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President Xi Jinping Inspects Carbon Reduction Tech Lab in Shengli Oilfield Crucial to Realizing Carbon Neutrality in China

Shengli Oilfield project to cut CO2 emissions by 1 million tons a year

By GT staff reporters

Oct 22, 2021 11:55 PM

Photo:Xinhua

Chinese President Xi Jinping inspected the Shengli Oilfield in Dongying, East China's Shandong Province on Thursday, a city born with an oilfield.

But the city is witnessing huge changes amid China's pursuit of carbon neutrality, with more and more technology and green development in the way oil is extracted, which shows that technology is playing a more important role in China's efforts on carbon reduction. 

Xi visited a research institute, founded in 1964, which has a research and development center for shale oil, and a laboratory for carbon capture, utilization and storage (CCUS), an important emissions reduction technology crucial to realizing the carbon neutrality goal, the Xinhua News Agency reported on Friday.

The R&D center is doing a "CT" for the shale which can pinpoint where the crude oil is hidden, and the application of CCUS technology in oilfields focuses on injecting captured carbon dioxide (CO2) into reservoirs, which can help pump up oil.

Analysts said the visit will boost and accelerate the development of CCUS technology in China, which can be applied to the energy system. CCUS will play an indispensable part in realizing carbon neutrality and reaching net zero.

CCUS technology is crucial to reducing carbon emissions and is indispensable to the carbon neutrality goal, Wang Jun, director of Carbon Asset Management of Sichuan Yongxiang Company, told the Global Times on Friday.

This year marks the 60th anniversary of the discovery of an oilfield in Dongying, which was later named Shengli Oilfield. 

Xi on Thursday said China, as a manufacturing powerhouse, must enhance self-reliance in energy amid efforts to develop the real economy.

Oil production is of great significance to the country, Xi noted.

The Shengli Oilfield is homes to China's first CCUS project above the 1 million ton level. Analysts said it's among the largest CCUS projects in the world.

The Shengli Oilfield CCUS project, which started construction in July by Sinopec, is expected to be put into operation at the end of 2021, and will become the largest demonstration base of the CCUS industry chain in China, which sets the stage for the country to promote the large-scale development of CCUS, according to Sinopec.

The project will capture CO2 from the Sinopec Qilu Fertilizer Plant in Zibo, Shandong and store CO2 in the Shengli Oilfield, which is used to displace oil from a reservoir. The two plants are approximately 70 kilometers apart.

Such a project can help reduce CO2 emissions by 1 million tons a year, which is equivalent to planting 9 million trees and shutting down 600,000 passenger cars a year.

CCUS contributes to emissions reductions in all regions in the sustainable development scenario. In absolute terms, China's contribution is the greatest, accounting for around one quarter of all the CO2 captured cumulatively to 2070 worldwide, according to a report by IEA.

The global CCUS market is expected to grow from $1.3 billion in 2020 to $1.46 billion in 2021 at a compounded annual growth rate of 12.3 percent, and will reach $2.97 billion in 2025, Research and Markets said.

"But investment in such a technology is huge and it's unprofitable for the most part, unlike new energy plants. Breakthroughs have yet to be made in CO2 hydraulics, and CCUS technology will not be widely used until later in the carbon neutrality process," Wang said.

The equipment used to capture and compress CO2 also uses a lot of energy, but carbon emissions are reduced. For example, a power plant equipped with CCUS equipment consumes 10-40 percent more energy than one without it, Wang said, noting that energy consumption is also one of the difficulties in promoting the widespread use of CCUS technology.

But Wang said that the CCUS application at Shengli Oilfield could be a good example of  benefitting from carbon reduction.

Analysts also said the development of CCUS can boost the construction of other clean energy plants in Shandong, and also in the Yellow River basin, where clean energy construction is less developed compared to other regions in China.

Wind, water and tidal power, and other forms of power generation are all clean energy sources, which the Yellow River basin includes, Sheng Honglei, an associate manager of CyberInsight New Energy Technology Company, told the Global Times on Friday.

"The Yellow River basin is a suitable region for the distribution of new and clean energy. Northwest China's Gansu Province and North China's Inner Mongolia Autonomous Region have enough wind to develop wind power, but less deployed with wind generation plants," Sheng said.

The oilfield visit is part of Xi's tour of Shandong Province. On Wednesday, Xi inspected the estuary of a river in the province.

Xi visited a dock, an ecological monitoring center and a national-level nature reserve in the Yellow River Delta. 

He also checked the river's waterways, the ecological environment of the wetlands in the river delta, and learned about the ecological protection and high-quality development of the Yellow River basin.