Critical first steps for carbon capture and storage projects that reduce risk

Going back decades, CCS has roots in injecting carbon (CO2) for enhanced oil recovery (EOR). CCS is particularly effective for point-source heavy emitters of carbon dioxide as there are tax incentives and funding for undertaking projects with these technologies. However, there can be significant technical and financial risks in maturing, licensing, and start-up of these projects. Businesses must ensure that the investments are worthwhile and that preferred sites are good candidates for drilling and ultimate storage capacity of the carbon emissions.

To maximize the success case, it is critical to get reasonable understanding of site potential, storage capacity and economic viability using straight-forward modeling methods. CCS project modeling studies require only a modest investment and are relatively quick to complete. They provide important information and insight from verifying technical potential, storage capacity, and financial viability.

To minimize the risks, companies looking to take on CCS projects can take important first steps to ensure project feasibility.

Robust cost estimating and economics modeling, based on case history, allows clear distinction between subsurface costs, CO2 capture and transportation costs, and the project’s ability to pay royalties and returns to the operator. Cost estimate accuracy is enhanced by combining both deterministic and statistical estimating methods, which considers both the scope of project target CO2 volumes, well counts, and transportation distances as well as average statistical costs for materials and services for similar projects. Economics modeling shows that interest rates, inflation, and basically the time-value-of-money can have a significant impact on the CAPEX that must be raised for projects, relative to revenue streams from 45Q tax credits and selling of CO2 offset credits. The work also shows the importance of robust project design parameters and reliability for operation of viable CCS projects.

Doing a regional sub-surface characterization allows you to understand where the geology is best for storing CO2. These preliminary studies use pre-existing data from wells that have already been drilled in the region, along with preliminary 2D seismic data, when available, and other geologic regional data. Through this data, we can produce a rough geologic model which can be used to simulate how the reservoir will respond to the CO2 injection. We are also able to run different development scenarios to understand the range of possible outcomes for injection and to determine which scenario initially appears to inject CO2 at the best rate and with higher storage capacities. This modeling can then form the starting point for further detailed appraisal as additional data is gathered and evaluated.

In the past few years, the CCUS industry has developed several analytical methods to estimate CO2 storage capacity for deep saline aquifers. There are differences in the various industry-defined models, and our team has studied how the different analytical models compare to detailed numerical simulations. The work shows that analytical methods can be used with caution for scoping studies and is a good lower-cost alternative to understanding storage capacities. Initial studies using one of the analytical methods will have assurance that a site’s storage capacity would likely be fit-for-purpose. As projects are matured and more accurate storage capacity estimates are required for financial investment decisions, then analytical modeling can be supplemented by proper reservoir numerical simulations.

Without the above studies, there is more risk involved in undertaking CCS projects, such as the possible waste of time and money spent drilling wells that are suboptimal and don’t achieve the defined objectives. Sub-surface characterization, CO2 volume capacity estimating and economics modelling allow projects to move forward with more confidence

On the Alberta Carbon Grid project, we created a large regional model for the sub-surface to determine options for the project site location and potential storage capacity. This was undertaken in approximately three months’ time and helped to narrow down the site selection and advance to the next phase of the project.

Carbon capture and storage projects are an important play in decarbonizing the energy sector. Carbon capture can be implemented for many major industrial carbon emitters such as refineries, gas processing plants, cement or steel factories and more. Worldwide, the estimated underground storage capacity is large enough for us to inject significant volumes of CO2 for many, many years to come as we explore other decarbonization techniques.

Join us at the CCUS conference, sponsored by Society of Petroleum Engineers, American Association of Petroleum Geologists, and Society of Exploration Geophysicists, in Houston, Texas, to learn more about subsurface characterizations, storage capacity modeling, and economics at our presentations.

 

Subsurface Characterization of the Alberta Carbon Grid
Presentation by Michelle Pittenger
Tuesday, April 25 @ 2:00

CCS Project Economics Case History Quantifies Financial Drivers, Risks
Presentation by Mike Sumrow
Wednesday April 26 @ 9:25

Comparison of Different CO2 Storage Capacity Calculation Methods in Alberta Industrial Heartland Area
Poster session by Erlinda Chew
Thursday, April 27 @ 12:00 to 1:55