Chapter 4 - CO₂ leakage

This chapter addresses calculated damages arising from CO₂ leakage. The FutureGen Risk Assessment provides estimates of potential leakage rates for a variety of release mechanisms. However, the FutureGen reports do not quantify the potential volume of CO₂ that could be released to the atmosphere in the event of such a release. Further, the magnitude of potential future damages due to CO₂ leakage will depend on the design and implementation of a greenhouse gas (GHG) regime. The timing and specific design of any such program in the U.S. is uncertain. Nevertheless, in recognition of the potential for damages arising from CO₂ leakage within the 100 year timeframe of this analysis, the Monte Carlo analysis includes a series of bounding calculations designed to broadly assess potential CO₂ leakage damages arising from CCS at the Jewett, TX site

4.1 Cost of carbon

Two sources of information can help bound potential unit values ($/ton) for leaked CO₂ in the U.S.:

• U.S. Government Interagency Working Group on Social Cost of Carbon report (February 2010); and
• Predictions of CO₂ allowance prices in future decades, based on regulatory scenarios contemplated in the U.S.

Estimates of the social cost of carbon from the U.S. Government Interagency Working Group on Social Cost of Carbon report are presented in Table 4-1. This report, developed by a wide range of governmental agencies, including CEA, CEQ, DOA, DOC, DOE, DOT, EPA, NEC, OECC, OMB, OSTP, Treasury, is intended to allow agencies to incorporate the social benefits of reducing carbon dioxide (CO₂) emissions into cost-benefit analyses of regulatory actions that have small, or ‘marginal,’ impacts on cumulative global emissions. At a minimum, these estimates attempt to include changes in net agricultural productivity, human health, property damages from increased flood risk, and the value of ecosystem services due to climate change.

In recent years, numerous entities have developed predictions of CO₂ allowance prices. Several entities (e.g., CBO, EPA, individual researchers) made allowance price forecasts based on requirements in legislative proposals, including H.R. 2454, S. 1733, S.2191. Others such as McKinsey at MIT, developed estimates without regard to specific legislative proposals. A table summarizing these estimates is provided in the Executive Summary (see Executive Summary Attachment 1). Generally, these values fall within the (broad) range identified in the Social Cost of Carbon report, although some present ‘upper end’ estimates that, for some years, exceed the highest values presented in Table 4-1.

Table 4-1. Social Cost of Carbon Per U.S. Govern Interagency Working Group

Social Cost of CO², 2010–2050 (in 2007 dollars)

The Monte Carlo analysis used in this analysis relies on the schedule of offset prices identified in Table 4-2, based on information in Nordhaus (2010). A range of prices based on the schedule in Table 4-2 is assigned to every year in the 100-year period analyzed in this study, assuming ‘straight-line’ price changes in the years between those identified in the table. If a CO₂ leakage event occurs as part of a Monte Carlo trial in this study, an offset price is chosen randomly from within the specified range for the year associated with the release.

4.2 CO₂ leakage quantities

The magnitude of potential future damages due to CO₂ leakage also will depend on the amount of CO₂ released into the atmosphere. The FutureGen Risk Assessment provides estimates of potential leakage rates for a variety of release mechanisms. These estimates are based on site-specific analysis and review of natural and industrial CO₂ storage analogs (see Table 4-3). For well events, they reflect flux rates to surface. For other events, they reflect flux rates to subsurface receptors.

However, the FutureGen analyses do not attempt to estimate: (1) the proportion of leaks expected to be observed and stopped; (2) the release duration; or (3) the fraction of leaked volumes that ultimately reach the atmosphere. Further, potential damages arising from CO₂ leakage at the sequestration site are likely to be substantially dependent on the type, density and duration of attendant monitoring efforts at the site.

Table 4-2. Range of CO₂ Offset Prices used in Monte Carlo Analysis

Researchers have attempted to estimate bounds for potential CO₂ leakage volumes. For example, Dooley and Wise (pg. 3) state:

In one of the most comprehensive studies to date looking at CO₂ sequestration in relationship to enhanced oil recovery, Stevens et. al. [10] “conservatively estimate that 10% of net CO₂ purchased is emitted” during the lifetime of EOR operations in a field. It is critical to note that in the context of the Stevens’ study which was principally focused on the economics of using CO₂ for hydrocarbon recovery, the 10% figure should be interpreted as the authors’ estimate of an upper bound for leakage from this class of reservoirs and indeed Stevens and his coauthors note that “the actual percentage may be lower.”

Table 4-3. Flux Rates by Event Type

The IPCC Special Report on CCS (2005) estimates that appropriately selected and managed geologic reservoirs are very likely to exceed 99% over 100 years (pg. 14). Overall, site-specific data and information from the general technical literature are insufficient to assign precise probabilities to potential leakage volumes. Nonetheless, this study applies an array of leakage volume estimates in order to bound resulting damages estimates. In the absence of site-specific data, the bounding estimates identified below are used in the Monte Carlo analysis underpinning this study:¹⁴

• If a pipeline rupture or puncture occurs, all of the CO₂ in the affected 5 mile section of pipeline (1,290 tonnes) is assumed to be released to the atmosphere;¹⁵
• If an injection well release occurs during the operational period (2011 – 2060), the Monte Carlo analysis randomly assigns a release volume to the atmosphere between 0.1 and 16.5 tonnes of CO₂;
• If an injection well release occurs between 2061 and 2110, the Monte Carlo analysis randomly assigns a release volume to the atmosphere between 0.6 and 99 tonnes of CO₂;
• If an ‘other well’ release occurs at any time in the analysis period (2011 – 2110), the Monte Carlo analysis randomly assigns a release volume to the atmosphere between 99 and 5,400 tonnes of CO₂.

Other release events within the 100 year period of analysis have low probabilities and/or atmospheric release volumes, resulting in a negligible contribution to potential CO₂ leakage damages.

¹⁴ See Appendix A.

¹⁵ The FutureGen Risk Assessment indicates that the volume of CO₂ released during a pipeline incident (1,290 tonnes) reflects the volume present in between safety shutoff valves placed every 5 miles along the pipeline. Although some of the CO₂ released would be in solid phase, the Monte Carlo analysis conservatively assumes that all CO₂ would eventually vaporize.