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PreRulemakingPublicMeetingtoDiscuss

2018LCFSPreliminaryDraftRegulatoryAmendmentText

INDUSTRIALSTRATEGIESDIVISIONTRANSPORTATIONFUELSBRANCH

NOVEMBER6,2017SACRAMENTO,CA

MeetingParticipation

PostedmaterialscanbefoundontheLCFSMeetingswebpageo https://www.arb.ca.gov/fuels/lcfs/lcfs_meetings/lcfs_meetings.htm

WatchandlistenviatheWebcast:o https://video.calepa.ca.gov/

Askquestionsorprovidefeedbackduringtheworkingmeetingo Emailsierrarm@calepa.ca.gov.o Participateviaconferencecall

TollFree:8885665916 Toll/OutsidetheUnitedStates:17737564816 ParticipantCode:9886883

Feedbackshouldbesentto: LCFSworkshop@arb.ca.gov byDecember4,2017

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AgendaOutline

PotentialAmendmentstotheLowCarbonFuelStandard:o Protocolforcarboncaptureandsequestrationprojectso Bufferaccountsandupdatestocreditprovisionso Renewableelectricityandhydrogeno Updatestolifecycleanalysismodelingtoolsandrelatedpathwayissueso Creditingprovisionsforrefineries

Miscellaneousupdates RulemakingTimeline NextSteps OpenDiscussion

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SupportingInformationandDraftMaterials

DraftCCSProtocol DraftCAGREET3.0 DraftLookupTablePathwayDocuments UpdatedDraftSimplifiedCIcalculatorsandtheirrespectiveTier1Manuals

o CornEthanolo SugarEthanolo BiodieselandRenewableDieselo LandfillGastoRNG

NewPreliminaryDraftRegulatorylanguage,includingo CarbonIntensityBenchmarkso LookupandTemporaryFuelPathwayTablesoOthersegmentsrelatedtotodaysdiscussiontopics

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PostedmaterialscanbefoundontheLCFSMeetingswebpagehttps://www.arb.ca.gov/fuels/lcfs/lcfs_meetings/lcfs_meetings.htm

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AccountingandPermanenceProtocolforCarbonCaptureandGeologicSequestrationundertheLCFS (CCSProtocol)

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CCSDiscussionOutline

Background

ReviewPreliminaryDraftofCCSProtocol.

CCSPermanenceRequirements

CCSAccountingRequirements

OpenDiscussion

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Background

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PotentialforCCSinCalifornia

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CO2 storagepotentialinCAo 30420Gigatonne onshoreformationcapacity(California

GeologicalSurvey,2011)o Offshoresubseabedoffersadditionalcapacity

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2018LCFSAmendmentsforCCS

ExistingprovisionsforpotentialCCSgenerationofLCFScredits: Refineryinvestmentcredits Innovativecrudeproductioncredits,and Provisionsforfuelpathways

StaffisconsideringproposingtoincludeprovisionsforcreditingdirectaircaptureCCSprojects

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CCSProjectsinLCFS

Creditsgotocapturefacility Currentproposal:storagefacilitymustbecoapplicant Captureandstoragefacilitiesdonotneedtobecolocated MustcomplywithCCSprotocol NocreditsissueduntilCCSProtocolisapprovedandprojectmeetsallprotocolrequirements

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LessonsLearnedfromUndergroundNaturalGasStorageLeaks

Highqualitysiteselectionthatminimizesleakageriskisimportant Wellintegrityrequirementsneedtobestrong Rigorousmonitoringisnecessary Bestpracticesneedtobefollowed

o DOEsNationalEnergyTechnologyLabpublishedseveralbestpracticemanuals

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DraftCCSProtocolisAvailable

DraftCCSProtocolmadeavailablepublically(includingaccountingandpermanencerequirements)https://www.arb.ca.gov/fuels/lcfs/lcfs_meetings/lcfs_meetings.htm

CCSProtocolanticipatedtobeproposedtobeincorporatedintotheLCFSaspartof2018amendmentrulemaking

StaffcontinuestorefinetheCCSProtocol

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CCSPermanenceRequirements

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GeneralProcessforCCSProtocolAdoptionandImplementation

CCSprotocol(includesaccountingandpermanencerequirements)

LCFSamendment(incorporatesCCSprotocolbyreference)

ProjectapplicationpursuanttoCCSprotocolandLCFS

Projectcrediting

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ProjectProcessUnderCCSProtocol

Applicationforsite

certificationInjectionsitecertification

WellConstruction

Applicationforinjectionstartandcrediting

Injectionstartandcreditingcertification

Injectionoperationand

crediting

Injectioncompletion

Postinjectionmonitoring Siteclosure

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OverallPermanenceRequirements

Permanencecertificationo Sequestrationsitecertificationo Injectionstartandcreditingcertification

WellconstructionOperatingrequirementsMonitoringrequirements Financial,postinjection,andotherrequirements

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PermanenceCertification

Applicationforsequestrationsitecertificationo Includessitecharacterizationo Includesallnecessaryplans(e.g.wellconstruction,monitoring,financialinstruments,emergencyresponse)

oMustbereviewedbythirdparty,independent,professionalgeologist priortosubmittal

CARBcertificationofsequestrationsite Applicationforinjectionstartandcrediting

oSubmittedafterwellconstructionoMustbereviewedbythirdparty,independent,professionalpetroleumengineerpriortosubmittal

CARBcertificationforcreditingofinjectedCO2

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SiteCharacterization:FocusAreas

Minimumsiteselectioncriteria Sitebasedriskassessment Geologicandhydrogeologic evaluationoftheproposedsite Areaofreviewdelineation Correctiveactionrequirements Baselinesurfaceandnearsurfacemeasurement

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SiteCharacterization:MinimumSiteSelectionCriteria

Sequestrationreservoir: Sufficientarealextent,thickness,porosity,permeability,andinjectivity

Minimuminjectiondepth: 800m(~2,600ft)

Primaryconfininglayer: Freeoftransmissivefaultsorfracturesandofsufficientarealextent,integrity,thickness,andductility

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SiteCharacterization:MinimumSiteSelectionCriteria(continued)

Dissipationintervalsabovethestoragecomplex Atleastonepermeablestratumandasecondaryconfininglayerabovestoragecomplex

Dissipationinterval(s)belowthestoragecomplex CARBmayrequirethistolowerthepotentialforinducedseismicity

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SiteCharacterization:SitebasedRiskAssessment

Sitebasedriskassessmentdemonstratesthatthesiteisappropriateforsequestration: EvaluationofpotentialpathwaysforCO2leaksormigration Classificationofriskprobabilityandconsequence,accompaniedbyasufficientexplanation

Riskmanagementplanrequired Ifanyriskscenariosshowhighprobabilityofoccurrenceandhighmagnitudeofadverseimpacts,thenrisksmustbemitigatedpriortoCARBapproval

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SiteCharacterization:GeologicandHydrogeologic Evaluation

Protocolrequireseachsitetoundergoageologicstudytoshowthatallminimumsiteselectionrequirementsaremet

Existingsitecharacterizationdatacanbeusedtofulfillthesitecharacterizationrequirementsifsufficient

Protocolestablishesformationandwelltestingrequirements

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SiteCharacterization:AreaofReview(AOR)andCorrectiveAction

AORencompasses: TheregionoverlyingthefreephaseCO2 plume,and TheCO2 pressurefront

AORandcorrectiveactionrequirementsensure: Potentiallyimpactedareasaredelineated, Wellsreceivecorrectiveactionwhenappropriate,and TheAORisupdatedasconditionswarrant

TheprotocolsetsforththeAORandcorrectiveactionrequirements

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SiteCharacterization:RelationshipBetweenActivities

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SiteCharacterization:BaselineSurfaceandNearsurfaceMeasurement

Baselinemonitoringanddatacollection Aminimumof1yearpriortoinjection

Propertiesthataffectbaselinedatamustbeevaluated: Soiltype,soilorganiccarbon,vegetationtype/density

Repeatedmeasurementsatseveralfixedsites Captureseasonalordiurnalvariations

Samplelocationsmustrepresent Areasonablegridsizeandpotentialpointsources

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WellConstruction:GeneralRequirements

Mustpreventmovementoffluidsintoorbetweenanyunauthorizedzones

MustpermitcontinuouspressuremonitoringWellmaterialsmustbecompatiblewithinjectionandformationfluids

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WellConstruction:GeneralRequirements(continued)

Surfacecasingmust: Extendthroughbaseoflowermostfreshwateraquifer

Onelongstringcasingmustextendfromsurfacetotheinjectionzone

Allcasingmustbecementedtothesurface

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WellConstruction:PreinjectionTestingRequirements

Logs,surveys,andtestsduringdrillingandconstructionofwells

Coresamplesofsequestrationzoneandconfininglayer Representativesamplesofsequestrationzoneformationfluids

RequiredTests: Pressurefalloff,pump,andinjectivity

MustprovideCARBwiththeopportunitytowitnessallloggingandtestingactivities

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OperatingRequirements:General

Injectionpressuremustnot: Exceed90%ofthefracturepressureoftheinjectionzone Initiatefracturesintheconfininglayer

Mechanicalintegrityintheinjectionwellmustbemaintainedatalltimes

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OperatingRequirements:RequiredShutdowns

Whenlossofwellmechanicalintegrityissuspected,operatormustimmediatelyandquicklyinvestigatethecause

Ifinvestigationandmonitoringindicatethatthewelllacksmechanicalintegrity: Immediatelyceaseinjection Restoreanddemonstratemechanicalintegrity ObtainCARBapprovalpriortoresuminginjection

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MonitoringRequirements:TestingandMonitoringPlan

CARBapprovedTestingandMonitoringPlanisrequired,whichmustinclude: Continuousmonitoringofwellsduringinjection

o Pressure,injectionrate,andvolume Quarterlycorrosionmonitoring Mechanicalintegritytesting Projectmonitoringduringinjection

o Emissionso Verificationofcontainment

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MonitoringRequirements:MechanicalIntegrityTesting

Generalrequirementsonmechanicalintegritytesting: Performtestingtodemonstratemechanicalintegrityofwellsannually

Casingwallthicknessandintegritymustbeinspectedatleastonceevery24months

CARBmayrequesttheoperatordemonstratemechanicalintegrity

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MonitoringRequirements:ContainmentMonitoring

Plumetracking Pressurefront FreephaseCO2 plume

Surfaceandnearsurfacemonitoring Surfaceairmonitoringofpointandothertargetedsourcestoquantify