Carbon Storage Addressing Key Issues

Transcription

1 Carbon Storage Addressing Key Issues John McCurry (Carbon Storage Business Development Manager) UKCCSC and IPA Carbon Capture and Storage Conference Heriot-Watt University Conference Centre, Edinburgh 1 st September,

2 Carbon Storage: Key Issues CCS Consultations highlight: Technical, Skills, Costs, Commercial, Finance, Liability, Legal/Regulatory, Policy Public Support (impacts Technical, Cost and Policy) Overview Background Public Support Implications Is Capacity An Issue? Can We Rely On Capacity Estimates? Technical, Cost and Policy Implications The Way Ahead

3 Onshore vs Offshore Storage Debate Debate is taking place why? Onshore Storage - Impact of public opposition: Jan 2009: Northern Jutland Project, Denmark suspended (Vattenfall) March 2009 Schwarze Pumpe Project, Germany storage permit prevented (Vattenfall) Nov 2010: Barendrecht Project, Netherlands - cancelled (Shell) Jan 2011: Alleged CO2 leak Weyburn refuted (Encana/Cenovus) Feb 2011: Groningen Onshore Storage, Netherlands - Government withdraws support (RWE/Essent) April 2011: amendment to proposed CCS Legislation in Germany - States allowed to veto storage May 2011: Porto Tolle Project in Italy - High Court overturns approvals (ENEL) August 2011: Bergermeer natural gas storage - suspended by Dutch Government (Taqa) NER300 Submissions (13): UK (7) - all offshore Netherlands and Italy (1 each) - offshore France, Germany, Poland, Romania (1 each) - onshore Total: Offshore 9 Onshore 4 Greenpeace Protest: Beeskow, Germany, July 2010

4 Large Scale Demonstration Projects Planned Storage (2010) Storage Site Saline Aquifer Depleted Gas Fields Enhanced Oil Recovery Other (Basalt) Combination or Not Specified Total Onshore Offshore Totals ~75% current projects are onshore Source: GCCSI Global Status of CCS 2011 Offshore: all but 4 are in Europe, mostly North Sea others are Australia, China, Korea and USA Note: concentration of EOR onshore (commercial focus)

5 Senergy Carbon Storage Project Activity Industry 500 staff, 8 international offices Technical advisors delivery of CO2 storage > 50 CCS projects globally Oil and gas heritage Government Source: BP 2005 Technical storage advisors UK CCS Competition Australian CCS Flagship Program European Commission CCS Initiatives GCCSI Project Support Programme CO2/EOR Project Activity, DECC, UK (since 2000) Technical Director ETI UK Storage Appraisal Project Senergy Carbon Storage and CO2 EOR Experience

6 Public Support: Offshore vs Onshore Capacity Implications: 1. Is Capacity An Issue?

7 Strategy to Locate and Engineer a Site for Carbon Storage Three Limiting Parameters Key Factor: 1. EOR 2. Depleted Gas Reservoir 3. Saline Aquifer 4. ECBM Capacity Screen for Candidate Site Injectivity Characterise Site Containment Field Design

8 Four Factors Constraining Capacity 1. Static Capacity - how much pore space in the rock (usually fluid filled) 2. Dynamic Capacity - how much of that space can be used for storage before pressure too great 3. Injectivity (low) can all of that potential space be accessed or does pressure build up around the well(s) preventing access 4. Injectivity (high) - is sufficient volume of CO2 being supplied to fill the space

9 CO2 Storage Resource Classification (1) Techno-economic storage pyramid Observations: Defined project with specified pore space available for storage after detailed technical analysis complete Indicates available pore space that the CO2 may actually access Only a small fraction of the estimated Total Pore Volume is ever likely to be filled with CO2 Source: CSLF, 2007

10 CO2 Storage Resource Classification Key categories of the SPE classification system are: Theoretical storage resource CO 2 that theoretically can be stored in the total pore volume of the storage target (includes volumes confirmed by well(s) as well as prospective volumes) Characterised Storage Resource CO 2 that theoretically can be stored in pore volume mapped based on well and seismic data Effective Storage Volume CO 2 that can be stored in the part of the mapped pore volume that can be swept by CO 2 (taking account of irreducible/residual HC and/or water saturations and CO 2 sweep efficiency) Practical Storage Capacity CO 2 that can be stored based on current firm project(s) Proved, Probable and Possible parts reflect confidence levels/uncertainties Source: EERC SPE Gorecki et al 2009

11 Is Onshore Storage Needed? How much do we need to store? 28 Gt CO2/yr (2005) Do nothing scenario 62 Gt CO2/yr (2050) Stabilisation target 14 Gt CO2/yr (2050) CCS ~8 Gt CO2/yr by 2050 CCS~145 Gt CO2 stored by 2050 Why do we need to store? 130% increase in CO2 emissions C temp increase CCS achieves 19% of required stabilisation reductions costs 70% more without CCS stabilisation Source: IEA Technology Roadmap CCS 2009

12 Global Storage Availability: Capacity Storage Site (GtCO2) Saline Aquifer Gas Field Oil Field Enhanced Coal Bed Methane Total (GtCO2) Onshore 120* ,142 Offshore 120* Total ,660 IPCC 2005 IEA 2009/10 *exact distribution unknown 1,000-10, ,678-11,100 Global capacity study storage estimates highly variable 8,000-16,800 Sources: Based on Ecofys Global CO2 Storage Potential and Costs 2004: IPCC CCS Report 2005; IEA Technology Roadmap CCS 2009 and Targets 2010 Theoretical storage capacities ~90-99% higher than storage requirement

13 Global Storage Availability: Location Source: IEAGHG R&D Programme and GCCS 2011; Bellona CCS Web 2011

14 Capacity Requirement Summary Capacity: Location: 145 GtCO2 required 1,700-17,000 GtCO2 available (theoretical) <1-9% High volume onshore (majority?) Major inland point sources: N America, Eastern Europe, Central Asia, China and India Onshore storage challenges: India, China, parts of Eastern Europe Major capacity reduction if onshore not accessed Onshore storage is a probable requirement to meet emission stabilisation targets Example: Netherlands 2Gt 1Gt (requirement 2 Gt)

15 Public Support: Offshore vs Onshore Capacity Implications: 2. Can We Rely on Capacity Estimates?

16 Important to know are theoretical capacity estimates reliable? Source: IEA Technology Roadmap CCS: Targets 2010

17 CCS Project Examples Project 1: New Build Power Plant Regional study indicates storage Short Senergy study no storage available (containment risk) New 1 year National Capacity Study 100 s Mt storage in basin Short study reviewed same conclusion Impact 100s km increase in pipeline length to secure site Project 2: New Build Power Plant National Capacity Study indicates storage in basin Senergy engaged to assess basin (3 months initially) Containment risk meant no storage available Impact: project cancelled due to lack of storage site

18 Saline Aquifer Basin Study Capacity Reduction (figures altered) Published theoretical capacity available, e.g. 50 Gt CO2 Actual capacity that may be available based on a study of available data 4 Gt CO2 ~ 5%

19 Gasfield Basin Study Capacity Reduction (figures altered) Published theoretical capacity available, e.g. 25 Gt CO2 Actual capacity that may be available based on a study of available data 2 Gt CO2 ~8% Gasfields - Basin Capacity Gt CO Field Availability Injectivity Reduction Field Size Reduction Remaining Capacity Reduction 16

20 Capacity Estimation Summary This is not the end, this is not even the beginning of the end, but it is, perhaps, the end of the beginning. Churchill Starting point for detailed technical investigation Capacity will reduce further through these investigations Nothing to suggest insufficient global capacity However suggests we need to access all available capacity both onshore and offshore And we need dependable, reliable NCSs to base decision making

21 UK Storage Appraisal Project Energy Technologies Institute Objective: fully auditable, defensible and realistic estimate of overall UK CO2 storage capacity: Government: underpin energy strategy to 2050 no storage, no CCS Industry: reliable storage mapping and data for effective decision making Not West of Shetland (too remote) x Funding: UK Gov (50%), EON, EDF, Shell, BP, Rolls Royce, Caterpillar (50%) East Irish Sea Northern, Central & Southern North Sea Co-ordinator: Senergy (Technical and Project Management) Participants: Survey: British Geological Survey, Universities: Edinburgh, Imperial, Durham, Heriot Watt Industry: Senergy, Element Energy, RPS Timing: 18th months (completed Sept, 2011) Western Approaches Output GIS Database, Map, Report

22 Public Support: Offshore vs Onshore Technical, Cost and Public Support Implications

23 Technical Implications Large scale CO2 storage is happening - both onshore and offshore Injection technologies adjust to a range of surface and subsurface settings So what are the principal differences? Source: Statoil 2011

24 Site Characterisation / Field Design Data Assessment Seismic Interpretation Static Geological Modelling Multi Component Seismic Seep Characterisation Well Integity Analysis Simulation Matching Microseismicity Tracer Studies Sampling Sonar VSP Geology Geophysics Petrophysics Geochemistry Geomechanics Well Engineering Reservoir Engineering Production Engineering Dynamic Flow Modelling Well Design Field Design Development Operation

25 Cost of Transport and Storage Estimate Range: Transport 1-25 tonne / CO2 transported Storage 2-40 tonne / CO2 stored Source: GCCSI 2011

26 Source: based on ZEP The Costs of CO2 Capture, Transport and Storage 2011; McKinsey CCS: Assessing the Economics 2008 Transport Costs Highly variable: Distance Volume Offshore>Onshore Shipping>Pipeline ~ Transport Cost ( tonne CO2) Short, high volume (180km, 20Mtpa) Onshore Pipeline 2 na Offshore Pipeline 4 20 Ship Long, low volume (500km, 2.5Mtpa) Demonstration ( ) Early commercial ( ) Mature commercial (2030+) Distance to storage increases Infrastructure develops Costs may remain broadly similar at lower tonnages

27 Source: based on ZEP The Costs of CO2 Capture, Transport and Storage 2011; McKinsey CCS: Assessing the Economics 2008 Storage Costs Highly variable: Offshore>Onshore Saline Aquifers(SA)>Depleted Oil and Gas Fields(DOGF) No Wells>Wells Storage Scenario Range ~ Storage Cost ( tonne CO2) Medium DOGF; Wells Onshore DOGF; No wells Saline Aquifer DOGF; Wells Offshore DOGF; No wells Saline Aquifer Key Cost Sensitivities: Capacity highest in saline aquifers Well Injection rates Demonstration ( ) Early commercial ( ) Mature commercial (2030+) Exploration of remoter basins SA knowledge increases; DOGF become available Costs may remain broadly similar at lower tonnages

28 Cost Summary Overall offshore storage is anticipated to increase cost of: Transport ~ x1.5-2 [10-20% increase in cost of CCS] Storage ~ x2-2.5 [20-30% increase in cost of CCS] Overall 30-50% increase in cost of CCS Hides massive variability Reuse of infrastructure - early projects Storage type - volume EOR - oil price Economics may support offshore over onshore Complex or distant onshore storage Infrastructure in place offshore in well explored hydrocarbon basin e.g. Offshore Gippsland Basin, Australia

29 CO2 EOR: Why Not Offshore? Mature Industry (>30 years) ~50 million tonnes CO2 injected per year in USA 53 projects USA 80 worldwide (almost all onshore) But: Source: Statoil 2011 The industry has had difficulty transferring offshore. because the economics are more challenging

30 Wells Offshore More expensive so fewer further apart Operational Impact: Less reservoir knowledge (and per ) Higher injection rate per well required to: Offset cost Maximise access to available capacity Not able to access all the capacity at site (c.f. with equivalent reservoir onshore) require more capacity Investment Impact: Larger investment required at all stages RISK Investment decisions based on less knowledge RISK Criteria for Final Investment Decision stricter Fewer Project Sanctions Source: GCCSI 2011

31 Onshore vs Offshore Projects Storage Related Risk PS Onshore I I Ca Offshore IT Probability IT Ca Capacity PS Co Containment Ca PS Public Support IT Investment Technical Co Co I Investment Overall Consequence

32 The Way Ahead Early days for CCS (from public perspective): CCS generally has not entered public consciousness Where it has it is on perceived safety concerns (consultation/education needed) Public broadly supportive of climate change mitigation measures but unaware of cost implications for them Only when the cost implications are factored in will a real debate about CCS (and climate change) take place There are no easier CO2 reduction alternatives so the case for CCS is strong CCS demonstrators up and running is the biggest confidence boosting measure for both the public and industry

33 Carbon Storage Contact The answer to carbon storage is here Thank you John McCurry Carbon Storage Business Development Manager Tel: +44 (0) Creating the future together