quest carbon capture & storage project project overview
TRANSCRIPT
Copyright SHELL CANADA ENERGY 1
Use this area for cover image
(Maximum height 6.5cm & width 8cm)
QUEST Carbon Capture & Storage Project Project Overview and Regulatory Process
International Energy Agency CCS Regulatory Network November 8, 2012
J.P. Jepp- Regulatory Policy Advisor- Shell Canada
2
Quest- Project Overview
Capture and Compression
Capture at Shell Scotford Upgrader- amines
CO2 source 3 x HMUs (SMR technology)
Up to 1.2 Mtpa CO2 ; CO2 > 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 2012- Regulatory Approvals
Sept 2012- Final Investment Decision!!
Quest- Project Overview
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)
CO2 Disposal Permit (ERCB- Directive 65)
Environmental Assessment (Alberta Environment)
Environmental Impact Assessment (Environment Canada)
MMV Plan / Closure Plan (Alberta Energy)
Closure Certificate (Alberta Energy)
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 CO2 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
5
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 2011
Regulatory Challenges- Tenure
6
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
Regulatory Challenges- CO2 Disposal Approval
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
Well
License Drill
Injection
Permit
Well
Licenses Drill
Injection
Permit
Amended
Injection
Permit
(scheme)
Current Requirements
Shell Proposal
7
Existing requirements specific to sour
gas and HVP lines- no requirement for
site-specific ERP
Requirement only to include specifics of
CO2 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 CO2
(i.e. dispersion modeling) when
establishing the required distances
RFA- Recommendations for Emergency
Planning Zone requirements
Regulatory Challenges- Emergency Response
8
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
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 CO2 dispersion
Regulatory Challenges- Consultation/Notification
1.6 km
1.6 km
e.g. Mineral Notification
D56 Requirement
- 1.6 km radius from section
hosting well (3x3 grid)
Shell Quest
- Maximal radius of
CO2 plume
- Penetrations of
target zone within
AOI
9
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
Regulatory Challenges- Handover Criteria
10
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 CO2 credits if loss of CO2 from
container (i.e. climate liability)
RFA- Recommendations that
responsibilities be amended to include
liability for climate
Regulatory Challenges- Liability
11
After CO2 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
Regulatory Challenges- Post Closure Stewardship Fund
12