A staged approach helps identify and mitigate the subsurface risks that can impact a SCS project. Most importantly, this approach incrementally exposes capital as the project evolves so we can make good decisions about whether to continue investing. In general terms, the staged approach can be summarized in a Decision Tree (shown in the Figure below). Note that the tree contains four stages:
- An Identification Stage that evaluates whether the discovered volume is significant enough to warrant continued project evaluation. It may not be necessary to drill a well for this purpose.
- An Appraisal Stage that drills at least one well to determine whether CO2 can be injected at a sufficient rate to be commercially attractive.
- An Injection Stage that drills additional wells (if needed) to inject CO2 and ensures that the reservoir volume and connectivity is sufficient to store the contracted CO2 volume.
- A Monitoring Stage that provides confidence that the injected CO2 is staying where intended without any significant leakage outside of the defined storage complex, induced seismicity, or migration outside the boundary of the project area.
Our experience is that there will always be a desire to shorten or eliminate some stages. This may be possible if there is plenty of good quality subsurface data and analogs, but this decision cannot be taken lightly. Prematurely removing stages (and their stage thresholds) increases the risk of squandering large sums on failed projects.
Careful consideration of the Value of Information (VOI) is also required throughout the process. Information adds value if it affects a decision. Some of the injection projects discussed in previous postings clearly would have benefitted from a VOI exercise. For example, a thorough front-end risk assessment of the Castor project would have revealed the lack of injectivity data and the risk of induced seismicity. This could have prompted an injectivity test, revealing seismicity and avoiding the needless construction of facilities and infrastructure.
For any given project, the staged approach can be modified and coupled with a fit-for-purpose risk assessment workflow. These should be modified as the project proceeds, preferably as deliverables from an assurance process. For advice on how to implement such a process, please contact us at Rose Subsurface Assessment. We manage a Risk Coordinator’s Network consisting of 30+ companies focused on assurance best practices.
