The transition to low-carbon power generation requires near-term broader-scale deployment of carbon capture, transport, and geological storage (CCS) as a bridging technology. CCS is technically feasible. But industry and government need to ensure a high level of protection to the environment and human health from CCS risks. This in turn requires a sound and accepted risk management approach.
Det Norske Veritas has taken on the task of developing a standardized risk management approach for CCS. This article outlines this work and some of the factors influencing it.
Background
Governments and the energy industry have for many years put effort into developing a portfolio of solutions to mitigate climate change. One promising solution is CCS.
Large-scale CCS technology remains immature for both coal and oil-based energy generation. CCS has the potential to become a preferred solution to climate problems but will not be a quick fix. CCS entails a number of risks and dilemmas and involves a number of stakeholders with potentially conflicting goals.
The energy industries in many countries face the political risk of not having long-term solutions for how to incentivize emissions reduction. The framework conditions for CCS are not yet defined. But European Union member countries have progressed over the last few years with, for example, the EU geological storage directive and amendments to existing legislation. Such developments will help reduce long-term political unpredictability when huge CCS investment decisions are made in the near future in Europe, North America, and Australia.
Besides political risk, CCS as a concept has other aspects requiring safe and responsible management. Health, safety, and environmental risks need to be acceptably managed across the entire carbon value chain; both for society at large and for the communities surrounding CCS infrastructure.
CCS logistical risks range from capture and transportation to storage, and involve the commercial risks related to building a completely new value chain capable of establishing the appropriate risk-reward relationships for a variety of stakeholders with different backgrounds, objectives, and appetites for risk. The new CCS market must provide predictable long-term conditions for everyone, including a transparent decision basis and interfaces yet to be defined.
Positive developments
DNV notes positive developments in several places around the world.
Norway plans to build its first full-scale CCS plant as early as 2012. Europe hopes to develop demonstration projects by 2015, followed by large-scale industry plants by 2020. North America and Australia are also active, and the global community is discussing how to incorporate CCS in a possible global greenhouse gas emission trading scheme, based on the goal of having a strong, global CO2 price as one important incentive for the industry.
DNV is working together with industry participants and governments in developing CCS as a safe and reliable means of reducing CO2 emissions by developing industry guidelines and international regulations; qualifying new capture technologies, pipelines and storage sites; verifying new and retrofitted CCS installations; certifying CO2 credits; and helping industry and authorities manage their increasingly complex risk exposure.
In November 2008 DNV began developing a standard methodology for characterizing, selecting, and qualifying proper sites for geological storage of CO2—both offshore and onshore—working with Norwegian authorities and more than 10 oil, gas, and coal industry participants.
Many pilot-scale and demo-scale projects are under way around the world, and project developers are considering taking the next step and implementing large-scale CCS projects. But for CCS to have a real effect on the carbon balance, more than a thousand large-scale projects must be implemented over the next couple of decades, making speed of the essence.
DNV's work addresses the lack of publicly available and recognized best-practice guidelines. Such guidelines should explain how to efficiently implement legal and regulatory frameworks, adopt concurrent best engineering practices, and how to manage the risks and uncertainties throughout the storage cycle.
Establishing a common practice acceptable to stakeholders will ensure geological storage of CO2 takes place in a transparent and straightforward manner and present benefits and risks in a balanced and well communicated manner. Current knowledge and experience gained from research and development and pilots must be converted into recommended practices and guidelines, making it possible to identify knowledge gaps and help prioritize further research and development, providing guidance on how to establish permanent, safe, and cost-efficient CO2 storage.
DNV's joint-industry project includes Gassnova SF (responsible for managing the Norwegian state's involvement in CCS activities), Gassco AS, IEA Greenhouse Gas R&D Programme, StatoilHydro, BP, Shell, Petrobras, RWE Dea, Schlumberger, Vattenfall AB, BG Group, and DONG Energy.
Barriers
The science and technology behind CCS are known but have never been implemented to reduce CO2 emissions. Further development, particularly on storage, is needed and several problems must be overcome if CCS is to be a sound mitigation solution.
Demonstration projects are at various stages of development worldwide. The International Energy Agency says if these demonstration projects deliver good results, CCS technology could be deployed on a broader scale by 2015.
Major problems facing CCS implementation include:
• Technology. The technologies for carbon capture, transport, and storage are known and are often used under different operating conditions and on smaller scales. Developing full-scale, commercially viable CCS solutions based on current experience poses considerable technological problems.
• Geology. One of the biggest questions is whether stored CO2 can be retained for long periods. Current storage projects such as the Statoil Sleipner project have only stored CO2 since 1996, a period too short to prove long-term safety. Careful site selection with optimal verification procedures and monitoring instruments will be essential.
• International regulatory framework. International legislation related to marine pollution and marine protection (the London Protocol, the Convention for the Protection of the Marine Environment of the Northeast Atlantic (OSPAR), the Kyoto Protocol, and others) posed major legal problems for CCS a few years ago. Issues related to property rights and liability will also likely be difficult to overcome.
Amendments under the OSPAR Convention and the London Protocol allow and regulate the storage of CO2 streams from capture processes in subseabed geological formations. The EU geological storage directive addresses liability issues by giving provisions for liability for environmental damage, and provisions for liability for climate change as a result of leakage, but these issues require further clarification.
• Accounting, verification. In Europe, CCS in now included as an activity under the scheme for greenhouse gas emissions allowance trading within the European Community, implying requirements to surrender emissions trading allowances for any leaked emissions.
• Public trust. Public support and acceptance for CCS is essential. The public is poorly informed on the topic and therefore skeptical. When presented with options for combating climate change, the public finds wind, wave, tidal, and solar energy to be more attractive than CSS, preferring it only to nuclear power.
• Environmental policy. More research is needed on the potential environmental effects of CO2 retention.
• Economy. CCS still costs too much. The major cost elements relate to investment costs and operational costs of the capture plant. The broad, ongoing technology development aims to reduce these costs.
• Risk management. While geological storage of CO2 has little track record in Europe, related industrial experience and scientific knowledge serve as a sound basis for appropriate risk management, including remediation.
The oil and gas industry has extensive experience with management of uncertainties subsurface. Several relevant industrial activities exist worldwide, such as natural gas storage and acid gas disposal, providing a basis for proper management of risks and uncertainties related to geological storage of CO2.
A new problem posed by geological storage of CO2, however, is subjecting the results of site assessment and associated risk evaluations to scrutiny by regulators and other stakeholders as part of the storage permit application process.
It will also be important to document and communicate how individual risks evolve and are effectively reduced through the project lifecycle with proper risk-based monitoring and verification programs.
The author
