QUEST Carbon Capture & Storage Project Project Overview and Regulatory Process

Transcription

1 QUEST Carbon Capture & Storage Project Project Overview and Regulatory Process International Energy Agency CCS Regulatory Network November 8, 2012 Use this area for cover image (Maximum height 6.5cm & width 8cm) J.P. Jepp- Regulatory Policy Advisor- Shell Canada Copyright SHELL CANADA ENERGY 1

2 Quest- Project Overview Capture and Compression Capture at Shell Scotford Upgrader- amines CO 2 source 3 x HMUs (SMR technology) Up to 1.2 Mtpa CO 2 ; CO 2 > 95% purity Pipeline Agricultural lands with distributed population 12 inch line; about 80 km length Laterals pipelines from main to wellheads Disposal Scheme 3-8 wells Target zone is saline aquifer- over 2000m depth 39+ townships Area of Interest (AOI) MMV Program To verify containment and storage performance Project Status July Regulatory Approvals Sept Final Investment Decision!! 2

3 Quest- Major Regulatory Applications Pore Space Tenure (Alberta Energy- Sequestration Leases) Well Licenses (ERCB- Directive 56) Pipeline License (ERCB- Directive 56) Capture Infrastructure (ERCB- OSCA Amendment) CO 2 Disposal Permit (ERCB- Directive 65) Environmental Assessment (Alberta Environment) Environmental Impact Assessment (Environment Canada) MMV Plan / Closure Plan (Alberta Energy) Closure Certificate (Alberta Energy) 3

4 Alberta- Addressing Gaps in CCS Regulation Alberta Carbon Capture and Storage Statutes Amendment Act (December 2010) Enables the government to assume liability for stored CO 2 from project operators Clarifies the ownership of pore space (i.e. the Province of Alberta)) Enables Alberta to create a Post-Closure Stewardship Fund Enables Alberta to issue Tenure Agreements (i.e. pore space tenure) Alberta Carbon Sequestration Tenure Regulation (April 2011) Provides administrative details on evaluation permits and carbon sequestration leases Provides framework for MMV Plans and Closure Plans Alberta Regulatory Framework Assessment (2011/2012) Multi-stakeholder group examining existing regulatory framework for CCS in Alberta Provides recommendations to Government on how gaps in framework may be addressed 4

5 Regulatory Challenges- Tenure With the Carbon Capture and Storage Statutes Amendment Act Alberta has clarified pore space ownership Carbon Sequestration Tenure Regulation, enabled Alberta to grant evaluation permits and sequestration leases Tenure no longer a gap in Alberta Alberta s first Carbon Sequestration Leases granted May

6 Regulatory Challenges- CO 2 Disposal Approval Existing permitting geared for single acid gas and similar disposal wells- doesn t work for multiple wells and large scale O&G approach is to drill field, and then convert to injection With CCS, may also not know total wells needed until after period of operation Need to be able to use non-invasive techniques (e.g. seismic) to prove field Should be able to apply for a broad field concept (i.e. scheme), that gets refined with period of operations RFA- Recommendations for scheme approach to approvals for projects with multiple wells Current Requirements Well License Drill Injection Permit Shell Proposal Injection Permit (scheme) Well Licenses Drill Injection Permit Amended 6

7 Regulatory Challenges- Emergency Response Existing requirements specific to sour gas and HVP lines- no requirement for site-specific ERP Requirement only to include specifics of CO 2 as a hazard in corporate ERP For landowner safety and public acceptance, site-specific ERP needed Consultation and notification should be based upon the unique aspects of CO 2 (i.e. dispersion modeling) when establishing the required distances RFA- Recommendations for Emergency Planning Zone requirements 7

8 Regulatory Challenges- Consultation/Notification Effective stakeholder engagement is critical- to include potentially affected parties and to support CCS on forward basis Existing requirements specific to petroleum- need to be adjusted for CCS e.g. Mineral Notification 1.6 km D56 Requirement km radius from section hosting well (3x3 grid) 1. Expansion of subsurface notification to include additional potentially affected parties 2. Notification of surface occupants in relation to proposed subsurface activity RFA- Recommendations for expansion of consultation and notification in-line with subsurface CO 2 dispersion 1.6 km Shell Quest - Maximal radius of CO 2 plume - Penetrations of target zone within AOI 8

9 Regulatory Challenges- Handover Criteria With Carbon Capture and Storage Statutes Amendment Act, Alberta has ability to grant Closure Certificate and accept long-term responsibility for stored carbon dioxide Alberta would then become responsible for all obligations of lessee - including facilities, environment, and land Entirely appropriate- provides continuity and a carrot for good operators Stringent criteria must, however, be in place, for public protection and confidence The minimum closure period and performance criteria that must be met before Alberta can assume liability and grant Closure Certificate have not yet been identified RFA- Recommendations for minimum closure period and performance criteria 9

10 Regulatory Challenges- Liability With Carbon Capture and Storage Statutes Amendment Act, Alberta has ability to accept responsibility for stored carbon dioxide. This includes liability for tort action. Question of who responsible for true up of granted CO 2 credits if loss of CO 2 from container (i.e. climate liability) RFA- Recommendations that responsibilities be amended to include liability for climate 10

11 Regulatory Challenges- Post Closure Stewardship Fund After CO 2 transferred to Alberta, government responsible for post-closure monitoring (i.e. MMV), reclamation of transferred facilities, orphaned facilities, and unforeseen events Appropriate that operators cover some/all costs, but details are important- For projects needing cost certainty, questions: How PCSF rates are determined? What is an appropriate use of the PCSF? What if PCSF funds are exhausted? Could PCSF rates rise, or there be subsequent assessments on operators? RFA- Recommendations for determinants of rates and appropriate uses of PCSF 11

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