Legal detail outweighs science of storage
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