iea ghg risk assessment workshop september 10, 2004 ... · iea greenhouse gas r&d programme...

IEA GHG RISK ASSESSMENT WORKSHOP

September 10, 2004

Fairmont Hotel, Vancouver, Canada

Contents Workshop/Network Objectives Questions for Discussion Opening Notes – John Gale, IEA GHG Outline – Mike Monea, PTRC COSRAIN – Malcolm Wilson, U of Regina CO2 GeoNet – Ton Wildenborg, TNO Licensing a storage project – Tony Espie, BP Standards and Accreditation – Staale Selmer-Olsen, DNV Commercial Risk Assessment – Carl Hustad, CO2–Norway AS Current PTRC activites on RA – Koorosh Asghari, U of Regina

Workshop / Network Objectives

1. Develop membership in the network. 2. Develop an inventory of existing approaches, models,

tools that will be used. 3. Establish a subgroup to agree on data formatting

requirements to ensure effective data management and accessibility, etc.

4. Identify procedures for using models and interpreting

results.

5. Develop processes for understanding sensitivities of the models to input parameters.

6. Define a basis for an iterative route forward, building off

each workshop. 7. Develop a plan to engage stakeholders in the process

(ie: Regulators, environmental non-government organizations (NGO’s) followed by the general public.

8. Target the next Risk Assessment workshop – Europe

early 2005.

Questions for Discussion

1. What is the level of interest in the proposed network?

2. Who is interested in participating?

3. How can the network ensure that results remain non- proprietary?

4. How should the network be funded?

5. What network attributes are required to establish confidence and ensure transparency?

6. Should the network address concerns of regulators and NGOs before addressing the public?

RISK ASSESSMENT WORKSHOP

John Gale IEA Greenhouse Gas R&D Programme

Fairmont Hotel, Vancouver, Canada 10th September 2004

www.ieagreen.org.uk

Risk Assessment Workshop Introduction to workshop

WelcomeThanks for hanging on for another day after GHGT-7Housekeeping issuesSafety issues

Two phase of alarmsSlow beep - stay put & wait for security arrivesFast beep – exit the building by nearest exit and muster outside the front of the building

Risk Assessment Workshop Introduction to my talk

Briefly introduce IEA GHGWhy do we need a Risk Assessment NetworkDiscuss outcomes of London Risk Assessment workshop and how it led to this initiativeBenchmarking of risk assessment models

IEA Greenhouse Gas R&D Programme

KoreaJapan

FranceFinlandDenmarkCECCanada

India

Australia

VenezuelaUSAUKSwitzerlandSwedenNorwayNew ZealandNetherlands

Sponsors: Alstom Power Technology, BP, ChevronTexaco, EniTecnologie SpA, EPRI, ExxonMobil, Repsol-YPF, RWE AG,

Shell International, Total

IEA Greenhouse Gas R&D Programme

International research networksIEA GHG has a mandate to develop research networks on key issues relating to CCS3 networks now operatingThe safety and environmental impact of geological storage of CO2 is a key questionStudying the risk associated with CCS is one measure that can help allay public concern Risk assessment is an obvious choice for a new international network

RISK ASSESSMENT London workshop

Held in London February 2004Organised in conjunction with BPSupported by

EPRIUK DTI

48 delegates from 12 countriesWorkshop aim:

To assess the current status of research work on risk assessment for geological storage of CO2

London Workshop Summary of findings

Brought together key research groups that are actively studying Risk Assessment worldwide A lot of work underway but at an early stageSeveral different approaches being used:

Development of FEP1 data bases and scenario developmentsExpert panel reviews and analyses Simple analytical modelling and very detailed modelling activities underwayQualitative and Probabilistic assessments

London Workshop Summary of status

Two detailed case studies completed to dateForties oil field – North SeaWeyburn oil field – Saskatchewan, Canada

Results from cases studies indicate:Risk of leakage from geological reservoir is lowWell bores are a concernSmall long term leaks least easy to detect

London Workshop Data deficiencies

Some deficiencies in the data currently used by the modellers were identified:

Flow through faultsWell bore failure modesWell bore leakage pathwaysHow to incorporate geochemical data on cap rock interactions with CO2 into the models

Some work is underway in all these areas that could be utilised in the future

Deeper analysis needed

Geological Storage of CO2 Further research needs

Identify causes of leakage through abandoned wells and the processes controlling leakageThe processes controlling leakage through faults also needs to be researched in depthResearch work is needed on the potential effects of undersea leakage on ecosystems

London Workshop Further needs

The effect of leakage on offshore ecosystems needs to be addressedRisk assessment process needs to be transparentStakeholder dialogue is needed to ensure they become engaged early in the processCareful thought needs to be given to how best present the limited data now available

Risk Assessment Network Benchmarking of models

Identified before London that there was a need to undertake a benchmarking exercise

Transparent and open exerciseLimited number of data sets available to work with

Feedback from modelling groups at London workshop was that it was premature

Models needed further developmentFeedback taken into account but it is felt that there is a need to start such a process

Never will be a right time

Risk Assessment Network Benchmarking of models, cont’d

Since London workshop PTRC have taken a lead in promoting a benchmarking study

Weyburn datasetRecently agreed an international consortium to take this exercise forward

PTRCIEA GHGBPShellNITG-TNO

Risk Assessment Network Regulatory issues

Risk assessment will be a key component of any future regulatory processRegulatory framework development is now underway

EC is developing guidelines on CCS for the EC emissions trading schemeUS – USDOE and USEPA are working on the development of guidelines

Such activities will take several years to complete

Risk Assessment Network Regulatory issues

Risk assessment methodologies need to be developed now

Match within the same timescale as the development of regulatory frameworks

Hence the need for this workshop to begin the process for risk assessment

Risk Assessment Network Vancouver workshop

Basic aim is to present how we plan to take this network forwardTake on board any commentsHope you will be sufficiently interested to become actively involved

London Workshop Final report

Final report and copies of presentations at:WWW.Co2captureandstorage.infoListed under technical workshops

Some copies available here

http://www.co2captureandstorage.info/

http://www.co2captureandstorage.info/

IEA GHG Weyburn COIEA GHG Weyburn CO22 Monitoring and Storage ProjectMonitoring and Storage Project

September 10 workshop

Welcome weary participants

•Risk Assessment or “Consistently Communicating Uncertainty”

•Relationship of Weyburn 2 and Risk Assessment

•Building the hardware

•Timing of events

•Interested network participants?

Phase 2Phase 2

Strategic plan in placeStrategic plan in place–– Strategic proposal developedStrategic proposal developed–– Request for proposals has gone outRequest for proposals has gone out–– Request for sponsorship initiatedRequest for sponsorship initiated

Project design in progressProject design in progressSponsorship requests initiatedSponsorship requests initiated–– See PTRC boothSee PTRC booth

Start date Start date –– October, 2004October, 2004Initial transition funding has been provided Initial transition funding has been provided by Fed/by Fed/ProvProv governmentgovernment

Phase 2 Risk AssessmentPhase 2 Risk Assessment

Focused Risk Assessment Focused Risk Assessment –– Separate ManagementSeparate Management–– Broad networkingBroad networking–– Strong “Stakeholder” Strong “Stakeholder”

engagementengagement–– Global database for COGlobal database for CO22

projectsprojects

PTRC PTRC equipment equipment supplied by supplied by

SunSun

IEA GHG Weyburn COIEA GHG Weyburn CO22 Monitoring and Storage ProjectMonitoring and Storage Project

September 10 workshop

Slight agenda change, Dr. Carl Husted will give Michael Moore’s presentation

Malcolm Wilson will outline our vision of this project

COSRAINCOSRAIN

Mike Monea and Malcolm WilsonMike Monea and Malcolm WilsonPTRC/PTRC/UofReginaUofRegina

Where we areWhere we are

• Weyburn Phase 1 complete• CCP Phase 1 complete• Phase 2 projects on the books• CO2CRC started • In Salah in operation, others in planning and

development stages• Ketzin project with some preliminary funding• Other pilots and projects in various stages, such

as Alberta/Federal gov supported projects.

Some ResultsSome Results

• We need to develop better tools.• Difficult to interpret results from different

approaches.• Geochemical modeling coming along.• Reservoir simulation needs work to look at

longer term and integrate other models/tools.

• Current lack of transparency.

The VisionThe Vision

• To be able to communicate uncertainty in geological storage.

• To be able to test and interpret risk assessment models, and the underlying suite of models required to achieve effective risk assessment.

• To develop confidence in the results of our models. Transparent discussion.

• To continuously improve.

Why develop a Network?Why develop a Network?

• Ability to manage and engage datasets.• To obtain inclusivity in testing.• To become a “Network of Excellence” in the

communication of uncertainty for geological storage.

• To be the network viewed by regulators and ENGOs as having a transparent process.

• Develop confidence in the models/tools.• To provide a forum to meet the needs of other

processes – eg CSLF, IPCC etc

ApproachApproach

• Structured process to assess model capabilities with “real data”.

• To ensure effective gap identification and gap filling – the “shoot-out” approach.

• To determine “smallest effective data requirements”.

• Iterative – continuous improvement.• Ensure effective industry engagement.

Approach cont.Approach cont.

• IEA GHG to provide facilitation, communication and expert review.

• PTRC (western Canadian engagement) and CO2GEONET (TNO engagement) to provide core management and support.

• PTRC to provide “OK Corral” to enable access to datasets, including some confidential data.

• Industry to provide extensive input and guidance.• Network to develop structured tests and

interpretive discussions.

Next StepsNext Steps

• Agreement on formation of Network.• Provision of areas of expertise, capabilities and

interests – the questionnaire.• Ideas on the structuring or “road-mapping”.• PTRC and BP will take the first cut at a business plan.• Small group will take straw-dog plan and develop.• This plan will be circulated to network for discussion.

This Meeting This Meeting -- doesdoes

• Follows London meeting.• Develops the network and agrees on vision.• Commits us to the development of a full

business plan. Provides input to the plan.• Initiates full communication.• Identifies other potential partners.• Discusses the role and engagement of

regulators and ENGOs – they must be involved, but what is the most effective way?

This Meeting This Meeting –– does notdoes not

• Engage in detailed debate about the merits of different approaches.

• Engage in discussion of the relative attributes of tools/models.

• Discuss the timing issues or attempt to distort the aim of the network with unrealistic goals.

UnknownsUnknowns

• Prospective level of funding – currently a “pay-to-play” approach. This may not be cash into network core activity, but self-funding of structured tests, attendance and discussion.

• PTRC, BP and others are committed to attempt to provide effective and adequate funding provision to support the network.

• There may be support in future, particularly key deliverables, structured gap filling etc.

PartnersPartners

• Commit to open discussion.• Commit to full collaboration.• Commit to excellence in the communication of

uncertainty.• Commit to meeting timelines set by the network.• Publish results in peer-reviewed journals (look at

ISEIS as potentially a “home” journal).• Go to www.co2captureandstorage.info

Network SchematicNetwork Schematic

“CO2 GeoNet”European Network of Excellence

Geological Storage of CO2

Nick Riley (BGS): Network Co-ordinatorTon Wildenborg (TNO): Research leader “Risk & uncertainty”

RA Workshop, Vancouver, 10 Sep 2004

13 Partners from 7 countriesDenmarkGeological Survey of Denmark and Greenland –GEUS

FranceBureau de Recherches Geologiques et Minieres- BRGMInstitute Francais du Petrole –IFP

GermanyFederal Institute for Geosciences and Natural Resources –BGR

ItalyIstituto Nazionale di Oceanografia e di Geofisica Sperimentale-OGSUniversità di Roma “La Sapienza” -URS

NetherlandsNetherlands Organisation for Applied Scientific Research –TNO

NorwayNorwegian Institute for Water Research –NIVAStiftelsen Rogalandsforskning-RFSINTEF Petroleumsforskning AS –SPR

UKNatural Environment Research Council-British Geological Survey-BGS)Heriot-Watt University –HWUImperial College of Science, Technology and Medicine-IMPERIAL

Why Network of Excellence?Need to strengthen European Research Area (ERA):•Align & harness national research programmes•Jointly develop / share knowledge & research infrastructure•Durable integration resulting in co-dependence & standardisation•Grow the Network•Pave the way for the next generation of researchers•Provide authoritative geotechnical advice for Europe on CO2 storage R&D•Engage and collaborate with major non-EU R&D programmes & research centres

GeomechanicalIFP

Fluid flowSPR

GeophysicalOGS

GeochemicalBRGM

Predictivenumerical

toolsBRGM

GeomechanicalGEUS

Fluid behaviourSPR

GeophysicalIFP

GeochemicalBGS

Rock&fluidbehaviour

experimentsBGS

Coal bedsIMPERIAL

Gas fieldsTNO

Oil fieldsRF

Enhancedhydrocarbon

recoverySPR

Remote sensingBGS

HydrologicalBRGM

BiologicalBGS

GeochemicalBGR

GeophysicalBGS

Monitoringtechniques

BGS

Mitigation strat.URS

Quantific. toolsIMPERIAL

Long term security.TNO

Health&safetyURS

EcosystemNIVA

Risk &uncertainty

TNO

Joint Research Activities

Food for thought

The proposed Network & international R&D programmes

European

UnionCO2GEONET

Canada

Japan

USA

Australia

InternationalRisk

Assessment Network

(IEA GHG)

Why an international RA network?

Sense of Sense of concernconcern (industry and NGOs)(industry and NGOs)

Sense of Sense of urgencyurgency (regulators and policy (regulators and policy makers)makers)

Further consideration

Industry: to be able to choose from a set of risk Industry: to be able to choose from a set of risk assessment methods and tools that come up with assessment methods and tools that come up with consistentconsistent resultsresultsR&D: R&D: UnderstandUnderstand what underlies possible what underlies possible differences in outcomes of risk assessment differences in outcomes of risk assessment exercisesexercisesRegulator: provide Regulator: provide recommendationsrecommendations for for regulatory performance criteriaregulatory performance criteriaNGOs: provide NGOs: provide confidenceconfidence that environmental and that environmental and safety aspects are properly dealt withsafety aspects are properly dealt with

Network objective

Provide the necessary Provide the necessary building blocks for abuilding blocks for aconsistentconsistent, , transparenttransparent andandtimely,timely, internationally internationally accepted practice for HSE accepted practice for HSE risk management and risk management and CDM/JI/ET certification CDM/JI/ET certification of underground COof underground CO22storagestorage

Scope of the network?

1.1. Risk Risk assessmentassessment

2.2. Risk Risk managementmanagementRisk Risk AssessmentAssessmentMonitoringMonitoringVerification Verification and and remediationremediation

Possible network activitiesImproveImprove existing risk assessment methods and existing risk assessment methods and tools and tools and developdevelop new toolsnew tools

Identification of risk factorsIdentification of risk factorsNumerical tools for CONumerical tools for CO22 migrationmigrationAnalytical toolsAnalytical toolsUncertainty analysisUncertainty analysisEtc.Etc.

Benchmark/compare Benchmark/compare methods and tools methods and tools

ExtractExtract best practice for risk assessmentbest practice for risk assessment

RecommendRecommend procedures for licensing and procedures for licensing and certificationcertification

GHGT-7

Licensing A Storage Project

Tony Espie

GHGT-7 5th-9th September 2004

Gas Treatment

PowerGeneration

EOR / Storage

GasImport

UK GasGrid

Capture and Storage Scenario

CO2

AdditionalCO2 Sources


Legislation RequirementsSI 1967 No. 1769 Pipe Lines (Inquiries and Procedures) Rules 1967SI 1974 No. 1986 Pipe-Lines Act 1962 (Repeals and Modifications) Regulations 1974Pipe-line Works (Environmental Impact Assessment) Regulations 2000 (SI 2000/1928)

A Pipeline Construction Authorisation is required, with an Environmental Impact Assessment (EIA) as precursor.

Town and Country Planning (General Permitted Development) (Scotland) Order 1992

Planning Permission for pipeline and ancillary works.

The Pipelines Safety Regulations 1996, S.I. 1996 No. 825 Design, construction, maintenance requirements.

The Environmental Impact Assessment (Scotland) Regulations 1999 (SSI 1999/1)

Requires Environmental Impact Assessment.

Conservation (Natural Habitats, etc.) Regulations 1994 (SI 1994/2716), as amended

Requirement for appropriate assessment of developments likely to have a significant effect on “European sites” prior to giving development consent.

Construction (Design and Management) Regulations 1994 –SI 1994/3140

Formal Notification of Construction, appointment of Planning Supervisor and Principal Contractor, etc.

Town and Country Planning (General Permitted Development) (Scotland) Order 1992

Planning Permission for the Development proposed, and ancillary works

The Pressure Systems Safety Regulations 2000, S.I. 2000 No. 128

Written scheme of examination and other control systems –including “CE Marking”.

The Pressure Equipment Regulations 1999, S.I. 1999 No. 2001 (as amended)

Written scheme of examination and other control systems –including “CE Marking”.

Existing Legislation :

Onshore Installations And Pipelines


Existing Legislation : Offshore Pipelines

Legislation RequirementsCrown Estate Act 1961 Lease of Easement requirements.

The Petroleum Act 1998 (Commencement No. 1) Order 1999, S.I. 1999 No. 161

Pipeline Works Authorisation and associated consent to Deposit Materials on to the Seabed.

The Offshore Petroleum Production and Pipe-lines (Assessment of Environmental Effects) Regulations 1999, S.I. 1999 No. 360

EIA (Environmental Impact Assessment) and ES (Environmental Statement) submission.

Offshore Petroleum Operations (Conservation of Habitats) Regulations 2001, S.I. 2001, No. 1754

Appropriate Assessment for EIA.

The Pipelines Safety Regulations 1996, S.I. 1996 No. 825 Design, construction, maintenance requirements.

The Offshore Installations and Pipeline Works (Management and Administration) Regulations 1995 – SI 1995/738

Management systems and facilities requirements.


Existing Legislation : Offshore Installations

Legislation RequirementsPetroleum Act 1998 Amendment to Field Development Programme due to change of

use.

Petroleum Act 1988The Offshore Petroleum Activities (Conservation of Habitats) Regulations 2001, S.I. 2001 No. 1754

Geological survey consents required.

Appropriate assessment of effects of certain oil and gas activities likely to have a significant environmental impact.

The Offshore Chemicals Regulations 2002, S.I. 2002 No. 1355 Permits for use and discharge of offshore chemicals.

The Offshore Installations and Pipeline Works (Management and Administration) Regulations 1995, S.I. 1995 No. 738

Requirements for management systems and facilities.

Offshore Installations (Safety Case) Regulations 1992, S.I. 1992No. 2885

Requirements for management systems and facilities -production of Design Safety Case and Operation Safety Case.

The Pressure Systems Safety Regulations 2000, S.I. 2000 No. 128

Written scheme of examination and other control systems.

The Pressure Equipment Regulations 1999. S.I. 1999 No. 2001 (as amended)

Written scheme of examination and other control. Systems –including “CE Marking”


What Might Regulator Want To Know About Storage ?

• What could go wrong and can the downsides be managed ?

• Have you used an appropriate approach to analysing risk and uncertainty ?

• How good is your performance prediction ?– Are any modelling assumptions reasonable ?

– Are the tools appropriate ?

– Are you sure that you have modelled the right processes ?

• Need evidential basis to support discussions– Comprehensive datasets

– Comparison of different tools and approaches


Risk Assessment Process

• Structured process for Risk Assessment :

− Identification of key risks and event scenarios

− Quantification of risks

− Evaluation of risks (with stakeholder input)

− Process modification to eliminate excess risk

− Monitoring and intervention strategy to manage remaining risk


CO2 Release Scenarios

WikramaratnaWikramaratna & Lawrence, ECL. Dec& Lawrence, ECL. Dec--20032003

Aquifer flow

Seabed

SequestrationField A

CO2 Release Scenarios

Shale

GSGIShale

Diffusion

Diffusion& flow

Mineralisation

Dispersivemixing

Freegas P, T

Pressureinducedfracture

Over pressuriseshallower formation

OWC tiltEscape tosurface viaaquifer outflow

Leak off

Diffusion

Abandonedwell

Well plug

AccumulationsIn mud

Old pockmark“Wytch hole”

RemoteField C

Sea current

SequestrationField B

WAG

Aquiferflow at shallowerdepths

WAG allowsAquifer flowthrough trappedgas

Cap goodfor oil butnot gas

Pathways:Pathways:--

1.1. Underlying Underlying AquiferAquifer

2.2. Cap and Cap and OverburdenOverburden

3.3. WellsWells

Identification of Risks


Evaluating Seal Integrity


Predicting Migration Through Geological Pathways


Wellbore Integrity

• Issues– Locating and evaluating old and/or abandoned wells

– Modelling wellbore-fluid interactions• Characterising key processes

• Equilibrium and kinetic data for modelling

• Monitoring wellbore processes– Operational monitoring and logging

– Post-abandonment

• Modifying existing practice– Materials

– Practices


What is Needed ?

• Comprehensive datasets to test models− Demonstration sites

− Natural analogues

− Engineered systems

• Comparison of different tools and approaches


In Salah CO2 Storage Project


Context

• Capture and storage of CO2 in geological formations can offer a material contribution to mitigation of GHG emissions

• Technical, commercial, acceptance issues to be resolved prior to large scale implementation– Cost (primarily of capture and transportation)

– Performance prediction (duration of storage and risk)

– Public engagement

• Considerable activity to understand and model performance as pre-cursor to risk analysis


Summary

1. Substantial advances in identifying key issues and developing a structured risk assessment process for geological storage of CO2

2. Database of key performance factors available on IEA GHG website : www.co2captureandstorage

3. Initial case studies indicate that lateral and vertical migration through caprocks likely to be small on 1000 year timescale

4. Further work is required to allow processes to be tested

5. Gaps in areas of test datasets, impacts and stakeholder engagement


Forties Overview

Diffusion through Overburden: Diffusion through Overburden: Base: 50mBase: 50mWorst: 350m in 1000 YearsWorst: 350m in 1000 Years(1)(1)

Advection in Aquifer : Advection in Aquifer : Base: <0.5m Base: <0.5m Worst: 8 m in 1000 Years Worst: 8 m in 1000 Years (2)(2)

Major Risk: Major Risk: Well Integrity Well Integrity (2)(2)

Major Areas for further Study: Major Areas for further Study: Well Integrity Well Integrity (2)(2)

(1)(1) Le Gallo, IFP. DecLe Gallo, IFP. Dec--20032003(2)(2) Wikramaratna & Lawrence, ECL. DecWikramaratna & Lawrence, ECL. Dec--20032003


Key Messages

• Performance factors database now available www.co2captureandstorage

• Performance prediction tools becoming available but more use is required to understand strengths and weaknesses

• Case histories indicate that lateral and vertical fluid migration appears to be limited on 1000 year timescale– How long is long enough ?

• Extension of performance prediction to risk assessment incomplete

• Further well monitored demonstration projects and natural analogue datasets required to test tools

• Further development work required prior to application ofprobabalistic modelling


Status of Risk Evaluation & Monitoring• Evaluating risks

− Increasing activity

− Ongoing debate on criteria for effectiveness

− CSLF taskforce on regulatory, legal and economic issues

− Activity to improve impact of seepage on shallow marine environment

• Monitoring and Intervention− Several projects field testing options for monitoring

− Focus has been on testing technologies and ‘over-acquisition’ of data rather than long term monitoring strategies

− Synthesis of results and applicability of options in range of scenarios would be timely

IEA GHG RISK ASSESSMENT WORKSHOPSeptember 10, 2004

- Standards and Accreditation -Role in Risk Assessment of

CO2 Capture and Storage (CCS)

Dr. Staale SELMER-OLSENDNV

CO2 Capture and Storage (CCS) Risks

CCS as an option to reduce GHG emissions:• How can Accreditation and Verification be used

to ensure safe and reliable CCS, • and to build public confidence?

Picture produced by the GESTCO project

Contents

• Why Verification? – Why 3rd Party?

• Why Risk Assessment Verification?

• Proposed Way Forward

Risk Example: Natural Gas (NG) Underground Storage Industry

• How well do we manage the risks of other engineered underground storage systems (analogs)?

• Still learning after 5000+ site-years of operations for NG

• Number of NG storage sites relevant for large-scale CCS implementation

• NG underground storage until 1970’s was dominated by leaky storage – due mainly to poor wellbore

cement technology

• Current global NG industry has fugitive emissions of 1-2% of total NG handled – from production well to (but not

including) end user

Explosion at Moss Bluff NG UndergroundStorage facility Aug. 19th 2004, fire put outAug. 26th.

Certification/Verification Regimes -Typical Structure and Terminology

Government and/or IndustryIdentify needs and initiate process. Sets objectives

Accreditation BodySets Requirements and Approves Certifier/Verifier

Accredited Certifier/VerifierAuditors Verify with Accepted Standards and Verification Processes

Certified Organization/Process/ProductAudited and approved by Accredited Certifier/Verifier

Examples: Climate Change Standards and Accreditation

Frameworks:• Kyoto Protocol (180 countries): CDM, JI and IET• EU ETS (2003) (Emission Trading Scheme)• World Bank PCF Guidelines

Accreditation:• UN FCCC (Framework Convention for Climate Change)• EU ETS Emission Trading Scheme• US Californian Climate Action Registry

Typical objectives of Accredited GHG Verification?

Objective of Verification:The objective is to evaluate the GHG emissions (and the short- and long-term risks of GHG emissions) and express a conclusion with a high, but not absolute, level of comfort (assurance).

Significance:• Demonstrate Compliance• Manage and Minimize Risks (and uncertainties)• Avoid Future Loss or Liabilities• Provide Assurance to Stakeholders (complete and accurate)• Secure a Transparent, Consistent and Cost-effective Process

• CCS: The Stakeholder Assurance will be particularly important as one can expect close attention from NGO’s and the Public in general.

CCS: Is it different or can we build on known and tested structures and roles?

Technology, Tools and Processes

Health, Safety and EnvironmentValue of

tradable CO2 rights

Relevant Aspects for Verification in CCS:

GHG capintegrity

CCS chain – Where progress is needed:

Capture Transport Injection Post-Closure

Need fresh thinking and new regimes – Probably best to use Risk Assessment methods as Basis.

Can be dealt with under existing “HSE” and Risk Assessment regimes.

Would benefit from one common basic (Risk Assessment based) policy and consistent verification system with a holistic view.

(Reference to CSFL Workshop London 14-16 July)

Key issues in: Draft Principles for a “Regulatory Framework”

“Manage Risks Through a Licensing and Regulatory Regime”

1. Site Identification: • Science based -Address HSE and Community concerns.

2. Property Right Allowing Injection:• License and approval Process….. • Manage risks to satisfaction of Regulator…..

3. Injection Phase:• Develop Criteria, monitor, verify….• Tradable value of CO2 Reductions

4. Post Closure:• Monitor leakage…..

How to do this? Roles, Structures, Development needs…….

Possible Common Framework and Process for Verification

Develop technology

Propose site

Prepare site

Operate site

Close Site

Country A Country B Country CCountry D

Harmonized International Verification Framework and Process- Third Party Verifiers -

Guidelines,Standards Verification Accreditation

Parallel to EU-ETS Verification Roles

Main reference - by competent Authority:

Validated Monitoring protocol

OutputInput – by company

Monitoring Report

Copy GHG permit

Other Relevant info

VerificationVerificationStatement

Who:

“…competent, independent, accredited verification

body…”

Contents




Important for Acceptance

• Cost effective– Clear criteria, clear process, clear roles, good preparations.

• Consistent– Company to company, country to country, time to time

• Transparent– Repeatable, logical, easy to understand

• Complete and accurate

Source: The ASSURANCE EU-project, 2002.

Example: Uncertainties in Risk Assessment

Variations in individual societal risk calculations (based on fictitious population data).

Benchmarking exercise where independent risk assessments where made for the same Chemical Plant Installation.

Need to define best practises (standards) for risk assessment!Variations in individual safety distance

calculations: Maximum and minimum distances for the isorisk curve 10-5 yr-1.

Risk = f (probability, consequence)

CCS - Risks of What?

FutureLiability

Probability

Consequence

X

Systemintegrity

Reduction –CO2-credit

GHG capintegrity

Communityhazards

Publicperception

Technologyfailure

Businessloss

Trust and confidence

HSE

Different stakeholders=

Different perspectives!

Challenges for a RA Regime for CCS

• Harmonisation– Ideally same standards and requirements are accepted

across national/state borders. Makes approval process more cost-effective.

• Stakeholder Acceptance– Will demand sufficient public oversight and approval

by authorities responsible for the welfare of the national commons.

• Liability– Long-term risk & liability transfer to governments will

force policymakers to scrutinize CCS approval regimes, and demand appropriate assurance and safeguards from public agencies. Role of insurance companies.

• CCS: The last two issues will weigh heaviest. Therefore, a practical way forward could be a “hybrid” solution similar to the accredited verification in the EU Emissions Trading System (EU ETS).

Parallel to EU-ETS Verification Roles (2)

Step Installation Competent AccreditedAuthority Verifier

Define objectives

Apply for GHG permit/proposemonitoring protocol (risk level)Validate monitoring protocol (acceptable risk level)

Permit / validated protocol

Monitor emissions (assess risks against accepted level – actions?)

Report emission (risk assessment)

Verify report (risk assessment)against accepted standards

Report to authority/registry

Contents




A Risk Based Approach - What is Required for Acceptance?

• Clarity in definition of roles and responsibilities• A structured, systematic and balanced approach to

manage and control relevant risks • Comprise all activities with risk implications• Definition of best practises and criteria (standards)• Independent verification against accepted

standards:- Tools and data- Sites- Technology- Assessors and assessments

Need a robust system ensuring transparency, consistency, efficiency and accountability and thus maintaining public trust.

Timing for CCS

• 1992 UN FCCC (Framework Convention on Climate Change)– Ca 180 countries– 1997 Kyoto Protocol signed– 2003 ratify by 50%, 55 countries NO

• SBSTA (Subsidiary Board of Scientific Technology Assessment)• 1996 IPCC (Intergovernmental Panel for Climate Change)• National Accounting Guidelines for National Inventories

(workbooks, methodologies, sector guidance)• 2006 National Inventories to be revised and proposed to the

COP (Conference of the Parties to the UN FCCC):

EnergyIndustryTransportWaste

CCS (2006) CCS (2006)

– CCS to be included?Tier 1Tier 2Tier 3

Issues: • CCS RA Guidelines• Verification• International Harmonisation

Sources Sinks

Build Acceptance for CCS as a Safe and Reliable Approach

A focused multi stakeholder process to develop common assurance frameworks, processes and ultimately guidelines and standards for accreditation and verification.

Two well coordinated process levels:1. An overall framework for Accreditation and Verification

providing all stakeholders with reassurance in CCS as a safe andreliable.

2. Guidelines and standards for each part of the overall process.

An example of 2) is the evolution of best practices and criteria for Risk Assessments - against which Verification would be made.

This is familiar territory for DNV.We are keen to take a lead role in 1). We will participate in relevant parts of 2).

http://www.dnv.com/

DNV’s international network

Global presence: 5,800 employees - 300 offices - 100 countries

An independent foundation under no external financial or shareholder control.

Engaged in Climate Change Services for more than 6 years focusing on Third

Party Services Verification and Certification

Safeguarding life, property and environment since 1864

Sept 10, 2004 [email protected] 1

PTRC WorkshopPTRC WorkshopCommercialCommercial

Risk Assessment for Risk Assessment for Emission Reduction CreditsEmission Reduction Credits

Michael E. MooreMichael E. Moore--Falcon ESFalcon ESSeptember 10, 2004September 10, 2004

Vancouver, BCVancouver, BC

Sept 10, 2004Sept 10, 2004 [email protected]@falcongasstorage.com 22

Temperature and CO2 Correlate:CO2 Changes...Man or Nature??

White House now says Man!New York Times Aug 26th, 2004


““We Have Only Just Begun”We Have Only Just Begun”


Potential Sequestration Volume through CO2-EOR in Texas

Source: Texas BEG/GCCC

Percent Recovery

CO 2 -EOR Resource (B bbls)

CO 2 Sequestered (tons)

CO 2 Sequestered (metric tons, tonnes)

CO 2

Sequestered (Gigatonne, Gt)

10% 3.7 522,474,000 473,883,918 0.4720% 7.4 1,044,948,000 947,767,836 0.9530% 11.2 1,567,422,000 1,421,651,754 1.4240% 14.9 2,089,896,000 1,895,535,672 1.9050% 18.6 2,612,370,000 2,369,419,590 2.3760% 22.3 3,134,844,000 2,843,303,508 2.8470% 26.0 3,657,318,000 3,317,187,426 3.3280% 29.8 4,179,792,000 3,791,071,344 3.7990% 33.5 4,702,266,000 4,264,955,262 4.26

100% 37.2 5,224,740,000 4,738,839,180 4.74


Key DriversKey DriversAt Risk participants need markets and At Risk participants need markets and fundingfundingMarket requirements need to match Market requirements need to match sciencescienceBanks/Stockholders/Bondholders will be Banks/Stockholders/Bondholders will be needed to financeneeded to financeThey will need clarity on riskThey will need clarity on riskInsurance required for indemnification of Insurance required for indemnification of riskriskIndemnification comes with clarity on Indemnification comes with clarity on process and protocolprocess and protocolProcess needs to match commercial Process needs to match commercial expectationsexpectations


Who are the PlayersWho are the Players

Insurance and ReInsurance and Re-- Insurance CompaniesInsurance CompaniesWall Street: Wall Street: Rating Agencies, Analysts, Rating Agencies, Analysts, Shareholders, Banks, and UnderwritersShareholders, Banks, and UnderwritersEmittersEmittersMMV ProvidersMMV ProvidersRegulatory AgenciesRegulatory AgenciesMarket MakersMarket MakersProduct DevelopersProduct DevelopersScientific CommunityScientific CommunityNGO’sNGO’s


Key Unanswered QuestionsKey Unanswered QuestionsEach has Operational and Each has Operational and

Financial RiskFinancial Risk““Permanence” for how long?Permanence” for how long?

scientific or commercial driverscientific or commercial driverStorage or Sequestration?Storage or Sequestration?

regulatory or analogs to natural gas storageregulatory or analogs to natural gas storageWaste or Commodity?Waste or Commodity?

treated and handled as such at great expense treated and handled as such at great expense or a multibillion industry, valuable and useful or a multibillion industry, valuable and useful with commercial benefits to emitters, states and with commercial benefits to emitters, states and shareholdersshareholders


IssuesIssuesProof of Sequestration over required period of Proof of Sequestration over required period of timetimeInsurance coverage for indemnification against Insurance coverage for indemnification against leakage and/or catastrophic eventleakage and/or catastrophic eventOwnership transfer and fungibility will require Ownership transfer and fungibility will require clarityclarityAdequate timeline? 50, 100, 500, 5000 yrs?Adequate timeline? 50, 100, 500, 5000 yrs?MMV for timeline past corporate lifecycle, who is MMV for timeline past corporate lifecycle, who is ultimately responsible?ultimately responsible?Who buys/sells open ended risk?Who buys/sells open ended risk?Issue to be more contentious over time, hence Issue to be more contentious over time, hence risk premiums higher?risk premiums higher?Will risk premiums exceed financial capability?Will risk premiums exceed financial capability?Will Government be ultimate insurance of last Will Government be ultimate insurance of last resort?resort?Again, at what costAgain, at what costOverkill?Overkill?


Herzog IPIECA 10/2003Herzog IPIECA 10/2003Moore 9/10/2004 (Is it a Commodity or a Moore 9/10/2004 (Is it a Commodity or a

Waste?)Waste?)““If COIf CO22 were a just a commodity, we could were a just a commodity, we could simply add up component costs to get simply add up component costs to get total cost total cost –– i.e., i.e., •• Capture cost + Transport cost + Capture cost + Transport cost +

Storage cost”Storage cost”“However, calculating mitigation cost is “However, calculating mitigation cost is more complicated, because we can only more complicated, because we can only take credit for the COtake credit for the CO22 emissions avoided, emissions avoided, not the total amount captured”not the total amount captured”“Key word “credit” how about “offset”?”“Key word “credit” how about “offset”?”


Current StatusCurrent Status1 Proposed EOR CDM project to test concepts 1 Proposed EOR CDM project to test concepts (Statoil)?(Statoil)?0 Financial Projects0 Financial Projects0 Banks0 Banks0 Insurance 0 Insurance 0 Government guarantees0 Government guaranteesLarge capitalization scarceLarge capitalization scarce--major oil companies major oil companies pulling out of US E&P, especially in areas of pulling out of US E&P, especially in areas of mature, candidate fieldsmature, candidate fields200 plus papers presented at GHGT200 plus papers presented at GHGT--7 supporting 7 supporting geologic sequestrationgeologic sequestrationWhite House now supports scienceWhite House now supports scienceEPA sees need to become involved in Geologic EPA sees need to become involved in Geologic Sequestration management and regulationSequestration management and regulation


Matching Science with Matching Science with CommerceCommerce

CO2 SourceCO2 SourcePermanencePermanenceBaseBase--liningliningFungible ProductsFungible ProductsConvergence of RequirementsConvergence of RequirementsRegulatory Agencies Regulatory Agencies CDM expectationsCDM expectations--none delivered yet none delivered yet to test processto test process


Current European PricingCurrent European Pricingsource: “Point Carbon” Newsletter www.pointcarbon.comsource: “Point Carbon” Newsletter www.pointcarbon.com


Current Pricing CCXCurrent Pricing CCXsource: source: http://www.chicagoclimatex.comhttp://www.chicagoclimatex.com

This is the current price analog or active value This is the current price analog or active value proposition for any kind of sequestration currently proposition for any kind of sequestration currently

in the US. There are limited open market in the US. There are limited open market transactions of offsets derived from CO2 transactions of offsets derived from CO2

sequestered in EOR projects that effectively price sequestered in EOR projects that effectively price in the same range. I.e.: Blue Source to Entergy, in the same range. I.e.: Blue Source to Entergy,

200,000 tons done December 2003200,000 tons done December 2003

http://www.chicagoclimatex.com/


Who Guarantees the Product?Who Guarantees the Product?

If permanence requirement too long, If permanence requirement too long, non commercial and uninsurablenon commercial and uninsurableWill the private sector accept long Will the private sector accept long term permanence requirements and term permanence requirements and at what cost toleranceat what cost toleranceWill government assume risk of Will government assume risk of guaranteeing permanence if past guaranteeing permanence if past commercial tolerancecommercial toleranceWhy so important?Why so important?


ContactsMichael E. Moore Managing Partner was a founding partner in Amerex Power. Emerging commodity market development for past 20yearsGeorge Lyons III Managing Partner recently Senior VP of Trading Tractebel USA. Energy market trading past 20 years1776 Yorktown, Suite 500Houston, Texas 77056Main: 713-961-3204Fax: 713-961-2676

In NorwayPO Box 592NO3605 Kongsberg, Norwaywww.co2.no

http://www.co2.no/


Additional SlidesAdditional Slides


Commercialization ProcessCommercialization ProcessProtocolProtocol

Define scope: Corporate wide or project specificDefine scope: Corporate wide or project specific

Describe emission reduction projectDescribe emission reduction project

Example: Carbon sequestration through EORExample: Carbon sequestration through EOR

Quantification methodologyQuantification methodology

Creation ReportCreation Report

Quantity of emission reduction achievedQuantity of emission reduction achieved

Submitted annually for onSubmitted annually for on--going projectsgoing projects

Single report for oneSingle report for one--time or past projectstime or past projects

Verification and CertificationVerification and Certification

Internationally accredited firms verify and certify protocolInternationally accredited firms verify and certify protocol

Det Norske Veritas (DNV), KPMG, URS othersDet Norske Veritas (DNV), KPMG, URS others

“Buyer“Buyer--driven” certification?driven” certification?

Insurance Indemnification of leakage and catastrophic lossInsurance Indemnification of leakage and catastrophic loss

“Stamp of approval” critical for establishing market value“Stamp of approval” critical for establishing market value

ERC, VER, Offset MarketsERC, VER, Offset Markets

Long term sales or traded like commodityLong term sales or traded like commodity

Target markets: Power generation utilities, other industrialsTarget markets: Power generation utilities, other industrials

Market value is evolving, global market emergingMarket value is evolving, global market emerging


AnalogsAnalogs

Superfund site Superfund site Financial products: Fannie Mae, Financial products: Fannie Mae, ISDA, SEC, ISDA, SEC, insurance equivalentsinsurance equivalentsNuclear wasteNuclear wasteWaste versus commodityWaste versus commodityEnd game or endless gameEnd game or endless gameWho is responsible: i.e.: rating or Who is responsible: i.e.: rating or certification agencycertification agency


Commercial vs. Scientific Commercial vs. Scientific PermanencePermanence

Who Pays?Who Pays?Who Monitors?Who Monitors?Who is Responsible?Who is Responsible?


DriverDriver

What is expected?What is expected?What can be done?What can be done?Where is commercial/scientific Where is commercial/scientific breakpoint?breakpoint?Determined how?Determined how?Oversight body?Oversight body?Will regulations or commerce dictate Will regulations or commerce dictate in the end?in the end?

Current PTRC Activities on Risk Assessment

Koorosh Asghari, PTRC/University of Regina

Risk Assessment and PTRC

• Completion of Phase One of Weyburn IEA Monitoring Project

• Availability of the unique data set from Weyburn• The concerns around the long-term safety and

environmental impact of underground storage of carbon dioxide

• The will, on PTRC management part, to remain active and play a leading role on identifying and modeling the risks associated with geological storage of carbon dioxide.

PTRC and the International Network on Risk Assessment

• The need for transparency and inclusivity • The complex nature of the problem• Need for developing an international

agreement on the findings of this research

Current PTRC Activities

• Grid Computing Facilities• Weyburn Data Centralization and Management

Activities• Setting up the Expert Group from various

Saskatchewan and Alberta research organizations• Developing international network with research

groups and interested industry partners

Grid Computing Facilities

• A central node for:a. providing higher levels of computational powerb. establishing more effective communication among research providersc. store the data from Weyburn and potentially the future fields.

Weyburn Data Centralization and Management Activities

• Goal: to collect the data generated during the Phase One of Weyburn IEA Monitoring Project in a centralized center.

• This is essential for:– Providing data for research providers during the Phase Two of

Weyburn Project more efficiently– Safeguarding the confidentiality requirements

• Steps taken:– Purchasing the new computer facilities – A study is underway on the available database management tools– Experts opinions have been solicited

Expert Group from Saskatchewan and Alberta Research Organizations

• Univ. of Regina, Univ. of Saskatchewan, Univ. of Calgary, Univ. of Alberta, Saskatchewan Research Center and Alberta Research Center

• Two workshops have been carried out• Expertise in various areas of probabilistic modeling,

wellbore stability, simulation, effect of CO2 on biosphere and its environmental impact, and so on have been recognized

Developing International Network

• PTRC is actively involved in discussions with IEA-GHG, interested industry partners and other international research groups working on the issue of risk assessment for underground storage of carbon dioxide.

iea ghg risk assessment workshop september 10, 2004 ... · iea greenhouse gas r&d programme...

Documents