Insights and Commentaries

Carbon storage pathway for CO2-Enhanced Oil Recovery

15th November 2015

Topic(s): Carbon capture, Economics, law and regulation, Policy, use and storage (CCUS)

The Global CCS Institute has published its annual major report on the latest developments in carbon capture and storage (CCS). The Global Status of CCS: 2015 highlights new operational projects, policy and international climate discussions, new technology developments and further progress towards the emergence of coordinated industrial hubs and clusters. CCS is vital for meeting global climate goals at least-cost. In order for CCS to meet this potential urgent action is required to accelerate deployment. Key to the further deployment of CCS is an appropriate regulatory environment. In the United States the Enhanced Oil Recovery industry and associated regulations serve as an example of the regulatory instruments that can be employed to increase investment in- and deployment of CCS. In the following Insight Pamela Tomski, Senior Advisor, Policy and Regulatory – Americas, discusses two national regulatory programs that allow for the quantification of carbon dioxide stored as part of CO2-EOR operations, and the way such national programs are usefully applied.

Carbon dioxide enhanced oil recovery (CO2-EOR) operations that utilise captured anthropogenic CO₂ can offer a viable storage option when methods are implemented to quantify the amount of CO₂ stored.

In the United States (US), the US Environmental Protection Agency (EPA) administers two complementary but not fully integrated programs that establish regulatory requirements for CO₂ injection and storage:

1. The Underground Injection Control (UIC) Program is designed to protect underground drinking water resources.
2. The Greenhouse Gas Reporting Program (GHGRP) provides a framework to monitor and report GHG emissions.

Underground Injection Control Program

Injection of CO₂ into the sub-surface is regulated under the UIC Program according to different well classifications: Class II covers CO2-EOR and the more recent Class VI is for saline storage. Class VI requirements are much more rigorous in terms of well construction, operational and mechanical integrity testing, well plugging and post-injection site care. In the event of “increased risk” to underground sources of drinking water, or if the “primary purpose” of the operation becomes CO₂ storage, Class II operators would need to obtain a Class VI permit.

A state may apply to the EPA for primacy to administer the UIC program within their state. Forty-one states currently have primacy or share primacy with the EPA for Class II well permits. Only a small number of states have moved forward on Class VI primacy with North Dakota leading; however, the EPA’s decision on North Dakota’s primacy application is still pending. To date, EPA has granted five Class VI permits.

Greenhouse Gas Reporting Program

The GHGPR, managed directly by the EPA with no state involvement, provides a framework to quantify and report the amount of CO₂ stored and to confirm that it remains stored over the long term. Operators of Class II (CO2-EOR) and Class VI (saline storage) permits have different GHG reporting requirements.

GHGRP’s Subpart UU applies to CO2-EOR and requires operators to report basic information including mass of CO₂ received, CO₂ source, CO₂ concentration, and mass flow or volumetric flow. Data must be reported quarterly and records must be retained for three years. Approximately 90 facilities, mostly EOR, have reported under Subpart UU.

The more stringent Subpart RR applies to CO₂ injected for geologic storage and requires basic information on CO₂ received for injection, development and implementation of an EPA approved site-specific monitoring, reporting and verification (MRV) plan, and reporting on the amount of CO₂ stored using a mass balance approach and monitoring activities. Major components of the MRV plan include:

• delineation of monitoring areas
• potential CO₂ surface leakage pathways
• strategy to assess and quantify CO₂ surface leak detection
• strategy to establish expected baselines for monitoring CO₂ surface leakage
• considerations to calculate site-specific variables for the mass balance equation.

Class VI permit requirements, coupled with Subpart RR, establishes the framework to account for geologically stored CO₂. A Class II permit for CO2-EOR, coupled with Subpart RR, establishes a similar framework. However, no facilities to date have reported under Subpart RR.

From EOR to Dedicated Storage

In 2015, EPA released a statement of ‘key principles’ to clarify its previous guidance on the issue of transition from Class II EOR wells to Class VI storage wells. The EPA clarified that CO2-EOR does indeed store CO₂ while producing oil during EOR operations and that CO₂ injection under Class rules could recognise the incidentally stored volume with Subpart RR. EPA also confirmed that long-term liability by the operator up to 50 years could be avoided as long as the endangerment finding was acceptable to the regulator.

EPA’s clarification mitigates some major uncertainties and the path for CO2-EOR-storage is clear: operators can quantify the amount of CO₂ stored by reporting under Subpart RR. However, legal uncertainties and additional costs remain barriers.

While the technologies for CCS have developed into a mature, large-scale industry, the least developed aspect of CCS remains policy support and regulatory frameworks. The foundations for widespread deployment must be strengthened by providing an equitable level of consideration, recognition and support for CCS along-side other low-carbon technologies. 

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