Technical risk assessment and CCS · Analysis (from Damen et al, 2003) Knowledge Data & Models...

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Technical risk assessment and CCS

Gallagher Estate, Midrand, South Africa

28 , October , 2011

Ronald Munyai – Assistant Manager: Technical

South African Centre for Carbon Capture and Storage

(SACCCS)

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Core Parties

Participants

coal

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Presentation layout: contents

• Definitions

• CCS

• Risk• Risk

• The risk management process.

• What will make CCS technology to work?

• Possible risks for a CCS project.

• The risk management work at SACCCS.

• Conclusion.

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What is CCS?(Source: CO2CRC 2009

http://www.co2crc.com.au/imagelibrary/index.html)

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The CCS process

• Capturing carbon dioxide from industrial emission

streams.

• Compressing it into a supercritical (liquid-like) state.• Compressing it into a supercritical (liquid-like) state.

• Transporting CO2 via pipeline to injection site.

• Injecting CO2 into geologic formation (oil and gas,

saline, other) for permanent storage.

• Stored CO2 increasingly stabilized over time,

depending on site-specific factors.

• Monitoring the storage site.

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CO2 Storage Workflow (Source: Schlumberger)

Site Selection Site Characterization (SCP) Field Design

Site PreparationSite Construction Injection

Pre-Operation

Phase

OperationMonitoring (M&V)• Operation

Pe

rfo

rma

nce

& R

isk

Ma

na

ge

me

nt

Syste

m (

PR

SM

)

Co

mm

un

ica

tio

n a

nd

Pu

blic

Acce

pta

nce

Permitting

Operation

Phase

Post-Injection

PhaseSite Retirement Programme

(SRP)

• Operation

• Verification

• Environmental

Pe

rfo

rma

nce

& R

isk

Ma

na

ge

me

nt

Syste

m (

PR

SM

)

Co

mm

un

ica

tio

n a

nd

Pu

blic

Acce

pta

nce

SE

VE

RIT

Y

-11L

-21S

-41 C

-31M

-51M C

- 22 L

- 41S

- 62 M

- 82C

- 1 02 M C

-33L

-63 S

-93M

- 1 23 C

- 1 53M C

-44L

- 55 L

-84S

-1 24 M

-1 64 C

-2 04 M C

- 1 05 S

- 1 55M

- 2 05C

- 2 55M C

- 1L i g h t

- 2

- 3

- 4

- 5

S e rio u s

M a j o r

C a ta s tro p h ic

M u l t i- C a ta s tro p h i c

321

Po

ssib

le

Unlik

ely

Impro

bab

le

5

Pro

bab

le

4

Lik

ely

L IK EL IH O O D

W h i te a rr o w i n d ic a te s d e c re a s in g r is k

P R E V E N TIO N

M I T IG A T IO N

C o n tr o l

M e a su r e s

R E D

B L U E

Y E LL O W

G R E E N

IN T O L E R A B L E : D o n o t t a k e th is r is k

U N D E S IR A B L E : D e m o n s t ra te A L A R P b e f o re p ro c e e d in g

A C C E P T A B L E : P ro ce e d c a re fu lly , w ith c o n t in u o u s im p ro v e m e n t

N E G L I G IB L E : S a fe t o p r o ce e d

-1 6 t o -1 0

- 9 t o -5

- 4 t o -2

-1

B LA C K N O N -O P ER AB L E : E va c ua t e th e zo n e a n d o r a re a/ co u nt r y-2 5 t o -2 0

Transfer of Liabilities

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Geological storage options for CO2 (Image courtesy of

the CO2CRC)

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What is a risk?(Crater caused by bolide impact, from USGS website)

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Earlier definition of a risk• Frank Knight [1] offered early and widely recognized definition of risk: “To preserve the

distinction…between the measurable uncertainty and an unmeasurable one we may use the term ‘risk’ to designate the former and the term ‘uncertainty’ for the latter”.

Risk is understood to require both uncertainty and exposure – possible consequences. Risk is understood to require both uncertainty and exposure – possible consequences. Glyn Holton[1] supplied a more general definition of risk that might apply to almost any action with the two essential components: exposure and uncertainty: “Risk…is exposure to a proposition of which one is uncertain.”

• Risk is partly in the eye of the beholder particularly when dealing in situations where there is balance between subjective elements and objective elements.

[1] Knight, Frank H. 1921.”Risk, Uncertainty, and Profit”, Hart, Schaffner, and Marx (NY) as quoted in

Holton, Glyn A. 2004. “Defining Risk”, Financial Analysis Journal, Vol. 60,No. 6 (Nov/Dec 2004)

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Definitions (1)

• Hazard: A state or situation which poses a level of threat to life,

health, property, or environment. (e.g. well Leakage) .

• Impact: The measure of quantifying adverse health, safety and

environmental consequences from a hazard. (i.e. Asphyxiationenvironmental consequences from a hazard. (i.e. Asphyxiation

from elevated CO2 concentration via leaking well).

• Risk: A state or situation of uncertainty where some of the

possibilities involve a loss, undesired event to affect health,

safety and environment.

• Risk = Probability of Hazard × Consequence of Hazard (impact).

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Definitions (2)

• Inherent risks- risks if nothing is done to mitigate them.

• Residual risks- risks after the mitigating actions are put in

place.place.

• Risk causes- causes of the risks.

• Preventative controls- measures that are put in place to

address the causes of the risks.

• Corrective controls- measures that are put in place after the

the mitigation actions to control the risks have failed, to

remedy the situation.

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Risk Management Process (1)

• Risk management is an attempt to anticipate and prevent or mitigate harms that may be avoidable:avoidable:

• Anticipate: Model the downside risk and put into place, in advance of adverse events, the controls needed to minimize risk;

• Prevent or Mitigate: Some types of harms can be prevented (with adequate margin of safety), others can be reduced with good forward planning.

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Risk Management Process (2)

• The essence of effective risk management can be summed up in three “simple” directives:

• 1.Foresight: plan (don’t wait for the disaster to • 1.Foresight: plan (don’t wait for the disaster to strike);

• 2.Precaution: insure or spend judiciously in advance;

• 3.Protect the Downside: whatever else you do, make sure you have limited the extent of the possible damage or losses.

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Risk Management Process (3) (Source-Sasol)

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Probability table for risks (Source- Sasol)

P1 P2 P3 P4 P5 P6 P7

QUALITATIVE

DESCRIPTORSUnforeseen Highly unlikely Very unlikely Low Possible Likely Almost Certain

DESCRIPTORS

PROBABILITY

INTERVALS0 - 1% 1 - 5% 5 - 10% 10 - 20% 20 - 50% 50 - 80% > 80%

Likelihood

Definitions

The event may

occur within the

next 20 years

The event may

occur once in 20

years

The event may

occur once in

every

10 - 20 years

The event may

occur once in

every

5 - 10 years

The event may

occur once in

every

2 - 5 years

The event is

expected to

occur within the

next

1 - 2 years

The event may

occur at least

once or is

already

occurring

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Impact table for risks (Source- Sasol)

NPV Earnings

or Capital

Repeating

Operational

Cost

Repeating

Revenue

Impact 7 > R500m

Overall project

schedule slips

>15%

Financial

Impact

(Rand)

Intellectual

PropertyEnvironment

Government

Relations

Reputation /

BrandSchedule Technical

Safety &

Health

Community &

Customers

DCF Capital Evaluation

Impact

Severity

Impact 6R100m -

R500m

Overall project

schedule slippage

10% - 15%

Impact 5 R10m - R100m

Overall project

schedule slippage

5% - 10%

Impact 4 R1m - R10m

Overall project

schedule slippage

< 5%

Impact 3R100 000 -

R1m-

Impact 2R10 000 -

R100 000-

Impact 1 <R10 000 -

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Table for ranking the risks (Source- Sasol)

l6Level 1Level 1Level 2Level 2Level 3Level 3Level 4




P7P6P5P4P3P2P1






P7P6P5P4P3P2P1






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Diagram showing risks movements from inherent ranking to residual

ranking (Source-Sasol)

I7 > R 4500 m > $ 566 m > € 355 m

I6 R 4500 m $ 566 m € 355 m

I5 R 1500 m $ 189 m € 118 m

Functional Excellence Programme Residual Risk Profile- 22 July 2011

Completed

New

28

31 I5 R 1500 m $ 189 m € 118 m

I4 R 300 m $ 38 m € 24 m

I3 R 150 m $ 19 m € 12 m

I2 R 30 m $ 4 m € 2.3m

I1 R 3 m $ .4 m € .25 m

P1 P2 P3 P4 P5 P6 P7

Un-

foreseen

0 to 1%

The event

may occur

within the

next 20 years

Highly

Unlikely

1 to 5%

The event

may occur

once in

every 20 years

Very

unlikely

5 to 10%

The event

may occur

ones in

every 10 to 20

years

Low

10 to 20%

The event may

occur

once in every 5 to

10 years

Possible

20 to 50%

The event

may

occur once

every 2

to 5 years

Likely

50 to 80%

The event may

occur

within the next 1 to

2 years

Almost

certain

> 80%

The event

may occur at

least

once a year or is

already

occurring

RAND

Exchange

Rate

US Dollar

7.95

Euro

12.69

1

436

9 2227 3029

Existing

31

32

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Risk ranking

• Residual risks with ranking of level 1 to

level 3 have to be communicated to the level 3 have to be communicated to the

SACCCS board.

• Residual risks with ranking of level 4 and

below are communicated to the project

team and to the affected stakeholders.

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What will make CCS technology to work.

• Sufficient funding.

• Suitable storage site.

• Safe transportability of CO2.• Safe transportability of CO2.

• Performance and reliability of technology.

• Quality of risk management.

• Adequate regulation.

• Clear responsibility and liability.

• Stable climate regimes and incentive structures.

• Transparency and communication of risks.

• Proof of long term storage stability.

• Public acceptance of CCS.

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Possible risks for a CCS project

• Leakage.

• Natural catastrophes.

• Unintended environmental impact.

• Lack of risk awareness.

• Long term liability issues.

• The cost to mitigate the risks.

• The threat of loss of public acceptance.

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Example: Well integrity risk assessment as part of mitigation efforts to prevent leakage (Source: Schlumberger)

Risk Ranking &

Performance

Evaluation

Construction of

Leakage Scenario

Identification and

quantification of

failure mechanisms

Functional

Analysis

(from Damen et al, 2003)Knowledge

Data & ModelsUncertainties

Exhaustive inventory of features and

potential hazards

(from US Geological Survey)

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Impact of exposure to varying concentrations

of CO2

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Risk Management work at SACCCS -Work in

Progress.

• Risk assessment of SACCCS workplan is

currently being done.currently being done.

• Further risk management workshops for

storage and the test injection project are

planned.

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SACCCS Risk Management process- work in progress

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Conclusion

• There is large and growing body of CCS risk literature, protocols, guidelines, models.

• Literature suggests underground storage is • Literature suggests underground storage is viable and safe when coupled with comprehensive Risk Assessment (holistic) approach (IPCC 2005).

• Also, risk assessment is required to support the regulatory approval process for CCS projects.

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Source: SchlumbergerSource: Schlumberger

“All I’m saying is “All I’m saying is nownow is the time is the time

to develop the technology to develop the technology

to deflect an asteroid.”to deflect an asteroid.”

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Thank you.Thank you.

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Email: [email protected]

Phone: (010) 201 8108Phone: (010) 201 8108

Website: www.sacccs.org.za

Technical risk assessment and CCS · Analysis (from Damen et al, 2003) Knowledge Data & Models...

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