Geologic Storage Standards, Legislation and Regulation: Developments and Implications for Commercial Deployment

Steven M. Carpenter, VP Advanced Resources International, Inc. RECS Monday, June 24th, 2013

Acknowledgement
This presentation is based upon work supported by the Department of Energy National Energy Technology Laboratory under DE-FC26-05NT42590 and was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof.

Order of the Day

Workshop = participation Feel free to move around = be comfortable Interrupt me when needed This is about you! Planned discussion points
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What we plan to cover

Regulations:
CWA, USDW, UIC (Class II, V, & VI) CAA, EPA MRR Best Available Control Technology (BACT)

Standards:
Z-741: Geological storage of carbon dioxide ISO TC-265: Carbon dioxide capture, transportation, and geological storage

Examples:
What does an actual Class V permit look like? What does an actual MRR submittal look like?

Legislation:
Does EPA consider CO2 as a hazardous waste? How is permanent storage defined?

CCS Roadmap is COMPLEX

Regulation = Permitting
CWA, USDW, UIC
Class II, V, & VI What does an actual Class V permit look like? Lessons learned from our permit

CAA, EPA Mandatory Greenhouse Gas Reporting Rule (MRR)

Subparts A, C, W, FF, RR, & UU What does an actual MRR submittal look like?

Best Available Control Technology (BACT) analysis of CCS

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CWA, USDW, UIC

Clean Water Act the CWA establishes the basic structure for
regulating discharges of pollutants into the waters of the US. In 1948, the Federal Water Pollution Control Act, reorganized in 1972 to become CWA

Underground Source of Drinking Water (USDW)

An aquifer or portion of an aquifer that supplies any public water system or that contains a sufficient quantity of ground water to supply a public water system, and currently supplies drinking water for human consumption, or that contains fewer than 10,000 mg/l total dissolved solids and is not an exempted aquifer.

Underground Injection Control - Is responsible for

regulating the construction, operation, permitting, and closure of injection wells that place fluids underground for storage or disposal. Wells are regulated into one of 6 classes or categories of wells.

UIC Class I Well Disposal

Hazardous Waste Disposal Wells under RCRA , operating in 10 states, approximately 20% of wells Non-Hazardous Industrial Waste Disposal Wells, operating in 19 states, approximately 50% of wells Municipal Wastewater Disposal Wells, with much large diameter (up to 36 inches) casing and rely on gravity for injection, approximately 30% of wells. Radioactive Waste Disposal Wells, used to inject waste which contains radioactive material below the lowermost formation containing a USDW. There are 0 known radioactive waste disposal wells operating in the U.S.

UIC Class II Wells Oil & Gas

Enhanced Recovery Wells approximately 80% - 151,000 wells Brine & Fluid Disposal Wells approximately 20% wells Hydrocarbon Storage Wells inject liquid hydrocarbons in underground formations (such as salt caverns) where they are stored, generally, as part of the U.S. Strategic Petroleum Reserve. There are over 100 liquid hydrocarbon storage wells in operation.

UIC Class III Wells - Mining

Class III mining well - inject fluids to dissolve and extract minerals such as uranium, salt, copper, and sulfur. 50% of salt 80% of uranium Approximately 165 mining sites Approximately 18,500 wells

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UIC Class IV Wells Shallow

Class IV wells are shallow wells used to inject hazardous or radioactive wastes into or above a geologic formation that contains a USDW. In 1984, EPA banned the use of Class IV injection wells 32 waste clean-up sites with Class IV wells in the United States, as part of EPA authorized clean up.

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UIC Class V Wells various

>20 well subtypes that fall into Class V Approximately 650,000 Class V wells in operation nationwide Includes storm water drainage wells, cesspools, and septic system leach fields More complex & sophisticated wells typically deeper and include aquifer storage, recovery wells, geothermal electric power, and pilot or experimental geologic sequestration (GS) projects
D 4-14 Observation Wellbore
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UIC Class VI Wells Com CCS

Used for injection of CO2 for commercial storage Currently NO Class VI wells Required MRV plans to address:
the relative buoyancy of CO2 mobility in the subsurface corrosivity in the presence of water large anticipated CO2 volumes

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EPA GHG MRR

Legal & Regulatory Framework Title V of the CAA 40 CFR part 75 Acid Rain Program Any electric generation over 25 MW CEMs for NOx, SO2, and CO2 If these, then EPA MRR e-GGRT Subparts A, D, and possibly W, FF, HH, RR, & UU

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Industries affected by MRR

Electricity generation (D)
Adipic acid production Aluminum production Ammonia manufacturing

Natural Gas Production (W)

Nitric acid production Petrochemical production Petroleum refineries Phosphoric acid production Silicon carbide production Soda ash production

CCS Projects (RR, UU)

Cement production HCFC-22 production HFC-23 destruction processes Industrial Waste Landfills Industrial WWTP Lime manufacturing Magnesium production Manure systems

Suppliers of NG (NN) Suppliers of Industrial GHG (OO) Suppliers of CO2 (PP)

Titanium dioxide production

Underground Coal Mines (FF)

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Mandatory GHG Reporting Rule

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Electric Signature and Authorization

1. ~ 1 week to process 2. Snail Mail 3. Maintain email

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Register facility (one per address)

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Certificate of Representation
As the Designated Representa0ve (DR) or Alternate DR, I cer0fy that

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Designated Felon
I certify that I was selected as the designated representative or alternate designated representative, as applicable, by an agreement binding on the owners and operators of the facility or supplier, as applicable. I certify that I have all the necessary authority to carry out my duties and responsibilities under 40 CFR Part 98 on behalf of the owners and operators of the facility or supplier, as applicable, and that each such owner and operator should be fully bound by my representations, actions, inactions, or submissions. I certify that the owners and operators of the facility or supplier, as applicable, should be bound by any order issued to me by the USEPA Administrator or a court regarding the facility or supplier. If there are multiple owners and operators of the facility or supplier, as applicable, I certify that I have given a written notice of my selection as the designated representative or alternate designated representative, as applicable, and of the agreement by which I was selected to each owner and operator of the facility or supplier."

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MRR Reporting Requirements

Illustrative Representation of Requirements

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MMR RR Monitoring (MRV) Plans

Required for RR projects Unclear if they are required for R&D exemption projects (we submitted one for the SECARB Test) Should complement Class VI UIC MVA plan Required components:
Delineation of the maximum monitoring area (MMA) Delineation of the active monitoring areas (AMA) Identification of potential surface leakage Surface leakage detection strategy Surface baseline monitoring strategy Well ID number(s) Date to begin collecting data

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MMR RR Monitoring (MRV) Plans

A list of all units, operations, processes, and activities The data used to calculate the GHG emissions Identify surface leakage pathways (EOR focus: legacy wells) Baseline measurements (pre-injection conditions) Calculation methodologies and accounting (2012 CBI rule) Continue Post Injection Monitoring Until No Leakage Risk The Annual GHG reports Retained record for any missing data Certification & QA/QC data of instrumentation 3 years of post-injection monitoring
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Schedule and Timing

January 1: Register facilit(ies) March 31: Data reporting previous year April 1: GHG Monitoring or QA/QC Plan:
Identification of responsibilities (i.e., job titles) for data collection Explanation of processes and methods used for data collection Describes QA/QC procedures Existing corporate documents (e.g., SOPs) Yearly revision to the Plan to reflect changes in processes Upon request make available for audit

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Submit data electronically

Submit data

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Subpart RR Exemption Requests

To date, 4 R&D exemptions have been granted:
No RR Facilities have reported

ADM/MGSC Class I AEP/EPRI Class V Boise/BSCSP Class V Southern Co Class V

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Best Available Control Technology

All OPTIONS WITH PRACTICAL POTENTIAL

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New Source Review, Prevention of Significant Deterioration & Title V:

Best Available Control Technology (BACT) 5 Step Process:

Step 1: ID all available technologies Step 2: Eliminate technically infeasible options Step 3: Rank remaining technologies Step 4: Evaluate most effective controls Step 5: Select BACTs

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Best Available Control Technology (BACT)

After January 2, 2011 BACT must address GHGs WHIJTCCS defines, and EPA considers CCS as an available add-on technology, THEREFORE: Must include in Step 1 Analysis: Identify May exclude in Step 4 Analysis: Evaluate In either case, CCS clearly warrants a comprehensive consideration and a detailed case-specific analysis needed to dismiss

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What is happening to CCS under BACT

What is happening to CCS under BACT

Immediately dismissed due to economic considerations Immediately dismissed due to technological considerations Immediately dismissed due to deployment issues Immediately dismissed due to uncertain regulatory issues

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New Source Review, Prevention of Significant Deterioration & Title V

What is expected under BACT is

Preliminarily evaluation of CO2 source Preliminarily evaluate of CO2 sink capacity Evaluate the regulatory status in the jurisdiction Only then, make a decision about CCS applicability

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CO2 under BACT

EPA CCS rule to White House (OMB) for review:
EPAs rules would exclude CO2 as Hazardous Waste Proposed in August 2011, OMB has 90 days to review By announcing the proposed rule, the EPA has determined that geological sequestration does not present a substantial risk to people's health or the environment EPA also says injecting carbon dioxide into the ground has long been used for producing gas and oil in so-called enhanced recovery techniques. Long-term underground storage, however, raises a host of new issues, partly because it would potentially involve much larger quantities of carbon dioxide EPA CCS rule could cap CO2 emissions at 1,000 pounds CO2/ MWh To date EPA has received more than 3,000,000 comments on the rule
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Integration Communication is Key!

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Standards
What are standards? Best Practices Z-741: Geological storage of carbon dioxide ISO TC-265: Carbon dioxide capture, transportation, and geological storage
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Standards a go-by
Standards, by themselves, do not have the force of law unless officially adopted by a regulatory authority. Regulatory authorities can (should) adopt Standards with certain exceptions or additional requirements recommended that the regulatory authority of the relevant jurisdiction be consulted Where this Standard conflicts with regulatory requirements, the regulatory requirements will (shall) take precedence.

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Best Practices a stronger go-by

reliable and consistent standardsessential for providing the basis for a legal and regulatory framework and encouraging widespread global CCS deployment:
MVA Public Outreach Geologic Storage Formation Classification Site Selection, Screening, & Characterization Risk Analysis & Simulation

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What is a CDM?
Clean Development Mechanism, established under the Kyoto Protocol Managed by the United Nations Framework Convention on Climate Change (UNFCCC) Primary International Offset Program for GHG reduction in developing countries Generates Certified Emission Reductions (CER) or carbon credits = financial mechanism for implementation

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GHG offset under CDM must be:

1. Additional(ity) in addition to BAU 2. Measurable MVA, MMV, MRV 3. Independently Audited 3rd party, no OCI 4. Unambiguously Owned based clearly on domestic and international law, no double counting 5. Address/Account for leakage outside of the project boundary MVA, MMV, MRV 6. Permanent non-reversible

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Types of CDM Projects

Afforestation Electric generation fuel switching SF6 emission reductions Landfill methane (CH4) collection CMM & VAM Manure management CCS (recently added)

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Z-741 Kills 2 Birds with 1 Stone

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World's first formally recognized CCS standard Geologic Storage

International Standards Organization - 31000, 17024, 14064, 14065 International Performance Assessment Centre for Geologic Storage of CO2 Seed document Canadian Standards Association - ISO Secretariat, standards developer Bi-national agreement between USA & Canada

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Brings together 2 nations, multiple stakeholders

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TOC and Working Groups

Reference Publications Management Systems Site Screening, Selection & Characterization Risk Management Site & Well Development Monitoring & Verification (MVA) Closure
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Must INCLUDE any and all

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UNFCCC - IPCC ISO EU European Directives CSA DOE WRI IPAC-CO2 Federal, Provincial, State regulations Future expected directives

40 people, beer, pizza & hockey

40 = 52 = 47

Game 7 Boston (US) v. Vancouver (CAN) in a bar

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Why not take on the World?

International Organization for Standardization (ISO) Technical Committee TC-265 Title: Carbon dioxide capture, transportation, and geological storage Acceptance of Z-741 by Standards Council of Canada and American National Standards Institute (ANSI) is seed document for TC-265 26 countries participating and NGOs

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Twined Secretariat: Canada & China

Participating Countries:
o o o o o o o o o o o o o o o Australia Canada China France Germany Italy Japan South Korea Netherlands Norway South Africa Spain Switzerland United Kingdom United States

Observing Countries:
o o o o o o o o o o o Argentina Brazil Czech Republic Egypt Finland India Iran New Zealand Serbia Sweden United States

No in 2012 Yes in 2013

NGO/Liaison:
o o o o GCCSI IEAGHG WRI others

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CSA is the Mirror Committee

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5 Working Groups
Capture: led by Japan, will focus largely on post-, preand oxyfuel combustion capture processes Transportation: let by Germany, will focus on pipelines not currently covered by existing ISO/TC-67 standards Storage: split leadership with Canada focusing on onshore and Japan focusing on offshore. Quantification and verification: split leadership with China leading the group and support provided by France Cross-cutting issues: has split leadership with France leading the group supported by China
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Next Steps
Select US Head of Delegation (HoD) for US Technical Advisory Group (TAG) TC-265 General call for technical and subject matter experts to join the five working groups Select Working Group Leaders for the 5 WG Countries that are voting or P-member nations may identify and add technical experts to all committees Populate Capture, Transportation, Storage, Quantification and Verification, and Cross-cutting working group to address issues

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Populate Working Groups

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Legislation
Previous legislation Cap & trade bill (Waxman Markey) Pending legislation - does EPA consider CO2 as a hazardous waste? Sen. Feinstein to introduce carbon tax bill for power plants EPA CCS rule could cap CO2 emissions at 1,000 pounds CO2/MWh How is permanent storage defined? Just how long is permanent?
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Perpetual Event Horizon

Sequestration to Storage; CCS to CCUS MMV to MRV to MVA Perpetual Event (Time) Horizon
Sequestration requires 00s & 000s years monitoring, verification and reporting

Perpetual Event Horizon WILL outlast:

Risk & Financial models Companies who placed the CO2 Companies who manage the CO2

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EPA confirmation delay raises questions about U.S. carbon rules

June 14, 2013, WASHINGTON (Reuters) - With a Senate vote on President Barack Obama's nominee to head the Environmental Protection Agency still in limbo, speculation is rising about the fate of a proposed emissions rule for new power plants that was scheduled to have been finished in April. Industry and environmental groups have been waiting for the EPA to complete one of its most eagerly anticipated regulations, the so-called New Source Performance Standard for new power plants. Under the rule, which some say could play a major role in Obama's climate strategy, no new power plant could emit more than 1,000lb CO2/MWh - about the same as a new natural-gas combined-cycle power plant. The emissions target is far lower than even the most efficient coal plants today, which emit carbon at around 1,800 lb CO2/MWh. It would effectively rule out the use of coal in the electric sector without installing carbon capture technology, which is not yet commercially viable. Meanwhile, 60 days have passed since three environmental groups and a dozen states and cities filed their intent to sue the agency for missing the April 13 deadline. Those parties could take legal action as soon as Monday.

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Other Wild Cards

Carbon Pricing 10 to $80 Liability: Price-Anderson Act Indemnification Insurance products Preemption state & local v. federal Lack of success

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AEP Mountaineer

Poster-child for success; CCPI, RCSP funded Pilot successful NO LONGER IN OPERATION
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Dominion VCHEC

CCPI, RCSP not funded NO CCS

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Thank you!
Office Locations
Washington, DC 4501 Fairfax Drive, Suite 910 Arlington, VA 22203 Phone: (703) 528-8420 Fax: (703) 528-0439 Houston, TX 11931 Wickchester Ln., Suite 200 Houston, TX 77043 Phone: (281) 558-9200 Fax: (281) 558-9202 Knoxville, TN 603 W. Main Street, Suite 906 Knoxville, TN 37902 Phone: (865) 541-4690 Fax: (865) 541-4688 Cincinnati, OH 1282 Secretariat Court Batavia, OH 45103 Phone: (513) 460-0360 Email: scarpenter@adv-res.com

http://adv-res.com/
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Back up and Supporting Slides

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Class II vs. Class VI

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UIC Class II-VI Transition requires change in Subpart RR MRV plan

the UIC Class VI rule provides that UIC Class II ER projects must seek a UIC Class VI permit when there is an increased risk to USDWs compared to UIC Class II operations. If a facilitys UIC permit were to change from Class II to Class VI, it would be required to submit a revised MRV plan to EPA for approval.

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75FR at 75066 Dec 1, 2010

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Plant-Barry-Citronelle Integrated Saline Test. 50,000 TPY/yr

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Advanced MRV Technology: CCP Modular Borehole Monitoring

Cintronelle / Plant Barry project CCP, EPRI Southern Co, SECARB cooperators Goal: a "rugged" modular multi sensor CO2 monitoring system in small diameter but deep wells. Semi-permanent flat sensor string including fiber optic cable and sample tubing down the annulus between the long string casing and injection tubing and right through the packer into the injection zone. Can determine plume location with geophone array; Crosswell, offset VSP, walk-away VSP. Reservoir pressure & T using quartz P/T sensors Heat-pulse monitoring =/- 0.1 deg C sensitivity leak detection / flow monitoring Fluid sampling via U-tube.
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EXAMPLE APPLICATIONS
Coal vs. NG Water cooling vs. air cooling Simple cycle vs. combined cycle California Renewable Portfolio Standards CCS and international standards

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Proposed NG Gas Plant May Set Tighter GHG BACT Permit Precedent
AES Corp. Huntington Beach Energy Project in southern California Natural gas-fired, combined-cycle, air-cooled, 939megawatt (MW) electrical generating facility EPA has proposed to delegate authority for issuing the plant's Clean Air Act prevention of signification deterioration (PSD) permit to California's South Coast Air Quality Management District EPA will have final jurisdiction over 2010 guidance for how to perform BACT reviews for GHG permits

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Proposed NG Gas Plant May Set Tighter GHG BACT Permit Precedent
The BACT for GHG emissions for the AES project is a rate of 1,082 pounds of carbon dioxide per megawatt hour (CO2/MWhr) of gross energy output, and a total annual CO2 emissions limit of 3,161,785 metric tons per year. By comparison the average emission rate for NG fired power is 1,135 lbs of CO2/MWh By comparison the average emission rates for coal fired power 2,249 lbs of CO2/MWh

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Proposed NG Gas Plant May Set Tighter GHG BACT Permit Precedent
EPA officials can cite AES advanced technologies or plant designs that are employed to meet GHG BACT when considering subsequent permit applications across the United States Project developers must then examine the AES system components and permit conditions when applying for any new permits elsewhere This creates a nuanced issue of simple-cycle vs. combined-cycle for Peaker plants that are required to fast-ramp, fast-start, and ramp-down

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Proposed NG Gas Plant May Set Tighter GHG BACT Permit Precedent
A simple-cycle plant, which does not include the heat-recovery steam generators, would result in more GHG emissions Simple-cycle vs. combined-cycle turbine systems has emerged as a key issue in GHG permits Wisconsin officials rejected a request by EPA Region V to consider mandating more efficient combined-cycle gas turbines in a final GHG permit due to space (air cooled) issues

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Proposed NG Gas Plant May Set Tighter GHG BACT Permit Precedent
EPA Region IX approved a simple-cycle system for the Pio Pico Energy Center "peaking" power plant in CA AES Huntington Beach project, planned at two more AES facilities in the coming months, could set a new GHG emissions or energy efficiency threshold EPA or local regulators must follow for future proposals AES PSD permit application with the South Coast Air District ALSO must contain renewable power at a significantly higher energy efficiency rate, helping utilities achieve Californias stringent renewable portfolio standard (RPS) with fewer GHG emissions

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Proposed NG Gas Plant May Set Tighter GHG BACT Permit Precedent
This may mean that ALL future BACT considerations: Be required to meet enlarged size (footprint) restrictions of air cooled turbines Be required to meet non-peaker GHG emission rate for peaker designed plants (fast-ramp, fast-start, and ramp-down) Be required to meet California's Renewable Portfolio Standards (RPS)

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FUTURE CONSIDERATIONS
The California Public Utilities Commission has likely made some San Diego County residents very happy today with a decision not to allow San Diego Gas & Electric to buy power from the controversial proposed Pio Pico Energy Center (KCET.org, March 212, 2013) ISO TC-265 Geologic Storage of Carbon Dioxide

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CPUC denies PPA to Pio Pico

California Commission Quashes 2 San Diego Gas Plants
by Chris Clarke on March 21, 2013 4:09 PM, KCET.org

The California Public U0li0es Commission (CPUC) has likely made some San Diego County residents very happy today with a decision not to allow San Diego Gas & Electric (SDG&E) to buy power from the controversial proposed Pio Pico Energy Center and Quail Brush Power gas-red power plants. The plants were slammed earlier this month by the Sierra Club, which rated the pair of proposals as the second-most wasteful u0lity projects in the state. If both had been built, according to the Sierra Club, the state's ratepayers would have seen a cumula0ve $2 billion added to their power bills. S0ll, it's got to be gra:fying to those who opposed the plants to hear the CPUC deny the power purchase agreements in language remarkably similar to that opponents had used.

Under BACT with inclusion of CCS costs will increase Given this scenario, permit approval does not look likely
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CCS for BACT has arrived

1,000 vs. 1,135 or 2,249 lbs of CO2/MWh Water cooling vs. air cooling (footprint) Simple cycle vs. combined cycle California Renewable Portfolio Standards International CCS standards EPA CCS Rules

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Injecting Tracer for Monitoring

500 milliliters of perfluoro-trimethyl cylclohexane (CF3)3C6F9 Injected over a 12-hour period by DOE 1-week after starting the CO2 injection