Risk Considerations for Geologic CO2 Storage

Risk Management in CO2Geologic Storage Projects

RECS 2016, Birmingham, AL

Sources and Acknowledgements CSA z741-2012

ISO CCS standard to be issued 2017-2018ISO 31000, Project Management Institute, NIST, ANSI, IEAGHG

National Energy Technology Lab, RCSP program:BSCSP (Kevin Dome), Westcarb (Kimberlina),MGSC (Illinois Basin Decatur Project), SWP (Farnsworth) ...

PurGen (NJ), Pioneer (AB), Aquistore (SK), Cemex (TX), Big Springs (NE), CarbonNET (VIC, AU) ...

Schlumberger Carbon Services

TechPlace, 74 Orion St.Brunswick, ME [email protected] (508)395-2730 GHG Underground

ISO CCS Standard (~2017)

“Geological Storage”: One of 3-5 Standards to be issued in 2017-2018.

Modules1. Risk Management is ...

2. Information, Gaps, and Uncertainties

3. Risk Targets and Risk Tolerance> Defining risk targets

4. Severity and Likelihood> Defining S&L scales

5. Risk Elements: Features, Events, and Processes> Collecting FEPs and Scenarios

6. Expertise> Expertise self-evaluation

7. Workshop: Risk Evaluation

8. Risk Treatment

Definitions of Risk1. The effect of uncertainty upon objectives

2. The probability of a loss or drop in value

3. Exposure to the possibility of loss, injury, or other adverse or unwelcome circumstance; a chance or situation involving such a possibility

4. The probability or threat of quantifiable damage, injury, liability, loss, or any other negative occurrence that is caused by external or internal vulnerabilities

5. An uncertain event or condition that, if it occurs, has an effect on at least one project objective

6. The product of the consequence and probability of a hazardous event or phenomenon

7.

Additional Factors

RISK = Severity X Likelihood; R = S*LRISK = Consequences X Probability; R = C*P

Additional factors sometimes used:R = S*L*X

*Aleatory vs. Epistemic uncertainty: Randomness/unknowability vs. Lack of knowledge

X = f( ... )Uncertainty*

Controllability or TreatabilitySurprise vs. Anticipatable

Horror factor / Shock Value / DirenessVoluntariness

Risk Management for a project: three questions(1) How much don’t we know?

(2) How badly could what we don’t know hurt?

(3) What are we going to do about it?

How much don’t we know?

https://www.quintessa.org/co2fepdb/v2.0.0/

FEPs – Features, Events, and Processes:

Categories of things we need to know about a proposed CCS project.

To the extent we don’t know about these things, there’s risk.

181 FEPs for CCS!

This description is a FEP – not a This description is a FEP – not a Scenario – because it is not a

chain of events with impact(s). More on FEPs vs Scenarios later.

Uncertainties Create Risks

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1. Project’s physical environment> Tornadoes, fires, and floods here? What are we drilling into?

2. “Baseline” physical states of the systems we do plan to affect> Enough porosity? Nice thick caprock? Pressures and stresses OK?

3. “Baseline” physical states of the systems we do not plan to affect> What depths have drinkable groundwater? What’s their chemistry now?

4. Changes in physical states> Can we track the injected CO2? What else will change, and can we measure it?

5. Financing and budget> Can we convince investors; can we prove storage? Can we do it under budget?

6. Project’s social license to operate> The opinions of the project’s neighbors and other stakeholders matter.

181 FEPs, ∞ Uncertainties ...... are we done?

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HAVE WE IDENTIFIED

ALLTHE RISKS?

HAVE WE IDENTIFIED

ALLTHE RISKS?

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The Fuzzy Universe of Risk

What can our project affect?What can our project be affected by?Where in the world do we look for risks?How do we know when we’ve looked enough?

What in the world could “All The Risk” be?How do we say what pieces of “All” to look at?

Is “All” greater than the sum of the pieces, or less?

Obvious graphic metaphor

a) Project Phases or Scope Elements b) Professional Expertise Areas c) Risk Targets / Project Values /

Elements of Concern d) Subject Areas (FEPs) e) Scenarios f) Rumsfeldianistically

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Ways to Subdivide the Universe of Risk

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Rumsfeldian Epignostic Quadrantology

Known Knowns

Unknown Unknowns

Unknown Knowns

Known Unknowns




4. Severity and Likelihood > Defining S&L scales




8. Risk Treatment

Information sharing on a real project whose risks we will evaluate Or we construct a hypothetical project.

Notes will be a useful reference later.

~10 minutes.




4. Severity and Likelihood > Defining S&L scales




8. Risk Treatment

Risk Targets – Project Values –Elements of ConcernCanadian Standards Association (CSA) z741-12

Appropriate elements of concern shall be identified by the project operator for each project and [shall] include human health and safety, the environment, and system performance (e.g., injectivity, capacity, containment, and service reliability).

The elements of concern should include cost, schedule, and reputation and may include industry stewardship, project financing, monitoring capacity, licensing and regulatory approval, research objectives, and public support.

What values are at risk?

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Project Value Goal

ProjectManagement Plan and execute within budget and on schedule.

Safety & Health No one’s health impaired by the project, on or off site.

Environment No adverse environmental impacts.

CO2 Storage Inject and retain a commercial-scale mass of CO2.

Progress toward closure

Through monitoring and modeling, track injection progress and effects and progressively develop confidence in permanent site stability.

Reputation The participating organizations are viewed positively by the public as a result of their roles in the project.

Defining Risk Tolerance:The point is to spur action.

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Risk evaluation criteria distinguish risks as acceptable, tolerable, or unacceptable.

These distinctions can be based on a combination of internal or external requirements or expectations, explicit policy statements, and regulatory requirements.

Risks are reduced by implementing risk controls. Before the project reaches a stage where the risk scenario can occur,

risks previously determined to be unacceptable must be re-evaluated as acceptable or tolerable.

Risk Tolerance “heat maps” 24SEVER

ITY

-11L

-21S

-41C

-31M

-51MC

-22L

-41S

-62M

-82C

-102MC

-33L

-63S

-93M

-123C

-153MC

-44L

-55L

-84S

-124M

-164C

-204MC

-105S

-155M

-205C

-255MC

-1Light

-2

-3

-4

-5

Serious

Major

Catastrophic

Multi-Catastrophic

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Possible

Unlikely

Improbable

5

Probable

4

Likely

LIKELIHOOD

White arrow indicates decreasing risk

PREVENTION

MITIGATION

ControlMeasures

RED

BLUE

YELLOWGREEN

INTOLERABLE: Do not take this risk

UNDESIRABLE: Demonstrate ALARP before proceeding

ACCEPTABLE: Proceed carefully, with continuous improvement

NEGLIGIBLE: Safe to proceed

-16 to -10

-9 to -5

-4 to -2

-1

BLACK NON-OPERABLE: Evacuate the zone and or area/country-25 to -20

Schlumberger

Scott McKay, AICPA

NPPD








8. Risk Treatment

Severity ScaleScales of potential negative impact to project values from project activities

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Scales of potential negative impact to project valuesProject Value -1 -2 -3 -4 -5

ProjectManagement

5% Impact on Annual Budget; ~1 Day

Unplanned Operations Downtime

10% Impact on Annual Budget; 3 Days

Unplanned Downtime; 2 Month Injection

Delay

40% Impact on Annual Budget; 2 Weeks


Delay

75% Impact on Annual Budget; 1 Month


Delay

>125% Impact on Annual Budget; 1

Season Unplanned Downtime; 18 Month

Injection Delay

Safety & Health Minor Injury or Illness, First Aid

Temp. Disability, Hospital to 1 day, Lost

Days 1-100

Perm. Disability, Lost Days >100, Intensive

Care >1 dayFatality Multi-Fatality

EnvironmentMinor Temporary Impact Limited to Project Worksite

Significant Temporary Impact On or Near Project Worksite

Significant Long-Term Impact On or Near Project Worksite

Significant Long-Term Impact upon 1/4 sq mi

Major Long-Term Impact upon 1 sq mi

Reservoir Characterization

Minor Loss of Core, 1 Log Partially Fails, 1

Poor Test, Minor Seismic Coverage Gap

1 Failed Core Run, Log, or Test; 1 Dataset Unrepresentative of

Reservoir

Significant Failure in 1 of Coring, Logging,

Testing, Representativeness

Significant Failure in 2 Characterization

Programs; Much Data Questionably

Representative

Very Little Decision Support Gained from

Characterization

Monitoring

Pre-drill modeling provides only weak

guidance for monitoring.

Sparsity of pre-injection data impairs

seeing injection change.

Poor agreement between simulations

and monitoring results.

Monitoring results leave major doubt

about fate of injected CO2.

Injection permit renewal denied due to uncertainty about CO2

fate.

Prove theBuffering Concept

(*assuming flow-rate demand for CO2)

CO2 flow short 5% of demand.




After years of injection, little salable

CO2 flow or no ops learning.

(a specific project)

Ranking Factor Severity of Negative Impact (S)

5 Catastrophic Multiple fatalities. Damages exceeding $100M. Project shut down.

4 Serious One fatality. Damages $10M-$100M. Project lost time greater than 1 year.

3 SignificantInjury causing permanent disability, Damages exceeding $1M to $10M. Project lost time greater than 1 month. Permit suspension.

Area evacuation.

2 Moderate Injury causing temporary disability. Damages $100k to $1M. Project lost time greater than 1 week. Regulatory notice.

1 Light Minor injury or illness. Damages less than $100k. Project lost time less than 1 week.

Severity ScaleScales of potential negative impact to project values from project activities

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(Project X)

Severity: Upper Bound & Best Guess (Sub, Sbg)

FEP Group Gp ID Risk area (FEP)Potential scenarios and failure modes

(examples of things that could go wrong, be harmed, or be sources of harm)

Sub SbgL ofSbg

RISK = Sbg * L

Example 0 Meteorites Meteorite or falling space debris lands inside project footprint area. 5 2 1 2

Neighbors, stakeholders, permitting A01 Permits, Obtaining Project cannot obtain new permits; delay occurs. 0

Neighbors, stakeholders, permitting A02 Social and institutional developments

Change in zoning laws, land use. environmental legislation, demographics or loss of public records

needed by project0

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Why both?

Heuristics. Rules of Thumb. Cognitive anchoring. So that we separate our images of “worst-case scenarios” from our reasonable judgments of what’s more likely to happen.

See work by Tversky, Slovik, Kahneman (Thinking Fast and Slow)... and especially Nicholas Nassim Taleb (The Black Swan).

Heuristics and Cognitive PitfallsHeuristics: Ways to make decisions under uncertainty; rules of thumb

Anchoring (The first-stated value influences later choices, even illogically)

Availability (Personal experience outweighs judgment of a general situation)

Bandwagon (Others’ judgments are overvalued as information)

Simulation (An event seems more likely if it is easier to understand or conceive)

Confirmation Bias (New information is filtered to support existing ideas and models)

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REPRESENTATIVENESSJudgments based on discrete characteristics of the present situation

... that can be compared among many similar situations ... whose outcomes are known.

Good Anchoring

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We need to know which way is upstream.So there’s a proper order:

1. Sub2. Sbg3. Lbg

Likelihood Scale

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• Design, Construction, Operations, Post-Operations Monitoring (Closure) Phases• Greater than 90% chance is beyond the realm of “risk” – just call it a “fact”!

Likelihood of negative impact during the project

TERMS Very Unlikely Unlikely Medium

Likelihood Likely Very Likely

PROBABILITIES <=1% ~3% ~10% ~30% >=90%

CATEGORICAL VALUES 1 2 3 4 5

(Project X)

Notice the roughly exponential expansion. This mimics how we feel quantitative distinctions –

how we actually judge magnitudes under uncertainty.

Likelihood

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• Why don’t we just look up how often these things happen??

• Why do we need these vague “L” categories when “we can just model it”??








8. Risk Treatment

FEPs

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• a Feature is a static attribute of a system.- Reservoir porosity.- Depth.

• an Event is a sudden change in the system or its environment.- Lightning strikes the dehydration equipment.- An external emergency requires injection shutdown.

• a Process progressively changes the system attributes or conditions.- Injected CO2 displaces formation brine near the injection well,

... or migrates updip away from the injection well,

... or partially dissolves into formation brine. - Manufactured components degrade over time.

FEPs Are Conceptual, Scenarios are Concrete

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FEPs ScenariosGeneral, Conceptual, Overlapping;

even Redundant Specific, Concrete, Well Bounded

Nouns and adjectives Complete Sentences: subject, verb, object

Conducive to broad thinking of connections, relationships, integration

Conducive to focused thinking of isolated chains of events

Can “paint the universe” N Scenarios Nx gaps

Durable / Eternal / Persistent / Repeatable Interruptible / Preventable / Mitigable

Evaluated using your easy & associative System 1

(Kahneman, 2011)

Evaluated using your effortful & calculating System 2

(Kahneman, 2011)

FEPs are semantic clouds that float in the firmament of reality.

Scenarios are actionable proxies for what actually happens.

We don’t start with Scenarios because …

36Scenarios must be concrete so that they point toward treatments.

Specific detailed scenarios can become cognitively compelling, [so] that people overlook other pathways to the same end-points.

It is often best to “cut the long causal chains” and focus on the

possible range of a few key variables [that] can most affect

[the] outcomes of interest.Morgan et al, 2009








8. Risk Treatment

Expertise

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Topic Groups1- Container

2- Fluids3- Wells

4- Function5- Execution

Level General Description Comment

5 High confidence and independent judgment – plus a few gray hairs

A few participants will have 1 or more 5’s

4 High confidence and independent judgment from extensive relevant experience; thorough knowledge of project facts in the topic area

Most participants will have 1 or several 4’s

3 Mid-career worker and/or broad knowledge in fields relevant to the topic area and project

2 Some acquaintance with the subject area; entry-level or small amount of experience

1 “Person on the Street” opinion; judgments based entirely on what a trusted expert says

Nearly all participants will have a couple of 1’s

“What level of expertise do I have to evaluate risks in each topic group of FEPs or Scenarios?”

“What level of expertise do I have to evaluate risks in each topic group of FEPs or Scenarios?”

Expertise results78 Monitoring or modeling plume and

pressure 5 5 4 4 4 4 4 4 4 4 4 3 3 3 3 3 2 2 2 2 2 2 1 1 1 1 1

78 Reservoir and caprock geology and petrophysics 5 5 4 4 4 4 4 4 3 3 3 3 3 3 3 3 3 2 2 2 2 2 2 2 1 1 1

71 Geomechanics geochemistry of CO2 injection 5 5 4 4 4 4 4 3 3 3 3 3 2 2 2 2 2 2 2 2 2 2 2 1 1 1 1

70 Regional geology physical environment 5 4 4 4 4 3 3 3 3 3 3 3 3 2 2 2 2 2 2 2 2 2 2 2 1 1 1

68 EOR aspects of CCS project 5 5 4 4 3 3 3 3 3 3 3 3 2 2 2 2 2 2 2 2 2 2 2 1 1 1 1

67 Project and program management 5 5 5 4 4 4 4 3 3 3 3 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1

61 Well drilling and completions 4 4 4 3 3 3 3 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 1 1 1

58 Health and safety hazard ID 5 4 4 4 4 3 3 3 2 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1

51 CO2 supply system design operation 4 4 3 3 3 3 2 2 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1

50 Neighbors stakeholders permitting 4 3 3 3 3 3 2 2 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1

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8. Risk Treatment

Project X: Top 20 Risk-Ranked FEPsFEP Sbg

avgLbgavg

Risk Rank

Schedule and planning 2.94 3.06 9.3 1

On-road driving 3.00 3.37 9.0 2

CO2 Delivery System: Source Composition 3.00 3.00 9.0 3

Legal/regulatory: lawsuits 3.15 2.70 8.5 4

CO2 injectate effects: Groundwater contamination: Public perception 3.21 2.93 8.5 5

Contracting 2.93 3.13 8.4 6

Placement and Performance of Production Wells 3.16 2.63 8.4 7

Reservoir injectivity 2.75 3.00 8.3 8

Legal/regulatory: Permits: Drilling and injection 3.05 3.10 8.2 9

Undefined specifications 3.00 2.67 8.0 10

Startup/shutdown operations 2.50 3.00 8.0 11

Characterization: Ability to characterize reservoir 2.33 3.00 8.0 12

Workover 2.00 4.00 8.0 13

Seismicity (project-induced earthquakes) 2.67 2.33 7.7 14

Construction and operations activities (project) other than drilling 2.50 3.00 7.5 15

Legal/regulatory: Area of review 2.89 2.47 7.5 16

Accidents and unplanned events (project) 2.75 2.65 7.5 17

Adequate risk characterization 3.00 2.40 7.4 18

Legal/regulatory framework 3.00 2.33 7.3 19

Staffing and staff competency 2.50 2.81 7.3 20

Quantitative analysis

Physical measurements

Monitoring and modeling

Practices, Procedures, Training

Practices, Procedures, Training

Higher-Risk Scenarios Addressed by Monitoring Technologies

Technology LocationIn

Existing Plan

Baseline Complete

Additional MMV/ Installation Required Scenarios Addressed

ASSURANCE MONITORING Tables prepared also for Operational Monitoring (well integrity and flow)

Soil gas and soil gas flux

2.5 km radius around injection well Yes No

Additional stations, Completion of Baseline

G05-10, G10-39, G10-19, G05-11, G09-38, G05-71,

G10-59

Geochemical analysis for soil gas

Selected sampling stations

Yes No Completion of baseline and sample analysis

G05-10, G10-39, G10-19, G05-11, G09-38, G05-71,

G10-59

Isotope analysis for soil gas

Subset of geochemical analysis


G05-10, G10-39, G10-19, G05-11, G09-38, G05-71,

G10-59

Groundwater monitoring

3 km radius around injection well Yes No

Additional stations, Completion of Baseline

G05-10, G10-39, G10-19, G05-11, G09-38, G05-71,

G10-59

Geochemical analysis for

groundwater

Selected sampling stations


G05-10, G10-39, G10-19, G05-11, G09-38, G05-71,

G10-59

Isotope analysis for groundwater Selected samples Yes No

Completion of baseline and sample analysis

G05-10, G10-39, G10-19, G05-11, G09-38, G05-71,

G10-59

Surface water sampling

Reservoir, Inflow stream

No No Baseline sampling G10-58

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Last Slide ... Once in a while, a question has a right answer! Try this one: Farmers Insurance will sell you a policy that pays

beneficiaries $1.5 million in the event you are abducted by aliens.

What do they charge per year to insure you against that risk?

GHG UndergroundTechPlace, 74 Orion St., Brunswick, ME 04011

[email protected](508)395-2730

Risk Considerations for Geologic CO2 Storage

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