Interactive 2009 Annual Report (PDF 7.56 MB) - Denbury Resources ...

Denbury Resources Inc. 2009 Annual Report 23Coast. This pipeline is contingent on the developmentof sufficient sources of CO 2 in the Midwest at reasonableeconomics in order to justify the capital expenditure.With the federal government encouraging innovativecoal gasification projects through federal loan guaranteeand economic stimulus programs, Denbury has enteredinto agreements with several project developers topurchase CO 2 from proposed gasification plants in the GulfCoast and Midwest for use in our Gulf Coast operations.Today there are no significant volumes of anthropogenicCO 2 being captured and sequestered in the Gulf Coastarea. To become a reality, many factors must cometogether favorably, including capital cost and regulatory,legal and permitting requirements. All of our pipelineinfrastructure will be connected to CO 2 being producedfrom Jackson Dome, which potentially allows JacksonDome to buffer the inherent imbalances that will occurbetween supply and demand for CO 2 . Since the CO 2emitters need someone to reliably take their gas 24 hoursa day, 365 days a year, our unique flexibility allows us tocontract for anthropogenic volumes for long periods oftime, as much as 15 to 20 years.CO 2 is dehydrated before it is transported, whichallows CO 2 pipelines to be constructed using relativelystandard carbon steel pipe. CO 2 pipelines generallyoperate at pressures in excess of 2,000 psi, which allowsfor the CO 2 to be transported in a super critical state (theso-called dense phase), which allows for significantlyhigher capacities than if the CO 2 was transported as a gas.The Green Pipelineis a key elementto our expansionstrategy and willnot only allow usto send JacksonDome CO 2tofields in Texas,but will also allowus to transportanthropogenicsources of CO 2from the variousemission sourcesand industrialfacilities alongits route.