Six Keys to Unlocking National Strategic CO2 Storage Resource – Some Lessons from UK Experience

In 2015 the UK Energy Technologies Institute commissioned an industrial project with the objective of materially progressing the development of the National Strategic carbon dioxide storage resource base.   The 12 month project, which was funded by the UK Government through the Department of Energy and Climate Change (DECC) and delivered by Pale Blue Dot Energy and its partners Axis Well Technology and Costain Engineering, was published in early May 2016.

The project succeeded in progressing the appraisal of five substantial stores, well-placed in relation to the UK’s major emission sources, towards readiness for final investment decision (FID) so that prospective capture projects will have a range of storage options 30 years into the future. The project significantly de-risked these stores and the results are transferable to storage developers wishing to progress the more capital intensive parts of the development programme. By selecting geological storage sites (both depleted oil and gas fields and saline aquifers) that already have had a great deal of information gathered and analysis completed through oil and gas exploration and production activities, the UK storage proposition could be available for injection from the early 2020’s. Three of the five new sites considered would not require any further appraisal drilling. This is a significant factor and serves to reduce the time required from identification to FID to between two and four years.

The project also developed learnings which may support projects in other areas of the world faced with similar challenges in developing a strategic CO2 storage resource base.

1. Establish Clear Objectives.

Before you go shopping, we all know that it is a good idea to make a list to avoid that unnecessary “impulse buy”.  The CO2 storage equivalent is to define how you want the CO2 Storage resource to operate to meet your requirements.  As a minimum, this should include specification of emissions geography, the growth of captured annual volumes in each geography, and some economic factors such as some target injection rates for sites and wells, maximum transportation distances that you would consider viable and any other factors such as onshore / offshore, proximity to populations.  The experience of others can help with setting these objectives.  In the UK, the Scenarios work from the ETI was a key component, it framed the future potential national requirements through a range of scenarios.  Any plan for the progression of the national storage resource has to be able to accommodate the bulk of the likely scenarios identified.  When working in a petroleum basin a key aspect of this is to achieve very early clarity on the issue of enhanced oil recovery and whether this is inside the scope or not since although EOR can present an attractive proposition, it can also significantly complicate the workflow by introducing additional, sometimes competing motivations and objectives.

2. Plan, Plan and then Plan Again.

Any complex project will benefit from detailed planning which is tested, refined and tested again by independent parties to ensure that each step contributes to the delivery of the overall project objectives and is also deliverable from a practical perspective.  The development and maintenance of a project delivery risk register also serves to maintain focus on the important aspects of the plan rather than be distracted by the numerous fascinating technical details of the challenge.

3. Build a High Level Outline Survey of all Possible Sites.

This should be developed using available national data archive resources.  This process should be a rigorous and inclusive one, using a simple and standardized methodology for assessment of all key attributes such as capacity, injectivity and containment and also include a confidence marker for each attribute such that a poorly understood sites can be included alongside sites which have been subject to extensive studies.  This is not an “Atlas” per say, but a catalogue of all potential storage sites from which the potential of the national resource can start to be quantified.  In the UK, the UKSAP project developed the CO2Stored database fulfils this requirement.  It represents a high level, but consistent assessment of the UK CO2 storage resource catalogue. The alternative to this starting point is to begin with an existing “Asset Play”.  This might be a depleted gas field or other asset at the end of its existing life that presents an opportunity for its conversion to CO2 storage service, thereby extending the asset lifetime and deferring expensive decommissioning activities.  Whilst such opportunities sound like ideal scenarios, experience suggests that they are quite rare, and whilst they may represent added value for the existing owner, they may not always represent the lowest cost solution.  Such projects may however be particularly well suited to short demonstration programmes that do not require the asset to withstand another 40 years of operation.  Also, the cost of offshore brown field modifications on platforms, subsea assets and wells should not be underestimated.  “Asset Plays” can be attractive, but may not result in the best value solution for the nation.

4. Adopt or Define a Screening and Portfolio Selection Process. 

Once a full inventory of potential storage sites is assembled, then the potential contribution of each site to meet the clear objectives can begin.  Here there will be a range of criteria to consider including Technical, Economic and Commercial.  The UK project deployed the pre-existing IEAGHG technical screening guidance for saline aquifers.  Whilst this best practice guidance provides excellent general guidance, it must be used carefully because it is rooted in some overarching economic assumptions and conditions and costs can vary locally and particularly between onshore and offshore sites.  With so many CCS projects failing to meet the finally investment decision (FID) hurdle, carrying a strong inventory of options forward is very important so that ideally there is more potential being matured than is ideally required.  This is essential as some projects will fall by the wayside for a whole range of reasons as they are progressed. Portfolio selection is all about risk management.  For the UK at a very early stage along the offshore CO2 storage experience curve an early decision was made to value diversity highly in the portfolio selected.  This resulted in a portfolio that had strength in diversity and was robust to any one particular storage play becoming less favoured going forwards.   Overall, the input from a range of different stakeholders in this process was essential in order to deliver a balanced portfolio and ensure that specific agendas important to some stakeholders did not get in the way of achieving a balanced outcome.  This can sometimes be very challenging at this early stage in the sector.  There are many good processes for portfolio selection.  Where many stakeholders are involved, it is recommended that a simple approach with transparency should be deployed.   Finally, whilst the economic benefits of “hubs and clusters” are clear to all, the commercial practicalities are that in most parts of the world, a hub and cluster system will be dependent upon a leading point to point emitter and store solution to serve as an “Anchor” for the cluster development.  Experience suggests that it is important to focus on and secure these “Anchor” projects first and then the adjacent projects will be able to build upon this.  Losing the “Anchor”, can delay, damage or even destroy a hub and cluster vision.  This should be considered in any portfolio selection process.

5. Data Availability. 

The status of data availability on any site also needs to be considered carefully since without data, detailed characterisation and assessment is not possible. Subsurface data is a crucial tool for the progression of any CO2 storage options.  A full and widely available national data archive will significantly support this effort.  Additional commercially available resources should also be considered carefully to assess whether these might be cost effectively added at an early stage.  The focus for this effort should include well records from petroleum, mineral or other exploratory or research drilling activities and also seismic data.  In petroleum basins,  well test results and production and injection records should be added to the list of requirements together with any subsurface pressure data acquired both during exploration and also importantly during production.  Detailed information of the status of active and abandoned wells is also important to assessment of the containment properties of any site.  Authorities regulating subsurface assets are encouraged to ensure that all of these data types are routinely collected by the national archive and curated.  Without this information, the cost of progressing CO2 storage opportunities will rise significantly and in the worst case scenario potentially be prevented because of incomplete records regarding well abandonment for example.  Regions with an oil and gas legacy may be particularly well served in this regard as long as national policies serve to place such data into accessible archives and formats.  Early availability of seismic data can significantly enhance early screening as it will be possible to consider the overall shape and structure of the subsurface which are important factors.  Data availability will control the degree to which a site can be progressed with data rich sites being more readily progressed towards FID status than data poor sites which may require further appraisal drilling.  Some regions of course will be “green field” sites and have very little subsurface data.  These areas are likely to require a significant lead time of exploration and appraisal drilling ahead of any CO2 storage development.  It is notable, however than the petroleum industry has acquired huge amounts of data in basins all around the world over the years and that there may be relatively few examples of CO2 storage being required in genuine “green field” areas.

6. Industrially Focussed Assessment. 

Once the portfolio is identified, it is important that the evaluation process is approached in a systematic and business focussed way.  All technical staff have a desire to do the best possible analysis with the task at hand. And both business and research focus take a science led approach to the evaluation.  In the business world however, the value of each work component is considered carefully before the technical work starts and also is the key to controlling when the technical work stops.  This allows a complex multidisciplinary task such as underground CO2 Storage site assessment to meet its objectives on time and on budget.  Of course there are always surprises to deal with along the way, but these are resolved with value based decision making developed through robust testing and discussion.  Any focussed assessment must also consider, track and monitor residual uncertainty and risk which arises from the business decisions made as well as from the inherent subsurface uncertainty.  This constructive challenge can be delivered very effectively by a small trusted team of stakeholder experts serving in as a regular project review panel who also support and measure the project against its goals as it moves through the major milestones and stage gates of the plan.  It is a process familiar to many oil and gas companies.

 

Like any other complex project, Progressing the Development of a National Strategic CO2 Storage Resource requires focus and discipline in addition to technical expertise in order to deliver successfully.  Much of this depends upon assembling a strong team with a keen business focus.  Experienced industry practitioners in a project review role are also fundamentally important to the project success.  A clear and thoroughly tested plan developed against crystal clear objectives is the key to strong progression together with an experienced technical team that has a strong business focus with value based decision making.  Finally at this early stage in the development of CCS, a portfolio perspective is important, together with maintaining a keen eye on technical and commercial risks.

This article was written by Alan James.

Written by Pale Blue Dot Energy

Management Consultants for the Energy Transition, delivering support in three key areas: 1. Carbon Capture and Storage 2. Oil and Gas Transition 3. Emerging Energy Systems

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