Le­gal de­tail out­weighs science of stor­age

The Weekend Australian - Review - - Clean Energy - Sarah Belfield

TECH­NOL­OGY isn’t ev­ery­thing when it comes to es­tab­lish­ing a CO stor­age in­dus­try. Car­bon diox­ide stor­age is tech­no­log­i­cally fea­si­ble, with oil and gas reser­voir rocks and deep saline aquifers the cur­rent favourites. But some non- sci­en­tific hur­dles must be crossed be­fore a fledg­ling CO - stor­age in­dus­try can launch suc­cess­fully.

Mike Haines, a project man­ager for the UK- based IEA Green­house Gas R& D Pro­gram, says al­low­ing mul­ti­ple par­ties to use the same CO stor­age re­source may cre­ate headaches if per­mits and agree­ments fail to spell out ex­pec­ta­tions.

One anal­ogy Haines draws on is the waste dis­posal sec­tor. At shared dump sites com­pa­nies’ rep­u­ta­tions are in­flu­enced by fel­low op­er­a­tors, which may not al­ways meet re­quired op­er­a­tional stan­dards. ‘‘ One per­son be­ing a cow­boy could spoil the dump for a lot of more re­spon­si­ble peo­ple,’’ he said.

An­other multi- user is­sue is the eq­ui­table di­vi­sion of a CO stor­age re­source.

Haines said lessons might be gleaned from the pe­tro­leum in­dus­try. It uses uni­ti­sa­tion agree­ments to ap­por­tion own­er­ship of hy­dro­car­bon re­serves that strad­dle ten­e­ments held by dif­fer­ent own­ers.

And when mul­ti­ple users want to use the same re­source for dif­fer­ent pur­poses, dif­fer­ing pri­or­i­ties of­ten mean more fric­tion, ac­cord­ing to Haines. So to bal­ance the pe­tro­leum and CO stor­age in­ter­ests op­er­at­ing in the same lo­ca­tion, per­mits need to clearly de­fine own­er­ship and op­er­a­tional re­spon­si­bil­i­ties.

For in­stance, if an oil reser­voir rested deeper than a saline aquifer stor­ing CO , and an oil well breached the aquifer, the ques­tion arises as to which op­er­a­tor would be re­spon­si­ble for any leak­ages of oil into the aquifer, or of CO into the well.

‘‘ You might get into a sit­u­a­tion where no­body [ thought they were] re­spon­si­ble, or they both thought they were re­spon­si­ble,’’ he said.

Ex­plo­ration rights may be an­other vexed topic. Haines sus­pects pe­tro­leum ex­plor­ers who win the acreage bid­ding process might not ap­pre­ci­ate the pres­ence of a CO - stor­age ex­plorer on their turf — es­pe­cially if the firm gath­er­ing data for po­ten­tial stor­age sites be­longs to an­other pe­tro­leum com­pany. Ex­plo­ration data is com­mer­cially sen­si­tive; it is used in ne­go­ti­a­tions with po­ten­tial jointven­ture part­ners and pro­vides clues about the prospec­tiv­ity of neigh­bour­ing acreage.

The De­part­ment of In­dus­try, Tourism and Re­sources says Aus­tralian leg­is­la­tion for off­shore ge­o­log­i­cal stor­age of CO is cur­rently be­ing drafted and en­tails amend­ing the Off­shore Pe­tro­leum Act 2006. De­tailed reg­u­la­tions are also be­ing de­vel­oped and a reg­u­la­tory body for car­bon stor­age will be con­sid­ered.

Fed­eral Re­sources Min­is­ter Ian Macfar­lane says man­ag­ing the in­ter­ac­tions be­tween the pe­tro­leum and CO stor­age in­dus­tries will be a key fo­cus of the leg­is­la­tion. It will aim to pro­tect the rights of ex­ist­ing pe­tro­leum pro­duc­tion lease hold­ers by hav­ing CO stor­age com­pa­nies demon­strate there would be no ad­verse im­pacts on pe­tro­leum pro­duc­tion. How­ever, the Min­is­ter says, CO stor­age leases would most likely be granted in ar­eas de­void of cur­rent pe­tro­leum pro­duc­tion — to min­imise any po­ten­tial con­flict be­tween pro­duc­tion and CO stor­age per­mit hold­ers.

Pas­sage of the amend­ments would see an acreage re­lease pro­gram sim­i­lar to that used in the pe­tro­leum in­dus­try. Com­pa­nies would bid for acreage on the ba­sis of work pro­grams that proved sites pro­vided safe and se­cure CO stor­age.

The amend­ments are ex­pected to come into force in the sec­ond half of this year, once state and ter­ri­tory gov­ern­ments have in­tro­duced mir­ror leg­is­la­tion for their ju­ris­dic­tions.



It will see the first CO - re­lated acreage re­lease in Com­mon­wealth wa­ters take place in 2008.

Along­side hav­ing to con­tem­plate new leg­is­la­tion and reg­u­la­tion, na­tions have found they’ve been speak­ing dif­fer­ent lan­guages when as­sess­ing and de­scrib­ing the ca­pac­ity of po­ten­tial CO host struc­tures.

The prob­lem is se­ri­ous enough that the Car­bon Se­ques­tra­tion Lead­er­ship Fo­rum ( CSLF) has moved to de­velop a sin­gle set of in­ter­na­tional stan­dards. The CSLF is an in­ter­na­tional ini­tia­tive work­ing to im­prove CO cap­ture and stor­age tech­nolo­gies and their de­ploy­ment. Aus­tralia is a mem­ber.

Ac­cord­ing to the CSLF’s Ste­fan Bachu, based in Canada, the goal of set­ting stan­dards was prompted by work he and his col­leagues were asked to do for a chap­ter of the In­ter­gov­ern­men­tal Panel on Cli­mate Change’s Spe­cial Re­port on CO Cap­ture and Stor­age.

‘‘ The co- or­di­na­tors of the chap­ter wanted us to come up with some global num­bers for [ CO stor­age] ca­pac­ity,’’ Bachu said.

‘‘ Af­ter we looked at the data and the ma­te­rial pub­lished we de­clined to do so, be­cause we re­alised that ev­ery­thing that was pub­lished up to that point was based on var­i­ous method­olo­gies, in some cases not very well ex­plained, var­i­ous as­sump­tions, and dif­fer­ent data — in many cases it was not very clear how it was ar­rived at.’’

‘‘ It was like [ com­par­ing] ap­ples and or­anges and ba­nanas and peaches and ev­ery­thing un­der the sun.’’

The CSLF is now work­ing with other na­tional groups to en­sure that a sin­gle, har­monised set of stor­age es­ti­ma­tion meth­ods will be used around the world.

One such group is the US De­part­ment of En­ergy’s Re­gional Car­bon Se­ques­tra­tion Part­ner­ship Pro­gram, ac­cord­ing to Bachu. The CSLF wants to pre­vent two sep­a­rate es­ti­ma­tion sys­tems from co- ex­ist­ing, one in the US and an­other in the rest of the world. An ex­am­ple is to­day’s mea­sure­ment sys­tem where the US used im­pe­rial units while met­ric units were used else­where.

Aus­tralia’s own ef­forts at en­sur­ing CO stor­age moves for­ward in­clude the Co­op­er­a­tive Re­search Cen­tre for Green­house Gas Tech­nol­ogy’s Ot­way Basin pilot project in Vic­to­ria.

The re­search cen­tre, also called the CO CRC, has gar­nered at­ten­tion for its tech­ni­cal aims. For in­stance, its CO stor­age mon­i­tor­ing work is the most com­pre­hen­sive of any done so far.

But the Ot­way project has also been blaz­ing a new trail within Vic­to­ria’s state gov­ern­ment ap­provals and reg­u­la­tory pro­cesses.

CO CRC chief ex­ec­u­tive Peter Cook said it took a con­sid­er­able ef­fort to iden­tify the per­mit­ting process the project re­quired. This was be­cause ac­tiv­i­ties fell within the ju­ris­dic­tions of wa­ter, en­vi­ron­men­tal pro­tec­tion, plan­ning and pe­tro­leum leg­is­la­tion.

Dur­ing that phase le­gal ad­vice was sought on many oc­ca­sions be­cause of reg­u­la­tory un­cer­tain­ties. It was a sig­nif­i­cant fi­nan­cial drain for the project.

Cook says that given the chance to do things again, they would al­low more time to ad­dress is­sues and make larger bud­get al­lo­ca­tions for le­gal ad­vice. How­ever, given a new process was be­ing de­vel­oped it was hard to say what they might have done dif­fer­ently. ‘‘ All we can say is that it would have been much harder with­out the ex­cel­lent sup­port from the gov­ern­ment de­part­ments,’’ he said.

Cook says those in­volved with the project were also grat­i­fied by the high level of sup­port from the lo­cal com­mu­nity.

Blaz­ing a new trail: Work at Ot­way project

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