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Tackling emissions from hydrocarbon production is a necessity because hydrocarbon production will last for a prolonged time. As a popular hydrocarbon production method, waterflooding operation is energy-intensive and accounts for significant CO2 emissions. This article investigates the effect of CO2 tax level on recovery process of already producing fields with waterflooding. Our methodology is waterflooding optimization in reservoir simulation models, specifically optimizing well-controls. Unlike traditional studies, our optimization objective comprises two components: the profitability of hydrocarbon production and an additional tax proportional to CO2 emissions. The associated CO2 emissions is estimated using a scheme developed upon an integrated model of reservoir, surface network, and topside facility. We examine our methodology on two cases with heterogeneous reservoir models. In each case, we optimize multi-scenarios enforcing different CO2 tax rates. The solutions indicate that imposing a higher CO2 tax rate reduces both emissions and hydrocarbon production. The fractional reduction of oil produced is however smaller than the emission reduction. While an increased tax rate drives the topside equipment to operate at higher efficiencies, the main effects of a higher tax rate are reduced water injection and more efficient subsurface drainage. There is a non-linear relationship between the reduced production and emissions. For increasing tax levels there are diminishing returns on lower emissions, reflecting reduced opportunities for emission reduction by changes in the drainage strategy. Some increments on the tax rate will therefore have negligible impacts on the optimal drainage strategy, and hence an adverse effect on the profitability with negligible emission reduction.

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Water injection provides efficient pressure support and increases oil recovery in field developments worldwide. The success of water injection comes from its cheap and simple application. However, waterflooding is an energy intensive operation. Typically, more than one third of total energy use in offshore platforms is allocated for water injection. Since many offshore platforms still rely on gas turbines as their main energy source, waterflooding thus accounts for a substantial portion of total CO2 emissions. The quantity of CO2 emitted depends on the injection strategy being adopted; both on the well placement and on the injection rates and pressures during production life. Traditional optimization of drainage strategies has given little heed to the cost of emissions. In this work this emission cost will be an integral part of the injection strategy optimization, as we will include the cost of emissions into our optimization objective. We formulate the optimization objective (net present value) so that it incorporates the cost of CO2 emission: Our augmented objective function includes not only revenue and cost of production, but also carbon tax proportional to CO2 emitted. Moreover, we introduce a scheme for quantifying CO2 emissions corresponding to a particular injection strategy. This scheme is based on an integrated subsurface-topside model and utilizes reservoir simulation results for calculating the energy spent by the water pump and treatment systems. This energy is then used to estimate the fuel consumption for water injection and the corresponding CO2 emissions. We conduct the optimization study using a two-dimensional numerical reservoir simulation model. In addition, we optimize over a range of CO2 tax rates and investigate how the different tax regimes affect the optimal solution and associated carbon emissions. Our results indicate that the optimal well placement is dependent on the CO2 tax rate. A higher CO2 tax rate moves the optimal injection location towards higher permeable zones. This leads to lower oil production and lower emissions. However, the relative reduction in emissions is larger than the relative reduction in oil production.