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Energy Procedía
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Energy Procedía 1 (2009) 1 <565-1972
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GHGT-9
The CO2CRC Otway Project: Overcoming Challenges from Planning to Execution of Australia's first CCS project
Sandeep Sharmaa,b*, Peter Cooka, Thomas Berlyac , Mal Lees d
aThe Cooperative Research Centre for Greenhouse Gas Technologies, Canberra, ACT 2601, Australia. bSchlumberger Australia, Pty. Ltd., Perth, WA 6000, Australia. cAustralian Coal Association, Canberra, ACT 2601, Australia., dRio Tinto, Brisbane,Queensland 4000, Australia.,
Abstract
The aim of the CO2CRC Otway Project (Otway) is to demonstrate that carbon capture and storage (CCS) is a viable option for CO2 mitigation under Australian conditions. The Otway Project is Australia's first demonstration project and is well underway with injection having started in April 2008 and over 23,000 tonnes of CO2 injected by the end of September.
Project activities commenced in late 2004 and being the first, faced significant regulatory and execution challenges. In 2005, the emphasis was on feasibility and project development. Following a rigorous technical and consultative approach, the project regulatory permitting process was defined, the site characterisation and risk assessment started and the field implementation organization defined. In 2006 the project focused on reducing the uncertainties and following Front End Engineering Development (FEED) process as part of seeking approval for major expenses. Several technical challenges were faced and dealt with in finalising the new injection well location and the plant design. The monitoring and verification plan was defined and data acquisition for the pre-injection atmospheric, soil gas and water chemistry characteristics started.
In 2007, the project entered the execution phase with the successful drilling of a new injection well. A rich data set of cores and logs was collected enhancing the reservoir model and dynamic simulations. Monitoring activities continued and a 3D surface-seismic and vertical seismic profile (VSP) acquired concurrently to define the pre injection baseline. Through a complex workover operation, the observation well was equipped with an integrated geophysical and geochemical sensor assembly to facilitate collecting monitoring data during injection. Surface installations, such as the process plant and the pipeline were constructed and the system commissioned in readiness to commence injection.
At each stage the project faced several non-technical and technical challenges. In overcoming these, valuable insights have been gained and lessons learnt. These have been incorporated in the proposed Australian legislation on CCS and planning for future projects. To date the project has been positively received by the community. Injection has commenced and supported by a rigorous monitoring and modeling program, is well on its way towards gaining public acceptance for CCS under Australian conditions, through a comprehensive community consultation program and safe and successful operations.
© 2009 Elsevier Ltd. All rights reserved.
* Corresponding author. Tel.: +61-8-6436-8736; fax: +61-8-6436-8555. E-mail address: sharma2@slb.com
doi:10.1016/j.egypro.2009.01.256
Keywords: CCS, Geosequestration, Regulation, Policy, Community
1. Introduction
Geological sequestration is a promising technology for reducing atmospheric emissions of carbon dioxide (CO2) with the potential to geologically store a significant proportion of Australia's stationary CO2 emissions. Stationary emissions comprise almost 50% (or approximately 280 million tonnes of CO2 per annum) of Australia's total greenhouse gas emissions. The Australian Federal and State Governments are targeting clean energy production through the "National Pollution Reduction Plan" and encouraging technology developments such as carbon capture and geological storage (geosequestration) as a mechanism to achieve future reductions in emissions.
Demonstration projects represent an important step towards building industry and community confidence in the widespread uptake of carbon capture and storage (CCS). Such projects should demonstrate effective storage of CO2 and have a rigorous monitoring and modeling program to allow validation of a range of CCS technologies. This needs to be accomplished safely and cost-effectively. It is also vital that these projects develop stakeholder engagement processes and ultimately gain public support for CCS as a viable option for reducing greenhouse gas emissions.
The Cooperative Research Centre for Greenhouse Gas Technologies (CO2CRC) is undertaking a comprehensive geosequestration research and demonstration program in the Otway Basin in Victoria. The Otway Project aims to show that CO2, can be safely captured, transported, stored deep underground, and its behaviour monitored and verified. Work has been underway since 2004 and injection of CO2 commenced in April 2008.
As the first project of its kind in Australia, the CO2CRC Otway Project (Otway) has faced a number of regulatory, organisational and stakeholder challenges. It has helped highlight overlaps in jurisdictions and provided valuable input to state and federal legislations, which are currently being finalized.
2. The CO2CRC Otway Project Concept
The CO2CRC Otway Project is located off the Great Ocean Road, around 40 km from the town of Warrnambool in South-West Victoria (Figure 1). The Otway Basin with its naturally occurring accumulations of CO2 and many depleted natural gas fields offers an ideal site to test scientific and regulatory concepts related to CO2 storage and evaluate public response through stakeholder engagement.
The project utilizes two petroleum tenements acquired through commercial negotiation specifically for this demonstration. These contain an undeveloped CO2 field (Buttress), which is the source of CO2, and a depleted gas field (Naylor) located around 2 km south of Buttress, which will be the injection/containment site. The Naylor field is a small gas field with original gas in place estimated at 6 billion standard cubic feet. From May 2002 to February 2004, the field produced a total of 3.96 billion standard cubic feet of natural gas, mainly from the Waarre "C" reservoir unit through the solitary well Naylor-1. The well was suspended in 2004 after water started to be produced and the field is now considered depleted. The Buttress field is a fault-confined CO2 reservoir with a single potential production well, Buttress-1. This well was drilled in 2002, but after encountering the CO2 bearing Waarre C, was cased and suspended without being perforated.
The Otway Project concept is as shown in Figure 1. Natural gas (80% carbon dioxide; 20% methane) will be extracted from the existing well (Buttress-1), processed and compressed through a custom built surface plant before being transported via a new, underground, 2.25 km long, stainless steel pipeline to a new injection well. This well CRC-1 has been drilled down-dip of the existing Naylor-1 well into the depleted Waarre C reservoir at a depth of 2050 meters.
Over two years, up to 100,000 tonnes of the CO2-rich gas stream will be injected via the CRC-1 well, at supercritical state, into the depleted Waarre C Formation, with an extended observation period continuing post injection.
monitoring SeiMraSV^I
J| monitoring
' S ¿5
Gas treatment & Transport o1 C02 IÔO Cum pression rich gas in pipelm
,.—1 tm- ■
- CRC Wo 1
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Migration pathway
Figure 1: The Otway Project Location and Concept
3. Developing the CO2CRC Otway Project
The CO2CRC Otway Project was developed using an established stage gate development process, ensuring appropriate due diligence at each stage through a rigorous internal and external peer review process.
Project activities commenced in late 2004 and being the first, faced significant regulatory and execution challenges. In 2005, the emphasis was on feasibility and project development. Following a rigorous technical and consultative approach, the project regulatory permitting process was outlined. In parallel, detailed site characterisation was started by Spencer et.al [1] and the field implementation organization considered. With the inability of some of the CO2CRC members to own assets and undertake oil-field type operations, a special purpose company, CO2CRC Pilot Project Limited (CPPL), was established in November 2005. As explained by Sharma et.al [2], the members of CPPL are key resource companies who manage field operations as part of their regular business portfolios. The role of CPPL is to manage the Otway Project operations in accordance with oil and gas industry best practices and to date this has been successfully done with no lost time incidents.
A comprehensive risk assessment exercise was performed and a detailed monitoring and verification (M&V) program defined to ensure adequate risk mitigation. Three domains were considered for monitoring; the sub-surface domain (reservoir) to monitor and verify the deep migration and behaviour of stored CO2; the near-surface domain (shallow subsurface zones and the soil) to verify the non-seepage into shallow aquifers and soils and the atmospheric domain to characterize the atmospheric distributions of gasses in the area. As described by Dodds et.al [3], a database of current patterns (baseline) has been gathered across all three domains and will be the norm against which injection and post injection measurements will be compared. Throughout the injection period and following injection, the M&V program will be conducted to understand the geochemical reactions, geomechanical processes and various fluid migration interactions of the CO2 in the reservoir. The technologies used cover geophysics, geochemistry and atmospheric sensing. Concurrently, the project acquired new well and field data focused on
reducing the uncertainties and commenced the Front End Engineering Development (FEED) process as part of seeking approval for major expenses.
In 2007, the project entered the execution phase with the successful drilling of a new injection well. A rich data set of cores and logs was collected enhancing the reservoir model and dynamic simulations. Concurrently baselinemonitoring activities have continued and a 3D surface seismic and vertical seismic profile (VSP) have been acquired to define the pre injection baseline. The monitoring well has been equipped with an integrated geophysical and geochemical monitoring assembly to maximize the opportunity for data collection. The process plant has been constructed, an underground pipeline installed and the commissioning completed. The project was formally inaugurated by the Federal Minister for Energy and his Victorian State counterpart in April 2008 and injection commenced thereafter.
4. Legislative Approvals for the CO2CRC Otway Project
As a pioneer, at each stage the Otway Project has faced unique challenges both technical and non-technical, compounded by the absence of a regulatory regime for CCS in Australia. Existing legislation has been tested and overlaps and contradictions between the various jurisdictions identified as the project proceeded to obtain permits.
The starting point was the application of the Victorian Petroleum Act, 1998 (VPA), which governs the oil and gas activities. Its direct application was questionable as the permitted activities were inconsistent with the project objectives. For example, the definition of petroleum production relevant to this activity refers to "the injection and storage of petroleum in reservoirs for the purpose of later recovering it." Clearly, geosequestration, which did not contemplate recovery, was not envisaged by the Act. For the project, this raised an issue regarding access and property rights, exemption from local planning permits etc., which are well defined within the Petroleum Act. As an example, Table 1 below lists some specific activities, which for geosequestration raised potential conflicts between the Petroleum and Planning & Environment (Planning) Acts.
Table 1: Victorian State Petroleum and Planning Legislation Complexities in Permitting the Otway Project
Activity Petroleum Act Instruments Planning Regulation Considerations Petroleum Regulators Position Issues
Extraction of carbon dioxide from the Buttress 1 well Production licence. Advisable to check status of planning permit as the intent is not consistent with "petroleum" production. Possible under the Petroleum Act 1998. New planning permit likely to be needed for activities covered if permissible under the Planning Act 1987.
Gathering pipeline from Buttress- 1 well to the CRC-1 well Production licence or Pipeline licence Planning permit not required if pipeline licence is obtained under the Pipelines Act 2005. If regarded as gathering line under Petroleum Act 1998, planning permit will be required. Seek exemption from the Pipelines Act 2005 pursuant to section 82 of the Petroleum Act 1998. Recommended approach will create need for planning permit.
Drilling of CRC-1 well Exploration license or, Production licence. If exploration licence, planning permit not required. If production licence, planning permit required. Could be considered as an "exploration well" if only data is being gathered Potential inconsistencies in the applications if the Petroleum Act 1998. May require planning scheme amendment.
Injection of carbon dioxide into the CRC-1 well Production licence. Planning permit required for activity under production licence. Otherwise, currently prohibited by planning scheme Potentially outside scope of Victorian Petroleum Act 1998. Petroleum Act 1998 requires recovery of gas. Planning permission almost certainly required and high likelihood of need for amendment.
The complexity was further exacerbated by the 2006 amendments to the State Planning Scheme, under which the proposed Otway Project area was rezoned from "Rural" to "Farming". Farming zones are very restrictive and do not allow innominate land use, therefore prohibit non-farming activities such as sequestration under the Planning Act.
These challenges have been met through innovative solutions and unprecedented cooperation between the project participants, government bodies and the community. With support from the local shire, a Ministerial decree was obtained declaring the Otway Project as one of Victorian State Significance and an exemption sought from the Planning and Environment Act. Rights to access the privately owned land including the production, injection and monitoring sites were obtained through compensation agreements with various landowners, and in one specific case a compulsory acquisition of a small area was made with government support.
The area was not known to have "native title" or aboriginal heritage issues. Notwithstanding, a Cultural Heritage survey was performed during the pipeline construction phase where 10% of the excavated land was sieved for artifacts. No items of significance were found and the project area was deemed to be of low cultural sensitivity.
Ultimately, following exceptional collaboration between all regulating bodies, the approval process for the project was defined using a combination of legislations (Table 2). The Departments involved were the Victorian Department of Primary Industries (DPI), The Department of Sustainability and Environment (DSE), The Department of Environment and Heritage (DEH), The Environmental Protection Agency (EPA), Southern Rural Water (SRW), The Moyne Shire and Local Government, The Department of Infrastructure (DOI), Aboriginal Affairs Victoria (AAV) and the Central Fire Authority (CFA).
Table 2: Approvals Template of the Otway Project
Activity Application Process
Production of CO2 - Victorian Petroleum Act, 1998 (DPI).
Compression & Transport of CO2: 1) Plant (compressor) 2) Gathering line 3) Other facilities (Site office, Control room facilities, Visitors Centre, etc.) - Victorian Petroleum Act 1998 (DPI) - Determined not to be a controlled action under the Environment Protection and Biodiversity Conservation Act 1999 (DEH) - Ministerial Amendment for exemption from the Planning & Environment Act 1987 (Moyne Shire/DSE) - Exemption from Pipeline Act 2005 (DPI) - Aboriginal Heritage Act 2006 (Aboriginal Affairs Victoria) - Compensation Agreement: consent to land access (Landowners) - Project of State Significance and Compulsory Acquisition (DSE, DOI) - Exemption from Rural Fire Service for construction phase (CFA)
Drilling of New well - Exploration license granted through the Victorian Petroleum Act 1998 (DPI).
Injection of CO2 (CRC-1) - Water Act 1989 Section 76 & 67: Approval to dispose of matter by means of a bore (SRW). - Compensation Agreement: consent to land access (Landowners)
Storage of CO2 - Environment Protection Act 1970: Research Development and Demonstration (RDD) Approval (EPA)
Monitoring & Verification 1) Atmospheric 2) SOBN Water wells 3) Downhole Monitoring - Ministerial Amendment for exemption from the Planning & Environment Act 1987 (Moyne Shire/DSE) - Consent to use State Observation Water Bores Network (SOBN) bores (DSE) - Compensation Agreement: consent to land access (Landowners)
The Victorian Petroleum Act, 1998, legislated through the Department of Primary Industries (DPI), covers the surface operations including the production and compression of CO2. The pipeline was constructed as a "gathering line" under the VPA having received an exemption from the Pipeline Act. The drilling operations of the injection well, CRC-1, were also conducted under the VPA, with the well treated as "exploration" for data gathering purposes. It was subsequently converted into an injection well with approval granted under the Section 76 of the Water Act: "approval to dispose of matter underground by means of a bore", through Southern Rural Water.
The CO2 storage was approved by the Victorian Environment Protection Authority (EPA) under the Research Development and Demonstration (RD&D) provision of the Act. The conditions of approval are underpinned by a set of key performance indicators (KPIs'). As outlined in Sharma et.al. [2], five project phases (pre-injection, injection, post-injection closure, post-closure and long term) are defined with each phase having a set of KPIs' based on expected monitoring outcomes. This provision only covers research & demonstration projects such as the Otway Project.
It took over two years to obtain all the regulatory approvals for the project. Long-term liability issues associated with the stored CO2 were the subject of a long debate with the government not prepared to indemnify the proponents against common law liabilities. Ultimately, it was accepted that if project operators, CPPL met all the EPA KPIs', they would have fulfilled their responsibilities and could hand the tenements back to the government.
5. Monitoring Activity at the Otway Project
The design of the Otway Project's comprehensive monitoring and verification (M&V) plan is based on site characterisation, risk assessment and meeting the regulatory requirements. Key monitoring activities are determined in the sub-surface, near-surface, surface and atmospheric domains to detect migrating CO2 or to verify performance of predicted behaviour. Monitoring emphasis and frequency vary depending on the project phase, which also defines trigger points and contingency actions, should the storage site not function as anticipated.
5.1 Atmospheric Monitoring
Atmospheric monitoring consists of detecting, attributing and quantifying the CO2 emissions in the atmosphere and at the surface-atmosphere boundary. The purpose of atmospheric monitoring is to identify any unusual CO2 concentration levels occurring in the vicinity of the Otway Project site, which are variable because of the proximity of biological and industrial sources. Ethreidge et al [4] describe the sentinel network of atmospheric monitoring equipment, which is providing continuous measurements of environmental background against which anomalous sources of CO2 or other gases (such as methane or tracers) can be detected. This data is referenced to the base measurements from the Bureau of Meteorology facility at Cape Grim, northwest Tasmania, Australia; where atmospheric C02 concentrations have been monitored for several years (Figure 2).
Figure 2: Otway Emissions compared to the Cape Grimm reference
All baseline-monitoring activities had been completed prior to the start of injection .The scientific challenge is in understanding these variations, with the help of multiple gas species measurements, transport models and knowledge of specific industrial events in the project proximity.
5.2 Near- Surface Monitoring
The presence of naturally occurring near surface CO2 in the Otway Basin makes identifying the injected CO2 very challenging. A regional survey of the distribution, type and origin of existing CO2 is being carried out through an integrated program of soil gas sampling, hydrogeology and water chemistry. Soil sampling is performed over a defined grid and has been repeated several times per year to account for seasonal effects as part of defining the baseline. The connectivity and fluid migration timescales of existing fresh water aquifers has been established using available hydraulic head, well pressure and geological information. Several water wells in the area are sampled for geochemical information and a sub-set have been equipped with sensors to continuously record pressure and fluid level data. These surveys are now repeated annually.
5.3 Sub- Surface Geophysical Monitoring
Geophysical monitoring can potentially detect geological structural elements, fluid distribution and changes associated with dynamic processes during the injection of supercritical CO2. In 2006, a multi-offset walkaway vertical seismic profile was acquired and interpreted to support the reservoir characterisation and subsequent citing of the new well CRC-1. Subsequently as described by Urosovic et al. [5], a concurrent 3D surface and wellbore seismic acquisition has been completed to get a higher degree of illumination in the sub-surface pre-injection. This data has proved to be of a good quality and of a higher resolution than original data recorded in the year 2000.
5.4 Integrated Geochemistry and Geophysics for Continuous Monitoring
For monitoring the injected plume, an integrated geochemistry and geophysics sensor string was designed with the Lawrence Berkeley National Laboratory. The design leveraged off the concept described by Freifeld et.al [6], but was more challenging, as the observation well Naylor-1 was live with gas to surface and the hole size restricted to 2.375".
Multiple sensors were integrated in a single bottom hole assembly and conveyed into the well on "sucker-rods". The system concept design (Figure 3) includes:
• An array of 8 single component geophones installed at a shallow depth to track the CO2 movement within the reservoir.
• Three 3-component geophones above the reservoir for monitoring micro seismic events.
• A packer to isolate the reservoir from the annulus above
• Three geophones and three hydrophones in the Waarre C reservoir for high resolution travel time measurements.
• Three U-tubes for geochemical sampling in the reservoir: one in the gas cap, one below the gas water contact (GWC) and one deeper in the water zone of the Waarre C.
• 2 Pressure/Temperature gauges at the top and bottom of the Waarre C reservoir
Figure 3: Multi-sensor arrangement in Naylor-1 well.
6. Conclusions
The Otway Project has successfully addressed technical and regulatory challenges through a team-based approach involving scientists, engineers, industry partners and various government and regulatory bodies. The project broke new ground in terms of developing stakeholder processes, gaining consensus across a broad range of stakeholders as to the role of CCS in reducing CO2 emissions while satisfying environmental, health and safety standards. The Otway Project has gained insights into important "carbon storage" specific approval and regulatory issues, with the Federal and Victorian Governments incorporating the lessons learnt in developing CCS legislation for future commercial projects. Injection has commenced and new monitoring data is being acquired to enhance modeling of CO2 migration processes and transport mechanisms.
Numerous public consultation sessions have been held and a community led "stakeholder reference group" has been set up to better communicate with the public. Monitoring data is openly shared with the community in these sessions and the regulators are invited as well. Through a rigorous science based approach, safe operations and an ongoing community consultation program, the CO2CRC Otway project will facilitate industrial deployment of CCS in Australia.
7. Acknowledgements
The authors would like to acknowledge contributions to the CO2CRC Otway Project by researchers from the CO2CRC member industry organizations, Victorian and Federal Government Departments, Universities, CSIRO, Geoscience Australia and international collaborators Lawrence Berkeley National Laboratory, Alberta Research Council and Simon Fraser University. All participants of CO2CRC are listed on www.co2crc.com.au.
8. References
1. L.Spencer, Q.Xu, F. LaPedalina, G.Weir, 2006. Site characterization of the Otway Basin Storage Pilot in Australia. Proceedings of the 8th International Conference on Greenhouse Gas Control Technologies, 19-22 June 2006, Trondheim, Norway.
2. S.Sharma, P.J.Cook, S. Robinson, C.Anderson, 2006. Regulatory Challenges and Managing Public Perception in Planning a Geological Storage Pilot Project in Australia. Proceedings of the 8th International Conference on Greenhouse Gas Control Technologies, 19th - 22nd June 2006, Trondheim, Norway.
3. K.Dodds, D. Serlock, M.Urosovic, D.Etheridge, D. de Vries, S.Sharma, 2006. Developing a Monitoring and Verification Scheme for a Pilot Project, Otway Basin, Australia. Proceeding of the 8th International Conference on Greenhouse Gas Control Technologies, 19-22 June 2006, Trondheim, Norway.
4. D.Etheridge,R.Leuning, A.K.Luhar, B.L.Dunse, 2008. Atmospheric Monitoring and Verification Technologies for CO2 Geosequestration. International Journal of Greenhouse Gas Control, 2 (3): 401-414.
5. M.Urosevic, D.Sherlock, A.Kepic, S.Nakakishi, 2008. Time Lapse VSP program for Otway Basin CO2 Sequestration Project. 70th EAGE Conference and Exploration, Rome, Italy.
6. B.M.Freifeld, R.C.Trautz, K.K.Yousif, T.J. Phelps, L.R.Myer, S.D.Hovorka, D.Collins. 2005. The U-Tube: A novel system for acquiring borehole fluid samples from a deep geologic CO2 sequestration experiment, J. Geophysics. Res., 110, B10203,doi:10.1029/2005JB003735, 2005.
