Chapter 1 - Study framework and analytic method

Chapter 1 introduces the study framework and orients the reader to the intricacies of the analytic method used to arrive at observations of calculated damages for the Jewett, TX FutureGen site. Specifically, the damages calculations underpinning the findings of this study rely on three key variables:

• Valuation of Effects, or the potential value of damages awarded per effect. This valuation may be based on medical costs, productivity losses, environmental damages, etc. Chapters 2 and 3 of this report discuss these elements in more detail, with particular focus on developing a range of possible damages per effect.
• Number of Potential Effects, or the degree of harm arising from a CO₂ leak. Chapters 4 through 6 discuss the potential plumes that may result from pipeline, plant, or sequestration events, and the associated number of resulting effects from exposure to this plume.
• Event Probabilities, or the likelihood that a specific release event or accident occurs in a given year. All else equal, the lower the probability (or likelihood) of an event occurring, the lower the damages that are likely to result. Chapters 4 through 6 of this report also focus on the probability of an event occurring at either the pipeline, plant, or sequestration site.

Chapters 3 and 4 provide additional detail on potential damages associated with groundwater and CO₂ leakage, given the greater levels of uncertainty in each of the above variables for those impact categories.

The remainder of this chapter focuses on the study’s analytic method, with particular attention paid to the design and application of the Monte Carlo model, a well-accepted, probabilistic method used to quantitatively incorporate the effects of input parameter uncertainties into damages calculations. For a full technical description of the model, see Appendix B.