As part of the project funded under the Carbon Utilization and Storage Partnership (CUSP) of the Western United States, this paper demonstrates a workflow including site characterization and numerical simulation efforts of proposing a Monitoring, Reporting, and Verification (MRV) plan to the U.S. Environmental Protection Agency (EPA) for approval according to 40 CFR 98.440 (c)(1), Subpart RR of the Greenhouse Gas Reporting Program (GHGRP) to qualify for the tax credit in section 45Q of the federal Internal Revenue Services (IRS) Code.

In this project, the injectors and treated acid gas (TAG) plant are located at the northern margin of the Delaware Basin, a highly productive hydrocarbon basin in southeastern New Mexico. The target injection zones are the Permian-aged Cherry Canyon Formation for the acid gas injection (AGI) #1 well and Siluro-Devonian formations for the AGI #2 well, storage zones above and beneath active hydrocarbon pay zones respectively. The storage zones and caprocks are characterized through well log examinations, formation fluid chemistry evaluation, faults identification and interpretation. Reservoir models were constructed and simulation performed to predict the extent of the TAG plume after 30 years of injection with 5 years of post-injection site care monitoring. The reservoir mapping and cross sections interpreted from well logs indicate that the area around AGI #1 does not contain visible faulting or offsets that might influence fluid migration, suggesting that injected fluid would spread radially from the point of injection with a small elliptical component to the south. In the Siluro-Devonian formation, where AGI #2 is planned to be completed. The induced-seismicity risk assessment shows that the operation of the proposed injection combined with the historic volume contributions of the regional saltwater disposal (SWD) wells is not anticipated to contribute significantly to injection-induced fault slip. This result demonstrates that acid gas can be injected as proposed while maintaining the minimal risk of induced seismicity. The water sample collected from a nearby well indicates that the formation waters are highly saline (180,000 ppm NaCl) and compatible with the proposed injection. The reservoir simulation results indicate that the TAG plume is predicted to extend a maximum of 1.2 km from the injector wellbore when the identified faults are treated as non-transmissive and 0.90 km when they are treated as transmissive. The pressure profiles demonstrate the strong potential for safe injection into both target formations.

In December 2021, the United States Environmental Protection Agency (EPA) approved the Monitoring, Reporting, and Verification (MRV) plan, permitting Lucid Energy to sequester acid gas from its Red Hills gas processing complex in Lea County, New Mexico. This paper provides the industry with a critical roadmap for converting existing injectors into CO2 or TAG sequestration wells that may qualify for 45Q tax certification to comply with the current administrative regulations. As part of the project funded by Carbon Utilization and Storage Partnership (CUSP) of the Western United States, published data from this project is invaluable.

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