Challenges for Practical Useand Commercialisation ofCCS.
John GaleGeneral Manager
IEA Greenhouse Gas R&D ProgrammeWorkshop on Practical Use andCommercialization of CCSTokyo, Japan
18th January, 2012

IEA ANALYSIS OF GLOBAL ENERGYTRENDS AND FUTURES•••••••

Energy demand continues to grow: up
33% from 2012 to 2035
Despite policy action CO2 emissions
continue to grow
Without further action by 2017, the 450
scenario will be “locked in”
New “Golden Age” for gas
Increased use of gas without CCS will
not be enough to limit temp rise to 2C
CCS remains a key abatement option for
450ppm scenario
If CCS not deployed by 2020
extraordinary burden placed on other
Low C technology

MtCO2/year Captured

An ambitious growth pathway

OECD regions must lead in demonstrating CCS, but thetechnology must quickly spread to the rest of the world© OECD/IEA 2009

Need to Incentivise CCSUNFCCC Developments• COP17 Durban• Finally the Modalities and Procedures were agreed toallow CCS in the CDM

o Help support CCS deployment in Developing Countries• A roadmap to a legally binding agreement that includes

all countries taking on emissions targets, to be agreed
by 2015 and implemented from 2020
• A second commitment period for the Kyoto Protocol will
be agreed by the end of 2012.
• The Green Climate Fund was agreed which will funddeveloping countries for both mitigation and adaptation
activities.

Measured progress of large-scale
integrated Projects SINCE 2009

Source: Global CCS Institute, Global Status of CCS, 2011
6

Global Spread of Projects

Source: Global CCS Institute, Global Status of CCS, 20117

Concentration on power generation

Source: Global CCS Institute, Global Status of CCS, 20118

Regional bias towards storage selection

Source: Global CCS Institute, Global Status of CCS, 20119

Key messages• CCS projects are found in a number of applications (often
when carbon capture is already part of the industrial
process and where already well explored storage locations
are available).
• Two power projects are now under construction with the aidof government funding and EOR revenue.
• A number of projects have indicated they could be in aposition to decide on a financial investment decision within~12 months but ‘tying a ribbon’ around the business case istime consuming and difficult.
• Storage assessments in deep saline formations can havelong lead times – needs to be carefully integrated withcapture planning.
Source: Global CCS Institute, Global Status of CCS, 20111

Why have some projects
failed?
• Regulatory uncertainty – still the case in somejurisdictions• EC CCS Directive Approved in 2009o Only one country to date has implemented EC Directive intoNational Law
UKo Germany will only regulate for demonstration plants• USA

o USAEPA adapted existing UIC programme for CO2 injection in2011
New Class VI wells programme
http://water.epa.gov/type/groundwater/uic/wells_sequestration.cfm

o Operators trying to circumvent process for CO2EOR operations which use Class II well programmeWhy have some projects
failed?
• Economic/Investor uncertainty• No stable price for Carbon under EU ETSo Need $50/t but current price under €10/t• In contrast price for CO2 for EOR stimulatingtake up in USA/Canada• Economic woes in many countries affecting
viability of projects• Global market economics mean it more costeffective for operators to invest in more
dynamic markets
o Brazil, Mexico, Turkey, Indonesia etc.,

Are we giving ourselves achance?
• Are funding targets too tight to allow successfulproject delivery?

• Feedback from ZeroGen project in Australiao To meet Government targets for funding had to following threeplanning tracks in parallelo Storage path failed due to lack of suitable storage resource
o Whole project failed• Advice:o Stagger planning
Start storage exploration early– Upfront cost with high risk
– Longer project leads times (6-12 years)– But overall decreased project risko Keep a second option - added cost burdenUK FEED Results
Longannet – GoldeneyeField• Mature gas field coming
to end of life
• Operator/owner: Shell• Repressurised by waterdrive• Operational experienceand full data sets
• Confident that can inject
and store CO2.
• Monitoring/Abandonment
plans built around fullQRA

Kingsnorth – Hewett Field• Mature gas field –pressure depleted• Operators: ENI and Tulco• E.ON had to acquire fielddata• E.ON still don’t have acomplete data set• Monitoring planincomplete• No abandonment plan

UK FEED Summary• Capture plant design – in relative terms waseasy• Pipeline• A lot of issues with routing and design but
these could be overcome• Storage reservoir• Even in a mature oil and gas basin like North

Sea the storage reservoir can throw up issues
and uncertainty

http://www.decc.gov.uk/en/content/cms/emissions/ccs/de
mo_prog/feed/feed.aspx

CCS not winning publichearts and minds• Latest Euro barometer survey (364, May2011). Some key results• Only one in ten (10%) said they had heard of CCS andknew what it was• In the 6 countries where there is a major EU cofinanced CCS project, 88% had not heard of the project• 85% would be would be worried about CCS technology
if an underground storage site for CO2 were to belocated within 5km of their home.
• Respondents liked renewables but least popular were
nuclear and coal as energy sources
http://ec.europa.eu/public_opinion/archives/eb/eb74/eb74_publ_en.pdfPublic acceptability• Two notable project disappointments in Europe• Barendrecht, Netherlandso On shore depleted gas field projecto Stopped by public opiniono Dutch government then revised policy to only store off shore• Schwarzepumpe, Germanyo On shore storage projecto Local resistance to storage and transportationo Use of CO2 in Ketzin project abandonedo Opposition grown in German state legislatureso Led to Vattenfall stopping Janswalde demonstration projectPublic Concerns• Primarily around storage site

• Safety• What happens if it leaks?

• A lot of misinformation on web• Underlying lack of trust inindustry/Government• Failure to address issues early open

• Need to engage local groups earlyStorage Resource GapAnalysis for Policymakers• IEAGHG/GCCSI study• Aim of study:• Alert policymakers to the scale, cost and timingof the storage resource assessment, required
to enable deployment of commercial-scale
CCS projects by 2020: 20 projects envisagedby G8 Leaders, and 100 projects in IEA CCS
Roadmap

Suitability Map

Capacity assessment
initiatives

Costs• Cost models were considered for onshore andoffshore storage options both in Deep Saline
Formations and Depleted Oil and Gas Fields• Take account of failed storage sites• Numerous possibilities for each site to reach a
successful path• Cost models included an assessment of theeconomic uncertainties of project bankability

DSF European project cost
Total cost distribution for onshore bankability for an intensely explored area

Probability density total
0,180,160,140,120,10,080,060,040,020
36912 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81
M€

Cost of failure

Mean cost

The distributions includes
estimated failure costs ofdata acquisition, wells…
23

160

14012094

100

IEA 2020
Objective of 100
industrial
storage projects
worldwide

8075
13402320010264388101102

1618192026262626333388586010098

7214162111263152633842454545453412146154420

9444444444444444444442015

2016

2017

2018

2019

2020

2021

2022

2023

20242025

44444442012

2013

2014

Existing projects non EOR
Candidates for Bankability 2015- 2017
Potential EOR contribution

Existing projects EOR
Additional stand-by candidates for Bankability 2016-2018
Proposed additional candidates for Bankability 2018-2022

Summary• The storage resource issue is a primaryissue that needs to be resolved• To ensure CCS projects go ahead we need:• More up front investment on stage resourceassessment• Longer project lead times• Only if Governments recognise this issue
can we make significant progress on CCS
deployment globally.
http://www.globalccsinstitute.com/publications/globalstorage-resources-gap-analysis-policy-makers

What does this mean forJapan?
• Need a Government lead programme withstrong financial support from outset• Complex geology in a tectonically activeregion• Storage offshore can be advantage• Utilising aquifers which are less geologicallywell known• Need an extensive site characterisation
programme based around key basins fordemonstration projects.

What Could Japan do?
• Detailed characterisation of appropriate offshore
geology, first• Then begin stakeholder engagement• Build up knowledge base to develop geologicalmodels to assess:• Site integrity issues• Then undertake detailed risk assessment
programmes• Build up a QRA based monitoring plan
• Undertake test injections to assess injectivity
issues and calibrate models and test monitoringplan

What will this achieve?
• Upfront investment on geological resource
characterisation has potential to savemoney down stream• Must be prepared to lose investment• Build a dataset to use to interact withstakeholders and build confidence• Reduces risk and uncertainty before main
project commences.
• Provides confidence for investment in ademonstration project

GHGT-11• Call for papers now open
• http://www.ghgt.info/index.php/
Content-GHGT11/ghgt-11submit-paper.html• Deadline for abstract
submission: 10th Feb 2012
GHGT-1118th – 22nd November 2012Kyoto, Japan.
www.ghgt.infoありがとうございます。
お会いできる事を楽しみにしています。

GHGT-11John.Gale@ieaghg.org
www.ieaghg.org