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Technical risk assessment and CCS
Gallagher Estate, Midrand, South Africa
28 , October , 2011
Ronald Munyai – Assistant Manager: Technical
South African Centre for Carbon Capture and Storage
(SACCCS)
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Core Parties
Participants
coal
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Presentation layout: contents
• Definitions
• CCS
• Risk• Risk
• The risk management process.
• What will make CCS technology to work?
• Possible risks for a CCS project.
• The risk management work at SACCCS.
• Conclusion.
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What is CCS?(Source: CO2CRC 2009
http://www.co2crc.com.au/imagelibrary/index.html)
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The CCS process
• Capturing carbon dioxide from industrial emission
streams.
• Compressing it into a supercritical (liquid-like) state.• Compressing it into a supercritical (liquid-like) state.
• Transporting CO2 via pipeline to injection site.
• Injecting CO2 into geologic formation (oil and gas,
saline, other) for permanent storage.
• Stored CO2 increasingly stabilized over time,
depending on site-specific factors.
• Monitoring the storage site.
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CO2 Storage Workflow (Source: Schlumberger)
Site Selection Site Characterization (SCP) Field Design
Site PreparationSite Construction Injection
Pre-Operation
Phase
OperationMonitoring (M&V)• Operation
Pe
rfo
rma
nce
& R
isk
Ma
na
ge
me
nt
Syste
m (
PR
SM
)
Co
mm
un
ica
tio
n a
nd
Pu
blic
Acce
pta
nce
Permitting
Operation
Phase
Post-Injection
PhaseSite Retirement Programme
(SRP)
• Operation
• Verification
• Environmental
Pe
rfo
rma
nce
& R
isk
Ma
na
ge
me
nt
Syste
m (
PR
SM
)
Co
mm
un
ica
tio
n a
nd
Pu
blic
Acce
pta
nce
SE
VE
RIT
Y
-11L
-21S
-41 C
-31M
-51M C
- 22 L
- 41S
- 62 M
- 82C
- 1 02 M C
-33L
-63 S
-93M
- 1 23 C
- 1 53M C
-44L
- 55 L
-84S
-1 24 M
-1 64 C
-2 04 M C
- 1 05 S
- 1 55M
- 2 05C
- 2 55M C
- 1L i g h t
- 2
- 3
- 4
- 5
S e rio u s
M a j o r
C a ta s tro p h ic
M u l t i- C a ta s tro p h i c
321
Po
ssib
le
Unlik
ely
Impro
bab
le
5
Pro
bab
le
4
Lik
ely
L IK EL IH O O D
W h i te a rr o w i n d ic a te s d e c re a s in g r is k
P R E V E N TIO N
M I T IG A T IO N
C o n tr o l
M e a su r e s
R E D
B L U E
Y E LL O W
G R E E N
IN T O L E R A B L E : D o n o t t a k e th is r is k
U N D E S IR A B L E : D e m o n s t ra te A L A R P b e f o re p ro c e e d in g
A C C E P T A B L E : P ro ce e d c a re fu lly , w ith c o n t in u o u s im p ro v e m e n t
N E G L I G IB L E : S a fe t o p r o ce e d
-1 6 t o -1 0
- 9 t o -5
- 4 t o -2
-1
B LA C K N O N -O P ER AB L E : E va c ua t e th e zo n e a n d o r a re a/ co u nt r y-2 5 t o -2 0
Transfer of Liabilities
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Geological storage options for CO2 (Image courtesy of
the CO2CRC)
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What is a risk?(Crater caused by bolide impact, from USGS website)
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Earlier definition of a risk• Frank Knight [1] offered early and widely recognized definition of risk: “To preserve the
distinction…between the measurable uncertainty and an unmeasurable one we may use the term ‘risk’ to designate the former and the term ‘uncertainty’ for the latter”.
Risk is understood to require both uncertainty and exposure – possible consequences. Risk is understood to require both uncertainty and exposure – possible consequences. Glyn Holton[1] supplied a more general definition of risk that might apply to almost any action with the two essential components: exposure and uncertainty: “Risk…is exposure to a proposition of which one is uncertain.”
• Risk is partly in the eye of the beholder particularly when dealing in situations where there is balance between subjective elements and objective elements.
[1] Knight, Frank H. 1921.”Risk, Uncertainty, and Profit”, Hart, Schaffner, and Marx (NY) as quoted in
Holton, Glyn A. 2004. “Defining Risk”, Financial Analysis Journal, Vol. 60,No. 6 (Nov/Dec 2004)
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Definitions (1)
• Hazard: A state or situation which poses a level of threat to life,
health, property, or environment. (e.g. well Leakage) .
• Impact: The measure of quantifying adverse health, safety and
environmental consequences from a hazard. (i.e. Asphyxiationenvironmental consequences from a hazard. (i.e. Asphyxiation
from elevated CO2 concentration via leaking well).
• Risk: A state or situation of uncertainty where some of the
possibilities involve a loss, undesired event to affect health,
safety and environment.
• Risk = Probability of Hazard × Consequence of Hazard (impact).
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Definitions (2)
• Inherent risks- risks if nothing is done to mitigate them.
• Residual risks- risks after the mitigating actions are put in
place.place.
• Risk causes- causes of the risks.
• Preventative controls- measures that are put in place to
address the causes of the risks.
• Corrective controls- measures that are put in place after the
the mitigation actions to control the risks have failed, to
remedy the situation.
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Risk Management Process (1)
• Risk management is an attempt to anticipate and prevent or mitigate harms that may be avoidable:avoidable:
• Anticipate: Model the downside risk and put into place, in advance of adverse events, the controls needed to minimize risk;
• Prevent or Mitigate: Some types of harms can be prevented (with adequate margin of safety), others can be reduced with good forward planning.
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Risk Management Process (2)
• The essence of effective risk management can be summed up in three “simple” directives:
• 1.Foresight: plan (don’t wait for the disaster to • 1.Foresight: plan (don’t wait for the disaster to strike);
• 2.Precaution: insure or spend judiciously in advance;
• 3.Protect the Downside: whatever else you do, make sure you have limited the extent of the possible damage or losses.
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Risk Management Process (3) (Source-Sasol)
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Probability table for risks (Source- Sasol)
P1 P2 P3 P4 P5 P6 P7
QUALITATIVE
DESCRIPTORSUnforeseen Highly unlikely Very unlikely Low Possible Likely Almost Certain
DESCRIPTORS
PROBABILITY
INTERVALS0 - 1% 1 - 5% 5 - 10% 10 - 20% 20 - 50% 50 - 80% > 80%
Likelihood
Definitions
The event may
occur within the
next 20 years
The event may
occur once in 20
years
The event may
occur once in
every
10 - 20 years
The event may
occur once in
every
5 - 10 years
The event may
occur once in
every
2 - 5 years
The event is
expected to
occur within the
next
1 - 2 years
The event may
occur at least
once or is
already
occurring
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Impact table for risks (Source- Sasol)
NPV Earnings
or Capital
Repeating
Operational
Cost
Repeating
Revenue
Impact 7 > R500m
Overall project
schedule slips
>15%
Financial
Impact
(Rand)
Intellectual
PropertyEnvironment
Government
Relations
Reputation /
BrandSchedule Technical
Safety &
Health
Community &
Customers
DCF Capital Evaluation
Impact
Severity
Impact 6R100m -
R500m
Overall project
schedule slippage
10% - 15%
Impact 5 R10m - R100m
Overall project
schedule slippage
5% - 10%
Impact 4 R1m - R10m
Overall project
schedule slippage
< 5%
Impact 3R100 000 -
R1m-
Impact 2R10 000 -
R100 000-
Impact 1 <R10 000 -
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Table for ranking the risks (Source- Sasol)
l6Level 1Level 1Level 2Level 2Level 3Level 3Level 4
l7Level 1Level 1Level 1Level 2Level 3Level 3Level 4
l6Level 1Level 1Level 2Level 2Level 3Level 3Level 4
l7Level 1Level 1Level 1Level 2Level 3Level 3Level 4
P7P6P5P4P3P2P1
l1Level 6Level 6Level 6Level 6Level 6Level 6Level 6
l2Level 4Level 4Level 5Level 5Level 6Level 6Level 6
l3Level 3Level 3Level 4Level 4Level 5Level 5Level 6
l4Level 3Level 3Level 3Level 4Level 4Level 5Level 6
l5Level 2Level 2Level 2Level 3Level 3Level 4Level 5
P7P6P5P4P3P2P1
l1Level 6Level 6Level 6Level 6Level 6Level 6Level 6
l2Level 4Level 4Level 5Level 5Level 6Level 6Level 6
l3Level 3Level 3Level 4Level 4Level 5Level 5Level 6
l4Level 3Level 3Level 3Level 4Level 4Level 5Level 6
l5Level 2Level 2Level 2Level 3Level 3Level 4Level 5
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Diagram showing risks movements from inherent ranking to residual
ranking (Source-Sasol)
I7 > R 4500 m > $ 566 m > € 355 m
I6 R 4500 m $ 566 m € 355 m
I5 R 1500 m $ 189 m € 118 m
Functional Excellence Programme Residual Risk Profile- 22 July 2011
Completed
New
28
31 I5 R 1500 m $ 189 m € 118 m
I4 R 300 m $ 38 m € 24 m
I3 R 150 m $ 19 m € 12 m
I2 R 30 m $ 4 m € 2.3m
I1 R 3 m $ .4 m € .25 m
P1 P2 P3 P4 P5 P6 P7
Un-
foreseen
0 to 1%
The event
may occur
within the
next 20 years
Highly
Unlikely
1 to 5%
The event
may occur
once in
every 20 years
Very
unlikely
5 to 10%
The event
may occur
ones in
every 10 to 20
years
Low
10 to 20%
The event may
occur
once in every 5 to
10 years
Possible
20 to 50%
The event
may
occur once
every 2
to 5 years
Likely
50 to 80%
The event may
occur
within the next 1 to
2 years
Almost
certain
> 80%
The event
may occur at
least
once a year or is
already
occurring
RAND
Exchange
Rate
US Dollar
7.95
Euro
12.69
1
436
9 2227 3029
Existing
31
32
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Risk ranking
• Residual risks with ranking of level 1 to
level 3 have to be communicated to the level 3 have to be communicated to the
SACCCS board.
• Residual risks with ranking of level 4 and
below are communicated to the project
team and to the affected stakeholders.
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What will make CCS technology to work.
• Sufficient funding.
• Suitable storage site.
• Safe transportability of CO2.• Safe transportability of CO2.
• Performance and reliability of technology.
• Quality of risk management.
• Adequate regulation.
• Clear responsibility and liability.
• Stable climate regimes and incentive structures.
• Transparency and communication of risks.
• Proof of long term storage stability.
• Public acceptance of CCS.
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Possible risks for a CCS project
• Leakage.
• Natural catastrophes.
• Unintended environmental impact.
• Lack of risk awareness.
• Long term liability issues.
• The cost to mitigate the risks.
• The threat of loss of public acceptance.
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Example: Well integrity risk assessment as part of mitigation efforts to prevent leakage (Source: Schlumberger)
Risk Ranking &
Performance
Evaluation
Construction of
Leakage Scenario
Identification and
quantification of
failure mechanisms
Functional
Analysis
(from Damen et al, 2003)Knowledge
Data & ModelsUncertainties
Exhaustive inventory of features and
potential hazards
(from US Geological Survey)
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Impact of exposure to varying concentrations
of CO2
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Risk Management work at SACCCS -Work in
Progress.
• Risk assessment of SACCCS workplan is
currently being done.currently being done.
• Further risk management workshops for
storage and the test injection project are
planned.
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SACCCS Risk Management process- work in progress
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Conclusion
• There is large and growing body of CCS risk literature, protocols, guidelines, models.
• Literature suggests underground storage is • Literature suggests underground storage is viable and safe when coupled with comprehensive Risk Assessment (holistic) approach (IPCC 2005).
• Also, risk assessment is required to support the regulatory approval process for CCS projects.
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Source: SchlumbergerSource: Schlumberger
“All I’m saying is “All I’m saying is nownow is the time is the time
to develop the technology to develop the technology
to deflect an asteroid.”to deflect an asteroid.”
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Thank you.Thank you.
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Email: ronaldm@saneri.org.za
Phone: (010) 201 8108Phone: (010) 201 8108
Website: www.sacccs.org.za
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