there are capacity problems, and additional disposal well would be installed.
All wells, including disposal wells, are designed to protect groundwater, and have strict standards, Brock said.
Wells are encased with concrete for 3,000 feet down, and mechanical integrity tests are done in cooperation with the state to insure groundwater protection.
An additional 30 to 40 miles of pipe will be required to deliver CO2 from new wells to the cluster sites, and onto the main pipeline, officials said. Pipelines are buried five feet, and can be farmed over.
The new central-faculties plant at roads BB and 8 is near Lowry Pueblo on Canyons of the Ancients National Monument. To reduce visual impacts, the plant was designed with a low profile and muted colors. Construction on the plant will begin this spring.
Road CC has been taking a beating by Kinder Morgan truck traffic.
The company announced it will contribute $1.5 million towards repaving a four-mile section of CR CC when the new central facility is built.
"Once construction is done there and all the big trucks are done hauling material, it will be paved with actual asphalt, not chip seal," said Bob Clayton, a superintendent for Kinder Morgan.