Technical risk assessment and CCS

Transcription

1 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)

2 Core Parties Participants coal

3 Definitions CCS Risk Presentation layout: contents The risk management process. What will make CCS technology to work? Possible risks for a CCS project. The risk management work at SACCCS. Conclusion.

4 What is CCS?(Source: CO2CRC

5 The CCS process Capturing carbon dioxide from industrial emission streams. 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.

6 -2 5 to to to -5-4 to -2-1 P R E V E N TIO N L i g h t S e rio u s M a j o r C a ta s tro p h ic M u l ti- C a ta s tro p h i c B LA C K NO N -O P ER AB LE : E vac uate the zone and or area/ country R E D Y E LL O W G R E E N B L U E M I TIG A TIO N C o n tr o l M e a su r e s IN T O LER A BLE : UN D ES IR ABL E : AC C EPT AB LE : NE G LIG IB LE : 1-1 1L -2 1S -3 1M -4 1 C -5 1M C D o not take this risk D em onstrate AL AR P before p roceeding P roce ed care fully, w ith continuous im provem ent S afe to pr oce ed L - 4 1S M - 8 2C M C 3 L IK EL IH O O D -3 3L -6 3 S -9 3M C M C W hite arrow indicates decreasing risk 4-4 4L -8 4S M C M C L S M C M C Hosted by CO 2 Storage Workflow (Source: Schlumberger) Pre-Operation Phase Site Selection Site Characterization (SCP) Field Design Permitting Operation Phase Post-Injection Phase Transfer of Liabilities Site Construction Site Retirement Programme (SRP) Site Preparation Injection Environmental Monitoring (M&V) Operation Verification Performance & Risk Management System (PRSM) Communication and Public Acceptance Improbable Unlikely Possible Likely Probable SEVERITY

7 Geological storage options for CO2 (Image courtesy of the CO2CRC)

8 What is a risk? (Crater caused by bolide impact, from USGS website)

9 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. 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 Risk, Uncertainty, and Profit, Hart, Schaffner, and Marx (NY) as quoted in Holton, Glyn A Defining Risk, Financial Analysis Journal, Vol. 60,No. 6 (Nov/Dec 2004)

10 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. 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).

11 Definitions (2) Inherent risks- risks if nothing is done to mitigate them. Residual risks-risks after the mitigating actions are put in 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 themitigation actions to control the risks have failed, to remedy the situation.

12 Risk Management Process (1) Risk management is an attempt to anticipate and prevent or mitigate harms that may be 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.

13 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 strike); 2.Precaution: insure or spend judiciously in advance; 3.Protectthe Downside: whatever else you do, make sure you have limited the extent of the possible damage or losses.

14 Risk Management Process (3) (Source-Sasol)

15 Probability table for risks (Source- Sasol) P1 P2 P3 P4 P5 P6 P7 QUALITATIVE DESCRIPTORS Unforeseen Highly unlikely Very unlikely Low Possible Likely Almost Certain PROBABILITY INTERVALS 0-1% 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 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

16 Impact table for risks (Source- Sasol) Impact Severity Financial Impact (Rand) NPV Earnings or Capital DCF Capital Evaluation Repeating Operational Cost Repeating Revenue Intellectual Property Schedule Technical Safety & Health Community & Customers Environment Government Relations Reputation / Brand Impact 7 > R500m Overall project schedule slips >15% Impact 6 R100m - 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 3 R R1m - Impact 2 R R Impact 1 <R

17 Table for ranking the risks (Source- Sasol) Level 4 Level 3 Level 3 Level 2 Level 1 Level 1 Level 1 l7 Level 4 Level 3 Level 3 Level 2 Level 2 Level 1 Level 1 l6 Level 5 Level 4 Level 3 Level 3 Level 2 Level 2 Level 2 l5 Level 6 Level 5 Level 4 Level 4 Level 3 Level 3 Level 3 l4 Level 6 Level 5 Level 5 Level 4 Level 4 Level 3 Level 3 l3 Level 6 Level 6 Level 6 Level 5 Level 5 Level 4 Level 4 l2 Level 6 Level 6 Level 6 Level 6 Level 6 Level 6 Level 6 l1 P1 P2 P3 P4 P5 P6 P7

18 Diagram showing risks movements from inherent ranking to residual ranking (Source-Sasol) Functional Excellence Programme Residual Risk Profile- 22 July 2011 I7 > R 4500 m > $ 566 m > 355 m I6 R 4500 m $ 566 m 355 m Completed New Existing 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 Unforeseen 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

19 Risk ranking Residual risks with ranking of level 1 to 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.

20 What will make CCS technology to work. Sufficient funding. Suitable storage site. 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.

21 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.

22 Example: Well integrity risk assessment as part of mitigation efforts to prevent leakage (Source: Schlumberger) Functional Analysis Construction of Leakage Scenario Identification and quantification of failure mechanisms Risk Ranking & Performance Evaluation (from US Geological Survey) Exhaustive inventory of features and potential hazards (from Damen et al, 2003) Knowledge Data & Models Uncertainties

23 Impact of exposure to varying concentrations of CO2

24 Risk Management work at SACCCS -Work in Progress. Risk assessment of SACCCS workplanis currently being done. Further risk management workshops for storage and the test injection project are planned.

25 SACCCS Risk Management process- work in progress

26 Conclusion There is large and growing body of CCS risk literature, protocols, guidelines, models. 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.

27 Source: Schlumberger All I m saying is now is the time to develop the technology to deflect an asteroid.

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