Tamar Hallerman
GHG Monitor
8/30/13
Flexibility and the effective management of uncertainty are the biggest lessons learned after 10 years of CO2 injection and monitoring operations, according to several researchers involved with the Department of Energy’s Regional Carbon Sequestration Partnerships. In interviews with GHG Monitor and in remarks at a National Energy Technology Laboratory-sponsored conference in Pittsburgh last week, researchers involved with the Department’s seven regional partnerships said that having multiple plans for each phase of their projects has helped them roll with the punches over their first decade of operations. “We’ve learned that you have to plan for several different scenarios—have a plan A, a plan B and a Plan C ready—and that as you move forward you need to be able to pivot based on what you need to get accomplished and the realities on the ground,” NETL Carbon Storage Technology Manager Traci Rodesta, who oversees much of the lab’s regional partnership work, said in an interview. “That’s all we can do.”
Those changing realities on the ground—from overarching political shifts and permitting changes to public acceptance challenges and technical and geomechanical roadblocks—have forced the managers of regional partnerships to adopt a flexible approach, partnership leaders said. “If we’ve learned anything, it’s that you can’t underestimate the commitment necessary to put a project in place,” the Midwest Geological Sequestration Consortium’s Rob Finley said. “Significant coordination is required to effectively manage the ongoing issues and details that crop up.”
Battelle’s Neeraj Gupta, who is overseeing the Midwest Regional Carbon Sequestration Partnership’s injection work, recounted how his team has had to change its plans twice for where it would site its CO2 injection work due first to public acceptance roadblocks in Ohio and then regulatory challenges related to sequestration work in Michigan. Instead, the partnership retooled its large-scale injection project to piggyback off enhanced oil recovery operations in Michigan, work that kicked off earlier this summer. “Having those A, B and C plans really helped us in the long term,” Gupta said.
Class VI Regs Caused Uncertainty
Researchers particularly highlighted the impact of the Environmental Protection Agency’s new Class VI regulations on their projects. When the new permitting class of injection well was finalized by the agency in late 2010, several regional partnerships said they were forced to retool their large-scale injection projects due to the more stringent liability requirements under Class VI. The University of Utah’s Brian McPherson, who oversees the Southwest Regional Partnership on Carbon Sequestration, said his project’s industry field operator was not willing to take on the additional risk of a Class VI permit, and so the partnership was forced to re-scope as an enhanced oil recovery-related project in order to receive a less stringent Class II permit from EPA. “We weren’t going to get a Class VI permit with our particular project operator, so we had to make some major changes,” McPherson said in an interview. The Southeast Regional Carbon Sequestration Partnership also got caught up in a similar permitting debate tied to its Citronelle injection project and lobbied hard for a Class V experimental permit from the state in order to move forward, a request that was eventually granted
Others, meanwhile, decided to move ahead under a Class VI framework. Lee Spangler said his Big Sky Carbon Sequestration Partnership is pulling together information to pursue the permit class for its Kevin Dome large-scale injection project, but that the process has cost the partnership more money than it had initially planned. “We designed this project expecting Class V, but then the Class VI rules came into place,” Spangler said. “With these kinds of projects, there’s a fixed budget and you can’t take new costs out of operations or infrastructure, because then you don’t have a project. So whenever new costs arise, the science gets cut. I don’t mean to imply that we don’t expect to be unregulated, but we are going to incur additional costs through Class VI.”
Regional Partnerships Face Sizable Budget Cuts
Project developers said they are taking a similar risk management approach when planning for the partnerships’ fiscal future, which appears to be facing mounting uncertainties. The Obama Administration’s Fiscal Year 2014 budget request for DOE calls for a nearly 50 percent cut for the regional partnerships compared to FY 2012 levels, from $80.9 million to $40.5 million. The FY 2014 Energy-Water appropriations bill that passed the House earlier this summer also maintains the 50 percent budget cuts for the partnerships, even though it increases money for the carbon storage program overall. The Senate has yet to vote on its version of the spending bill and it is unclear where the program’s coffers will stand later in the year.
McPherson said he was not aware of the proposed budget but said that, if implemented, the cuts could have a big impact on a project like the Southwest Regional Partnership’s, which is planning on ramping up large-scale, Phase III injection work in Texas in the coming months. “If that’s the case, we would definitely need to reduce scope, and we wouldn’t accomplish nearly as much as we’d want to. If we’re cut on the order of 50 percent, I think we’ll end up with a lot of information and not have enough support to finish analyzing it. We’ll be all dressed up with nowhere to go,” he said.
Rodesta said the fiscal uncertainties have not shifted NETL’s approach to managing the projects. “Politics change; they ebb and flow. We’re affected by [politics] based upon budgets and things like that, but first and foremost we’re a research organization and what we’re trying to do is develop those technologies that are going to be enabling us to move CCS into commercial deployment as part of the timeframes we have set under our program,” she said. “We know that no matter what happens to our budgets, at some point in time CCS is going to go commercial and we have to be ready. Do we have to sometimes do more with less? Of course. Will things change in the future? We don’t know, but we have a plan and we base our research plan on what we need to do to make sure that we have those technologies ready.”
Some regional partnership officials said they are approaching the budget challenges in the same way they have weathered the political and regulatory changes of the past decade. “If you deal with the subsurface, you’re used to dealing with uncertainty. This is just uncertainty in different parts of the project, and we’ll deal with it in the same way,” Spangler said.
