CO2 Storage Resources
and their Development
An IEA CCUS Handbook

INTERNATIONAL ENERGY AGENCY
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Source: IEA.
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ThailandUkraineAbstract

CO2 Storage Resources and their Development

Abstract
Carbon capture, utilisation and storage (CCUS) technologies are an
important solution for the decarbonisation of the global energy
system as it proceeds down the path to net zero emissions. CCUS
can contribute to the decarbonisation of the industrial and power
generation sectors, and can also unlock technology-based carbon
dioxide (CO2) removal. However, its successful deployment hinges
on the availability of CO2 storage. For widespread CCUS
deployment to occur, CO2 storage infrastructure needs to develop
at the same speed or faster than CO2 capture facilities.

end of this report and complements the IEA CCUS Handbook on
Legal and Regulatory Frameworks.

CO2 has been injected into the Earth’s subsurface since the 1970sand dedicated CO2 storage (where CO2 is injected for the purposeof its storage and not for CO2-based enhanced oil recovery) has
been occurring since 1996. There are seven commercial-scale
dedicated CO2 storage sites today, with more than 100 others indevelopment. Lessons learned from these sites, along withresearch, pilot and demonstration projects, contribute to ourunderstanding of CO2 storage resources, their assessment andtheir development into CO2 storage sites.

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This IEA CCUS Handbook is an aid for energy sector stakeholders
on CO2 storage resources and their development. It provides an
overview of geological storage, its benefits, risks andsocio-economic considerations. The handbook is supported by anextensive glossary of CO2 storage-related terminology found at theTable of contents

CO2 Storage Resources and their Development

Table of contents
Executive summary ........................................................................................6

Measurement, monitoring and verification ........................................... 39

CO2 storage enables net zero goals ...................................................... 7

Site closure and post-closure ............................................................... 41

Resource assessment and development take time, but momentum isbuilding................................................................................................... 7

Site transfer .......................................................................................... 42
Assessment and development .................................................................... 43

Storage-related risks are manageable .................................................. 8

The assessment and development process is usually phased ............ 45

Commercialisation requires policy support ............................................ 8

Overview and project framing............................................................... 46

Getting started on CO2 storage resource assessment .......................... 9

Assessment and development workflow .............................................. 47

Priority actions to develop CO2 storage resources .............................. 10

Regional and site screening ................................................................. 48

Introduction ..................................................................................................12Site selection ........................................................................................ 50

Context of this IEA CCUS Handbook on CO2 storage ........................ 13

Initial and detailed site characterisation ............................................... 51

Structure of this handbook ................................................................... 15

Site design and development ............................................................... 53

CO2 storage resources.................................................................................16

Technical assessment criteria ..................................................................... 55

CO2 storage is an effective and secure way to permanently isolate
emissions ............................................................................................. 18

Technical criteria determine storage site performance and security.... 57
Timing of technical studies ................................................................... 58

Where CO2 is injected.......................................................................... 19

Containment ......................................................................................... 59

Types of CO2 storage resources ......................................................... 20

Monitorability ........................................................................................ 60

Physical properties that influence CO2 injection .................................. 22

Injectivity ............................................................................................... 61

Mechanisms that trap injected CO2 ..................................................... 23

Capacity................................................................................................ 62

CO2 storage projects ....................................................................................25

Methods to estimate capacity ............................................................... 63

CO2 storage resources are a strategic asset for energy transitions .... 27

Constraints on matched capacity ......................................................... 64

The stages of a CO2 storage project ................................................... 28

Risk management ........................................................................................ 65

Necessary expertise and competencies .............................................. 29

CO2 storage projects have unique risks that need to be managed ...... 67

Assessment and development frameworks ......................................... 30

Risk management in CO2 storage ........................................................ 68

Resource assessment and site development ...................................... 33

Risk assessment and analysis ............................................................. 69

Source–sink matching ......................................................................... 35

Risk mitigation and remediation ........................................................... 71

CO2 storage wells ................................................................................ 37

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Pressure management ......................................................................... 72

Table of contents

CO2 Storage Resources and their Development

Technical risks .............................................................................................74

Support early movers and boost investment in CO2 storage ............. 110

There are five main categories of technical risks ................................ 76

Support the develop of CO2 storage competencies, expertise andtechnologies ....................................................................................... 110

Site performance risks ......................................................................... 77

Private-sector actions ......................................................................... 111

Health, safety and environmental risks ................................................ 78

General annex ........................................................................................... 112

Containment risks ................................................................................ 80

Further reading ................................................................................... 113

Induced seismicity risks ....................................................................... 84

Abbreviations and acronyms .............................................................. 116

Resource interaction risks ................................................................... 86

Glossary ............................................................................................. 117

Commercialisation of CO2 storage ...............................................................87

Acknowledgements, contributors and credits..................................... 125

CO2 storage commercialisation requires business model development............................................................................................................. 89
Project type .......................................................................................... 91
Project costs ........................................................................................ 93
CO2 storage cost evolution .................................................................. 95
Project ownership and the role of specialised CO2 storage companies............................................................................................................. 96
Project financing .................................................................................. 99
Revenue models ................................................................................ 100
Financial risk management ................................................................ 101
CO2 storage liabilities......................................................................... 102
Stewardship funds and other mechanisms........................................ 103
Public perception ............................................................................... 104
Actions to support deployment...................................................................105
Well-designed policies and private-sector support enable CO2 storage
deployment ........................................................................................ 106
Identify CO2 storage resources and provide access to necessary data........................................................................................................... 108
Ensure legal and regulatory frameworks account for CO2 storagespecific needs .................................................................................... 108

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Develop policies that support CO2 storage ........................................ 109

Executive summary

CO2 Storage Resources and their Development

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Executive summary

Executive summary

CO2 Storage Resources and their Development

CO2 storage enables net zero goals

Resource assessment and development taketime, but momentum is building

CO2 storage is a proven and effective way to permanently
isolate captured CO2 from the atmosphere. Currently, sevendedicated commercial-scale CO2 storage sites inject around 10 Mt
of CO2 annually into deep geological formations. The piloting anddemonstration of dedicated storage has been occurring since the1990s. Dedicated storage also builds upon 50 years of lessons
learned from CO2 enhanced oil recovery (CO2-EOR) and over 150
years of subsurface activity by the oil and gas sector.

As of the middle of 2022, more than 130 CO2 storage sites are
in development in 20 countries. Many of these sites have been indevelopment for years, but plans for 60 new storage projects wereannounced in 2021. By 2030 annual dedicated injection capacity
could increase to more than 110 Mt from some 10 Mt today.
Ample CO2 storage resources may be available globally, but
further assessment is required. Globally, CO2 storage resources
are under-appraised and only a small handful qualify as reserves
that can be developed into sites. To support the development of
resource management strategies, governments should assess CO2
storage potential and define reserves. It can take three to ten years
to develop suitable resources into operating sites and not every
resource will be developable. Government-led precompetitive
resource assessment can reduce the financial risks of developing
CO2 storage and accelerate the creation of new sites.

Access to safe and secure geological CO2 storage is critical to
CO2 management in the context of stabilising global
temperature rise. In the IEA’s Net Zero Emissions by 2050
Scenario, 5.9 Gt of captured CO2 is stored annually in 2050.
Enterprises may be hesitant to invest in CO2 capture if they are notconfident that CO2 storage will be available to store captured
emissions. Global CO2 storage development is currently lagging
behind the development of CO2 capture. Targeted government
intervention and expanding policy support to encompass CO2
storage development can help accelerate its progress.
Technology-based CO2 removal requires CO2 storage. Direct air
capture with CO2 storage (DACS) and bioenergy with carbon
capture and storage (BECCS) rely on geological storage topermanently remove captured CO2. Without CO2 storage, thepotential for carbon removal offered by these technologies cannot
be realised.

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Phasing the assessment and development process is efficientand effective. Assessment becomes increasingly detailed andcostly as it proceeds. A phased process allows resources that do
not meet project criteria to be excluded from further assessment.
This reduces exploration risk and increases confidence in storage.
Phasing also allows different actors to conduct different phases ofassessment so, for example, the private sector can build on
precompetitive assessments conducted by governments.

Executive summary

CO2 Storage Resources and their Development

Storage-related risks are manageable

Commercialisation requires policy support

The technical risks associated with CO2 storage can be
managed effectively. Regulatory oversight, robust site assessment
and competent site operations support risk management andcontribute to CO2 storage security. Measurement, monitoring andverification (MMV) programmes – a mandatory part of CO2 storage
operations – underpin risk management processes and demonstrateeffective CO2 storage. To date, pilot, demonstration and commercial
CO2 storage projects have supported the development of MMV
expertise and experience. Regulators should ensure that frameworks
outline MMV requirements without being overly prescriptive as to thetypes of technologies that need to be used.

Developing large, multi-source CO2 storage sites should be a
top priority. Multi-source storage sites are the foundation of a hub
model for deploying CO2 storage. They capitalise on economies ofscale to reduce storage costs and support the deployment of CO2
capture at emitters where full-chain CCUS projects are not feasible,
such as emitters that are small or have no storage expertise.
CO2 storage costs may increase with time due to resource
availability and quality. Resources that have the most data, arethe most accessible or are the largest or least complex are likely to
be developed first. As a result, assessment, development, operating
and monitoring costs may increase due to the need to gather
additional data, or due to increased complexity of injection
operations, or both. Learning-related cost reductions can offset cost
increases, while resource management can support the strategic
development of resources, which can in turn reduce disruptive cost
increases.

Business model development will support economic risk
reduction. New business models are emerging as dedicated CO2
storage activity increases to support decarbonisation efforts.
Business models from other sectors can provide guidance, but
regionally informed, storage-specific business models are needed
to support upscaling and widespread deployment. Such models
have to account for the unique market and financial risks faced by
the developing storage industry, be guided by local policies andregulation, and address risk sharing, long-term liability and revenue
models. Since CO2 storage sites are effectively providing a public
service, both the public and private sectors should play a role indeveloping sustainable business models for CO2 storage activity.

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Decarbonisation strategies should account for the location ofstorage resources. CO2 storage resources are immovable, so thebenefits of siting new facilities that will capture CO2 alongside CO2
storage resources should be considered. Through economies ofagglomeration, this could support CO2 storage hub development,
CO2 transport cost reductions, and the strategic development of
DACS and BECCS facilities in regions with both storage resources
and high potential for renewable energy or bioenergy feedstock.

Executive summary

CO2 Storage Resources and their Development

Getting started on CO2 storage resource assessment
Many industrial and power generation facilities in emerging market
and developing economies (EMDEs) are relatively young,increasing the case for CCUS deployment in these countries inparticular. Some of these countries have started to assess their CO2
storage resources, but many have not. The IEA has devised thefollowing checklist for governments that are interested in developing
an atlas or database of their CO2 storage resources. It
predominantly targets EMDEs, but can be used by any country or
region as a starting point. Not every step will be required or relevant
to every country or region.
National CCUS focal point

Assess whether CO2 storage resources fall under the mandate ofany agency or agencies.



Identify and nominate an organisation or agency to serve as anational CCUS focal point.

Consider engaging the national geological survey or equivalent.

Decide which internationally recognised storage assessment
methodology should be used.



Initiate discussion on CO2 storage with stakeholders who may beable to assist in the assessment process, such as oil and gas
companies, local universities and research centres with
subsurface expertise, and other government agencies.

5. Data

Identify owners and custodians of geological data, which may be
government agencies, private-sector companies, researchorganisations, etc.

Gather as much existing relevant geological data as possible andmake it publicly available whenever possible.

6. CO2 storage assessment

Consider engaging international expertise and support to assist
with the process, such as the IEA, IEAGHG and World Bank.

Assess the collated data. As a part of assessment, clearly define
the methodology and assumptions that were used.



Make assessment results publicly available whenever possible.

7. Next steps

3. CO2 storage assessment project team



4. Leverage national human capacity

2. International supportDefine a project team to reanalyse existing geological data withthe goal of identifying CO2 storage resources.



Determine which agency should co-ordinate/be involved in the
resource assessment process.



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Determine if there are specific resources that should be targeted atfurther assessment.
Outline priorities for future CO2 storage-related work and consider
defining a CCUS deployment work programme.
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1.



Executive summary

CO2 Storage Resources and their Development

Priority actions to develop CO2 storage resources
To reduce the risk of CO2 storage becoming a bottleneck during
energy transitions, the IEA has identified five categories of priority
actions that governments can take to accelerate CO2 storage
development. The private sector can support these actions throughconsultation during the development of policies and regulation,
improving data management practices, increasing innovation, andsupporting the upskilling and reskilling of the oil and gas workforce.
Additionally, the IEA has defined specific considerations for theprivate sector to support CO2 storage deployment.

Ensure legal and regulatory frameworks enableeffective and secure CO2 storage

Identify CO2 storage resources and facilitate access tothe data necessary for storage development



Develop national CO2 storage resource atlases or databases using
internationally agreed methodology, such as the Storage Resource
Management System (SRMS), and existing subsurface data.

Support countries and regions without storage experience byencouraging knowledge transfer and data sharing.



Improve data management, support digitisation of legacy records,
and ensure data are accessible.

Address CO2 storage-specific liabilities.



Define clear licensing and permitting processes and appropriately
staff agencies to support efficient and timely permit issuing.



Clearly define the ownership of, access to and management ofsubsurface pore space if it is not already defined.



Consider the ownership of new subsurface data and if newly
acquired subsurface data should be considered a public good after
a set period of time.

Develop policies and regulatory competencies that
support CO2 storage

Accelerate pre-commercial exploration for CO2 storage in order toincrease confidence in storage resource availability andperformance.

Outline characterisation, quantification and MMV requirements inregulatory frameworks.

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Determine if CO2 storage, and by extension CCUS, should be
integrated into national climate, energy, industrial anddecarbonisation strategies. If yes, develop an appropriate resource
management plan.

Implement policies to encourage CO2 storage investment, such as
direct incentives or market-based policies like a carbon tax,
takeback obligation or emissions trading system.



Define methods of risk allocation and/or risk sharing between
public and private sectors.
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

Executive summary

CO2 Storage Resources and their Development

Incentivise the development of CO2 transport and storage hubs to
support the decarbonisation of industrial clusters and encourage
the co-location of clean energy technologies with CO2 storage
resources.
Foster public support by developing robust communication
channels and allowing for public engagement opportunities.



Support the reskilling and upskilling of oil and gas workforces sothey are also able to work on CO2 storage.



Encourage the development of CO2 storage and CCUS research,engineering and technology programmes at the university level
and at national research centres.

Incentivise private-sector companies with CCUS experience toinvest in the national workforce, in the form of training andapprenticeships, to truly build on the human capacity needed to
deploy projects.

Develop technology solutions that enable the co-location ofdifferent clean energy technology solutions.

Support early movers, develop business models andboost investment in CO2 storage

Develop dedicated incentives to support resource assessment anddevelopment.

Provide early movers with access to targeted funding that iscontingent on active resource assessment and knowledge/data
sharing. For example, an exploration tax credit could encouragecompanies to perform resource assessments.

Encourage public–private partnerships on storage development.



Ensure ongoing development funding to support CCUS andstorage development.

Private-sector considerations

Support the development of CO2 storage
competencies, expertise and technologies
1

Engage in or support technology development that can improve
resource assessment, site operations and MMV processes.

Consider creating a market for tradeable, regulatory compliant
CO2 storage certificates.

Incorporate CO2 management into corporate decarbonisation andenvironmental, sustainability and governance (ESG) strategies. As
part of this, consider if CCUS should be included in current andfuture growth strategies.



Develop and build CO2 storage infrastructure. 1Drive investment towards CO2 storage infrastructure by supporting
CO2 management and insuring it is permissible within sustainablefinance metrics.

Create insurance products that cover CO2 storage activities.



Recognise proven CO2 storage reserves as an asset. 22This can also be done by state-owned enterprises and public–private partnerships.

The Storage Resource Management System published by the Society of Petroleum Engineers
provides a mechanism to assign a book value to CO2 storage resources.
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

Chapter 1. Introduction

CO2 Storage Resources and their Development

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Introduction

Chapter 1. Introduction

CO2 Storage Resources and their Development

Context of this IEA CCUS Handbook on CO2 storage
risking negative final investment decisions (FIDs) on capture
facilities or inefficient investment.

Carbon capture, utilisation and storage (CCUS) technologies
provide significant decarbonisation potential and their widespread
deployment is an integral part of a lower-cost and more attainable
net zero future. In the IEA Net Zero Emissions by 2050 Scenario(Net Zero Scenario), some 5.9 Gt of CO2 are captured and stored in
2050. This requires significant expansion of dedicated CO2 storage
capacity since today around 10 Mt of CO2 is injected annually into
dedicated CO2 storage sites.

To deploy CO2 storage on a gigatonne scale, storage resources
need to be assessed and developed, storage activities need to be
regulated, a market for CO2 storage needs to be built, and policy
needs to be designed to support this. The energy sector should
consider the role CO2 storage will play in its decarbonisation.
Storage deployment can be supported by stakeholders across theenergy sector and both the public and private sectors can play arole. To that end, the IEA has identified several major technical,
economic, policy, and legal and regulatory considerations that feed
into the deployment of CO2 storage infrastructure.

For CCUS technologies to achieve their CO2 management
potential, a significant and expedient scale-up of CO2 storage fromthe megatonne to gigatonne scale is required. Access to effective
and secure CO2 storage enables widespread deployment of CO2
capture technologies during energy transitions, making it the mostpivotal component of the CO2 management value chain. Without
confidence in CO2 storage availability, the decarbonisation potentialof CCUS technologies is significantly reduced. Additionally,
technology-based CO2 removals – bioenergy with carbon captureand storage (BECCS) and direct air capture with storage (DACS) –require CO2 storage.

Info point: About the IEA CCUS Handbook series
Meeting net zero goals will require a rapid scale-up of CCUS
globally, from tens of millions of tonnes of CO2 captured today tobillions of tonnes by 2030 and beyond.

A gap is developing between ambitions to develop CO2 capture andambitions to develop CO2 storage. Without urgent and concerted
action by the public and private sectors to accelerate CO2 storage
assessment and development, this gap may continue to grow,

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The IEA CCUS Handbook series aims to support the accelerated
development and deployment of CCUS by sharing global goodpractice and experience. The handbooks provide a practicalresource for policy makers and stakeholders across the energy
industry to navigate a range of technical, economic, policy, legal
and social issues for CCUS implementation.

Chapter 1. Introduction

CO2 Storage Resources and their Development

Schematic of a potential CO2 management value chain

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Note: CO2 transport can also include barges, trains and tank trucks.

Chapter 1. Introduction

CO2 Storage Resources and their Development

Structure of this handbook
Chapter 6. Risk management outlines the role risk management
has in CO2 storage activities. It goes through the main risk
management processes.

This IEA CCUS Handbook aims to be a resource on CO2 storage
that can be used by stakeholders across the energy industry tobetter understand CO2 storage, from resource assessment
onwards.

Chapter 7. Technical risks provides an overview of the five maincategories of technical risks that must be managed by a CO2
storage project.

The handbook is structured as follows:
Chapter 1. Introduction outlines the structure of this handbook andintroduces the importance of CO2 storage in energy transitions.

Chapter 8. Commercialisation of CO2 storage addresses thesocio-economic aspects of CO2 storage projects, including businessmodels and long-term liability.

Chapter 2. CO2 storage resources provides a general introduction
to what CO2 storage resources are, how much CO2 can be injected
and how it is trapped in a geological formation.

Chapter 9. Actions to support deployment looks at how CO2
storage deployment can be accelerated and provides concrete
actions that can be taken by policy makers and the private sector.

Chapter 3. CO2 storage projects presents the lifecycle of a CO2
storage project, the skills and competencies that support CO2
storage projects, and frameworks that can be used to develop
projects.

The handbook is supported by an extensive glossary of CO2
storage-related terminology found at the end of this report. It
complements the IEA CCUS Handbook on Legal and Regulatory
Frameworks.

Chapter 4. Assessment and development breaks down the
resource assessment and development process into its component
phases and defines key considerations for each phase.

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Chapter 5. Technical assessment criteria goes through thefour main technical criteria that are evaluated during resource
assessment and development.

Chapter 2. Storage resources

CO2 Storage Resources and their Development

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CO2 storage resources

Chapter 2. Storage resources

CO2 Storage Resources and their Development

Chapter summary
CO2 storage resources are porous subsurface rocks that can trap
injected CO2. They can be broadly divided into three types: saline
formations (or saline aquifers), depleted oil and gas fields, andunconventional resources (igneous rocks, unmineable coal seams
and organic shales). Storage resources can be found globally, butlike other natural resources they are not evenly distributed.

Policy actions:

How much CO2 can be injected will depend on the physicalproperties of the resource along with site engineering and regulation(see Chapter 5 for more detailed discussion).







Determine the type of storage resources available in a region or
country.
Assess CO2 storage resources on a national or regional level.
Identify countries and regions where storage resources are likely
to be present, but have not been assessed.
Support storage resource assessments in emerging market anddeveloping economies.

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Once injected, CO2 becomes trapped by physical and chemical
processes allowing it to remain safely stored for thousands of years.
The four main mechanisms – structural/stratigraphic, residual,
solubility/dissolution, and mineral trapping – occur on different
timescales and at different ratios depending on reservoir
characteristics and injection type.

Chapter 2. Storage resources

CO2 Storage Resources and their Development

CO2 storage is an effective and secure way to permanently isolate emissions
Geological storage involves injecting captured CO2 deep into thesubsurface where it is trapped. Since the 1970s CO2 has been
injected into the subsurface for the purpose of enhanced oil
recovery (EOR). In 1996 the first dedicated CO2 storage project(i.e. not using the CO2 for EOR, but to reduce emissions) was
commissioned at the Sleipner gas fields in Norway. Decades of safe
CO2 injection into the subsurface and more than 150 years ofsubsurface activity, engineering and innovation support the wide
deployment of CO2 storage.

Reservoirs can contain oil and gas, naturally occurring CO2,
freshwater, saltwater (commonly called brine) and other fluids.
Reservoirs suitable for geological storage of CO2 are found in
sedimentary basins – regions where accumulated sediment has
been compacted into rock. However, some igneous rock formations
may also be suitable for CO2 storage. 3 In order to contain CO2,
reservoirs generally should be capped by an impermeable layer ofrock known as a caprock or seal. These seals directly contribute to
storage security and should have sufficient lateral extent that CO2
cannot spread beyond their boundaries and migrate to the surface.

Like oil and natural gas, CO2 deposits can be found in thesubsurface. The Bravo Dome CO2 gas field in the United States is
one such example, where natural processes have trapped CO2 forover 1 million years. These same natural processes can be
exploited to trap and immobilise injected CO2. This is the foundationof geological CO2 storage. In appropriately characterised,developed and operated storage sites, CO2 can be expected toremain trapped permanently.

During the storage process, CO2 is injected into a suitablegeological reservoir where it will remain trapped in a defined area.
For injection to be successful, CO2 needs to be at a slightly higher
pressure than the targeted reservoir. Typically, CO2 is injected in its
dense phase at high pressure (> 100 bar) to depths below 800 m,
where subsurface pressure allows the CO2 to remain in its densest
and most compressed phase. Inside the reservoir, CO2 often
becomes a supercritical fluid – dense like a liquid, but with low
viscosity like a gas – as it warms to reservoir temperature andremains under high pressure. This allows for the efficient use ofstorage space.

A place where fluid or gas collects in the subsurface is known as areservoir. Reservoirs are permeable and porous rock formations
found deep underground both on and offshore. When reservoirs arefound in proximity to one another the resulting area is called a field.

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3Storage in basalts, a type of igneous rock, has been piloted in Iceland and the United States;
however, additional demonstration is needed to ascertain the viability of widespread deployment
and scale-up of this type of storage.

Chapter 2. Storage resources

CO2 Storage Resources and their Development

Where CO2 is injected
Schematic of onshore and offshore CO2 storage reservoirs

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Note: As with oil and gas wells, CO2 injection wells can be vertical, horizontal or deviated.

Chapter 2. Storage resources

CO2 Storage Resources and their Development

Types of CO2 storage resources
CO2 storage resources are permeable rock formations with pores –small holes and voids between mineral grains – that can be filledwith CO2. These resources can be divided into three maincategories: saline formations, depleted oil and gas fields (areas with
one or more reservoirs), and unconventional storage resources.

Depleted oil and gas fields
Oil and gas fields are made up of one or more reservoirs wherebrine has been replaced by hydrocarbons. When it is no longer
possible to extract hydrocarbons, a reservoir is considered
depleted. While the processes and seals that trap hydrocarbons in
oil and gas reservoirs can also trap CO2, not every depleted
reservoir will be suitable or available for CO2 storage. In addition totechnical considerations, many jurisdictions restrict CO2 injection
other than for the purpose of CO2-EOR in fields where somereservoirs are still being used for hydrocarbon extraction, in order tominimise the risk of negative interactions between the resource andCO2. In the near term, this could constrain the number of depleted
oil and gas reservoirs available for dedicated CO2 storage.
Reservoirs with ongoing oil and gas extraction are not suitable fordedicated CO2 storage, but they may be a target for CO2-EOR or
hybrid approaches.

Saline formations
Saline formations, also known as saline aquifers, are porous andpermeable sedimentary rocks that contain salty, non-potable watercommonly known as brine. They are a common geological feature
with wide geographic distribution. Some 98% of the world’s
estimated CO2 storage resources are in the form of saline aquifers
and they offer significant theoretical storage capacity. However, ona global scale, the usable capacity of these resources is unknown
because there is insufficient site-specific data to characterise them.
To date – in the absence of a strong climate imperative – the lack ofan economic driver means that the process of assessing theseresources’ potential has not substantially progressed. Typically,saline aquifers near to, or in the same geological unit as, oil and gas
reservoirs are better characterised than greenfield saline aquifers
since they benefit from data collected during oil and gas activities.
Examples of operating projects in saline aquifers include: Gorgon
CCS in Australia, Quest CCUS in Canada, Illinois Industrial CCS in
the United States and the Sleipner and Snøhvit projects in Norway.

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Repurposing depleted oil and gas reservoirs into CO2 storage sites
offers several benefits. Due to extraction activities, these reservoirs
usually have lower than natural reservoir pressure, are wellcharacterised and have extensive existing infrastructure. Lower
than natural reservoir pressure may make it easier to inject CO2 intoa reservoir, but needs to be evaluated on a site-by-site basis.
Existing data can be reused, thereby reducing data acquisition
costs. Existing infrastructure (platforms, wells, pumping stations,Chapter 2. Storage resources

CO2 Storage Resources and their Development

Unmineable coal seams can absorb CO2; however, methane isoften released when CO2 is injected into them. Ongoing research is
examining how effectively these deposits can store CO2.

etc.) could potentially be reused or repurposed, leading to reduced
decommissioning costs at the end of oil or gas extraction andreduced construction costs for the storage site. Existing
infrastructure should be assessed to ensure that it is fit for purpose
before a depleted reservoir is repurposed. As part of this, all legacy(i.e. pre-existing) wells will need to be assessed to ensure that theycannot become a pathway from which CO2 could leak.

Organic shales are a type of sedimentary rock rich in organic
matter. Organic matter can absorb CO2 in a manner similar to coal.
Limited work has been done to date on the technical and economic
feasibility of using these resources for storage.

As of 2022, no dedicated CO2 storage is occurring in depleted
fields. However, a number of projects are in development, including
the Acorn project and the HyNet North West storage site, both off
the United Kingdom, Project Greensand off Denmark, Porthos andAramis, both off the Netherlands, the offshore Bayu-Undan projectin Timor-Leste, the Ravenna hub off Italy, and the Moomba CCS
project in the Australian outback.

Info point: CO2 use for the extraction of oil, gas and water
CO2 can be used as a working fluid in many undergroundapplications, including for enhanced oil recovery (EOR),
enhanced gas recovery (EGR), and enhanced water recovery(EWR). The primary objective of CO2 injection in theseapplications is to enhance extraction. As a by-product, some CO2
remains trapped in the subsurface. In the case of CO2-EOR, overthe lifetime of the project a significant proportion of the injected
CO2 is retained underground. CO2-EOR can be optimised forCO2 storage, also known as CO2-EOR+. At least four additional
activities to occur for conventional EOR operations to qualify.
These include:

Basalts and peridotites are igneous rocks and are reactive to CO2.
When CO2 is injected, some of the rock dissolves and chemical
reactions convert a proportion of the injected CO2 into solidminerals. Carbfix in Iceland operates the only active storage projectin basalts and injected around 80 kt of CO2 between 2014 and the
middle of 2022. The company aims to expand operations with the
Coda Terminal, a project that will inject 300 kt CO2 per year startingin 2025. CO2 storage in basalts was also piloted in the
United States during the Wallula Basalt Sequestration Pilot Project.






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Additional site characterisation and risk assessment toevaluate the storage capability of a site.
Additional monitoring of vented and fugitive emissions.
Additional subsurface monitoring.
Changes to field abandonment practices.

IEA. CC BY 4.0.

Unconventional storage resources

Chapter 2. Storage resources

CO2 Storage Resources and their Development

Physical properties that influence CO2 injection
Porosity is the volume of rock pores as a proportion of the totalrock volume. Porosity can be measured directly from core samples
or it can be derived during well logging – the process of recording
the geological and geophysical characteristics of a well.

Three physical properties – permeability, pressure and porosity –influence how much CO2 can be injected into a reservoir, at what
rate and for how long.
Permeability measures how easily a fluid can pass through a rock.
While related to porosity, permeability is influenced by how poresare shaped and connected. It can either be measured directly or
estimated during well logging. Dynamic flow tests with water or CO2
are the most accurate way to assess reservoir permeability for CO2
storage. Relative permeability quantifies how injected CO2 andreservoir fluids interfere with one another as they both movethrough the reservoir. It measures the ability of two or more fluids topass through a rock and can be measured in a lab, modelled using
simulations or calculated from field performance data.

CO2 is injected into a reservoir via a well at a pressure higher thanthat of the fluids within the target rock formation. Once CO2 is
injected, it forms a plume that migrates through the reservoir,
pushing pre-existing reservoir fluids away from the injection zone.
The CO2 migrates within a network of interconnected pores where it
mixes with or displaces pre-existing reservoir fluids. Fluid
displacement and CO2 injection cause pressure to build within thereservoir. Elevated pressure from around the injection zone will
disperse through the reservoir and potentially into surrounding rockformations, travelling faster and further than the CO2 plume ordisplaced fluids. In certain cases, increased subsurface pressure
might be observed more than 100 km from the injection zone.
Pressure build-up is an expected part of large-scale operations, anddifferent techniques have been developed to manage it.

Pressure controls how easily CO2 can be injected and how much
CO2 can be safely stored. Reservoir pressure is the pressure of
fluid within the pores of the reservoir. It can be measured using
bottom-hole pressure gauges and during well tests. Reservoirpressure changes with subsurface activity. Extraction removes
fluids and usually causes pressure to decrease. Injection adds fluids
and usually causes pressure to increase. Fracture pressure is thepressure required to fracture a reservoir or its seal. It can becalculated or modelled. CO2 injections should not bring the reservoir
above its fracture pressure or the fracture pressure of its seal.

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The volume of CO2 that can be stored is determined by thepressure limits of a reservoir and how reservoir pressure responds
to injection, as influenced by its porosity and permeability. A highquality reservoir can have a porosity of 25% or more, be very
permeable and be at or below its natural – hydrostatic – pressure.

Chapter 2. Storage resources

CO2 Storage Resources and their Development

Mechanisms that trap injected CO2Mineral trapping occurs when dissolved CO2 reacts with minerals
in the reservoir to form solid carbonate minerals. This trapping
mechanism stores CO2 by incorporating it chemically into minerals.
Depending on injection parameters and resource type, mineraltrapping occurs on timescales ranging from minutes to millennia.

Four main mechanisms trap CO2 inside a reservoir. Eachcontributes to storage site performance and long-term security.
They occur over different timescales and at different ratios
depending on reservoir characteristics and injection type. CO2 canbe injected directly (as a gas, liquid or in supercritical form) or it canbe injected in dissolved form. Each provides a different level oflong-term security and immobilisation.

CO2 trapping mechanisms and storage security

Structural or stratigraphic trapping is an immediate mechanism,trapping CO2 in a reservoir via an impermeable upper boundary or
caprock. Since CO2 is usually less dense than reservoir fluids, itrises through the reservoir after injection. It stops once it reaches animpermeable boundary where it then spreads laterally. Its security isa function of the security of the seal. Seal penetration via wells or
geological features (e.g. faults) could contribute to leakage risk.
Residual trapping can occur as the CO2 plume moves throughreservoir and displaces formation fluids. It is the trapping of CO2 insmall pores by physical forces (capillary action). This mechanism
contributes to the long-term security of injected CO2 and is atrapping mechanism that continues to work even if a seal fails.
Dissolution or solubility trapping occurs when CO2 dissolves into
formation fluids causing it to be trapped by geochemical means.
CO2-enriched formation fluids are denser than those that are nonenriched and over time they slowly sink through the formation until
they reach an impermeable layer.
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Source: Reproduced from Figure 5.9 in S. Benson et al. (2005), Undergroundgeological storage, in B. Metz et al. (eds.), IPCC Special Report on Carbon Dioxide
Capture and Storage, Prepared by Working Group III of the IPCC, Cambridge
University Press, Cambridge, United Kingdom and New York, NY.

Chapter 2. Storage resources

CO2 Storage Resources and their Development

CO2 trapping within a reservoir on a microscopic scale

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Note: The scale and distance between mineral grains will vary between reservoirs.
Source: Adapted from S. Flude and J. Alcade (2020), Carbon capture and storage has stalled needlessly – three reasons why fears of CO₂ leakage are overblown, The Conversation(accessed 16 May 2022).

Chapter 3. Storage projects

CO2 Storage Resources and their Development

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CO2 storage projects

Chapter 3. Storage projects

CO2 Storage Resources and their Development

Chapter summary
CO2 storage resources are a finite and strategic resource thatcountries should consider as they look to CO2 management tosupport their decarbonisation strategies and energy transitions.

Policy actions:

Like most large infrastructure projects, it takes time, experience andskills to develop CO2 storage sites. Storage site development cantake anywhere from about three years to more than ten depending
on how well assessed the targeted storage resource is.







The lifecycle of a CO2 storage site can be divided into six phases,
each of which will require different levels of investment. Several
resource assessment and development frameworks exist. Project
developers should consider using the Storage Resource
Management System (SRMS), which is based on the Petroleum
Resource Management System (PRMS). The SRMS is project basedand excludes certain types of storage resources, namely
unconventional resources and those found in oil or gas fields withongoing active extraction. The SRMS can be adapted to support
assessments at a national or regional level, or assessments ofresources that fall outside the framework. Alternatively, otherframeworks can be used.

Consider the role CO2 management and by extension CO2
storage may have during regional or national energy transitions.
Encourage the development of CO2 storage-related expertiseand competencies – this can include reskilling or upskilling theexisting oil and gas labour pool.
Determine if CO2 storage resources should be consideredstrategic resources.
Create a resource development plan and define synergies
between existing natural resource development and CO2 storage
resource development.
Use source-sink matching to identify links between existing
emitting assets and CO2 storage resources.
Ensure regulation supports CO2 storage development.

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Source-sink matching can support the strategic roll-out of CO2
storage sites and optimal resource development.

Chapter 3. Storage projects

CO2 Storage Resources and their Development

CO2 storage resources are a strategic asset for energy transitions
creating infrastructure development funds, or having state-owned
enterprises manage storage assessment and site operations.

Natural resources – such as water, minerals, energy resources andsoil – underpin strategies for economic development and national
security. Energy transitions require large-scale CO2 management,
underpinned by extensive CO2 storage infrastructure. Since CO2
storage resources are finite, non-renewable and support energy
transitions, they represent a new type of economic resource. An
argument can be made for storage resources to be consideredstrategic assets and for CO2 storage sites to be considered criticalinfrastructure in the quest for net zero emissions.

National storage assessments and CCUS deployment level
Country or region
Australia
BrazilCanadaPeople's Republic of China*

Countries without an overview of their storage resources should
consider their energy transition pathway and determine if it would
be relevant to assess their CO2 storage resources. Some countries
and regions, mainly those with CCUS experience, have alreadyperformed initial precompetitive assessments.

European Union
Japan
Korea
MexicoGovernments that decide to treat storage resources as a strategic
natural resource should ensure that they are managed
appropriately. This often includes creating a storage resourcesmanagement plan, performing precompetitive resource
assessments and supporting resource development throughsubsidies, knowledge sharing and other incentives. A definedprocess for issuing exploration licences and permitting storage sites
is also needed. To support CO2 storage development, governments
may consider establishing preferential pathways for permitting,

NorwaySouth Africa
United Kingdom
United States

National resource
assessment levelCO2 storage experience

▲

●

▲

●

▲
▲

●
●

▲

● to ●

▲

●

▲
▲
▲
▲
▲
▲

●
●
●
●
●
●

▲ = Assessed to effective capacity; ▲ = Assessed to theoretical capacity;▲ = Moderately assessed; ● = At least one operating dedicated storage site; ● = At
least one dedicated storage demonstration project; ● = Limited piloting experience or

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experience restricted to CO2-EOR.
* Hereafter, “China”.
Note: In the European Union CO2 storage experience is country dependent.
Source: Based on IEA analysis and C. Consoli and N. Wildgust (2017).

Chapter 3. Storage projects

CO2 Storage Resources and their Development

The stages of a CO2 storage project

Resource
assessment

Design anddevelopment

Construction

Operation

ClosurePost closure

Timeframe (year)

2-6

1-5

1-3

20-50

Variable10+*

Investment level

Medium to highMediumHigh

Low

Moderate

Very low

SRMS category

Prospective

Contingent to capacity

Capacity

On injection

StoredStoredDescription

Process to identify
and study CO2
storage resources.
Investment carries
exploration risk since
not every resource will
be developable.

Project planning anddesign including
FEED activities andpermitting in advanceof FID.

Post-FID activities,
including site
construction,connection totransport lines,
expansion of MMV
instrumentation anddrilling of additional
wells.

Period of time during
which CO2 is actively
injected into thesubsurface. This iscommonly referred toas “on injection”.

Period between
cessation of injection
activities and the
granting of a closure
authorisation.

Period of time after
injection ceases
where the CO2 plumeis still actively being
monitored. Timeduring which site
responsibility istransferred if
applicable.

Policyconsiderations• Support resource assessment.
• Create a management strategy for storage
resources.
• Define fit-for-purpose legal and regulatory
frameworks.
• Consider whether existing infrastructurenearing end of its life could be repurposed.
• Ensure that resources are in place to support
licensing and permitting.
• Define safety criteria including MMV.
• Outline site inspection requirements.

• Consider providing subsidies to support earlymovers.
• Ensure regulatory framework allows forstorage operations.

• Define well abandonment and surface
remediation requirements.
• Define the requirements for issuance of aclosure certificate or equivalent.
• Define length of time required for post-closure
monitoring.
Consider mechanism to transfer liability to thestate after a period of post-closure monitoring.

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* Post-closure timeframes are jurisdictionally dependent and range from being unspecified to being over 50 years.
Notes: FEED = front-end engineering design; SRMS = Storage Resource Management System. Assessment and development activities carry exploration risk and assessed resources
may be defined as undevelopable or not commercially viable. Investment needs are relative to overall costs.

Chapter 3. Storage projects

CO2 Storage Resources and their Development

Necessary expertise and competencies
CO2 storage. Many universities are already renaming programmes
and some are adding modules related to CO2 storage (or CCUS).

Interdisciplinary teams will support CO2 storage sites all the way
from assessment through to post-closure monitoring. Teams willneed to include subsurface experts – geoscientists, engineers andmodellers – along with other specialists who have business,
economic, risk, legal and regulatory, social and environmental
assessment expertise. To support storage development, regulators
will need to have the necessary regulatory and institutional capacity
to allow for efficient licensing and permitting.

Case study: Supporting the acquisition of CO2 storage
expertise
CO2 storage-related knowledge and expertise can be developed
through collaboration between government, industry,
communities, educational organisations and other participants.
This is especially relevant in regions with oil and gas activity,
where the labour pool will already have many skills that support
CO2 storage and where employment may decline in the future
due to a shift away from fossil fuels towards other sources ofenergy. Both HyNet NorthWest in the United Kingdom andRavenna CCS in Italy are examples of CO2 storage hubs indevelopment that will support continued employment in regions
facing imminent closure of upstream activities due to depleted
reservoirs.

While there is significant overlap between the knowledge andexpertise required for CO2 storage and that used by the oil and gas
industry, CO2 storage requires certain specific expertise as well.
Currently, CO2 storage-specific expertise is limited globally, andtherefore there is a strong need to develop it across disciplines.
Specialists need, inter alia, the following knowledge and expertise:
CO2-specific well engineering, completion and injection
technologies.



Understanding and managing the reactivity and phases of CO2 ina storage-specific context.

CO2 storage-related dynamic modelling.



Environmental measurement, monitoring and verification.

CO2 containment and containment risk assessment.

In addition to the private sector transitioning their workers fromextraction to injection, postgraduate programmes such as
Edinburgh’s Carbon Management MSc, educational programmessuch as the IEAGHG’s Summer School and the US Departmentof Energy’s Research Experience in Carbon Sequestration,and geoscience and engineering programmes at universities all
support the acquisition of specific expertise and competencies.

To create a pipeline of future talent and support development of
CO2 storage competencies, university programmes related topetroleum geology or engineering could add modules related to
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

Chapter 3. Storage projects

CO2 Storage Resources and their Development

Assessment and development frameworks
Existing national or regional storage resource atlases rarely share acommon approach or classification framework, so it is usually notpossible to compare resource availability between regions orcountries. Depending on the methodology, the estimated volume ofavailable storage resources can vary by two to five orders ofmagnitude for the same geological formation, and resource capacity
is often reported as a range (refer to Chapter 5 for more information
on how capacity is assessed). One study estimated that global
capacity is between 8 000 Gt and 55 000 Gt. The quantification of
CO2 storage resources on all levels from local to global can be
improved with better data, more detailed assessments focused on
dynamic considerations, and a consistent classification
methodology.

DOE method, Boston square analysis) may be suitable for thedevelopment of national or regional atlases and databases. These
approaches, at least initially, usually focus on the potential volume
that can be stored rather than the rate and duration of CO2 injection.
While volume-based assessments are valuable for primary resource
identification, they do not represent actual CO2 storage capacity
since injection rate and duration are more of a constraint thanvolume.
An internationally consistent approach to resource classification
could help mature storage resource frameworks and support
commercial investment. To that end, the Society of Petroleum
Engineers (SPE) developed the Storage Resource Management
System (SRMS). It is a project-specific approach that incorporates
commercial and technical considerations. For saline aquifers anddeleted oil or gas fields, it can be used to identify the size of a
resource and how advanced a project is. It can also be adapted toother resource types. The SRMS functions in a similar manner tothe Petroleum Resource Management System (PRMS) which isused by the petroleum industry. As a result, its methodology may befamiliar to investors and lenders involved in hydrocarbon extraction
and it can be used to assign a book value to a CO2 storage
resource, allowing it to be treated as an asset.

The assessment and development of storage resources need tocomply with applicable local, regional and national regulations. They
can be guided by international standards such as ISO TC 265 –
27914:2017, 4 best or recommended practices (e.g. DOE/NETL2017/1844, DNVGL-RP-J203), or classification systems. Individualclassification frameworks provide a common method that can beused to assess and categorise resources based on specific criteria.
Those focused on primary resource identification (e.g. UN
Framework Classification, CSLF Resources-Reserves Pyramid, US-

ISO TC 265 – 27914:2017 is due to be revised in 2022. Readers should refer to the most up-todate version of the standard.
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4Chapter 3. Storage projects

CO2 Storage Resources and their Development

Info point: The Storage Resource Management System
The SRMS was completed and adopted by SPE in 2017. The system
is designed to classify CO2 storage projects by their maturity andaims to provide a set of definitions that can be used internationally tocompare projects and track progress on maturing storage resources.

regulatory regimes prohibit storage. The prospective, contingent andcapacity maturity classes can be further divided into subclasses.
The SRMS resource classification framework

The SRMS is project-based, with resources classified according totheir commerciality and the level to which they have been assessed.
If a resource that is being assessed is not clearly associated with aplanned commercial project, the SRMS can still by applied bydefining a nominal or theoretical project – in effect by identifying atechnically and commercially realistic development concept.
As a resource moves up the classification framework, the chancethat that project will develop into a commercial storage site increase.
Similar to the PRMS, the SRMS includes a range of uncertainty ineach class of project maturity. Uncertainty in the storable quantity of
CO2 increases from left to right.
Where the suitability for storage has not been determined for a
specific subsurface storage formation, storage resources areclassified as Undiscovered. Meanwhile, where the potential forstorage within a specific subsurface formation has been quantified,storage resources are classified as Discovered. In both classes,
resources can be defined as Inaccessible if they are not to be
developed for storage at the current time. An example of an
inaccessible resource would be one found in a jurisdiction where

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Source: Reproduced with modifications from Society of Petroleum Engineers (2017), CO2 Storage
Resources Management System.

Chapter 3. Storage projects

CO2 Storage Resources and their Development

Case study: Applying the SRMS methodology globally
A Global CO2 Storage Resource Catalogue, funded by the Oil and
Gas Climate Initiative (OGCI), is being created over six 12-month
cycles. During the process, existing data on CO2 storage resources
is reassessed using the SRMS methodology.

United States – which demonstrates the clear need for further
resource assessment in order to identify global reserves. Those
countries have regulatory and legal frameworks that allow for CO2
storage, but still lack widespread investment and deployment.

This work aims to provide a centralised publicly available databaseof CO2 storage resources in key regions. It uses the SRMS
methodology to compare resources across regions and to define thedegree of global commercial readiness of CO2 storage resources. Inline with SRMS methodology, storage resources are classified as
Undiscovered or Discovered based on technical and regulatory
aspects. Only resources assessed by the SRMS methodology areincluded in the catalogue. Therefore, unconventional storage
resources (such as basalts, coal seams and organic-rich shales),operating CO2-EOR projects, and oil and gas reservoirs that are notfully depleted (with ongoing extraction activity) have been excluded.

The assessors also found that most storage resource assessments
are not aligned with SRMS methodology and that it can be difficult toreassess resources with the SRMS methodology using only publishedinformation. For example, the resources associated with the Moomba
project are not included in the catalogue even though Santos
assigned them a book value in their 2021 reserves statement.

Source: Reproduced with modifications from OGCI (2022) CO2 Storage Resource Catalogue.

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At the end of the third assessment cycle, 852 sites had beenassessed across 30 countries or regions. Nearly 14 000 Gt ofstorage resources were found across all SRMS maturity classes.
More than 95% of those resources were classified as Undiscovered(Prospective) following the SRMS methodology. Only 96.6 Gt or0.7% of resources assessed globally were part of defined projects.
These results suggest that global storage potential is substantial.
However, SRMS-classified commercial resources continue to befound only in four countries – Australia, Canada, Norway and theStorage catalogue results for selected countries

Chapter 3. Storage projects

CO2 Storage Resources and their Development

Resource assessment and site development
The goal of the resource assessment process is to determine
where, in what quantity, at what rate and for how long CO2 can beinjected. CO2 storage projects generally have longer lead times
than capture or transport due to substantial subsurface
uncertainties and related study requirements. As a result, resource
assessment needs to begin well in advance of capture project
development. Countrywide assessment of CO2 storage resources
can take two to five years depending on the targeted level of detailand the amount of data collection required. It can take a further
three to ten years to develop a CO2 storage site from a countrywide
or regional assessment. Site development is included in the
resource assessment process and takes an assessed resource
through permitting and the FID.

Case study: Financing storage assessments in emerging
market and developing economies
National or regional assessment of CO2 storage resources
supports the deployment of CCUS. Storage resources have beenassessed only in a limited number of emerging market anddeveloping economies (EMDEs), mainly in Southeast Asia, andsignificant improvements can be made. Multilateral financeinstitutions have played a key role in supporting storage resource
assessments in EMDEs.
The Asian Development Bank’s CCS Fund is a multi-partner trust
fund, established in 2009 and set to close in 2022. The fund has
supported storage resource assessments, CCUS piloting anddemonstration in Southeast Asia and the China.

Governments can accelerate a region’s level of storage readinessby conducting precompetitive resource assessments. As part ofthis, dedicated data acquisition programmes can include drilling,geochemical and hydrogeological studies, seismic campaigns andregional mapping. Depending on the level of detail, costs can be in
the order of USD 10-100 million. Country or regional assessments
may successfully end with the development of a resource atlas or aportfolio of resources earmarked for further assessment. Projectspecific assessments will aim to develop one or more CO2 storagesites. Resource assessment may end without identifying any
commercially viable resources and capital expended duringassessment activities carries exploration risk.

The World Bank CCS Trust Fund, funded by the United Kingdom
and Norway, was established in 2009 and is set to close in 2023.
It has allocated more than USD 55 million to CCUS programmesin ten EMDEs, including support for high-level storage
assessment and data input into storage atlases in Botswana,
Egypt, Jordan, Mexico, Nigeria and South Africa.

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Given that both of these trust funds are set to close in the near
future, alternative ways to support CO2 storage assessments in
EMDEs are needed. Both banks are open to working with donor
countries to develop new ways to support CCUS including CO2
storage.

Chapter 3. Storage projects

CO2 Storage Resources and their Development

Case study: CCUS centres of excellence support storage
development

Case study: Atlas on geological storage of carbon dioxidein South Africa

CCUS centres of excellence, or their equivalent, can serve as anational focal point for CCUS research and development andcontribute to the development of government strategies. This isespecially valuable for EMDEs looking to deploy CCUS, since a
centre of excellence can support this work.

Since 2007, CCUS has been included in South Africa’s long-term
strategy for CO2 emissions reduction. Given the country’s energy
mix, coal resources and coal-based petrochemical activities,
CCUS technologies can allow for continued development whilestill decarbonising certain activities.

The Indonesia Center for Excellence for CCS and CCUS is
supported by the government’s University Center of Excellences
Program and the Ministry of Research, Technology and Higher
Education. The centre was opened in 2017 and serves as alearning facility for CCUS. The centre aims to:

The first atlas on geological storage resources in South Africa
was published in 2010. Prepared by the Council of Geosciences
and the Petroleum Agency of South Africa, it covers depleted oil
and gas reservoirs, unextractable coal seams and deep saline
aquifers. The agencies used existing data from seismic surveys
and historic drill cores to estimate the on and offshore storage
potential of each resource type. Generally, there was higher
confidence in offshore resource estimations due to the presenceof significant data sets stemming from oil and gas activities.



Deliver a co-ordinated programme of CCUS research.
Pilot CCUS in Indonesia and identify opportunities for CCUS
deployment.
Formulate policies, strategies and regulations that support
implementation.
Develop effective communication on CCUS.
Provide educational and informational materials on CCUS.

The Atlas on Geological Storage of Carbon Dioxide inSouth Africa estimates the theoretical capacity of South Africa’s
storage resources to be around 150 Gt, with more than 98% ofthat capacity located offshore.

The centre has led Indonesia’s work on CCUS, including
supporting the development of CCUS activities. In collaboration
with industry and international partners it has created theIndonesia CO2 Source–Sinks Mapping and Spatial Database andis conducting multiple CCUS-related feasibility studies.

Subsequent assessment work has mainly focused on the
Zululand, Algoa and Durban basins, and more recently on
basalts in the Klipriversberg Group, where a pilot storage projectis under development.

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

Chapter 3. Storage projects

CO2 Storage Resources and their Development

Source-sink matching
CO2 injection capacity ideally needs to increase faster than CO2
capture capacity, or at a minimum at the same rate. Confidence instorage should drive capture deployment and can be increased byphasing the deployment of capture and storage. Phased
deployment can increase confidence in a site’s future performanceby decreasing dynamic uncertainties. To promote the effective
development and use of storage resources, sustainable injection
rates and their duration should determine capture rates. Ratemismatch between capture and injection should be minimised. Thisis an important consideration for multi-source storage sites that arelikely to receive CO2 from sources with different capture rates.

CO2 storage resources are not evenly distributed globally. Desktop
analysis can be used to estimate whether storage resources withina region are likely to be limited, sufficient or abundant in comparison
with current and projected emissions. Following that, source-sink
matching can be used to associate emission points (sources) withstorage resources (sinks) based on a number of criteria. Sourcesink matching exercises underpin the development of CO2 storage
resources in two main ways:
From a policy perspective, they allow for the association ofemission points with potential sinks as a precursor to assessing
whether CO2 storage resources within a region are sufficient anddeveloping decarbonisation strategies.



From a technical perspective, they ensure the effective
development of rate-matched CO2 capture and injection.

Source-sink matching can also be used to develop rate-matched
contingency plans to reduce the risk of unplanned emissions due toinjection interruptions. In order for storage sites to be able to ensurethat they can consistently inject captured CO2, site operators should
consider site-specific contingencies such as maintaining an injection
rate margin. Regional co-operation agreements could also act as acontingency mechanism. Licence agreements and contracts needto outline how unplanned emissions are managed, but ultimately theaim is to reduce the risk of unplanned emissions as much as
possible. Without adequate risk management, venting could be
required. This would reduce the effectiveness of CO2 management
and present a risk to any capture facility operating in a jurisdiction
with carbon penalties or caps.

Location and distance can be used to produce a rough overview ofthe geographic distribution of emission points and storage
resources and hence to match one with the other. Such analysis
can support the development of resource management strategies,
but more refined analysis is likely required to develop concrete
deployment strategies. Analysis can be refined by including
estimated storage capacity, capture rates, injection rates, injection
duration, transport pathways and project information (development
timelines, lifetimes, operating projects, etc.). If the export or importof CO2 is planned, these volumes and rates also should be
accounted for.
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

Chapter 3. Storage projects

CO2 Storage Resources and their Development

Schematic of source-sink matching analysis

IEA. CC BY 4.0.

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Notes: Line weights are used to represent different volumes of CO2 from capture to storage.

Chapter 3. Storage projects

CO2 Storage Resources and their Development

CO2 storage wells
Wells are designed to be fit for purpose for a specific activity. There
are notable differences between CO2 storage wells and other well
types. CO2 mixed with water is corrosive, so storage wells are
sometimes constructed using corrosion-resistant materials,
including special types of steel. Portland cement reacts chemicallywith CO2, which can lead to dissolution; however, research showsthat wells sealed with sufficient amounts of well-bonded cement canmaintain their integrity when exposed to CO2. Nevertheless, someprojects choose to employ specialised cement. Special care should
be taken during the well completion process – preparation of a well
for activity – to ensure that neither reservoir nor well integrity arecompromised. CO2 storage relies on four main types of wells, eachwith its own purpose and design, size and cost considerations.

exploration and injection. Legacy wells can be reused as injectors ifthey pass stringent requalification for the purpose of CO2 storage.
Monitoring wells are outfitted with equipment to monitor the
storage complex and CO2 plume. Their depth and location, and theequipment they contain, will be dictated by their specific aim.
Brine extraction wells are used to extract reservoir fluids forpressure management. Not every site has this well type.
Info point: Well terminology
Some jurisdictions provide legal definitions for the terms:“legacy”, “orphan” and “abandon/abandonment”. This handbook
uses the following definitions for these terms:

Exploration (and appraisal) wells are used to characterise
storage resources, including their injectivity, containing features andperformance. The orientation, design and depth of the exploration
wells will determine whether they can be reused during site
operations for another purpose. If they are to be reused, conversion
usually occurs after site characterisation or site development. Data
from both legacy (i.e. pre-existing) wells and the wells themselves
may be used for exploration purposes, depending on well/data
ownership, local regulation and design specifications.

Abandoned wells are wells that are no longer in production andhave been closed following plug and abandon procedures.
Legacy wells are previously drilled wells in a region or area.
They can be actively producing, abandoned, suspended,orphaned or in an unknown state.
Orphaned wells are wells whose ownership cannot be
determined. They may not be plugged or sealed properly.

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Well abandonment, also known in some jurisdictions as
decommissioning, is the process during which a well is cleaned
and sealed, and its surface footprint removed.

Injection wells, often called injectors, are used to inject CO2.
Generally, injectors are purpose built or dual-purpose forChapter 3. Storage projects

CO2 Storage Resources and their Development

Schematic of open and closed CO2 storage wells

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Notes: Figure not to scale. Casing requirements and cementing standards, along with decommissioning or plug and abandon standards, are jurisdictionally determined.

Chapter 3. Storage projects

CO2 Storage Resources and their Development

Measurement, monitoring and verification
addressing monitoring is technology neutral and risk-based. It
should focus on the aims of monitoring rather than how to achieve
those aims and should outline MMV reporting requirements. Eachjurisdiction is likely to have slightly different MMV requirements.

Measurement, monitoring and verification (MMV) entails verifying
the containment of injected CO2, confirming the conformance of thesite and increasing confidence in CO2 storage operations. MMV
programmes are a critical part of storage site operations. While they
qualify and quantify the plume of CO2, they do not detect every
injected CO2 molecule. Instead, overlapping and complementary
techniques are used to observe site performance, detect early
warning signs of CO2 migration and verify that CO2 is securely
stored underground with minimal risk to human health or theenvironment. This provides confidence that injected CO2 is locatedand behaving as expected. Verification of stored emissions is basedon matched trends between measured and modelled behaviour. It isparticularly important for sites that are affiliated to a carbon removal
scheme or operating in a jurisdiction with emission reduction
regulations. In the unlikely event of leakage, MMV results can beused to hold site owners accountable.

Data collected by MMV programmes inform risk assessment,
management and mitigation processes. These data are used tocalibrate and validate predictive models and simulations. There is afeedback loop between MMV programmes and risk assessments.
Since both need to be reviewed periodically, their review timelines
should be synchronised. MMV programmes need to be flexible
enough to allow for periodic updates, as new technologies areintegrated to follow best practice and regulatory change and as theunderstanding of the storage site matures.

MMV activities include baseline measurements during sitecharacterisation, followed by active monitoring during site
operations, through to site closure. Post-closure monitoring aims toconfirm effective site closure and complements the MMV activities
that occur during operations. Typically, post-closure monitoring
requirements are different from those during injection. MMV work
plans should be site-specific and must meet or exceed regulatory
requirements. To provide technical flexibility and to future-proof
regulatory frameworks, policy makers should ensure that regulation
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Over 50 different monitoring technologies are currently in use at
CO2 storage projects around the globe. No project will deploy every
monitoring technique or technology. Risk-based MMV, such as thatof the Quest project, provides safety assurances while promoting
cost-effective deployment of monitoring technologies and optimisedsite operations. Equipment should be selected according to the
MMV needs of a site, regulatory requirements, and cost. Lessons
learned from ongoing or previous CO2 storage activities suggestthat monitoring pressure and temperature is a cost-effective way to
reduce and manage multiple risk categories. Groundwater, surface
and atmospheric monitoring can be valuable for risk reduction.

Chapter 3. Storage projects

CO2 Storage Resources and their Development

Components of an MMV programme

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Source: Adapted from the IEAGHG Monitoring Selection Tool.

Chapter 3. Storage projects

CO2 Storage Resources and their Development

Site closure and post-closure
Once demonstrated that a CO2 storage project is properly
decommissioned and poses no unacceptable risk to health, safetyor the environment, it can be certified as closed. Certification of site
closure is usually a prerequisite for transferring liability. In mostjurisdictions, monitoring will continue beyond closure.

The resource assessment process followed by MMV during
operations is designed to demonstrate secure CO2 storage. Postclosure monitoring demonstrates that closure of the site is effective.
It also allows operators or owners of the site to confirm to
stakeholders that there have been no emergent events, which canin turn increase confidence in storage.

Case study: Closure of the Ketzin pilot site

A storage site can be closed after a period of post-injection
monitoring. As part of site closure, any wells not needed for longterm monitoring should be plugged and abandoned in compliancewith existing regulation and best practice. Given the limited numberof closed CO2 storage sites, it is expected that closure and postclosure best practices and regulatory requirements will continue to
evolve. Legal and regulatory considerations are outlined further in
the IEA CCUS Handbook on Legal and Regulatory Frameworks for
CCUS.

The Ketzin pilot site, Germany, was the first onshore CO2 storagesite to be operated and closed in Germany. The project had atwo-stage abandonment procedure to confirm that closuretechniques were suitable to trap the 67 kt of injected CO2.

Well abandonment will be governed by region- or country-specificregulation, but the fundamental principle is that functional barriers
are in place to prevent CO2 leakage or unintended migration.
Cement is used at specific intervals – such as at the end of casings,
in sealing units and at the surface – to isolate specific geologicalintervals and prevent fluid exchange. In some cases, the entire
injection casing may need to be cemented to the surface. Wellrecords, including their abandonment procedures, should be madeaccessible in a public database.

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In 2013 the reservoir and caprock section of one well wereplugged with specialised CO2-resistant cement. Pressure andgas sensors remained in the cement plug for two years anddetected no anomalies. In 2015 a core sample was taken fromthe cement plug to confirm that it had not lost its integrity due tointeractions with stored CO2. Site operators were able to provethat the cementing procedure was fit for purpose and the first well
was then fully abandoned. This included removing any wellcasing above the cement plugs and backfilling the well withstandard cement. The other three deep wells at the Ketzin sitewere abandoned using the same procedure in 2017. Liability wasformally handed over to the competent authority in 2018.

Chapter 3. Storage projects

CO2 Storage Resources and their Development

Site transfer
mechanisms, but transfer is usually contingent on successful site
closure and decommissioning. Both time-based and performancebased criteria can be considered when defining title transfer
conditions. After the point of transfer to another entity, project
operators are generally no longer responsible for the site or its
liabilities. This may vary slightly between jurisdictions and is usuallycontingent on no malfeasance on the part of the operator.

After a site is certified as closed, the owner, operator or both
typically remain legally responsible for stewardship and liability until
such time that title may be transferred to another entity (typically thestate). Stewardship responsibilities include site remediation, postclosure monitoring and associated activities such as routine
maintenance on the MMV instruments. These responsibilities makeup a small portion of CO2 storage project costs. However, they
represent continuing long-term liability that may be unacceptable tothe private sector if it does not have a defined termination point.

Policy makers should ensure the following are included in a
regulatory framework that allows for liability transfer:

The private sector may be more attracted to developing CO2
storage sites if it is possible to transfer long-term liabilities andstewardship obligations to the state after site closure and a periodof successful monitoring. Compared with sovereign states, CO2
storage operators may have limited lifespans that prevent indefinite
stewardship or financial assurance of liability. A regulated
performance-based transfer process would provide storage
operators and the state with a measure of confidence regarding themanagement of financial risks associated with decommissioned
storage sites.

How, when and to whom title and liabilities can be transferred.

Which liabilities are transferable and which, if any, must be borneby the operator post-transfer.

The conditions to be fulfilled, or performance criteria to be met, in
advance of transfer.

How long post-closure monitoring is required.



Funding mechanisms and financial requirements for post-transfer
stewardship and post-transfer monitoring.

A competent authority could be one way for the public sector to
manage long-term liability and stewardship. Such an authority could
take over post-closure monitoring and certain liabilities associatedwith the site after title is transferred to it from the site owner.
Conditions for transfer vary between jurisdictions with established

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After site transfer, monitoring and stewardship needs may continue.
These can be funded by insurance instruments, royalties or otherschemes. In many jurisdictions, site operators or owners will be
required to make financial provisions for post-closure stewardship
responsibility and compensatory liabilities. Existing oil, gas andmining regulations could provide a model for how those provisions
are structured in jurisdictions without existing regulation.

Chapter 4. Assessment phases

CO2 Storage Resources and their Development

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Assessment and development

Chapter 4. Assessment phases

CO2 Storage Resources and their Development

Chapter summary
Policy actions:

Similar to the use of geological surveys for other natural resource
assessment, countries can conduct pre-commercial assessments togain a better understanding of CO2 storage resources. This isparticularly effective at the regional level.

Each phase of the process is designed to build upon earlier work, but
not every storage project will start assessment at the level of regional
screening. Projects can build upon previously collected informationor previous resource assessments. Some resources – such as thosein depleted oil and gas fields – may already have been extensively
studied. In such cases, drilling campaigns may not be necessary,
though it will be necessary to reanalyse the data with CO2 storage in
mind.



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Develop a national storage atlas or database using existing data.
Develop and undertake regional and national data acquisition
programmes.
Provide financial and/or technical support to resource
assessment.
Ensure clear regulatory regimes exist for issuing exploration
licences (or equivalent), permitting, environmental impact
assessment, and monitoring and verification.
Consider the value of digitisation of legacy data to support CO2
storage resource assessment and development. Sources
include: legacy well data (location, abandonment protocol,
depth, etc.), geological maps, surveys, seismic data, andhistorical exploration permits and production licences for natural
resources.
Consider the value of having geological data publicly available
and searchable in common data formats.

IEA. CC BY 4.0.

Storage resource assessment is often phased, allowing different
actors to be involved at different points. A CO2 storage resource
atlas or database can provide a first assessment of resources andthereby supports the development of CO2 storage. Atlases can often
be compiled from existing data and geological maps. Both policy
makers and project developers can use this kind of regional or
national inventory of resources.

Chapter 4. Assessment phases

CO2 Storage Resources and their Development

The assessment and development process is usually phased
The assessment and development process including data and modelling requirements

Regional screening

Site screening

Site selection

Initialcharacterisation

Detailedcharacterisation

Design anddevelopment

Undiscovered toprospective resource

Play to lead

Lead to prospect

Prospect

Prospect to contingent

Contingent to capacity

CSLF capacity

Theoretical

Effective

Practical

Practical

MatchedMatchedNumber ofpotential sites

Hundreds

30-50

~20

~5

3-5

1*

Description

Examination of storage
resources on aregional (geologic
basin) scale. Includes
preliminary data
gathering to identify
promising regions.

Sub-regional analysisof resource potential
based on existing data.
Sub-regions should be
evaluated using criteria
defined during projectframing.

Evaluation of selectedsites based on
predefined technicaland non-technicalrequirements to
produce preliminary
development plans.

Site-specificassessment based on
existing data leading toan up-to-date andcosted site
development plan foreach viable site.

Site-specificassessment withtechnical studies to
produce the datarequired to update
reservoir modelling andfor permitting.

Preparation of the siteand site studies for
permitting and FID.

Data
requirements
Additive toearlier phases• Existing geological
data to identify
subsurface
resources and theircharacteristics• Geographic data
• Social anddemographic data

• Existing seismic
data, well logs,
stratigraphic records• Data purchases may
be needed• Existing geochemicaland hydrogeologicaldata• New reservoir andwell data required tocharacterise storage
performance andcontainment• Baseline monitoring datacollection• Any additional dataneeded for permitting or
FID

Simplified models
using existing data

First-generation
detailed models

Second-generation
detailed models

Detailed models anddevelopment plans

SRMS
category

Modelling

Sedimentary basin
atlas or CO2 storage
resource atlas

Screening assessment
based on existing data

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* Multiple sites can be developed in parallel depending on the goals of a developer or project.
Notes: CSLF = Carbon Sequestration Leadership Forum; SRMS = Storage Resource Management System. Specific projects will start this process at different phases depending on
the level of previous work in a country or region or on a specific storage resource. Investment needs are relative to overall cost of an individual project and may vary significantly
according to the amount of data available.

Chapter 4. Assessment phases

CO2 Storage Resources and their Development

Overview and project framing
Developers certain of where they want to locate their project may beable to bypass certain phases of the assessment process. This canbe the case for projects developed in conjunction with oil or gas
activities, or for projects which benefit from previously conductedsite screening or site selection.

Project development kicks off with project framing. This involves
defining the boundaries of a project and the criteria that will be used
for resource and site assessment. Following project framing,
storage resources are assessed using technical and non-technicalcriteria. As a resource moves through the process, increasingly
detailed development planning and engineering studies occur.
Similar to oil, gas and mineral exploration, not all storage resources
will be developable. This can be due to many factors, such as theirlocation, the rate and duration of injection they can support or theirdevelopment cost. For that reason, multiple sites should beassessed. At the end of each phase, sites which do not meet
evaluation criteria are deselected, and only resources that fulfil thetechnical and non-technical criteria defined during project framing
advance. This reduces exploration risk – the risk of sinking too
much investment in an undevelopable resource – since technicalstudies become increasingly more detailed and costly as theprocess proceeds. It also enhances storage confidence.

Categories to address during project framing

Usually, regional screening, site screening, site selection and initialcharacterisation are considered precompetitive exploration, sincethese phases often do not require new data and may not require
licences or permitting. The detailed characterisation step includes
dedicated exploration and appraisal with the associated permitting
or licensing requirements.

Category

Aspects to consider

Scope• Define overall project including objectives and project
evaluation criteria• Describe site screening, selection and characterisation
processes

CO2 strategy• Develop a strategy for sourcing and injecting CO2• Outline implementation options along with risks andmitigation

Evaluation criteria• Outline the technical, economic and social criteria thatwill be assessed during screening, selection andcharacterisation• Define how different criteria will be weighted whenranking sites• Define the storage confidence and injection rate needed
to support resource development

Project resources• Identify the expertise required during the site assessment
process• Create a resource allocation plan that includes financial
thresholds, contingencies and other resourcing risks

Schedule• Create project schedule that includes milestones andcontingency plans

Risk assessment• Perform a project-specific risk assessment• Define a project implementation plan that includes
decision gates at key stages

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Source: Based on DOE/NETL-2017/1844.

Chapter 4. Assessment phases

CO2 Storage Resources and their Development

Assessment and development workflow
Flowchart of the assessment and development process

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Notes: Dev. = development

Chapter 4. Assessment phases

CO2 Storage Resources and their Development

Regional and site screening
The screening phase of the assessment and development process
is designed to identify CO2 storage resources in a region (regional
screening) and then eliminate sites, locations or resources that are
unsuitable for further development (site screening) at that point intime. Resources are eliminated according to the criteria defined in
the project management plan.

Considerations
In countries with national or regional CO2 storage resource atlases
or databases, regional screening or site screening may havealready been performed. However, resource atlases and databases
typically only include geological characteristics and may not include
technical, socio-economic or regulatory considerations. As a result,more refined site screening may still be required.

The expected outcome of screening is a portfolio of promising leads
that can advance to the site selection phase.

Site screening is used to identify sub-regions (leads) within a large
area of interest that are potentially suitable for CO2 storage. During
this phase, promising sub-regions are identified and unsuitable subregions are eliminated based on the screening criteria defined
during project framing. Technical criteria are assessed andunderstanding of storage resources is refined from the basin level tothe sequence level using the data gathered during regional
screening.
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Geological data – Assessment of subsurface data focused on
identifying the type of storage resource, along with its depth, seals
and capacity.

Legacy well records – Data relating to the status, location andtechnical properties (depth, orientation, etc.) of legacy wells can
support rough assessments of seal integrity.



Regional geographic data – Regional geographic data areimportant because they can determine site access. Protected andsensitive zones, urban centres, existing resource exploitation andexisting pipelines can influence the suitability of a sub-region forstorage development.

Social and demographic data – Demographic trends and land
use can influence the public perception of industrial activities andfuture CO2 storage projects. These data should be assessed early
since they will feed into project communication strategies.
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Four main types of data should be collected and evaluated during
screening:

Regional screening is performed over a large area, typically ageological basin. An area of interest is defined and then an
inventory of the CO2 storage resources present in that area is madeusing existing data and information. This phase of the assessment
process is primarily focused on gathering existing data, which arethen analysed during the next part of the screening process.
Dynamic data are especially valuable since they inform injection
rates and can be used to identify pressure constraints.

Chapter 4. Assessment phases

CO2 Storage Resources and their Development

Case study: Countrywide storage resource appraisal
The UK Storage Appraisal project was initiated in 2011 with
USD 6.6 million (GBP 4 million) in funding from the Department ofEnergy and Climate Change. It was dedicated to assessing theUnited Kingdom’s CO2 storage resources. Its goal was to produce aresource assessment that was publicly available, robust and realistic.
The results of the assessment are available in the CO2 Stored
database.

UK CO2 Storage Appraisal programme portfolio of sites

Regional screening: 579 storage resources were analysed.
Site screening: 37 sites qualified as “potentially strategic storagesites”. Those sites were then ranked using six factors – capacity,
injectivity, engineered containment risk, geological containment risk,
development cost factor, and upside potential – to produce aninventory of 20 sites.
Site selection: Seismic data from the 20 selected sites werereviewed, and preliminary reservoir assessments were made using
available well information. Sites were then reviewed and five wereselected based on the goals of the assessment programme. The
portfolio of five sites was then reviewed externally.

IEA. CC BY 4.0.
Source: Cost data from Summary of results from the strategic UK CO2 Storage Appraisal Project(2016).

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Site characterisation: The five selected sites proceeded to initialcharacterisation and are currently in various stages ofcharacterisation and development. Each site was studied in detailduring the Strategic UK CCS Storage Appraisal and it wasdetermined that they have the ability to sustainably inject CO2 at acommercial rate and for a commercial duration.

Chapter 4. Assessment phases

CO2 Storage Resources and their Development

Site selection
Site selection is a continuation of the screening process. During thisphase, sub-regions, also known as leads, within the portfolio areevaluated using the predefined assessment criteria and those thatare not suitable are eliminated. Data gathered during the screening
phase are analysed more thoroughly. This phase can include thepurchase of additional data if they are available.
The expected outcome of site selection is a portfolio of storage
resources that can advance to site characterisation. To enhancestorage confidence, each site should have a preliminary fielddevelopment plan and initial economic analysis to document theirsuitability for characterisation. If the preliminary field development
plan can demonstrate that it may be possible to develop theresource and achieve the desired injection rate, then it can support
the development of CO2 capture facilities and transport pathways.
In the SRMS classification, the selected sites will be characterisedas “prospects”, meaning that they represent a drilling target.

Considerations



Legacy well records – Assessment of legacy wells and thepotential risks they pose using existing records. Well inventories
should identify whether a legacy well is accessible or inaccessible.

Regulatory requirements – Assessment of regulatory
requirements for exploration, appraisal and site development. Thiscan include mineral rights, pore space ownership, accessconditions and operational requirements. Any regulation-dictatedoperational requirements such as maximum injection pressure,liability and containment should be integrated into the site
selection criteria and the project management plan as required.

Models and modelling – Modelling requirements and parameters
should be identified. This should include boundary conditions anduncertainties. Developed models should incorporate existing
seismic and geological data. Data gaps should be identified and acost–benefit analysis should be made to determine the most costeffective way to acquire new data that address data gaps.



Site suitability – The geographic assessment made during
screening should be refined during site selection and sites should
be assessed to determine infrastructure requirements andmonitoring needs. Additionally, the overall footprint (sometimes
called area of review) for each site should be estimated using
modelling results and any access constraints further investigated.

Social and demographic data – Stakeholder outreach should
begin with key stakeholders and communication strategies shouldbe tested.

Six technical and non-technical aspects should be evaluated duringsite selection.


Geological data – Assessment of subsurface data, including
seismic data, course stratigraphic and structure frameworks, coredata and well records in order to identify storage reservoirs and

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injection zones. It uses existing data to characterise seals,
trapping mechanisms, injectivity properties and resource capacity.

Chapter 4. Assessment phases

CO2 Storage Resources and their Development

Initial and detailed site characterisation
Site characterisation is a continuous and interactive process during
which one or more highly ranked potential sites are evaluated. It is
divided into two parts, reflecting data acquisition requirements.
Initial site characterisation consists of an in-depth site-specifictechnical and non-technical assessment performed using existing
data. If a site fulfils the assessment criteria, it can progress todetailed characterisation. Progression is usually contingent on a sitehaving reservoir characteristics that support CO2 storage, modellingthat demonstrates a viable site, and up-to-date plans for public
outreach, site development and site operations.
Detailed characterisation involves the acquisition of new, sitespecific data and information through a dedicated exploration andappraisal programme. A detailed characterisation plan will becreated for sites that advance into this phase to ensure that public
outreach, data acquisition, reservoir modelling and site permitting
are performed in a cost-effective and timely manner. Depending on
the jurisdiction, certain exploration and appraisal activities may
require a licence or permit, or equivalent.



Regulatory requirements – This should build on the regulatory
review completed during site selection. Dialogue with regulatory
agencies to confirm the timelines and requirements for thepermitting process should be entered into, and any project plans ordefinitions should be updated as required. Regulatory
requirements relating to operations should be reassessed on asite-specific basis, with a focus on ensuring site viability andpreparing for permitting.



Reservoir characteristics – Building on the subsurface dataassessments made in earlier phases, the geological, geochemical,
geomechanical and hydrogeological characteristics of eachtargeted reservoir should be assessed using existing datasets.
Developers may choose to purchase data sets to support
assessment.

Legacy well assessment – Building on the legacy wellassessments in earlier phases, each legacy well should be
individually assessed to determine the level of risk it may pose,
whether it may require remediation, and if remediation ispotentially feasible.

Modelling – Reservoir characteristics will be integrated intomodels designed to characterise reservoir behaviour. Both static
models and dynamic simulations will be used to design andoptimise injection plans and to support risk analysis.

Considerations for initial characterisation
Six main aspects of each potential site should be evaluated:

Public outreach – A site-specific outreach strategy should be
developed to ensure that targeted public engagement occurs as

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required. Since not all exploration will result in development, it isimportant to manage stakeholder expectations during thecharacterisation phase. If a viable outreach strategy or plan cannot
be developed, then the site may not be viable.

Chapter 4. Assessment phases

CO2 Storage Resources and their Development

Site development – The initial site development plan from site
selection should be updated during evaluation of each aspectoutlined here. If a potential site is found to be viable on the basis of
public outreach, regulatory requirements, reservoir characteristics,
modelling results and the up-to-date site development plan, then it
may be recommended to advance to detailed characterisation.

necessary documents, data and information should be gatheredand prepared in line with jurisdictional requirements.

Case study: Simultaneous assessment of sites
The Carbon Storage Assurance Facility Enterprise(CarbonSAFE) Initiative, funded by the US Department of Energy(DOE), provides substantial support to carbon storage projects. It
focuses on sites that will be able to store 50 Mt of CO2 or more
over their lifetime and aims to develop storage projects that will
support integrated deployment of CCUS between 2025 and2030. It is divided into four phases:

Considerations for detailed characterisation

Outreach plan – The public outreach plan or strategy developed
during initial site characterisation should be assessed andmodified to ensure that it accounts for any new activities that may
occur during the detailed characterisation phase. Stakeholder
dialogue and other outreach activities related to site design anddevelopment will also commence during this phase in preparationfor environmental impact assessment and other requirements.



Data acquisition campaigns – New geological, geophysical andgeochemical data will be acquired and analysed. They can include
2D or 3D seismic surveys, the drilling of new wells, re-entry oflegacy wells, and flow or injection tests. It should also include a
detailed assessment of legacy wells. The purpose of dataacquisition is to map and characterise the reservoir, its seals, andthe geochemical, geomechanical and geophysical characteristicsof the storage resource. This serves a dual purpose: to both
determine site suitability and to establish pre-injection baselines.

Update models and simulations – Geological models andreservoir simulations will be updated and refined using newly
collected data.



Assemble necessary data for site development – Assuming thesite is found to be viable, it can move forward to permitting. All

Phase I broadly aligns with site screening; 13 projects
received a share of USD 15 million.
Phase II aligns with site selection; USD 60 million worth offunding was divided among six projects.
Phase III aligns with site characterisation and site designand development. Five projects have received funding underPhase III, and each is associated with a DOE-supported CO2
capture project.
Phase IV aligns with site design and development andconstruction.

In September 2022 the first call for proposals for Phase IV
projects was released alongside an expansion of Phase III
funding. Projects selected to receive Phase IV funding canreceive up to 50% of total project costs. The CarbonSAFE
programme effectively shares exploration risk between project
developers and the government.

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

Chapter 4. Assessment phases

CO2 Storage Resources and their Development

Site design and development
capacity. This can increase confidence in a resource while also
reducing economic risk. Developers of sites with the aim of
expanding injection capacity, or which only have a proportion of
injection capacity locked in contracts before FID, should likely havesome form of commitment (e.g. heads of terms or a memorandumof understanding) with emitters who are considering storing their
CO2 at the future site.

Site design and development is a natural continuation of sitecharacterisation. It is when a developer finalises site planning anddesign in order to prepare for FID. By the end of site development,a storage site will be approximately shovel-ready, as long as it is notfound undevelopable during the phase. In the SRMS, resources
which advance to this phase are considered “contingent storage
resources”.
The main outcome of successful site design and development
would be a positive FID taken on the basis of the project’s FEED
study, site development plans, business plan, up-to-date risk
assessment and successful permitting. In the SRMS, a resourcethat has received a positive FID is considered “approved fordevelopment” and qualifies as “capacity”. Resources that are preFID but have all other necessary approvals are also considered“capacity”, but are only considered “justified for development”.

Considerations

Project plans will need to account for the whole CCUS chain even if
a project is storage-specific. Integrated full-chain projects should bealigned in their development timelines so that each part of the chain
is commissioned at around the same time. Non-integrated projects
will need, at a minimum, defined potential CO2 sources andtransport options. Given the early nature of the CO2 management
sector, it is possible that contractual relationships amounting to thewhole annual injection capacity may not be confirmed in advance ofFID. Developers can choose to incrementally scale up injection

PAGE | 53

Completed engineering studies and project planning, including
FEED, site development plan, business plan and an up-to-daterisk assessment.



Received the necessary environmental and development consents
and permits from the appropriate regulators, including a storage
licence or equivalent.



Conducted an environmental impact assessment and received
approval from the appropriate regulator.

Secured approval from the appropriate regulator that the planned
MMV programme meets or exceeds the regulatory requirements
for monitoring until site closure.



Firm CO2 supply contracts for at least a proportion of annual
injection capacity.
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Prior to FID being taken, storage developers will have completed
the necessary development steps to ensure a fully informed FID
process. Reaching FID is likely to be contingent on the site having:Chapter 4. Assessment phases

CO2 Storage Resources and their Development

Case study: Permitting CO2 storage in the United States

Case study: Developing a depleted oil or gas fieldAs with any infrastructure project, permitting CO2 storage iscomplex, nevertheless, the process needs to be efficient andtransparent. Ensuring that regulators have sufficient expertiseand capacity is critical since this supports timely processing.

As a rule, storage resources in depleted oil and gas fields will bebetter characterised than saline aquifers since these reservoirs
will have been studied prior to and during hydrocarbon
production.

In the United States, injection of CO2 is permitted under theEnvironmental Protection Agency’s Underground Injection
Control Well Class VI. Criteria for Class VI wells are stringent andvery few Class VI permits have been issued. Only North Dakota
and Wyoming have received Class VI well primacy, which grants
state authorities the right to issue permits on their own. In allother states, Class VI permits are processed by the federal EPA.

The entity that manages oil and gas production at a specificreservoir or field will have reservoir-specific data and expertise.
These can include knowing reservoir pressure (both current andinitial), reservoir behaviour during production and reservoir
geometry. The entity will also have an inventory of the wells in
the area and will own site infrastructure. Therefore, owners of oil
and gas assets that are nearing the end of their production
lifetime should consider whether they could be converted to CO2
storage sites.

Red Trail Energy was issued a Class VI permit in October 2021,
seven months after it applied. The permit application included allnecessary technical information describing the reservoir andinjection operations. It also included plans for site closure,financial assurance, monitoring and emergency response. Since
this permit was issued in the United States, where mineral rights
are often controlled by the landowner, the permit application also
included extensive documentation regarding pore space access.
For United States-based projects, pore space access cansignificantly complicate project development.

The Ravenna CCS project in Italy is one example where this isoccurring. Eni plans to develop a large CO2 storage site in the
Adriatic where it can convert depleted gas fields into CO2 storagesites. Since the company has been producing gas in the region
for many years, it has significant infrastructure both onshore andoff that can be reused or repurposed for CO2 storage. This can
reduce the overall CAPEX of the storage project and accelerate
project completion, and in general constitutes a more efficientuse of existing resources.

This was the first Class VI permit that North Dakota issued and it
was processed in an efficient manner. Its timely processing can
support the further development of CO2 storage in the state sincepermitting delays can substantially increase project costs.

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Eni aims to demonstrate CO2 storage at the Ravenna hub in
2023 and to commence with large-scale injection in 2027.

Chapter 5. Technical criteria

CO2 Storage Resources and their Development

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Technical assessment criteria

Chapter 5. Technical criteria

CO2 Storage Resources and their Development

Chapter summary

As with the assessment of hydrocarbon resources, confidence in astorage resource improves during the resource assessment process.
As part of this, estimation of the injectable capacity of a resource isrefined. The capacity of a storage resource decreases asassessment becomes more detailed. Initial capacity estimates areoften based on corrected pore volume, a static measurement that
can have little bearing on the injection rate that a resource cansustain and how long it can sustain CO2 injection. As assessments
are refined, they increasingly account for dynamic parameters suchas injectivity and engineering design. This increasing confidence in astorage resource’s capacity to hold CO2 is reflected in a number ofresource classification systems, including the SRMS. The resource
capacity estimated during regional screening will usually besignificantly higher than the matched – economic and risked –capacity of a resource that is being used as a storage site.

Policy actions:

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Consider if regulation is overly prescriptive in the timelines it
defines for project development and early operations, or if it
allows for reasonably flexible development timelines to accountfor potential project delays.
Consider the value of digitising legacy data to support CO2
storage resource assessment and development, including
legacy well data (location, abandonment protocol, depth, etc.),
geological maps, surveys, seismic data and historical exploration
licences and permits and extraction history for subsurface
natural resources.
Support dynamic capacity assessments of CO2 storage
resources through research and development programmes,
infrastructure programmes, and natural resource development
activities.

IEA. CC BY 4.0.

Four technical criteria determine whether a CO2 storage resource issuitable for development into a CO2 storage site: CO2 containment,
monitorability, injectivity and capacity. As a resource proceeds
through the assessment process, these four criteria are assessed inincreasing detail to ensure that assessment is cost-effective andrisks are minimised.

Chapter 5. Technical criteria

CO2 Storage Resources and their Development

Technical criteria determine storage site performance and security
Four interrelated criteria determine whether a CO2 storage resource
can be developed into a secure storage site with sufficientperformance capabilities. Storage security is related to thecontainment of CO2 and the monitorability of a site. Storage
performance is tied to the injectivity and capacity of a storage
resource. The resource assessment process is designed to study
these criteria to determine how much CO2 storage a resource can
support.

Info point: Parallels in terminology between industries
Natural resources, such as minerals, oil and gas, are often
discussed in terms of resources and reserves. Estimations ofresources and reserves evolve with time on the basis of new
discoveries, technologies and changing economic conditions.
Resources are estimated amounts of a geological commodity ina given geographic area. Resources can either be discovered (inplace) when their location and characteristics are known, or they
can be undiscovered (inferred) when they are thought to exist
based on geological knowledge but are not confirmed. Reserves
are known quantities of a commodity that are commercially
recoverable. Similar to the term “recovery factor” used by the oiland gas industry, “storage efficiency” is used to describe theproportion of pore space within a targeted reservoir that can be
filled with CO2. Storage efficiencies vary between reservoirs
according to their rock type, geometry and pressure.

Subsurface uncertainties relating to the geological properties of thestorage resource are one of the largest sources of project
uncertainty for a CO2 storage project. Uncertainties can never be
eliminated, but they can be reduced to an acceptable thresholdusing high-quality subsurface data, pre-injection monitoring and arobust MMV programme.
Technical studies become increasingly detailed as resources
advance through the assessment and development process. The
process is designed to optimise investment and minimise risk. As aresult, containment, injectivity and capacity are assessed early, andreassessed often. The detailed characterisation phase of storagesite assessment is the main phase when technical uncertainties canbe reduced to a level acceptable to a project developer or regulator.
It is also the most expensive phase of assessment due to the typesof technical studies, such as well tests, that are required andtherefore carries the most exploration risk.

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These terms apply to CO2 storage as well. While substantial CO2
storage resources have been identified, only a limited volume of
CO2 storage reserves have been defined globally. Initial
theoretical capacity estimations of storage resource capacity
rarely account for dynamic considerations. Only a small fractionof this capacity will be usable to store CO2. Substantial technicalassessment of storage resources is required to define CO2
storage reserves.

Chapter 5. Technical criteria

CO2 Storage Resources and their Development

Timing of technical studies
Technical criteria and the assessment process

Regional screening

Site screening

Containment• Confirmed onpresence of regional
seal or caprock• Reservoir depth
considered• Early screening of
legacy wells

Monitorability

Not assessed

Not necessarily
assessed

Initialcharacterisation

Detailedcharacterisation• Define containment
models• Examine records forlegacy wells andwellbore integrity• Model reservoirpressure andcontainment basedon existing data sets

• Update containment
models based on
newly acquired data
• Assess legacy wells
to confirm
containment• Confirm via well tests• Initial assessment ofmonitoring needs andrequirements• Refine monitoringplan based on initialsite development andoperation plans• Define monitoringplan• Finalise monitoringplan and prepare forit to be submitted aspart of site permitting

Site selection

Development• Commence withbaseline monitoring if
not already started
Not usually assessed• Reservoir
permeability and net
thickness can bebenchmarked against
other storage
projects as a proxyfor injectivity• Estimate injectivity
based on any
available extraction
or injection history in
the area, analysis ofexisting cores and/orhydrological tests• Improve injectivity
models and site
development plans
looking at numbers ofwells required• Perform injection
tests as required• Project models andplans improved
based on the resultsof technical studies• Injectivity models anddevelopment plan
improved based on
the results oftechnical studies• Establish preinjection baselines

Framework
assignation

CSLF: Theoretical
SRMS: Prospective

CSLF: Effective
SRMS: Play

CSLF: Practical
SRMS: Lead

CSLF: Practical
SRMS: Prospect

CSLF: Matched
SRMS: Prospect

CSLF: Matched
SRMS: Contingent

Capacity
estimation

Usually static

Usually static

Usually static anddynamic

Static and dynamic

Static and dynamic

Static and dynamic

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Injectivity

Chapter 5. Technical criteria

CO2 Storage Resources and their Development

Containment
Containment ensures that injected CO2 will remain trapped within
the boundaries of the storage reservoir and targeted zone. It is afunction of reservoir geology, historical development and site
operations. During development it is important to ensure thepresence of containing features and during operation the continued
security of the containment zone. CO2 should not be able to migrate
beyond the defined storage reservoir through either natural orengineered pathways (e.g. wells).

Case study: Containment of CO2 in a reservoir
The Otway Project in Australia was a pilot site for CO2 storage ina depleted gas reservoir. During the project, natural CO2 pumped
from the Buttress gas field was injected into the Naylor gas field
via the CRC-1 injection well. These gas reservoirs are less than
1 km apart, but they are isolated from one another by containing
features. In the geological cross-section below, thick black lines
are used to show the faults that laterally seal the two reservoirs.
The reservoirs are sealed vertically by an impermeable mudstone
caprock, shown in green.

Containment relies on the integrity of natural geological features
and the structural morphology of the reservoir. Reservoir studies
should confirm the presence of geological features that can limit thelateral and vertical migration of CO2 and effectively trap it in theintended storage zone. Such features can include sealed or closed
faults, caprocks and certain types of fractures.

Geological cross-section of the CO2CRC Otway projectContainment also relies on the integrity of engineered structures,
including new and legacy wells. Loss of containment can be caused
by wet CO2, overpressurisation due to injection and storage
processes, or corrosion. Loss of well integrity is the main potential
breach of engineering containment and can be minimised throughproper engineering and site management.
The risks associated with containment are discussed further in
Chapter 7.

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Source: Modified from J. Underschultz et al. (2011), CO2 storage in a depleted gas field: An
overview of the CO2CRC Otway Project and initial results, International Journal of Greenhouse
Gas Control, Vol. 5/4, pp. 922–932.

Chapter 5. Technical criteria

CO2 Storage Resources and their Development

Monitorability
injection focuses on site integrity and changes in reservoir
conditions, while post-injection and post-closure monitoring isdesigned to confirm the effective site closure. Site monitoring
equipment should be repairable to allow for failure, and it should be
updatable to allow for new monitoring equipment to be integrated.
Further details on monitoring are found in Chapter 3.

A storage site must be capable of being monitored. Site monitoringtracks conformance of the site (confirming the site is behaving inline with modelled behaviour), verifies containment of CO2 andprovides confidence that CO2 injection and storage are notimpacting humans or the environment in a negative manner. If CO2
plume migration and pressure propagation cannot be adequately
monitored, the suitability of the site should be reconsidered.

Case study: Monitoring of injected CO2

Monitorability of a site is influenced by a number of factors,
including access, other activities in the area, and technical factors
such as depth and resource type. For example, wind turbines (bothon and offshore) can provide storage sites with a source of powerand communications, and act as anchors for certain monitoring
equipment. At the same time, they can also affect project seismic
surveys and continuous seismic monitoring. Since CO2 storage
resources are immovable and may be a critical natural resource, it
is important to consider how nearby activities or activities co-locatedwith CO2 storage sites may affect their monitorability.

The Illinois Basin-Decatur Project in the United States injectednearly 1 Mt of CO2 between November 2011 and November
2014. This project’s comprehensive MMV programmedemonstrates the array of techniques that can be used to monitor
a CO2 storage project. The MMV programme for this project
deployed more than 20 monitoring techniques over an 11 year
period. Monitoring commenced two years before injection toestablish the baselines, and continued for three years during
injection and for at least six years post-injection. The monitoringzone includes the near surface to deep subsurface and examines
the atmosphere, soil, shallow ground water, above the reservoir
and its seal, and the injection zone of the reservoir.

Monitoring requirements should be assessed early in thedevelopment process so that a fit-for-purpose, site-specific MMV
plan can be established. Some aspects of monitoring start either
during detailed characterisation or site development and continue
long beyond the end of CO2 injection. Baseline monitoring is used
to establish an estimate of initial site conditions, including partial
and temporal variabilities that may be present. Monitoring during

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This project was the very first Class VI permitted well in the
United States and was designed as a research project.
Commercially operating sites, such as Quest in Canada, will havescaled-down risk-based monitoring programme.

Chapter 5. Technical criteria

CO2 Storage Resources and their Development

Injectivity
a pressure management strategy will be defined. More on pressure
management can be found in Chapter 6.

Injectivity is the ability to inject captured CO2 into a reservoir at therequired rate over time. A sustainable injection rate is a key
parameter for storage projects. The initial injection rate is dictatedby reservoir permeability, thickness and pressure, along with site
design. The injectivity of a reservoir will decline over time, referred
to as the injection decline rate. This is a function of reservoir
properties, including stratigraphy, structure, geologicalheterogeneity, connectivity, geochemistry and site operations
including how much CO2 has been injected.

Case studies: Injectivity challenges
Near-wellbore resistance to injection
Sand from the reservoir or debris from drilling can clog theinjection zone or injection well of storage sites. At the start of the
Sleipner CCS project in Norway, injectivity was about 10 times
lower than predicted. A well workover was performed to integratea sand screen that better distributed injected CO2. After theworkover, injectivity was even higher than expected at the start ofthe project. Sand clogging of a brine production well also
occurred during the early stages of the Gorgon Project.

In the subsurface, rocks and fluids are at elevated pressure.
Subsurface engineering, fluid injection and fluid extraction cancause local pressure regimes to change. Generally, the injection of
CO2 leads to increased subsurface pressure. Elevated pressures inturn cause injectivity to decline. The geomechanical conditions of
the storage formation need to be assessed to evaluate injectivity
and the potential for injection rate decline.

Chemical or salt clogging
Loss of injectivity can occur when salts precipitate in the porespace of a reservoir. To mitigate reduced injection rates due tosalt formation, a chemical solution that mitigates salt precipitation
can be injected. The Snøhvit project in Norway did this.

By simulating the flow dynamics at near-well and far-field scales
and pressure changes, it is possible to evaluate the potential for
injection rate decline and determine the injectivity of a site.
Reservoir models and simulations become increasingly detailed asassessment and development proceeds. Since well placement,
maximum injection pressure and well design all influence injectivity,
there is a feedback loop between site design and reservoir
modelling. By the end of site development, an injection strategy andFar-field reservoir effects

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The Snøhvit CCS project shifted its injection zone after reservoirpressure was unable to dissipate due to geological barriers some
3 km from the injection well. CO2 is now injected in a shallower
reservoir using a new injection well.

Chapter 5. Technical criteria

CO2 Storage Resources and their Development

Capacity
A pyramid is often used to show how storage resources advancethrough assessment. While this visualisation suggests a scaled
relationship between theoretical capacity and matched capacity, nosuch relationship exists.

Capacity refers to the volume of available pore space in a target
area. Often there is confusion regarding what is meant by the term
capacity because estimates are derived in different ways fordifferent purposes. Depending on how capacity is estimated, it may
not represent the actual usable capacity of a reservoir. In 2007 theCarbon Sequestration Leadership Forum provided definitions fordifferent capacity estimates that are still in use today:

The CO2 storage pyramid

Theoretical capacity is a regional or national first approximation of
capacity. It estimates the amount of pore space available forinjected CO2 to occupy; however, it does not account for the factthat injected CO2 will only fill a fraction of available pore space.
Effective capacity is an estimation of the theoretical amount ofcapacity that can be accessed and meets necessary geological andengineering criteria. It is often estimated using corrected porevolumes.
Practical capacity is a capacity estimation that accounts fortechnical, legal and regulatory, and infrastructure requirements andrestrictions. Some economic criteria may be included.
Matched capacity is an economic risked practical capacity that ismatched to emitting sources. Matched capacity estimations areconstrained by the practical constraints outlined above along withadditional economic and funding restrictions. Matched capacity issometimes used interchangeably with bankable capacity.

IEA. CC BY 4.0.

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Source: Adapted from the CSLF Techno-economic resource pyramid (2005/2007).

Chapter 5. Technical criteria

CO2 Storage Resources and their Development

Methods to estimate capacity
parameters on the CO2 plume and reservoir pressure over time.
Dynamic models constrained with site-specific data are used todetermine a safe and achievable injection rate and for how long
injection can be sustained. This can, in turn, inform the design ofcapture facilities and support development of rate-matched captureand storage. However, dynamic modelling is more expensive andrequires more data than static modelling, so it is often not used
before the site selection or site characterisation phases.

Capacity estimations can either be made using static methods or bederived from dynamic simulations. When capacity estimations are
published, authors should note whether they were made using staticor dynamic simulations. Uncertainty ranges (e.g. low, medium andhigh) should also be included.
Static capacity is a probabilistic estimation that accounts for
uncertainties such as reservoir quality. Static capacity is provided
as a function of corrected pore space and a storage efficiency
factor. It does not consider physical constraints on pressure or rate.
Static-based calculations have historically been used to estimate
the capacity of a CO2 storage resource. Many government-led
initiatives estimate theoretical or effective capacity of CO2 storage
resources using static capacity calculations. This includes theatlases or databases of Australia, the European Union, Norway, theUnited Kingdom, the United States and others.

Case study: Static versus dynamic capacity estimations
The EU GeoCapacity atlas uses static capacity and found thecapacity of storage resources in the Paris region to range
between 7.9 Gt and 27 Gt. In 2014 the region was reassessedusing dynamic modelling to identify if any sites could provide astorage capacity of 200 Mt injected over 40 years. Based on
available data, no site meeting that target capacity was found.

Static capacity estimations provide value in that they can establish
the general location of storage resources and can often be madeusing existing data. However, they can be misleading because
there is no strict relationship between static capacity and dynamic
capacity. As a result, atlases and databases that assess theoretical
capacity using static estimations may overestimate the usable
capacity of storage resources.
Dynamic capacity is a deterministic estimation made from dynamic
simulations. Simulations are used to assess the impact of specific
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The dynamic assessment resulted in a regional capacity estimateof 180-270 Mt. That study found that the best resource in theregion – Keuper Sud – has a storage capacity in the range of
54-140 Mt and 15 injection wells would be required to achievethat capacity. That work, along with other studies, demonstrates
that practical capacity estimated using dynamic modelling is often
significantly lower than theoretical capacity estimates derived
using static estimation methods.

Chapter 5. Technical criteria

CO2 Storage Resources and their Development

Constraints on matched capacity
the available injection pressure typically will be greater than that ofa virgin basin that has not experienced any fluid extraction.
Throughout the lifetime of a CO2 storage project, the bottom-holepressure will evolve according to subsurface activities in the samebasin.

Matched capacity is a function of geology and a site’s engineering
field development plan. It accounts for the geology of a storage
resource, the characteristics of the developable area and regulatory
limitations. A dynamic capacity assessment is needed to evaluate
the economic viability of a storage site since it accounts for how
injectivity declines with time.

Regulatory regimes and permitting conditions can constrain
capacity. Practical capacity and matched/bankable capacity
estimations account for these constraints. Regulation will typically:

Natural subsurface features, including faults and reservoir
geometry, influence the matched capacity of storage resources.
Engineered subsurface features, including legacy wells, can also
restrict capacity by creating uncertainties. Subsurface features
should be assessed early in the development of a site to ensurethat the storage resource will perform suitably and safely.
Pressure and how it propagates outward from the injection zone
influence both injectivity and capacity. The amount of pressure
available for CO2 injection is essentially the difference between theformation pressure (measured as bottom-hole pressure) and thefracture pressure of seals in a reservoir minus a safety margin.
Some regulations define the maximum allowable pressure of a site
as a function of a reservoir’s fracture pressure.

Define the licensed area or lease of a CO2 storage site. This
includes where wells can be drilled along with the area in which
the CO2 plume must remain contained.



Define the lease timeframe. Leases should be time limited and forother resources they typically endure around 25-30 years.



Account for overlapping resource constraints, including any
regulatory buffers between subsurface resources and CO2 storagesites and jurisdictional boundaries.

Initial bottom-hole pressure depends on the pressure history of thearea. In basins where there has been a long history of fluid
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Surface or near-surface restrictions can limit access to storage
resources and constrain capacity. Such restrictions may relate toareas with critical infrastructure, such as roadways, pipelines, powerlines, airports and urban exclusion zones; and environmentallysensitive areas, including national or regional parkland or marineparks, bodies of fresh water, wetlands and private property.

Chapter 6. Risk management

CO2 Storage Resources and their Development

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Risk management

Chapter 6. Risk management

CO2 Storage Resources and their Development

Chapter summary

Risk management processes are a key part of CO2 storage
assessment, development and operations. Processes addresssocio-economic and technical risks.

Operator actions:

Since risk exposure and impact vary throughout the lifetime of a CO2
storage project, risk assessment and analysis are first performed
during resource assessment. However, both continue throughout site
operations and through to closure. Proper project management
together with organisational competence act as a first line of defence
against risk events, while regulation is the second.
Several techniques and strategies exist for the mitigation andremediation of technical risks, and pressure management is a key
part of the planning and operations of any storage project.

Consider the role of independent evaluation of technical plansfor due diligence.






Conduct detailed site assessments, optimise site design andmanage pressure to mitigate performance risks.
Ensure robust MMV programmes are in place to mitigate health,safety and environmental risks.
Thoroughly assess legacy wells and natural seals, and ensure
robust site management to mitigate containment failure risks.
Ensure robust site characterisation and integrate monitoring to
mitigate induced seismicity risks.

Policy actions:

Ensure that resources are assessed and operated in a safe andeffective manner.
Prioritise and co-ordinate resource development to mitigate
resource interaction risks.

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

Chapter 6. Risk management

CO2 Storage Resources and their Development

CO2 storage projects have unique risks that need to be managed
into five main categories. The probability and impact of technicalrisks will be site dependent, but in general both probability andimpact are low to extremely low for properly developed andoperated sites. Technical risks are addressed in more detail in
Chapter 7.

The localised and project-specific risks posed by CO2 storage must
be balanced against the broad and far-reaching risks posed byclimate change. As with any infrastructure project, risk management
processes are integrated directly into CO2 storage site development
and operations. Risks can broadly be divided into two categories:
Socio-economic risks are risks that relate to social and economic
factors. For CO2 storage these risks mainly relate to public
perception and market failure. Different stakeholders perceive themarket risks associated with CO2 storage projects differently:

Risk type

Description

Mitigation

Site performance

Risks primarily relating to
injectivity and capacitythat affect theperformance of a site
Unsafe exposure to CO2
as a result of CO2 storage
activities•

Leakage of CO2 or brinefrom the storage reservoir
due to a failure of one ormore containment
features•

Injected fluids can activate
either known or unknown
faults and cause seismic
events

•CO2 can interact withother subsurface
resources; interactions
can be positive, negative
or neutral•

Site developers or owners – Market risks relate to sunk costs,
uncertainties relating to resource development, and counterparty
risk relating to CO2 sources and potentially transport operators.

Health, safety andenvironment (HSE)

Regulators and policy makers – Environmental, public safety
and public perception-related risks are of a higher priority thanpure market-related risks. They can include the risk of increased
public scrutiny for CCUS projects that receive government funding.

Containment failure

Finance and insurance industries – Risks relate to due
diligence, and long-term liability that can affect investment andunderwriting by increasing the market exposure of the insurer orinvestor.

Induced seismicity

Resource interaction

Market risks and public perception are addressed in further detail in
Chapter 8.
Technical risks are risks that relate directly to the CO2, its
injection, and storage operations. Technical risks can be grouped

•
•
•

•
•

•

•

Detailed site assessmentand optimised site design
Pressure management
Appropriate site operations
and management
MMV programmes todetect any leaks
Thorough assessment of
the natural seals in theselected reservoir
Robust site management
Thorough assessment of
any legacy wells
Robust sitecharacterisation
Integrated monitoring todetect subsurface andsurface pressure changes
Regulation of thedevelopment as required
Prioritisation of natural
resource development
based on interaction risks
and resource importance

Note: There is overlap between these risk categories.

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Technical risk categories relating to CO2 storage

Chapter 6. Risk management

CO2 Storage Resources and their Development

Risk management in CO2 storage
Risk management framework for CO2 storage

Risk management is a process whereby risks are identified,evaluated and prioritised; then risk monitoring and mitigation
strategies are developed and implemented. CO2 storage comes with
its own specific set of risks, and existing standards and best practices
can be adapted to support risk management processes in CO2
storage. Storage resources should be developed only when technicalrisks are sufficiently low and can be mitigated. The progressive scaleup of sites can reduce subsurface uncertainties and in turn risk.
Specialised expertise and competencies underpin safe resource

development and site operations (see Chapter 3). Competent site
operations, robust site assessment and effective regulatory oversightunderpin risk management and contribute to CO2 storage security.
Risk exposure and impact vary throughout the lifetime of a project.
Site-specific risk management programmes should account for thisand be dynamic rather than static. They will need to evolve in
response to advances in fundamental scientific understanding,changes in regulation, and in response to the results of MMV
programmes.
MMV programmes should be assessed during permitting and thenperiodically reviewed. There should also be a defined procedure forreporting MMV results. Permits should only be issued to sites andprojects where there is high confidence in the long-term security of
injected CO2.

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Source: Reproduced with modifications from IEAGHG (2009), Technical Study, Report
Number: 2009-TR7.

Chapter 6. Risk management

CO2 Storage Resources and their Development

Risk assessment and analysis
The assessment and management of technical risks have advanced
significantly in the last decade. A number of different risk
assessment tools – including databases, performance assessment
models, workflows and best practices – have been greatly refined ordeveloped during this period. There is no current consensus
regarding the time period used for risk assessment of a CO2
storage site, although most projects use at least a 1 000+ year time
horizon. Recently, there has been a move away from qualitative risk
profiles towards a combination of qualitative profiles supported byquantitative indicators. Qualitative risk profiles remain an extremely
valuable tool, especially for communicating environmental risks
through time. Risk assessment practices will continue to improve as
CO2 storage is deployed more widely and more data can be used tovalidate system-level models.

The assessment and analysis of risks, especially technical risks,
form a key part of storage site development and operations. Risks
are evaluated and assessed based on their probability (frequency ofoccurrence) and their magnitude (severity of their impacts). Often,
risks will be scored according to their probability and severity – both
mitigated and unmitigated – which allows them to be mapped onto arisk matrix. Risks that are highly probable or very severe, or both,will need to be evaluated in detail.
During project framing, the project manager should define priority
risk concerns, acceptability thresholds and acceptability criteria.
Acceptability thresholds will often be based on criteria such as
impacts on health, safety and the environment, cost, reputation andproject schedule, and technical considerations.
Technical risk assessments rely on data acquired during theresource assessment and development process and from MMV
programmes. Storage complex and plume models are created fromthese data and they underpin the basis of many technical risk
assessments. These assessments should be periodically reevaluated. For operating CO2 storage sites, risk assessments
should be performed or updated on a yearly basis at a minimum.
Annual project meetings can be used to update risk databases anddiscuss new or emerging risks. For resources under consideration
for development, risk assessments should be performed at least
once in every phase after initial regional and site screening.

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Project developers and operators will have different risk thresholds
according to their individual tolerance for risk, project plans, etc.
Regulators will also need to decide on their priority risk concernsand ensure that they define thresholds for those risks. The resulting
regulation should be neither too lax nor too stringent. Overly
stringent regulation can place undue burdens on project developers
and hamper storage development, while overly lax regulation could
decrease public acceptance of storage and potentially allow forrisky sites to be developed.

Chapter 6. Risk management

CO2 Storage Resources and their Development

Qualitative environmental risk profile for a CO2 storage project

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Source: Reproduced from S.M. Benson (2007), Carbon dioxide capture and storage: research pathways, progress, and potential, presentation given at the Global Climate & Energy
Project Annual Symposium, 1 October 2007.

Chapter 6. Risk management

CO2 Storage Resources and their Development

Risk mitigation and remediation
Risk management includes preparedness in case of a risk event.
While CO2 storage sites are selected and monitored to reduce risk
as much as possible, risk mitigation is a critical part of safe
infrastructure development and operations. Risk mitigation and risk
response strategies should be communicated to stakeholders in atransparent manner. This can enhance community trust andpromote a positive public perception of CO2 storage.
Regulation typically requires CO2 storage operators to define their
MMV programme, and their response and remediation plans andsubmit them for review. Suitable monitoring in conjunction with aswift response if abnormalities are observed are an effective way of
mitigating risks that may threaten the integrity of a storage site, theCO2 it holds, and public health or the environment. Japan CCS’s
rapid response to the naturally occurring Hokkaido Eastern Iburi
earthquake is an example of this. The earthquake occurred at
3:07 a.m. By 8:00 a.m. Japan CCS was able to confirm that there
were no abnormalities in the facilities. At 9:37 a.m. it publicly
confirmed that there was no abnormality in either capture or
injection facilities.
Should a risk event occur, a range of remediation measures can be
deployed to control, manage and minimise the impact. Remediation
options and strategies will depend on the type of incident and themagnitude of impact.

PAGE | 71Injection should cease in the event of a major leak or induced
seismicity above a defined threshold. Injection may need to be
stopped permanently.

Pressure management strategies such as brine extraction can beused if overpressurisation is observed. Brine extraction can relievepressure by removing fluids from the reservoir. It can also
potentially be used to change or control the pathway of a CO2
plume.



Water injection into the CO2 plume can dissolve gaseous CO2,
leading to increased residual and solubility trapping. This canimprove storage security and change plume behaviour. However,it may come with significant costs or risk of emissions.



Pump and treat methods can be used if brine or CO2
contamination of groundwater occurs. This method uses purposedrilled wells to remove CO2- or brine-contaminated groundwaterfrom an aquifer. The water is treated at surface and can either bedischarged or reinjected into the aquifer.

Well workovers can be used to repair minor well leaks. Wells canalso be sealed to prevent further leakage.

In the unlikely event of well blowout, relief wells can be drilled andheavy fluids can be pumped to prevent fluids from the reservoir
from flowing up and limit the quantities of CO2 released. This isconventionally known as well kill or killing a well.

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Remediation strategies

Chapter 6. Risk management

CO2 Storage Resources and their Development

Pressure management
Reservoir pressure – how it changes in response to injection, andhow it propagates in the subsurface – contributes to site
performance and CO2 containment, and is a component of mosttechnical risks. Therefore, pressure must be managed carefully
throughout the entire lifetime of a CO2 storage site. Different typesof storage resources will have different pressure considerations andthe geometry of the storage complex – the reservoir and its seals –will also influence pressure management.

characterisation. Bottom-hole pressure is monitored, often
continuously, as part of MMV programmes.

Depleted oil and gas reservoirs are likely to have a lower risk ofoverpressurisation than saline aquifers since extraction activities
can lower reservoir pressure. It is considered safe to gradually
repressurise the field to its initial pre-extraction pressure so long as
repressurisation will not cause well integrity issues or change theflow patterns of faults and seals in a deleterious manner. Saline
aquifers have typically not been subject to previous extraction andtherefore uncertainties around reservoir behaviour and its response
to pressure changes may be higher. In both resource types, there isminimal risk provided pressure is continuously monitored andpressure management strategies are in place.

Canada bottom-hole injection pressure is limited to 90% of the

In order to avoid overpressurisation, geomechanical fracture
pressure thresholds for the reservoir and seals should be defined.
Usually the maximum bottom-hole injection pressure is restricted toa fraction of the estimated reservoir pressure, the seal fracturing
pressure or the fault reactivation pressure, whichever is lowest.
Some jurisdictions choose to regulate this. For example, in Alberta,
estimated rock fracturing pressure.

Pressure and pressure management strongly influence site design,especially regarding injection-related parameters such asplacement of injection wells and injection rate. Pressure
management is both a mitigation measure for technical risks and a
remediation technique. Requirements are site-specific and dictate
the properties of the storage resource, site design and site
operations.

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There are a number of pressure management techniques and sites
are not limited to deploying one. Injection-related techniques include
lowering injection pressure or reconfiguring injection patterns. Brine
extraction – where brine is pumped out of the reservoir to makespace for CO2 – may be used to lower reservoir pressure and forplume control.

Overpressurisation can potentially cause the seal to fracture,reactivate existing faults and fractures, and cause induced
seismicity. At any given time, the maximum pressure in the system
will be at the injection point(s). To assess and manage pressure,initial bottom-hole pressure measurements are taken during site

Chapter 6. Risk management

CO2 Storage Resources and their Development

Info point: Open and closed storage systems

Case study: Pressure management via brine extraction

Open storage systems extend without lateral seals, allowing
fluids to migrate laterally to make room for the CO2 plume andallowing pressure to dissipate.

Brine extraction – pre-injection, continuous or for remediation –can be a valuable pressure management technique allowing
projects to maintain a stable injection rate. It comes with a suite oftechnical, financial and environmental considerations, including
increased project costs and changing flow paths within thereservoir. Projects with brine extraction can consider a number ofways to manage the volumes of brine they produce. Brine can bereinjected into a different area of the reservoir or into anotherformation for disposal. Brine has a number of potential uses, forexample it can be mined for valuable minerals, treated to produce
fresh water or used by different sectors for various purposes; uses
are site-specific and in some cases could offset extraction costs.

Closed storage systems are naturally sealed vertically andlaterally by faults or other features. In closed systems, injection
rates need to decrease with time to compensate for increasing
reservoir pressure.
The idealised representations below demonstrate how reservoir
geometry can affect fluid and CO2 movement in a reservoir. In
nature, most reservoirs will fall between these two systems.
Storage system geometry

The Gorgon Project in Australia is the first dedicated storage
project that includes water management (extraction) and water
injection wells in its operational plan. The project extracts brackish
water from the CO2 storage reservoir to manage reservoirpressure. The extracted brackish water is reinjected into a
different geological reservoir layer suitable for containment. Thiswater management allows the operator to maintain injection of
CO2 at a consistent predictable pressure level.

Source: Modified from Q. Zhou et al. (2008), A method for quick assessment of CO2 storage
capacity in closed and semi-closed saline formations, International Journal of Greenhouse Gas
Control.

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Another major consideration is the solid material that may be coproduced during brine extraction. Material from the reservoir suchas sand or carbonates can clog wells leading to lower extraction
rates. Salt precipitation can also reduce extraction rates, but canbe managed with standard industry techniques.

Chapter 7. Technical risks

CO2 Storage Resources and their Development

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Technical risks

Chapter 7. Technical risks

CO2 Storage Resources and their Development

Chapter summary
It is important for CO2 storage projects to have robust strategies inplace to manage technical risks given the potential impact associatedwith a negative risk event. Technical risks of CO2 storage can bebroadly categorised into:






site performance
health, safety and environment
containment
induced seismicity
resource interaction.

Generally these categories overlap and as a result risk management
and mitigation strategies are often quite similar. In every case,detailed resource assessment, optimised site design and MMV
programmes form the foundation for risk mitigation.

Prioritise and co-ordinate resource development to mitigate
resource interaction risks.
Ensure that resources are assessed and operated in a safe andeffective manner.

Operator actions:Conduct detailed site assessments, optimise site design andmanage pressure to mitigate performance risks.
Ensure robust MMV programmes to mitigate health, safety andenvironmental risks.
Thoroughly assess legacy wells and natural seals, and ensure
robust site management to mitigate containment failure risks.
Ensure robust site characterisation and integrate monitoring to
mitigate induced seismicity risks.

Policy actions:

Determine acceptable risk thresholds and define strategies tomanage risk events if they occur.
Define a resource management strategy to ensure that resource
contamination is minimised and that CO2 storage can occur.

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

Chapter 7. Technical risks

CO2 Storage Resources and their Development

There are five main categories of technical risks
These five categories overlap and risk management processes
reflect that. The probability and impact of negative technical risk
events should be low at CO2 storage sites that have benefited fromdetailed resource assessment and are operated in line with industry
good practice.

Technical risks relate directly to the CO2, its injection and storage
operations. During resource assessment and development, risks
are identified using three main approaches:Screening criteria can be used to identify key risks.



Historical operating data from similar geological settings can beused to identify technical risks.

A more comprehensive approach uses scenarios developed fromsite- and project-specific features, events and processes (FEPs) to
identify risks. FEP analysis is the most resource-intensive
approach, but also the most common method to identify risks. It
has been used by a number of CO2 storage projects. The openaccess Generic CO2 Geological Storage FEP Database 2.0
developed by Quintessa provides a comprehensive starting point
for FEP analysis.

site performance

health, safety and environment (HSE)

containmentinduced seismicity

resource interaction.

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The technical risks of CO2 storage can be broadly categorised intorisks relating to:Chapter 7. Technical risks

CO2 Storage Resources and their Development

Site performance risks
the goal of reducing injection pressure, increasing injection capacity
or minimising near-well pressure build-up.

Site performance risks are assessed during the assessment anddevelopment process to ensure that reservoir capacity andinjectivity meet project needs. Storage resources will either be
eliminated from further assessment or will advance to the next
phase depending on how they align with predefined performance
criteria. Reservoir modelling and site development plans will be
regularly refined to ensure that site performance risks are low or
can be mitigated.

Case study: Pressure build-up affecting performance
As part of the Snøhvit LNG project in Norway, CO2 is separated
from natural gas and then injected into an offshore storage site.
During project development, saline aquifers near the Snøhvit field
were assessed for their storage potential.

Mitigation

In April 2008 the project started injecting CO2. Within months, anincrease in reservoir pressure was observed and pressure buildup became a concern. Despite changes to operations, pressure
continued to rise. By late 2009 it appeared unlikely that the target
formation would be able to support the rate and volume of CO2
injection required by the Snøhvit project over its lifetime.

Site performance risks can be mitigated through optimisation of site
design, including pressure management. This will include an
integrated analysis of well, near-well and reservoir conditions. Welldevelopment plans should be periodically reassessed during site
development using the results of pumping tests, baseline
measurements and modelling, reservoir modelling and formationpressure. Well completion methods should be decided on the basisof site-specific features and regulatory requirements. For example,
sand and gravel packs in injection wells can be used to safeguard
well integrity and injectivity, but may not be required at all sites.
Brine extraction may be included in development or operations
plans to improve the sustainability of injection rates and relieve
reservoir pressure. Multiple wells may be used to inject CO2 with

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To address this, in April 2011 the project’s injection well was
worked over to allow injection into the water leg of the StøFormation. Since a back-up had been defined during project
development, the project was able switch injection zones and has
been successfully injecting CO2 ever since. In 2016 a second
injection well was drilled into the Stø Formation in order toincrease operational robustness and flexibility and reduce the risk
for contamination of Snøhvit gas by injected CO2; it has since
been the main injector.

Chapter 7. Technical risks

CO2 Storage Resources and their Development

Health, safety and environmental risks
Elevated concentrations of CO2 can lead to human health problems
and environmental concerns. Provided sites are properly managed,
the risk of toxic CO2 exposure or of CO2-related asphyxiation isextremely low. The highest risk for both is related to the sudden andunexpected release of CO2 or the continuous release of large
volumes of CO2 in a relatively confined area. This could occur in theform of a well blowout, a large leak from the pipeline transporting
CO2 to the injection well, or from depressurisation of temporarytank-based storage on site.

an underwater leak of 1-10 tonnes per week would be likely to
influence a few tens of metres.

Mitigation
HSE risks related to CO2 exposure can be mitigated through site
development and operations that follow best practice andregulation. MMV programmes should include monitoring of plume
behaviour and implementation of active safeguards in order toreduce the risk of leakage that could lead to environmental damage.

In the unlikely event of a CO2 leakage event, the impact on humanhealth will depend on the nature, size and concentration of the leak.
It will also depend on the proximity of humans to the leakage point,
the length of exposure time and the topography of the area.
Ecosystem impacts caused by exposure to elevated concentrationsof CO2 depend on the severity and longevity of a leak. Catastrophic
leakage events, while extremely unlikely, could significantly affectecosystem dynamics and may lead to ecosystem instability. Plants
and fungi tend to be more tolerant of elevated CO2 than animals.
Onshore, persistent CO2 leakage could cause localised harm toplant life since CO2 can suppress respiration and acidify soil if it
accumulates. Offshore, persistence leakage could lead to localised
seawater acidification that could affect some vulnerable organisms.
However, marine ecosystems can tolerate a certain variation in CO2
concentrations and acidity. Due to water movement and diffusion,

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Well operations should follow industry best practice and meet or
exceed regulatory requirements. Given the corrosive nature of CO2
when mixed with water, equipment should be regularly inspected
and anti-corrosion measures implemented. Well workovers
converting pre-existing non-CO2 storage wells into injection wells
should only be performed following rigorous well assessment. This
type of well workover is relatively common in the CO2-EOR industry.
Depending on their specifications, it is also possible to convert CO2
storage-specific exploration wells into injection wells. In such cases,
the exploration well will be designed and completed to thespecifications required for injection. The Northern Lights projectplans to do this with its Eos well.

Chapter 7. Technical risks

CO2 Storage Resources and their Development

Info point: Demystifying well blowouts

Case study: General hazards of CO2

Well blowouts occur when an operator loses control of wellpressure causing fluid to migrate up and out of a well. Wellblowouts can be caused by mechanical failure, flawed ordamaged equipment, operational error or unpredictable
circumstances (such as poorly sealed or unidentified legacy
wells). Blowout rates in oil and gas activities have declined
significantly in recent years due to improved technology,
increased experience and changes in safety practices. These
improvements are transferable to CO2 storage.

While unlikely to occur if equipment is appropriately managed,
both regulators and site operators need to be mindful of the risks
posed by a sudden large-scale release of CO2. No such releases
have occurred during CO2 storage activities, but examples can befound in other industries and from natural releases of CO2. The
risks posed by long-term low-level exposure should also be
accounted for.
In the United Kingdom, CO2 is classified as a “substancehazardous to health” and limits are placed to minimise workplace
exposure. In 2011 the Health and Safety Executive published areport assessing the major hazard potential of CO2.

In the context of CO2 storage, well blowouts pose risks related to
HSE, containment and public perception, and are a potential
source of liability. While no well blowouts have been reported atdedicated storage sites, a number of well blowouts have occurred
during CO2-EOR operations in the United States. CO2-EOR
activities are different from dedicated CO2 storage, but they
provide the best analogue for understanding the types of
blowouts that can occur. Four types of blowouts have occurred
during CO2-EOR activities. Blowouts during CO2-EOR operations
tend to be a consequence of operational problems tied to using
CO2 as an oil extraction medium. This suggests there is a lower
risk of blowout with dedicated CO2 storage than with CO2-EOR.
While blowouts can occur, the oil and gas industry has
demonstrated that risks can be managed by successfully
reducing the rate of blowouts. Additionally, the CO2-EOR industry
has demonstrated that it is possible to competently regain control
of a CO2 injection well.

The report found that CO2 has an accident potential in line withother regulated hazardous substances. The range of impact of a
CO2 release varies depending on how the CO2 is released (rateand volume) and in what form. The highest accident potential
relates to a release of supercritical CO2. Even though the reportfound that CO2 has the potential to cause a “major hazard
incident”, it also found that the likelihood of such an incident is“very low” when risks are properly controlled.

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The report highlights that knowledge and best practices relatingrisk management of supercritical or dense CO2 are limited.
Further research, codes of practice, standards and knowledge
sharing on CO2 handling will contribute to the safe operation of
CO2 storage sites and safe deployment of CCUS.

Chapter 7. Technical risks

CO2 Storage Resources and their Development

Containment risks
Containment failure is the most extensively researched risk
category in CO2 storage. Risks are site-specific, but their probability
and impact are low to very low for a properly assessed, developed
and operated site.

Mitigation

Containment failure can allow CO2 or brine to escape the storage
container via a number of pathways. This can have consequences
for the environment – including underground resources, ocean, land
and atmosphere – and for human health. Containment failure risks
are pathway and time dependent. In a poorly assessed or operated
reservoir, CO2 could leak out quickly in large quantities or seep out
slowly. Large leakages are very unlikely and should be prevented
with effective site characterisation. They would most likely occur via
engineered pathways, such as unidentified or improperly
rehabilitated legacy wells, and should be quickly detected as theywould produce abnormalities in monitoring data. CO2 seepage canbe more difficult to detect or monitor than larger leakages. Brinemigration – which occurs as a result of CO2 injection – can causebrine to be pushed out of the reservoir zone.

Containment assessments are used to identify leakage pathways
and confirm the presence of containing features. They assess the
top seal(s), faults, lateral structural features and engineered
structures. Wells around a storage site are inventoried, theirleakage pathways are identified and their baseline integrity isdefined. Legacy wells are assessed using public records andprivately held data. If necessary, they can also be re-entered forfurther assessment and re-abandoned. The construction andoperations of purpose-built wells are also assessed. Wells can bescored individually on their likelihood of leaking and the potential
size of a leak. As a rule, wells that meet CO2 storage construction
requirements will have lower containment risks than other wells.

Injection typically causes reservoir pressure to increase. If adequate
pressure management strategies are not employed, overpressurisation can occur. This can potentially lead to containment
failure. Post injection, reservoir pressure slowly declines and CO2
becomes trapped by residual, solubility and mineral trapping. As aresult, the risks relating to containment failure decline with time.

MMV programmes, in conjunction with clear decision trees andmeasures that can be activated in the case of abnormalities,
contribute to containment risk mitigation by tracking subsurface CO2
migration and pressure propagation. Pressure management
operations and altering injection rates and injection patterns canalso contribute to containment risk mitigation.

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Major containment risks are mitigated during the assessment anddevelopment process. Storage resources should only be developed
if uncertainties relating to containment are low and containment
risks are within a tolerable threshold.

Chapter 7. Technical risks

CO2 Storage Resources and their Development

Leakagepathway

Description

Mitigatedprobability

Severity

Mitigation• Robust characterisation of the storage container and its boundaries during
detailed site characterisation and site development.
• Integrating safeguards against lateral migration in site design whenrequired.

Lateralmigration

The CO2 plume or brine can migrate beyond theboundaries of the storage container or flow outof the container under spill points.

Very low

Low

Caprock failure
or insufficiency

If the vertical seal fails, is incomplete or isdamaged, CO2 can migrate vertically into or
beyond the caprock. Unintended damage to theseal can occur during poorly controlled drilling
operations. The caprock can fail if pressures rise
above its fracture pressure, but only if reservoirpressure is poorly managed.
Excessive cooling in the injection zone – causedby the rapid expansion of liquid CO2 into avapour – can lead to embrittlement of thecaprock or reservoir and/or to caprock fracturing.
CO2 or brine can migrate along pathways
created by faults, fault zones or fracture
systems. Injection-related pressure changes cancause existing faults to reactivate and/or new
fractures to form. Existing faults can also act asvalves that release pressure and then close.
CO2 wells can provide a pathway for leakage ifthey are not properly constructed, operated anddecommissioned.

Very low

Medium• Assessment of the sealing capacity of the caprock.
• Properly managed site operations.
• Pressure management.
• Monitoring of drilling conditions to reduce risk of damage.

Low

Medium• Managing the temperature and pressure of CO2 injection.
• Designing injection to manage caprock cooling.

Very low to
low

Low tomedium• Site-specific assessment of the risks posed by faults and fractures.
• Maximising distance from the injection point to existing faults.
• Pressure management.

Negligible

Low• Regulation regarding well construction and operations.
• Monitoring for well integrity throughout site lifetime.
• Following up-to-date best practice guidelines and regulation for wellconstruction, operations and abandonment.
• Plugging and abandoning wells using dedicated cement plugs to seal in CO2
and prevent leakage post injection.

Low tomediumSite-specific• Assessment and management of legacy wells, potentially including
reopening and re-abandoning them in line with current regulatory
requirements.
• Avoiding storage resources with legacy wells; this could potentially severely
limit access to storage resources.
• Site-specific assessment of legacy wells and their leakage risk.
• Maximising the distance between injection wells and legacy wells.

Embrittlement ofcaprock due tocooling
Faults andfractures

Purpose-built
CO2 wells

Known legacy
wells

Legacy oil and gas wells can provide a pathway
for CO2 leakage because construction andabandonment regulation and good practice were
not designed with CO2 storage in mind and may
not be sufficient to ensure CO2 containment.
Depending on their construction anddecommissioning, legacy wells could potentiallyallow CO2 or brine to migrate from the reservoir
into freshwater aquifers.

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Containment failure risks and their mitigation

Chapter 7. Technical risks

CO2 Storage Resources and their Development

Leakagepathway
Unknown legacy
wells that pierce
the seal or enter
the storage
reservoir

Description
Old and abandoned wells have been identified
as a critical potential leakage path. Such wells
may not be properly documented or there may
be low confidence in their construction andabandonment. Unknown wells could provide an
unconstrained leakage pathway for CO2.

Mitigatedprobability
Very low to
mediumdependingon region

Severity

Mitigation

High• In regions with historical subsurface activity (oil, gas, mining), extra careshould be taken to search records for legacy wells.
• Wells that enter the caprock or storage reservoir pose the most significant
risk, so the depth of the storage formation should be compared to standard
well depth in the region.
• Reservoir and caprock studies and pumping tests can aid in theidentification.

Notes: Probability and severity are site-specific and should be evaluated during risk assessment. The probability and severity estimations here are qualitative, not site-specific, andassume that sites have been assessed following best practice and risks are appropriately mitigated.

Case study: Injection rate affecting storage containment

In response to monitoring results and potential risk events, theproject’s risk register was modified on multiple occasions. The project
identified that CO2 was potentially injected at a rate that caused wellpressure to exceed fracture pressure and initiated appropriate
response measures including suspension in June 2011 after
seven years of operations. To date, no leakage has been observed.

In 2008 data from InSAR (a type of radar-based remote sensing used
to detect deformation land surfaces) and other monitoring techniques
showed that there may be increased risk of CO2 migrating northwardand potentially outside the project’s lease. In response, the project
collected additional data, updated reservoir modelling, continued with
monitoring and idled the northmost injection well.
In 2009 seismic monitoring showed that newly detected features
could indicate fracturing. The project reduced CO2 injection pressuresand updated some of its monitoring techniques.
In 2010 CO2 was detected in one of the project’s wellheads,suggesting that well may have lost integrity. The project plugged andabandoned that specific well, increased the frequency of wellinspections and placed additional focus on wellbore cement.

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The In Salah CCS project in Algeria operated between 2004 and2011. It is considered an important case study for seismic monitoring,and microseismicity in CO2 storage and risk management. Seismicity
related to the project remained below a magnitude of 1 Mw (themoment magnitude scale). During the project, 3.8 Mt of CO2 were
injected into a geological storage site located near to the Krechba
field in Algeria. The maximum permeability of the targeted zone waslow, so three wells were used to inject CO2.

Chapter 7. Technical risks

CO2 Storage Resources and their Development

Info point: Well decommissioning, legacy wells and risk

Decommissioning procedures of CO2 wells are designed to ensure
containment of CO2. Modern well decommissioning procedures for oil
and gas wells, including plugging and abandonment, started aroundthe 1950s. These procedures are designed to isolate the extraction
zone and other geological formations with which the well intersects.
However, they may not be sufficient to ensure CO2 containment. For
this reason, regulators should consider whether well
decommissioning procedures should be updated in regions where
there will be CO2 storage. Requiring deep wells that pierce thecaprock of storage resources to be decommissioned to CO2
containment specifications could lower the cost of CO2 storage
development. Additionally, making well records publicly available canmake it easier for storage developers to assess the site-specific risks
posed by legacy wells.
In addition to the risks posed by known and properly
decommissioned legacy wells, there are risks and uncertainties
relating to undocumented, very old, orphaned or illegally drilledlegacy wells. These wells are unlikely to have been closed in amanner that ensures CO2 containment. For example, some onshore
wells from historical oil and gas activity may have been plugged withtree trunks, gravel, lead, or not at all. Additionally, wells that havebeen deserted with surface equipment in place may have been
illegally reopened, the mechanical seals of the equipment may havefailed, or the surface equipment may have been tampered with. It
may be extremely costly or even impossible to locate such wells andto assess their containment.
Offshore, developers and operators of gas fields may be best
positioned to transition those fields towards CO2 storage because
they will be aware of the location, status and particularities ofindividual wells. Offshore decommissioning practices require thecasing and wellhead to be cut off permanently plugged andabandoned wells. While the exact depth requirements vary, once
subsea structures are removed it can be extremely difficult torelocate wells offshore.
Legacy oil and gas wells do not just pose leakage risks to CO2
storage operations. Globally there are an estimated 29 million
deserted oil and gas wells. These wells are a major source of
methane emissions and can also lead to unexpected disasters,
including explosions. Governments can contribute to methane
reduction and to CO2 storage readiness by enforcing existing welloperation and closure requirements and by improving well
decommissioning standards.

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Wells and boreholes of all kinds are decommissioned andabandoned after they have served their purpose. In mostjurisdictions, the decommissioning of wells is regulated anddetermined by well type. Modern decommissioning andabandonment requirements usually include removal of internal
equipment, sealing the well at one or more intervals with cement,
and removing surface hazards. Most authorities also require thelocation and decommissioned status of the well to be reported.

Chapter 7. Technical risks

CO2 Storage Resources and their Development

Induced seismicity risks
Seismic events occur when rocks fracture or when there is rockmovement along a fault. Natural seismicity is a phenomenon
caused by the Earth’s movement, resulting in the natural failure offaults or the release of stress. Triggered seismicity occurs whenhuman activity causes rock already under natural stress to fail orrelease stress. Induced seismicity occurs when human activity
increase stress and strains in the subsurface and causes it to bereleased. Induced seismicity is typically low-energy microseismicity
and can occur during activities related to oil and gas extraction, fluid
extraction or injection, or mining, as well as being caused byartificial lakes and dams.

Felt microseismicity has been associated with CO2 injection in one
CO2-EOR project, 5 but not with any dedicated CO2 storage projects.
No seismicity-related leakage has been attributed to any dedicated
CO2 storage project.
There are three main considerations regarding seismicity and risk
with CO2 storage:

CO2 storage is unlikely to trigger large earthquakes or reactivate
faults through which CO2 could leak. Generally, humans startfeeling seismic activity between magnitudes 2.0 and 3.0 depending
on depth, subsurface characteristics and distance. CO2 injection
may induce microseismicity, but the level of induced seismicity is
expected to be very low and lower than the induced seismicity thathas been observed during oil and gas operations, energy storage,
wastewater injection and geothermal energy production. Induced
microseismic activity with magnitudes below 2.0 has been detectedat some CO2 storage projects, including the Weyburn-Midale
Project, the Illinois Basin-Decatur Project and the In Salah Project.

Seismic risk is project- and site-specific and should be evaluatedon a per-project or per-site basis.



Risk assessment tools such as probabilistic seismic hazard
assessments can aid in determining the seismic risk level andwhether risks can be safely managed.



Public perception of seismic risks may have more impact on a siteor project than the actual technical risk of seismicity.

Mitigation
Seismic risks can be mitigated to an acceptable level during sitecharacterisation. Geomechanical assessments are used to identify,
mitigate and manage the risk of induced seismicity and fault
activation. They ensure that site operators have sufficientunderstanding of the geomechanical properties of the storage
reservoir, its seals, the overburden (rock sitting above the reservoir)

Multiple felt microseismic events occurred in Texas in 2011, it has been postulated that those
events related to CO2 injection, but investigation is ongoing into the cause of the microseismicity inthat area.
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5Chapter 7. Technical risks

CO2 Storage Resources and their Development

and any features that occur in the area of review of a storage site.
These assessments should place limits on the operating
parameters – mainly injection pressure, rate and temperature – of astorage site, or storage sites within a single storage resource.
These assessments will also inform the design of pressure
management schemes and MMV programmes.

Case study: CO2 storage in an earthquake-prone region
The Tomakomai CCS Demonstration Project captured and stored
300 kt of CO2 between April 2016 and November 2019. CO2 waspredominately injected into the Moebetsu Formation a few
kilometres off the coast of Tomakomai, Japan.

MMV programmes will monitor reservoir pressure before, during
and after injection to ensure that the reservoir remains below thecaprock fracture pressure. Integrated monitoring is deployed todetect surface deformation and microseismicity. This allows
operators to monitor pressure changes, detect any escalation in thefrequency and/or magnitude of microseismic events and respond if
necessary. Response strategies can include changing the injection
location or rate, both of which can have implications for pressure
management strategies. In some cases, injection may need tocease.

On 6 September 2018 a natural earthquake with a magnitude of
6.6 Mw was recorded in Hokkaido, around 30 km away from the
project at a depth of 37 km. Seismometers for the Tomakomai
CCS project recorded a MJMA 6 seismic intensity of around 5.
Within one day, Japan CCS confirmed that there were noabnormalities at the facility and that they were verifying the status
of injected CO2. Pressure and temperature data from the project’s
monitoring array confirmed that there was no CO2 leakage. In
November 2018 Japan CCS published a research report on theimpacts the earthquake had on the CO2 storage reservoir. That
report asserts that “it is inconceivable that there is any
relationship between CO2 injection and the Hokkaido Eastern
Iburi Earthquake”.
Following the earthquake, the project resumed CO2 injection until
November 2019 when the injection target of 300 kt was reached.
The project is now in post-injection monitoring and the project’s
monitoring equipment has detected no microseismic events in theinjection area since the start of injection.

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6
The Japan Meteorological Agency uses its own seismic intensity scale called the JMA. Rather
than qualifying how much energy an earthquake releases, it qualifies how much ground-shaking
occurs at distributed measurement sites.

Chapter 7. Technical risks

CO2 Storage Resources and their Development

Resource interaction risks
resource access prioritisation can support this. Resource
development plans should be periodically reassessed to ensure
they match current and future priorities. In some cases, storage
resources may not be available until other activities within the samegeological basin have ceased. Adverse resource interaction can be
mitigated by ensuring containment of CO2 and brine.

The risk of adverse resource interaction is low in properly
developed and managed CO2 storage sites. The likelihood ofinteraction between CO2 storage activities and subsurface
resources depends on the depth of injection, the type and depth of
the resources, and site operations. Resource interaction needs tobe assessed on a site-by-site basis. Regulatory mechanisms andcontractual arrangements can manage potential interferences.

Resource interaction between CO2 and subsurface resources

Storage activities can have positive, negative or neutral impacts on
resources found within the injection zone, reservoir and surroundingrocks. Additionally, CO2 storage development may be synergisticwith the development of other subsurface resources. Due to theirdepth, shallower resources – including shallow groundwater, coaland most mineral deposits – are less likely to be exposed to
injected CO2. However, a leak of either brine or CO2 from a poorly
selected site could result in contamination of shallow resources.
This is only a concern if containment fails. Deeper resources –including oil, gas, deep groundwater and geothermal resources –have a higher probability of interaction with CO2 storage activities
since they occur at similar depths.

Subsurface
resource

Positive impacts

Groundwater• Increased fluid pressure• Enhanced groundwater flow

Oil and gas• Increased extraction of oil• Mitigating depressurisation
caused by extraction• Reversal of subsistence• Potential displacement ofmethaneCoal andcoal seamgas

Mitigation
Natural resources should be assessed on a basin-scale and theiruse planned out to ensure compatibility between various activities,
including CO2 storage. Resource co-ordination agreements andGeothermal
resources• Exploration synergies
between the two resources

Mineralresources• Potential displacement ofdissolved minerals leading toenhanced extraction

Negative impacts• Changes in groundwaterchemistry including pH• Potential mobilisation of
metals• Displacement of brine into
freshwater aquifer• CO2 contamination• Disturbance of reservoirpressure• Potential displacement ofmethane• CO2 contamination of coalbed• Cooling effects, which could
reduce efficiency ofgeothermal fluids• CO2 could react with dissolved
minerals and plug pore space

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Note: Methane can be a valuable potential by-product but is also a highly polluting
GHG. Whether displacement is positive or negative will be project/site-specific.
Source: Adapted from IEAGHG (2013).

Chapter 8. Commercialisation

CO2 Storage Resources and their Development

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Commercialisation of CO2 storage

Chapter 8. Commercialisation

CO2 Storage Resources and their Development

Chapter summary
Policy actions:

A number of existing business models can inform the development of
CO2 storage business models. It is likely that models will differ
between geographic zones, accounting for resource availability,
decarbonisation needs, and legal and regulatory frameworks.



CO2 storage-specific business models will address storage-specificmarket risks and uncertainties, while accounting for the different
types of CO2 storage projects and project cost components. This will
include defining how revenue can be generated and how projects
can be financed.

Commercialisation will also hinge on public acceptance of CO2
storage. Public awareness of CO2 storage is generally low anddedicated storage is often conflated with CO2-EOR. Increasing publicawareness and improving public perception of the technology will
support the development of a CO2 storage industry.



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Undertake precompetitive exploration, but recognise that not all
exploration will result in developable resources.
Assess whether an existing state-owned enterprise has theexpertise and knowledge to assess or develop CO2 storage
resources.
Collaborate with the private sector to define how CO2 storage
can generate revenue.
Provide early movers with financing opportunities throughgrants, loans and other support mechanisms.
Consider CO2 storage-related liabilities and how they should be
regulated.
Determine how to implement risk sharing between the public andprivate sectors and how liabilities can be allocated.
Align incentives to develop CO2 capture and transport withconfidence in storage.

IEA. CC BY 4.0.

The CO2 storage industry is being developed to support the
decarbonisation required in energy transitions. Commercialisation of
CO2 storage will require collaboration and action by both the public
and private sectors.

Chapter 8. Commercialisation

CO2 Storage Resources and their Development

CO2 storage commercialisation requires business model development
transport infrastructure should be guided by the injection rate andduration of injection that individual storage resources can support.
Confidence in CO2 storage is needed to support the development of
capture and transport, but contractual arrangements with CO2
suppliers are also likely to be needed for storage sites to achieve
FIDs. Within the CO2 management value chain, CO2 capture isoverall more costly than CO2 storage. However, CO2 storage
development is more capital intensive than capture in the stages
before reaching the FID. These investments are at risk, and cangenerate no return if a resource is not suitable for development or if
the FID is negative.

Commercialisation of CO2 storage will require concerted action byboth the public and private sectors, including the development of
CO2 storage business models. While a limited number of dedicated
CO2 storage projects currently exist to inform regulatory regimes,
insurance underwriters and project developers, decarbonisation
efforts are driving the development of dedicated CO2 storage andthe business models to support it. Regionally informed, sectorspecific business models are needed to support the upscaling andwidespread deployment of storage; these can be informed by themodels used in other sectors.
CO2 storage-specific business models will need to address thefinancing of and revenue generation at CO2 storage sites. Given thecharacteristics of CO2 storage activities and the role they play inenergy transitions, there is potential for CO2 storage to be classified
as an essential service and regulated as a utility. Policy makers
should consider this since it could have a direct impact on businessmodels.
Investment in CO2 storage infrastructure is different from
infrastructure investment in other sectors. The industry is still
nascent and in many jurisdictions there is not a high level ofconfidence in policy support or in regulatory frameworks. Comparedto other infrastructure types, CO2 storage carries subsurface risk,
has a long project duration and requires counterparty co-ordination
with suppliers of CO2. The design of CO2 capture facilities and CO2

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Since there is limited experience of operating CO2 storage as acommercial industry, early movers will lead CO2 storage market
development. This should be a collaborative effort between
regulators and project promoters to ensure that a robust businessmodel develops and that storage resource acreage is appropriately
managed. Risk-sharing arrangements should be considered
because, compared to private-sector operators, governments may
be better equipped to deal with some of the risks associated with
CO2 storage – such as long-term liability or pre-commercial
exploration risk. Governments can thus act as a helpful risk-sharing
partner to encourage the development of storage resources.

Chapter 8. Commercialisation

CO2 Storage Resources and their Development

Elements to consider when defining a CO2 storage business model

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Notes: PFI = private finance initiative; PPP = public–private partnership.

Chapter 8. Commercialisation

CO2 Storage Resources and their Development

Project typeCO2 storage activities can be developed within the framework of afull-chain CCUS project or as a part-chain project. Part-chain
projects – storage-specific or with transport – may more effectively
support the development of a CO2 storage industry than full-chain
projects. There are benefits and drawbacks to each approach.
Full-chain projects are integrated projects where capture,transport and storage are developed within a single projectframework. Storage sites that are part of full-chain projects know
where their CO2 will be sourced from and what volumes will need to
be injected. This contributes to lower uncertainty about CO2 volume
and counterparty risk. However, a full-chain approach can increase
the probability and impact of cross-chain default.



Large CO2 (transport and) storage hubs developed to service
industrial clusters that are simultaneously deploying CO2 capture.



Storage (and transport) infrastructure developed with a more
speculative “if we build it, they will come” approach in order to offer
access to CO2 storage (and transport) as a commercial service.
Projects that consider this approach are likely need some initialamount of assured CO2 supply in order to justify investment.

Breaking the chain reduces the risk of cross-chain default but
increases exposure to counterparty risk. Due to the lack of aconcrete customer base, part-chain storage projects will have tomanage risks and uncertainties regarding CO2 supply. These canbe reduced though source-sink matching on a regional basis, as
can developing transport and storage hubs linked to large industrial
clusters. To proceed with storage development and reduce market
risks, some project developers are choosing phased site
development. Phasing construction can reduce the risk of stranding
oversized infrastructure, while still allowing capacity to increase in
response to market demand. Policy makers can also reducecounterparty risk by introducing carbon prices and greenhouse gas
regulations which serve as policy levers that can make emitting CO2
more costly than capturing and storing. This can ensure a customer
base. In all cases, measures should be taken to avoid the offshoringof emissions.

Part-chain projects support the development of independent
operators across the whole value chain. Breaking the value chain
into its individual components allows specialised entities to develop,
promoting innovation and competition. Existing entities withapplicable expertise and competencies can also expand to offer
CO2-specific products or services. For example, a shipping
company specialised in LNG could develop CO2 shipping; a pipeline
operator could develop CO2 pipelines; and companies with
subsurface expertise could develop and operate CO2 storage sites.

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Full-chain projects can morph into part-chain projects throughincremental expansion in response to demand. Currently, two mainmodels are emerging for part-chain project development:Chapter 8. Commercialisation

CO2 Storage Resources and their Development

Case study: Storage as a service

Case study: Development of CO2 storage hubs

“X” as a service, sometimes abbreviated as XaaS, is anincreasingly common business model in the information
technology sector. It recognises that specific companies may not
be suited to managing in-house development and deployment ofspecific technology services. A classic example is data storageas a service, which turns data storage into an operational
expenditure (OPEX). Customers pay a provider for access todata storage infrastructure, reducing their own need to makecapital investments in infrastructure. This model supported thedevelopment of specialised data storage companies.

To stimulate the development of CO2 storage hubs, the Canadianprovince of Alberta has implemented a competitive process toallocate subsurface CO2 storage rights. In the first round,six proposals were selected to explore carbon storage hub
development in Alberta’s industrial heartland region:Both data and CO2 storage require specialised skills andequipment to implement. Data storage is required by every
enterprise and CO2 storage may become increasingly required
during energy transitions. As with data storage, a CO2 storage
service customer could treat storage of its captured CO2 as
OPEX (depending on the contract modality and accounting
rules). This could reduce its exposure to storage-specific financial
risks and allow it to focus on its core activities.



Meadowbrook Hub Project by Bison Low Carbon VenturesInc.
The Open Access Wabamun Carbon Hub by Enbridge Inc.
The Origins Project by Enhance Energy Inc.
Alberta Carbon Grid™ by Pembina Pipeline Corp. and TC
Energy.
Atlas Carbon Sequestration Hub by Shell Canada Limited,
ATCO Energy Solutions Ltd and Suncor Energy Inc.
Currently unnamed project by Wolf Midstream and partners.

The Northern Lights project aims to deliver “carbon storage as aservice”. During development, only 0.8 Mt/year of CO2 fromtwo capture sites was assured. To reduce market risks, theproject is being developed in phases. Phase 1, with a capacity of
1.5 Mt/year, should start operating in 2024. Thanks to significant
interest in the project, development of Phase 2 (5 Mt/year
capacity) started in 2022 with the drilling of a second well.

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The companies involved with each hub have been invited tofurther evaluate the suitability of each location for CO2 storage. If
demonstrated that the sites can provide safe and permanentstorage, the companies can work with government on anagreement providing the right to inject CO2 while enabling open
access to emitters and affordable use of the hub. In March 2022
the Alberta government launched a second call for full project
proposals for CO2 storage hubs in the rest of Alberta. In October
2022 the government announced its selection of 19 further CO2
storage hub projects spread across the rest of Alberta.

Chapter 8. Commercialisation

CO2 Storage Resources and their Development

Project costs
Compared to CO2 capture, fewer detailed cost studies are available
on CO2 storage. Since the number of operating projects is limited,very few cost studies are based on actual built costs. Similar tocapacity, cost estimations that incorporate dynamic considerations– such as injection rate decline and pressure changes – tend to be
more realistic. Project-specific cost studies that account for thetechnical, legal, regulatory and local market considerations are
more accurate than large regional studies, which usually reportcosts as a range. Nevertheless, a few cost-related conclusions canbe drawn from the limited number of studies and operating sites:
Pre-FID costs are at risk and associated with resource
assessment and site design.

•

Onshore storage (assessment, development and operations) is
typically cheaper than offshore storage.

•

Storage resource capacity and injectivity strongly influence storage
unit costs.

•

Active pressure management can increase costs.

•

Saline resources will usually require more extensive, and costly,
data collection than resources in depleted oil and gas fields.

The UK CCS Storage Appraisal project, funded by the
Department of Energy & Climate Change, was a 12-month,
USD 3 million (GBP 2.5 million) programme that assessed fivestorage sites from the UK’s build-out portfolio. Each site wasstudied in detail, although remediation costs for legacy wells were
not fully accounted for. Site-specific development plans for CO2transport and storage were developed, with each project
designed to have a 40-year operational lifetime.
Relative weight of storage-related cost components

Costs vary significantly between storage projects and are regionallyspecific. They are usually expressed as a unit cost per tonne. Thisis a levelised cost, defined by the ratio of the total storage cost to
the levelised volume of CO2 stored. Total storage cost is calculated
to be the real-term, pre-tax, breakeven price for a storage operator.

Notes: CAPEX = capital expenditure, OPEX = operational expenditure, ABEX = abandonment
expenditure.
Source: Adapted from data deliverables 10-14 of the Strategic UK CCS Storage Appraisal project.

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•

Case study: Cost distribution of offshore storage sites

Chapter 8. Commercialisation

CO2 Storage Resources and their Development

Cost components and comparative considerations

Description

Design and development
expenditure

Capital expenditure(CAPEX)

Operational expenditure(OPEX)

Abandonment expenditure(ABEX)

Post closure (PC)

Pre-FID costs including
technical studies (including
exploration-related drilling
and well tests), due diligence,
data purchasing, fees.

Site infrastructure including
wells, well heads, surface
facilities/platforms, injection
systems, etc.

Costs relating to facility
operations over the lifetime ofthe project.

CAPEX and OPEX
specifically related toabandonment and closure.

Costs relating to post-closure
MMV programme, including
handover fees.

Low–medium

High

HighestMediumLow–medium

Share of total
cost
Considerations:
resource type

Saline:Saline:Saline:Saline:Saline:• Extensive data acquisition
often needed• Project area may be larger
Depleted:• Potentially lower availablepressure margin• May require more wells to
inject due to pressure*
Depleted:• Potentially greaterpressure management
needs than in depleted oil
and gas resources• Potentially more wells
Depleted:• May have more wells thatneed to be closed,
increasing cost
Depleted:• Potentially requires a larger
area of monitoring
Depleted:• Well characterised with
abundant data
• Accessibility depends on
nearby oil and gas
operations• May have existingtransport connections
Considerations:
resource
location• Possibility toreuse/repurpose existing
infrastructure• May have numerous
legacy wells that need tobe re-abandoned*• Potentially requires
measures to prevent
excessive wellbore cooling• Potentially higher
decommissioning costs if
infrastructure is reused• Potentially highremediation costs if
remnant hydrocarbons leakOnshore:Onshore:Onshore:Onshore:Onshore:• More stakeholder
engagement andinvolvement withlandowners
Offshore:• Larger risk of legacy wells
that need to be reabandoned*
Offshore:• May need more extensive
MMV and stakeholder
engagement
Offshore:• Abandonment procedures
and closure requirements
may be stricter
Offshore:• More expensive to drill andconstruct wells and reabandon legacy wells*• Infrastructure is more
expensive• Maintenance costs may behigher• Offshore labour costs
typically higher thanonshore• Higher decommissioning
costs due to offshore
facilities and wells• Potentially higher
remediation and/or
rewilding costs• Potentially higher long-term
liability burdens
Offshore:• More expensive thanonshore• Timing and availability ofequipment• Potentially less long-term
MMV required

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* Depending on the project legacy well assessment, remediation and re-abandonment (as required) may be pre FID or post FID.
Notes: Pre-FID CAPEX costs such as exploration wells fall under “Design and development” and exploration wells may be converted into other well types depending on their design.

Chapter 8. Commercialisation

CO2 Storage Resources and their Development

CO2 storage cost evolution
with significant existing data are likely to be developed first.
Following this, developers may target the highest quality, or largest
resources. As a result, resource quality may fall and dataacquisition requirements may increase. Since reservoir size andquality have the biggest influence on overall costs, a reduction inresource quality could result in increased costs during assessment,
development and operations. If roll-out is not managed correctly, it
could also lead to resource scarcity in some regions.

Cost evolution is a major consideration for developing industries
and sectors. Unlike the experience of many technologies, anddespite an initial decrease due to learning and economies of scale,
it is very possible that CO2 storage costs could increase with time.
Store size and quality have the greatest influence on overall CO2
storage costs. The most effective way to reduce CO2 storage costs
is to develop the right resource. Front loading data acquisition is ameasure to reduce overall development costs by allowing theelimination of resources unsuitable for development early in theassessment process. Simultaneous assessment of a portfolio of
resources means that data can be acquired on a regional basis,
potentially reducing costs. Since not every resource will be suitableand uncertainties can affect operations in even the best
characterised sites, contingency planning and back-up resources
can be important. Assessing multiple sites in a region supports thedevelopment of build-out scenarios and contingency plans.

Learning-by-doing can contribute to optimisation in resource
assessment and development as efforts become more refined.
Innovation can lead to improvements in resource assessment, CO2
injection and monitoring. For example, fibre-optic technology,
artificial intelligence and machine learning approaches could reduce
assessment and monitoring costs over time while improving thedevelopment process and increasing storage security. Injection welldesign optimisation can reduce well costs. Competency andtechnology spillover from other sectors could also reduce costs.

Economies of scale are linked to reservoir size and quality, andcan strongly influence storage costs. Since wells are the costliest
part of CO2 storage, large resources with high injectivity will benefit
most strongly from economies of scale. On a regional basis, smaller
resources or those with lower injectivity should have a higher unit
cost than larger resources with high injectivity.
Resource supply could contribute to increasing storage unit costs
through time. Resources without specific access restrictions and
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Storage-specific regulations and policies are key enablers of
CO2 storage and can put both upward and downward pressure on
project costs through time. Overly prescriptive regulations,complicated permitting or regulatory changes and uncertainty canincrease project costs due to project delays, increased compliancecosts and less favourable project financing. Clear regulations andsupportive policies can reduce or stabilise project costs.

Chapter 8. Commercialisation

CO2 Storage Resources and their Development

Project ownership and the role of specialised CO2 storage companies
Historically, governments have led the pre-competitive exploration
and assessment of natural resources, usually via geologicalsurveys. This can continue for CO2 storage. Dynamic data collectedby the oil and gas sector has substantial value to CO2 storage
assessments, but is often proprietary. Governments and data
owners should consider how these data can be reused to support
CO2 storage development. In many cases, the private sector or
public–private partnerships will lead on developing and operatingstorage sites because of the expertise required and precedents set
by other types of infrastructure.

Activities for an entity dedicated to CO2 storage could include:

Entities specialised in CO2 storage can support the growth of theCO2 management sector, enabling economies of scale bydeveloping and operating multiple CO2 storage sites and by
supporting a multiple source-to-sink business model. This can
support efficient resource management and development.
Dedicated entities can be special-purpose vehicles (SPVs), stateowned enterprises (SOEs), or companies specialised in CO2
storage. Countries with a national oil company or other SOE thathas subsurface expertise should consider if and how these
corporate entities can support CO2 storage site development andoperations. Any entity dedicated to CO2 storage will need todemonstrate the value proposition of CO2 storage. This is especiallytrue for early movers, who may face difficulties relating to public
perception and may be moving forward without a clear CO2 storage
market.



Creating a portfolio of storage resources ranked by resource type,
technical characteristics, access conditions and cost.

Assessing storage resources and creating resource development
plans. Resource development plans should include source-sink
matching to identify the most suitable emission sources for eachresource and define transport pathways.

Managing CO2 storage resource exploration and data collection.



Developing CO2 storage resources into operating storage sites.

Ensuring safe site operations once commissioned.

Complying with applicable regulation and contributing to thedevelopment of CO2 storage best practices.



Sharing data with researchers to support validation of CO2 storage
system models and the development of new or more optimisedmodelling approaches.

Closing the storage site once it has reached end of life andcontinuing with long-term monitoring to ensure containment.

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Much like the early days of the development of electricity andnatural gas infrastructure, entry into the CO2 storage industry has
substantial start-up costs, requires specific competencies and has
significant economies of scale. These characteristics often underpin
natural monopolies. CO2 storage needs to be safe, reliable andaccessible to a wide range of emitters, so regulation will be needed
to set the conditions for third-party access. This and market
structure can prevent monopolistic behaviour even though using
specialised entities can compound the risk of a monopoly.

Chapter 8. Commercialisation

CO2 Storage Resources and their Development

Examples of entities involved in CO2 storage resource assessment and development
Ownership

Entity type

ExamplesPublicGovernment
agencies including
those whose
mandate covers
energy,petroleum,environment or
geological surveys• Bureau de Recherches Géologique et Minières (France) – France’s geological survey, which has historically led thecountry’s R&D work on CO2 storage. Leads the PilotSTRATEGY Project aimed at developing CO2 storage sites in Europe.
• Council for Geosciences (South Africa) – Legal successor to South Africa’s Geological Survey. Manages the country’s
CCUS activities, including the development of a pilot storage site.
• Department of Energy (United States) – The agency tasked with managing US energy policy. Leads the CarbonSAFE
initiative that funds studies on storage resources. Assembled the NATCARB CO2 storage resource atlas.
• Norwegian Petroleum Directorate (Norway) – The agency tasked with managing data from the Norwegian continental shelfand offshore oil and gas activities. This agency prepared the CO2 Storage Atlas of the Norwegian North Sea.

PublicState-owned
enterprises• Gassnova (Norway) – Established in 2005 and tasked with the development of CCUS technologies and expertise and withadvising the Norwegian government on CCUS.
• Gasunie (Netherlands) – A natural gas infrastructure and transport company owned by the Dutch government. Promoter of
the Porthos project in partnership with the Port of Rotterdam and EBN.
• Shenhua Group (China) – Focused on activities in coal-based energy. Owners and former operators of the Shenhua CCS
Demonstration Project, which injected ~300 kt of CO2 into a saline aquifer between 2011 and 2015.

Mixed

Researchorganisations
and/or consortia• CO2CRC (Australia) – A research centre dedicated to CCUS research. Owners and operators of the Otway International Test
Centre, which is used to test different monitoring technologies and verification techniques.
• Petroleum Technology Research Centre (Canada) – A not-for-profit that facilitates R&D and demonstration in CO2
storage. Owners and operators of Aquistore, the CO2 storage project associated with the Boundary Dam CCS project.
• SINTEF (Norway) – A research organisation that is actively involved in the qualification and management of storage
resources and storage sites. Leads the CO2 Data Share Consortium, which hosts datasets from CO2 storage projects.

PrivateInterest groups• Oil and Gas Climate Initiative (United Kingdom) – An industry-led initiative that has funded the Global CO2 Storage
Resource Catalogue. That catalogue takes existing CO2 storage resource assessments and reanalyses them using the
SRMS framework.

PrivateCompanies or
corporate
partnerships• Japan CCS Co., Ltd (Japan) – An SPV founded in 2008 to develop CCS technologies in Japan.
• Northern Lights JV (Norway) – A joint venture between Equinor, Shell and TotalEnergies. Developers of the Northern Lights
Project.
• Storegga (United Kingdom) – A company focused on the development of carbon reduction and removal technologies.
Commercial lead of the Acorn Project and active worldwide in CCUS development.

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Note: This table presents a cross section of organisations involved in storage resource assessment and development; it is by no means exhaustive.

Chapter 8. Commercialisation

CO2 Storage Resources and their Development

Case study: An SPV dedicated to CCUS

Case study: An SOE dedicated to CCUS

Japan CCS Co., Ltd was established in 2008 bynine shareholders, which swiftly grew to 29. The company was
specifically founded to develop an integrated CCUS project andCCUS-specific technologies. Currently, it has 34 shareholders
whose expertise spans many CCUS-related sectors, including
power, oil and gas and engineering.

Established in 2005 by the Norwegian government, Gassnova
has a mandate to support the development of CCUS
technologies and knowledge through the CLIMIT programme.
The company also advises the government on matters relating to
CCUS.
Gassnova shares administrative responsibility for the CLIMIT
programme with the Research Council of Norway. CLIMIT is anational programme for the research, development anddemonstration of CCS technologies. Additionally, Gassnova
operates the carbon capture test platform called Technology
Centre Mongstad on behalf of the government and othershareholders.

Japan CCS works closely with Japan’s Ministry of Economy,
Trade and Industry (METI). Every year since 2008, METI hascommissioned the company on projects relating to CCUS. This
includes site surveys and site selection work between 2008 and2011, along with the Tomokamoi CCS Demonstration Projectfrom 2012. That project successfully injected around 300 kt of
CO2 into a saline reservoir between 2016 and 2019. It is nolonger actively injecting CO2, but is still actively monitoring theCO2 plume. In addition to the above, Japan CCS has assessed
potential CO2 storage sites from 2014 through to today.
As a corporation dedicated to CCUS, Japan CCS has been able
to build on the individual competencies of its shareholders andthrough that, it has successfully demonstrated CO2 storage inJapan.

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As an SOE dedicated to CCUS, Gassnova supports CO2 storage
development in Norway by channelling state aid to the Longship
CCS project. As co-ordinator of the overall project schedule forthe Longship CCS project (which includes the Northern Lights
Project), Gassnova is deeply involved with managing the crosschain and counterparty risks in the project. Due to Gassnova’srole as project integrator, the Norwegian state was able to accept
the cost and risks associated with breaking apart the CCUS value
chain and developing two capture projects separately from thetransport and storage project.

Chapter 8. Commercialisation

CO2 Storage Resources and their Development

Project financing
effective, the takeback obligation would need to apply to the point oforigin of fossil carbon and be linked to CCUS commitments or acountry’s nationally determined contribution. Such an obligation
could accelerate storage development while capitalising on the oiland gas sector’s existing subsurface competencies. Various
mechanisms, including tradeable carbon credits, CO2 removal
certificates and premiums on low-carbon products, can also support
capital investment in CO2 storage.

Investment in capital projects like CO2 storage sites can accelerate
growth within a region by supporting further economic development.
Capital investment in CO2 storage can come from public, private or
mixed sources in the form of grants or loans, equity or debt
financing, existing cash reserves and operational budgets. Specificproject funding and capital investment are needed to advance thedeployment of CO2 storage. While it should complement investment
in other parts of the CO2 management value chain, access to CO2
storage is paramount, so investment in storage should be a toppriority. Due to exploration risk, assessment is usually funded byequity, while resource development usually has access to otherfinancing propositions. One source of project funding can comefrom the tax system, either through incentives – such as in the
United States under the 45Q tax credit – or via specific taxes leviedon products or activities that have not been decarbonised.

Case study: Public grants to support a private project
The Quest CCS project, funded by Shell and the governments ofCanada and Alberta, has captured and stored over 6 Mt of CO2
ahead of its original schedule. The project also cost about 10%
less than the original estimate. This project is paving the way for
future projects that will no longer require government support.

Project funding can also come from emitters or fossil fuel suppliers
following a “polluter pays” principle, whereby CO2 storage
development is financed through obligations or taxes on emitters. In
the case of fossil fuels suppliers, researchers have recently
suggested that imposing a “carbon takeback obligation” on the fossil
fuel industry could reduce that industry’s emissions and provide a
low-risk and affordable pathway towards net zero emissions.
Takeback obligations – requiring fossil fuel producers and importers
to store a percentage of the CO2 generated by the fossil fuels theysell – would increase progressively with time. In order to be
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Commissioned in 2015, Quest is a full-chain project that capturesand stores emissions associated with oil sands processing.
Project CAPEX amounted to USD 618 million (CAD 790 million)
and the project received some USD 448 million (CAD 573 million)
in support for activities prior to operations. The government ofAlberta also contributes funding during operations based on theannual volume of CO2 stored. The storage-related FEED
amounted to USD 49 million (CAD 63 million) and storage-related
CAPEX – excluding labour – to USD 31 million (CAD 40 million).

Chapter 8. Commercialisation

CO2 Storage Resources and their Development

Revenue models

A contract for difference is a contract between a buyer and sellerthat sets a guaranteed price for a product. One contracting party
pays the other party the difference between the set price and themarket price, the direction of payment depending on whether themarket price is higher or lower than the set price. They are likely tohave limited relevance for part-chain CO2 storage projects beyond
providing emitters with a premium that could offset a fee for CO2
storage.
The public–private partnership (PPP) and private financeinitiative (PFI) approaches are well-known revenue models thatallow for flexible funding arrangements and support bothconstruction and operational phases. The Quest CCS project was
financed using this model.
Cost-plus pricing is when a fixed percentage is added to a unit
cost to produce a defined return on investment. In the case of CO2
storage, emitters would be charged a set fee based on the site’sunit cost and the defined markup. This revenue model is most often
used for government contracts and is sometimes criticised for notproviding incentives to reduce costs. It may be unsuitable forprivate-sector customers. While cost-plus pricing may be a valid
structure for early-moving CO2 storage sites, it is unlikely to be along-term revenue model for the industry.

The regulated asset base model is often used by public utilities. In
this model, a regulator controls investment levels and rate of return.
Since the model is well understood, it may be adaptable to the CO2
storage sector. However, it may not provide the private sector with
sufficient incentive to take on CO2 storage-related risks andliabilities, especially those related to pre-FID resource assets andpost-closure stewardship. Additional mechanisms to support CO2
storage development and to reduce market risks may be required.
Waste sector contracts would see a fee being charged per tonneof CO2 stored. This model is well understood and parallels can be
drawn between waste management and CO2 storage. However, themodel often suffers from financing difficulties due to its reliance on
short-term contracts and often insufficient cost recovery. Since CO2
storage contracts are expected to be longer, the model may be
unsuitable for CO2 storage.
The main drawback of the above revenue models is that they do notinclude a mechanism for funding pre-FID activities. It is likely that a
hybrid CO2 storage revenue model will evolve over time andincorporate different aspects of other known revenue models.
Evolving regulation, including tax credits and carbon taxes, cansupport or accelerate development of a revenue model for CO2
storage. CO2 removal certificates and CO2 storage credits offer
tradeable scheme that could drive revenue generation and be linked
to the cost of storage rather than an independent carbon price.

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A successful CO2 storage sector will need to generate revenue.
Existing revenue models could be adapted for the sector.

Chapter 8. Commercialisation

CO2 Storage Resources and their Development

Financial risk management

Financial risks include the uncertainty of a CO2 supply (counterpartyrisk), potentially uncapped long-term liabilities, cross-chain risk, andincompatibilities between the risk appetites of the public and private
sectors, along with uncertainties relating to policy and regulation.
The management of financial risks depends partially on thebusiness model developed for CO2 storage, and partially on how
CO2 storage activities are regulated. For example, common
financial risk management approaches include the availability ofloan and revenue guarantees, long-term contracts, price control,
public underwriting, fee regulation and insurance instruments.
Different approaches can be used to address different financial
risks. To account for the unique financial risks presented by CO2
storage activities, governments could consider a system whereby

storage developers are required to accept and manage businessas-usual risks, but CO2 storage-specific risks are shared.
The leakage risk in a well-designed, correctly operated site is
expected to be very low; however, the associated financial
exposure is significant. Liabilities may persist for tens to hundredsof years and have the potential to persist beyond the lifetime ofstorage owners and operators. Uncapped liability presents an
unacceptable level of risk to the private sector when not balanced
by a profitable revenue stream. In the case of CO2 storage,
governments may need to bear some of the primary responsibility ofcertain CO2 storage-specific risks, such as long-term liability.
Regulatory frameworks should be designed to reduce the exposureof private investors without unduly exposing the public sector. They
should address long-term stewardship requirements andcompensatory liabilities associated with CO2 storage sites.
Addressing long-term liability can greatly reduce future risks facedby site operators and governments. One way to do this is toimplement a risk capping and duration capping mechanism in whichsite operators or owners would be responsible for risks below thecap, with the government taking responsibility for risks above thecap. This could cap operator-borne liabilities for certain types ofleakage. Allowing the title of the storage site to be transferred to thegovernment after a period of post-closure monitoring subject tostrict performance-based conditions is another way to manage this.

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Capture and storage have substantially different financial risks andrequire different regulatory treatment. CO2 capture will largely be
driven by the private sector while CO2 (transport and) storage islikely to function more like critical infrastructure – such as water,
sewage, electricity and gas transmission systems. From a businessmodel perspective, there are benefits to decoupling capture from(transport and) storage and taking a part-chain approach todevelopment. Full-chain projects have much higher cross-chain risk,
although this is substantially reduced when equity is shared by allparts of the chain. Additionally, full-chain projects do not support a
multi-source to single sink model unless they plan to expand
injection capacity and make it open access.

Chapter 8. Commercialisation

CO2 Storage Resources and their Development

CO2 storage liabilities

Civil liabilities are those liabilities resulting from damage caused tothe interests of a third party. These are similar to the civil liabilities
in major infrastructure projects, oil and gas production, and mining.
Ownership of pore space and allocation of the exploitable pressure
margin should be considered.

Some CO2 storage liabilities will be very similar to those of otherindustrial activities. Others will be specific to CO2 storage andhighlight the need for tailor-made legal and regulatory frameworks.
A CCUS-specific approach to the management of liability includes
several critical aspects as first outlined by the IEA in 2010:

Administrative liabilities are those liabilities that may result fromthe exercise of a competent authority’s statutory powers and may
be activated in the event of environmental damage. Currently,
administrative liabilities and their degree of impact are hypothetical.
Existing regulation aimed at infrastructure projects, mining, and oil
and gas activities can provide examples of those administrative
liabilities that relate to CO2 storage and their potential impact.
Climate liabilities are those liabilities that relate to leakage of CO2either in cases where an operator derived a financial benefit fromstoring CO2 as part of an emissions trading system, or in cases
where a penalty is assessed for a leakage due to future carbon
prices or taxes. Climate liabilities are unique because they link
climate change liability to financial security and they represent
considerable financial risk to operators that continues even after the
closure of a storage site. The financial ramifications related to futurecarbon prices or taxes making them unconstrained.



Establishing good site characterisation selection procedures
coupled with effective regulatory oversight.



Establishing appropriate storage authorisation arrangements toensure clear operational guidelines for operators and owners.

Imposing ongoing performance-based monitoring and reporting
requirements.

Imposing ongoing requirements for reporting and inspection ofoperations to ensure problems are identified and rectified earlythroughout the period of operator liability.



Incorporating a structured and well-managed process for closure,post-closure and the transfer of responsibility, including regulatory
oversight of closure methods.



Incorporating a sensible system of cost recovery and use offinancial security mechanisms for handling long-term cost
implications as considered appropriate within a jurisdiction.

Long-term CO2 storage-related liabilities have been regulated inonly a limited number of jurisdictions. However, government andoperator treatment of storage-specific liabilities is evolving as
interest in CO2 storage grows. Further work to constrain the extent
of the liabilities borne by CO2 storage operators and to develop
insurance products could facilitate storage development.
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Liability must be addressed early in the development of CO2
storage-specific regulatory frameworks and business models.
CCUS-related liabilities can be largely divided into three categories.

Chapter 8. Commercialisation

CO2 Storage Resources and their Development

Stewardship funds and other mechanisms
mechanisms could reduce the risk premium that might be leviedagainst individual projects.

Several existing CCUS-specific regulatory regimes require
operators to provide some form of financial guarantee to cover thecost of long-term stewardship obligations. It may include some typeof post-closure monitoring. Financial guarantees should be in placeprior to any site transfer to an entity in charge of long-term
stewardship and liability. Financial guarantees are often
contribution-based and usually assessed on a per-unit basis during
injection. Depending on the mechanism, a per-tonne fee can be
paid into a post-closure trust, stewardship fund or other financial
instrument.

Case study: A province’s post-closure stewardship fundAlberta’s regulatory treatment of CCUS allows for the transfer of
liability from a site owner to the state during the post-closure
phase of the project. The Mines and Minerals Act states thatliability is transferred upon the issuance of a closure certificate.
The closure certificate is contingent on compliance with postinjection monitoring requirements, well abandonment and site
decommissioning, behaviour of the CO2 plume, and a prescribedclosure period.

Regulators could consider allowing third-party mechanisms to act
as financial guarantees. Private mechanisms include escrowaccounts, bank guarantees, performance bonds, prepaid insurance
policies, corporate guarantees and third-party trust funds.
Government mechanisms are also possible, including governmentadministered pooled funds, guarantees, indemnities or a transfer of
liability from operators to a government entity.

To finance some of the state-borne costs that will occur after titleof the site is transferred, Alberta created the Post-Closure
Stewardship Fund. This fund is financed by contributions fromstorage resource leaseholders and contributions are determinedon a per-project basis.

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The fund will be used to support liabilities relating to post-closure
monitoring, statutory substitution liabilities and certain costs
associated and orphaned sites.

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Cost recovery and financial security mechanisms can ensure proper
handling of long-term cost implications. Outlining the mechanismsthat will be used in regulation can provide project developers withcertainty and help them better estimate the full cost of a storage
project. Some project developers suggest using a risk-weighted
approach. Others recommend financial mechanisms forunderwriting cashflow or liability-sharing mechanisms. Such

Chapter 8. Commercialisation

CO2 Storage Resources and their Development

Public perception
emissions are treated. Stakeholder support can improve bycommunicating how CO2 management contributes to wider
decarbonisation goals such as enabling negative emissions via
direct air capture with storage or bioenergy with CCS (BECCS).

Public acceptance of CCUS technologies, especially CO2 storage,
is pivotal to the commercial rollout of CO2 management. Public
acceptance needs to be carefully managed by both governments
and the private sector. As part of this, governments should work to
reinforce the public’s trust in regulatory agencies. In recent years,
the public perception of CO2 storage has been studied and bestpractices to support public engagement have been developed.
Public perception of a risk is very often greater than the statisticalprobability of that risk occurring and public perception cancontribute to project delays and cancellations. Research suggeststhat there is low public awareness of CCUS, but awareness has
been rising in recent years. In addition to low public awareness,
CCUS technologies, including CO2 storage, are often conflated withoil and gas activities or as a way to continue the use of coal. This
does not enhance the public’s perception of these technologies, and
it is important to emphasise that they have far wider applications
than decarbonising fossil fuels. In the case of dedicated CO2
storage, this includes highlighting that it is not CO2-EOR and does
not result in more oil production.

Given the limited deployment of CO2 storage infrastructure to date,regulators and developers need to be mindful of public perception.
Negative occurrences, including project cancellations or risk events,
more strongly influence public perception than positive occurrences
or business-as-usual operations. As a result, scale-up hinges on
successfully developed and safely operated projects.
Public engagement and outreach are a critical part of mitigating any
risks public perception may pose to projects. Engagement
strategies should be developed early during project assessment.
Outreach to the local community should gradually increase throughproject development and continue throughout the whole project.

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Support for CO2 storage often improves when CO2 management isframed in the context of dealing with “waste”. Significant parallels
can be drawn between the waste management industry and thedeveloping CO2 management industry. Yet, the public has astronger understanding of how their waste is treated than how GHG

Successful and safe operations of storage sites contribute to
mitigating public perception of risk. Project developers andoperators should be transparent with regulators and local
communities. This includes providing detailed information about
their MMV strategy and how they will respond in the case of a risk
event. Even though the probability of risk events should be very low
in well-operated projects, communicating probability to local
stakeholders will not necessarily assuage fears. Rather,communicating response strategies can build trust and goodwill.

Chapter 9. Actions

CO2 Storage Resources and their Development

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Actions to support deployment

Chapter 9. Actions

CO2 Storage Resources and their Development

Well-designed policies and private-sector support enable CO2 storage deployment
Large-scale CO2 management, using CCUS technologies, will
require gigatonne-scale CO2 storage along with complex, multimodal transport networks linking CO2 sources with sinks. For CO2
management to realise its potential during energy transitions, urgent
action needs to be taken to ensure that the availability of CO2
storage infrastructure does not become a bottleneck. This could
occur if efforts are not swiftly made to accelerate CO2 storage
resource assessment and development.
The IEA has identified five overarching categories of actions thatpolicy makers should take to encourage CO2 storage development:

Identify storage resources and provide access to necessary data.

Ensure legal and regulatory frameworks enable effective andsecure CO2 storage.



Develop policies that support CO2 storage.

Support early movers and boost investment in CO2 storage.



Encourage the development of CO2 storage competencies,
expertise and technologies.



Incorporate CO2 management into corporate decarbonisation
strategies and include it in environmental, sustainability andgovernance (ESG) targets.

Develop and build CO2 storage infrastructure. 7Drive investment towards CO2 storage infrastructure by supporting
CO2 management and insuring it is permitted within sustainablefinance metrics.



Recognise proven CO2 storage reserves as an asset.

Create insurance products that cover CO2 storage activities.



Create a market for tradeable, regulation-compliant CO2 storagecertificates.

Successful development of CO2 storage also hinges on trust in the
public sector and confidence that they will appropriately manage theprivate-sector entities that are likely to lead the development of CO2
storage infrastructure.

Public-sector actions and activities are only one part of the puzzle.
The private sector can and should be involved in implementation of
the above actions and take other specific steps to support CO2
storage development such as:

This can also be done through state-owned enterprises or public–private partnerships.
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7

Chapter 9. Actions

CO2 Storage Resources and their Development

Elements that feed into the commercialisation of CO2 storage

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Chapter 9. Actions

CO2 Storage Resources and their Development

Identify CO2 storage resources and provide
access to necessary data

Ensure legal and regulatory frameworks
account for CO2 storage-specific needs

CO2 storage resource assessment shares many similarities with theprocess of assessing other energy resources, but it has received
less support from governments and lower engagement among theprivate sector. Long lead times for CO2 storage development meanthat identifying and assessing resources should be a top priority forpolicy makers today. Existing subsurface data can provide a
valuable starting point for regional assessments.

CCUS legal and regulatory frameworks are a key part of enabling
CO2 storage development, as is having a body or bodies dedicatedto enforcing them. In consultation with the public and industry,
governments should conduct a comprehensive review of existinglaws and regulations that affect CO2 storage activities. Dependingon whether or not substantial regulation is already in place,governments may decide to amend existing frameworks to regulate
CO2 storage, or instead choose to develop a dedicated CCUS
framework for commercial deployment. Following this, they mustensure that regulators are sufficiently staffed and have thenecessary storage-related competencies and expertise to oversee
the implementation of regulation. Legal and regulatory frameworks
need to address several key issues:

Governments can play an important role in the development ofstorage resources by investing in pre-competitive exploration anddata acquisition campaigns. They can also focus on curating anddigitising existing information, such as well records, in order tomake it publicly available and easily accessible.
Subsurface data collected by the private sector as part of resource
exploration, development and operations are often proprietary;
however, these data can be invaluable to storage resource
development. Data sharing, especially of proprietary legacy data,
between the public and private sector should be encouraged.

CO2 storage-specific liabilities and risksclear and appropriate processes for issuing licences and permitsownership of subsurface pore space if not already definedsite management requirements – monitoring, closure procedures,etc.

The IEA CCUS Handbook, Legal and Regulatory Frameworks for
CCUS, provides an overview on how to develop appropriate
frameworks. Several countries have already developed
comprehensive legal and regulatory frameworks for CCUS, which
form a valuable knowledge base for countries that have yet toestablish a legal foundation for CO2 storage activities.
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In 2021 the US DOE and the US Geological Survey signed amemorandum of understanding to co-operate on assessing global,
regional and national CO2 storage resources. This partnership,
along with the OGCI’s CO2 Storage Resource Catalogue, can help
catalyse a move towards developing gigatonne-scale CO2 storage.

Chapter 9. Actions

CO2 Storage Resources and their Development

Develop policies that support CO2 storage

Resource management strategies should be consistent and thegovernment agencies that manage resources should be aligned intheir treatment of CO2 storage resources. Policy makers should
consider whether existing resource prioritisation continues to beappropriate, or if it is necessary to update or redefine resource
prioritisation to preserve access to CO2 storage resources. Most
jurisdictions prohibit the injection of CO2 into oil and gas fields
where there is ongoing extraction unless it is injected for the
purpose of CO2-EOR or CO2-EGR. This can limit access to storage
resources and increase development costs, and may not betechnically necessary since storage operators can work to preventhydrocarbon breakthrough. Open access to CO2 storage should be
encouraged, as should the development of multi-user sites.

CO2 storage reserves, it will be difficult to create informed
development strategies for CO2 capture and transport. Policies that
support storage assessment and development directly support
decarbonisation goals, and increased confidence in storage canhelp a country refine its energy transition pathway.
Government policies to support CO2 storage development are also
crucial to create the right market conditions that attract privatesector investment. There are a range of policy instruments thatpolicy makers can use to incentivise CO2 storage development andaddress investment challenges:

Policy has a role to play in sequencing the development of CCUS
activities. Resource assessment in nearly every region is required
to identify CO2 storage reserves. Without improved confidence in

PAGE | 109Grants can provide capital funding to projects to conduct
assessment and characterisation activities.



Operational subsidies, such as tax credits, can provide a financial
incentive per tonne of CO2 stored.

Tradeable certificates or obligations, such as low-carbon fuelstandards, can encourage fuel producers to implement CO2
storage.

Innovation, R&D and deployment programmes can reduce costs.



Risk mitigation measures, such as loan guarantees and risk
capping, can provide CO2 storage projects with enough confidence
to raise debt financing from commercial lenders.



Carbon pricing and demand-side measures can indirectly
incentivise CO2 storage development by encouraging industry toadopt emissions-reducing technologies.

IEA. CC BY 4.0.

Government policies can provide strategic direction and clarity toindustry. The inclusion of CCUS in national energy and climate
plans, or the development of CCUS roadmaps, sends a signal thatcan encourage CO2 storage development. In this regard,
governments play a vital role in co-ordinating the strategic
deployment of infrastructure such as CO2 storage hubs. Including
CO2 storage resources in resource management plans can send aclear signal that they represent strategic resources that need to be
developed during energy transitions.

Chapter 9. Actions

CO2 Storage Resources and their Development

Support early movers and boost investment
in CO2 storage

Support the develop of CO2 storage
competencies, expertise and technologies

Economic regulation and specific policies can incentivise CO2
storage development. This is especially true for sharedinfrastructure such as CO2 transport and storage hubs. The
commercialisation aspects discussed in Chapter 8 are likely to feed
into the development of different business models in different
regions and jurisdictions. Since there is not yet a mature businessmodel for CO2 storage, early movers will be the most exposed tosocio-economic risks. They can be the target of dedicatedincentives to stimulate investment.

Energy transitions will prompt a shift away from oil and gas, which
could leave regions and workers behind if not managed carefully.
Since depleted oil and gas fields are a type of storage resource,
there is geographic overlap with the carbon management industry.
Governments can encourage the development of CO2 storage sitesin oil and gas producing regions to support continued employment
and to prevent brain drain. This can support a just transition in suchregions by bringing new lines of revenue and new activities. Oil andgas producing companies can encourage and support workers
develop CO2 storage related knowledge and competencies.

Case study: Developing CO2 storage as a regulated asset
base

R&D and innovation form another area where governments can
support development of CO2 storage. The CO2 storage assessment
process can benefit from advancements made in artificial
intelligence, machine learning, digitisation and legacy wellassessment. Additionally, innovation in monitoring technologies cancontribute to cost reductions.
CCUS centres of excellence or their equivalent can help countries
develop CO2 storage competencies and serve as a focal point for
CCUS-related discussions.

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In 2022, as part of its Energy Security Bill, the United Kingdom
took key steps to establish a framework for the economic
regulation of the CO2 management sector. In this bill, thegovernment distinguishes between transport and storage
activities and CO2 capture activities. It establishes a regulatory
framework based on a regulated asset base model. This creates
revenue certainty for transport and storage service providers.
Additionally, the bill outlines how financial assistance might be
granted to developers of CO2 transport and storage
infrastructure.

Chapter 9. Actions

CO2 Storage Resources and their Development

Private-sector actions
The private sector has a role to play in each of the five categories ofactions outlined above. In addition, there are specific actions thatthe private sector, either in partnership or as individual corporations,
can take to support CO2 storage deployment. Developing andbuilding CO2 storage infrastructure is only one small part of that.

of storage reserves. However, accounting conventions may need tobe adapted to account for specific CO2 storage resource
techniques, and a carbon price may be required to justify theirvalue.

The finance community has a major influence on ESG criteria; it cantake direct steps to support CO2 storage deployment by ensuringthat investment in storage site assessment and development is
considered a sustainable activity. The sustainable financecommunity should consider CO2 storage as a valuable part of thedecarbonisation toolkit and devote appropriate resources to it. ESG
officers in corporations can encourage the inclusion of CCUS-basedcarbon credits in corporate carbon mitigation portfolios. ESG-based
funds and activist investors can push emissions-intensive
companies to capture and store their emissions to reduce them inlieu of purchasing offsets.

Case study: Assigning a book value to storage resources

The insurance industry can also play a role in supporting CO2
storage deployment. Currently, there is a very limited number of
insurance products that storage operators can use. Developing
such products would further de-risk CO2 storage development.

On 1 November 2021 Santos and its joint venture partner
Beach Energy announced that they would be investing some
USD 165 million in the Moomba CCS project. Located inSouth Australia, commissioning is expected in 2024. To start, theproject is full chain and will store 1.7 Mt/year of CO2 sourced from
the Moomba gas plant operations. However, future phases of the
project will look to develop Moomba into a storage hub for theregion. The project aspires to expand up to a potential injection
capacity of 20 Mt a year.
To support the development of CO2 storage at Moomba, inFebruary 2022 Santos included 100 Mt of CO2 storage resource
capacity in its annual reserve statement. Using the SRMS
classification framework, Santos assigned a book value to its
storage resources in Cooper Basin.

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Proven CO2 storage reserves should be considered a valuableasset and included in corporate valuations. Consistent application of
the SRMS by organisations developing storage projects canimprove its visibility to the finance industry and support the valuation

Annexes
Annex

CO2 Storage Resources and their Development

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General annex

Annexes
Annex

CO2 Storage Resources and their Development

Further reading
References are provided throughout the report as hyperlinks within
the text. Additional references and further reading are provided here
for readers who wish to learn more on specific topics. This list andthe references within the handbook represent only a fraction of thework done on CO2 storage to date.

Alberta Canada, Carbon Capture, Utilization and Storage – Funded Projects
and Reports, https://www.alberta.ca/carbon-capture-utilization-andstorage-funded-projects-and-reports.aspx (accessed September 2022).
Bachu, S. and CSLF (2008), Comparison between Methodologies
Recommended for Estimation of CO2 Storage Capacity in GeologicalMedia, Carbon Sequestration Leadership Forum,
www.cslforum.org/publications/documents/PhaseIIIReportStorageCapa
cityEstimationTaskForc%0Ae0408.pdf.
Bankes, N. (2019), Alberta’s Approach to the Transfer of Liability for CCS
Projects.
Berly, T. and A. Garnett (2019), Scaling up CO2 transport and storage
infrastructure, SSRN Electronic Journal, October,
https://doi.org/10.2139/ssrn.3366352.
Blondes, M.S. et al. (2019), Carbon dioxide mineralisation feasibility in the
United States (Scientific Investigations Report No. 2018–5079),
Scientific Investigations Report, USGS.
Bui, M. et al. (2018), Carbon capture and storage (CCS): the way forward.
Energy Environ. Sci., Vol. 11, pp. 1062–1176,
https://doi.org/10.1039/C7EE02342A.

Cavanagh, A. et al. (2020), Methodologies for cluster development and bestpractices for data collection in the promising regions, Strategy CCUS,
https://www.strategyccus.eu/sites/default/files/STRATCCUSWP21PART2-SRAM-v1.pdf.
Department for Business, Energy & Industrial Strategy (BEIS), United
Kingdom (2022), Carbon Capture, Usage and Storage: An Update on
the Business Model for Transport and Storage,
https://assets.publishing.service.gov.uk/government/uploads/system/upl
oads/attachment_data/file/1045066/ccus-transport-storage-businessmodel-jan-2022.pdf.
Dixon, P. and T. Mitchell (2016), Lessons Learned: Lessons and evidence
derived from UK CCS programmes, 2008-2015, Carbon Capture andStorage Association.
DNVGL (2020), DNVGL-RP-J203 Geological Storage of Carbon Dioxide.
Element Energy and Vivideconomics for Scottish Enterprise (2021), CCUS
Economics Impacts Study: Delivering a Roadmap for Growth andEmissions Reduction For Scotland, https://www.scottishenterprise.com/media/4319/ccus-economic-impact-assessmentreport.pdf.
Energy Technologies Institute (2016), Progressing Development of the UK’s
Strategic Carbon Dioxide Storage Resource: A Summary of Resultsfrom the Strategic UK CO2 Storage Appraisal Project,https://www.eti.co.uk/programmes/carbon-capture-storage/strategic-ukccs-storage-appraisal.

PAGE | 113

IEA. CC BY 4.0.

Akhurst, M. et al. (2021), Storage Readiness Levels: communicating thematurity of site technical understanding, permitting and planningneeded for storage operations using CO2, International Journal ofGreenhouse Gas Control, Vol. 110, p. 103402,
https://doi.org/10.1016/j.ijggc.2021.103402.

Carey, J.W. (2013), Geochemistry of wellbore integrity in CO2 sequestration:
Portland cement-steel-brine-CO2 interactions, Reviews in Mineralogy
and Geochemistry, Vol. 77(1), pp. 505-539,
https://pubs.geoscienceworld.org/msa/rimg/articleabstract/77/1/505/141001.

Annexes
Annex

CO2 Storage Resources and their Development

Gluyas, J. and S. Mathias (eds.) (2013), Geological Storage of Carbon
Dioxide (CO2): Geoscience, Technologies, Environmental Aspects andLegal Frameworks, Woodhead Publishing, Cambridge, England.

Kelemen, P. et al. (2019), An overview of the status and challenges of CO2
storage in minerals and geological formations, Frontiers in Climate,Vol. 1, https://doi.org/10.3389/fclim.2019.00009.

Goodman, A. et al. (2011), U.S. DOE methodology for the development ofgeologic storage potential for carbon dioxide at the national andregional scale, International Journal of Greenhouse Gas Control, Vol.
5/4, pp. 952–965, https://doi.org/10.1016/j.ijggc.2011.03.010.

McGrail, B. P. et al. (2017), Field validation of supercritical CO2 reactivity withbasalts, Environmental Science & Technology Letters, Vol. 4(1), pp. 610,. https://doi.org/10.1021/acs.estlett.6b00387.
Muslemani, H. et al. (2020), Business Models for Carbon Capture, Utilizationand Storage Technologies in the Steel Sector: A Qualitative MultiMethod Study, Processes 2020, Vol. 8/5, p. 576, Multidisciplinary
Digital Publishing Institute, https://doi.org/10.3390/pr8050576.

Grant, N. et al. (2022), Enhancing the realism of decarbonisation scenarioswith practicable regional constraints on CO2 storage capacity,
International Journal of Greenhouse Gas Control, Vol. 120,https://doi.org/10.1016/j.ijggc.2022.103766.

NETL (National Energy Technology Laboratory) (2017), Site screening, site
selection, and site characterisation for geological storage projects, inBest Practices, https://netl.doe.gov/sites/default/files/2018-10/BPMSiteScreening.pdf.

Halland et al. (2011), CO2 Atlas Norwegian North Sea, Norwegian Petroleum
Directorate.
IEA (International Energy Agency) (2020), CCUS in clean energy transitions
2020, in Energy Technology Perspectives 2020.
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and Environmental Research Network Combined Meeting 2016-08,
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prepared by Working Group III of the IPCC, B. Metz et al. (eds.),
Cambridge University Press, Cambridge, United Kingdom and New
York, NY.
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https://www.iso.org/standard/64148.html.

NETL (2017), Operations for geological storage projects, in Best Practices,
https://www.netl.doe.gov/File Library/Research/Carbon-Storage/ProjectPortfolio/BPM_GeologicStorageClassification.pdf.
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Report 2016-TR02.

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storage projects, in Best Practices,
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the amount of geological CO2 storage over the period of 1996–2020,
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storage projects: Recent progress and remaining challenges, Int. Int. J.
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https://unece.org/unfc-and-injection-projects-0.

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ABEX

abandonment expenditure

MMV

measurement, monitoring and verification

BECCS

bio-energy with carbon capture and storage

OGCI

Oil and Gas Climate Initiative

CAPEX

capital expenditure

OPEX

operational expenditure

CarbonSAFE

Carbon Storage Assurance Facility EnterprisePC

post closure

CCS

carbon capture and storage

PRMS

Petroleum Resource Management System

CCUS

carbon capture, utilisation and storage

R&D

research and development

CO2

carbon dioxide

SOEstate-owned enterprise

CSLF

Carbon Sequestration Leadership Forum

SPE

Society of Petroleum Engineers

DAC

direct air capture

SPV

special purpose vehicle

DACS

direct air capture with storage

SRL

storage readiness level

DOE

Department of Energy

SRMS

Storage Resource Management System

EGR

enhanced gas recovery

TRL

technology readiness level

EMDE

emerging market and developing economies

EOR

enhanced oil recovery

Units of measure

ESG

environmental, social and governanceMt

megatonne

EWR

enhanced water recovery

ktkilotonne

FEED

front-end engineering designGt

gigatonne

FEP

features, events and processes

t

tonne

FID

final investment decision

m

metre

GHG

greenhouse gas

ML

local magnitude scale

IEAGHGIEA Greenhouse Gas R&D Programme

Mwmoment magnitude scale

IPCC

Intergovernmental Panel on Climate Change

MJMA Japanese Meteorological Agency Magnitude Scale

ISO

International Organization for Standardization

LNG

liquid natural gas

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Abbreviations and acronyms

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Abandoned well:

Appraisal:

A well that is no longer used for extraction
and has been closed following plug andabandon procedures. Sometimes thisrefers to a well that is no longer active but
is not properly closed.
The phase following exploration when an
identified resource is studied in depth todetermine its size and how to develop it
most effectively.

Bankable capacity:

An economic risked practical capacity thatis matched to emitting sources at a levelsuitable for FID.

Basalt:A dark fine-grained volcanic rock.

Baseline survey:

The collection of storage site data before
injection commences, to help identify any
possible effects of storage during or after
injection.

Bicarbonate (HCO3-):

Booked resource:

A proven reserve that has been assigned
an asset value and included in acompany’s asset reporting.

Borehole:

A deep hole in the ground, usually madevia drilling.

Brine:A highly concentrated salty water.

Brine extraction well:

A well used to extract (or produce) brinefrom a reservoir.

Brownfield:

Denotes a site that has previously beendeveloped.

Capacity:

General definition: The estimated storable
capacity of a resource. SRMS definition:
The estimated commercially storable
quantity of CO2 for a given
resource/project.

Caprock:A harder or more resistant rock type thatsits above a reservoir. Caprocks areimpermeable and act as seals.

Carbonate minerals:

Minerals that contain carbonate ions.

One of two forms that CO2 takes when it
dissolves in water.

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Glossary

Carbonic acid
(H2CO3):A weak acid formed when CO2 dissolves
in water.

Conformance

How well the actual behaviour of injected
CO2 aligns with modelled behaviour.

Casing (or casing
string):Large diameter pipes that are inserted
into wells/boreholes to keep them open
and to isolate the well from surrounding
rock, and the surface .

Connectivity:

The degree to which matter, such as
water or CO2, can move between different
parts of a system.

Containment:

The features and processes that keep
CO2 within a store for a specific period oftime.

Decommissioning:

The dismantling and removal of injection
facilities following cessation of injection
activities at a storage site and therestoration of a storage site as required by
the relevant authority prior to the granting
by the relevant authority of a closure
authorisation.

Casing shoe:

The bottom of a string of casing.

Closure period:

The period between cessation of injection
activities at a storage site and the granting
by the relevant authority of a closure
authorisation for the storage site.

CO2 plume:

See Plume.

CO2 storage
resources:

Permeable rock formations with pores thatcan be filled with CO2.

CO2 stream:

CO2 and other allowed substances
injected into a storage site.

Dedicated CO2
storage:

Storage of CO2 in geological formations.

Coal:

A solid, combustible fossil sedimentaryrock. Coal comes from buried vegetationtransformed by the action of strongpressure and high temperatures overmillions of years.

Depleted oil or gas
field:

An oil or gas field that has reached theend of its producible life.

Dynamic capacity:

A deterministic estimation made fromdynamic simulations.

Effective capacity:

A capacity estimation based on theamount of theoretical capacity that can be

Coal seam:

A bed of coal.

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accessed and meets necessarygeological and engineering criteria.
Enhanced gas
recovery:

Extraction of natural gas that cannot be
produced or recovered throughconventional means.

Enhanced oil
recovery:Also known as tertiary recovery, theinjection of fluids (such as water, CO2 orother chemicals) to enhance productivityof a field and recover oil that would
normally be irrecoverable otherwise.

Enhanced resource
recovery:Enhanced water
recovery:

Exploration:
Exploration well:

The process through which CO2 is used toenhance the production of anotherresource such as water, natural gas or oil.
Extraction of formation water to relievepressure in a reservoir. Extracted waters
need to be treated before they are
considered potable.
The process of searching for andidentifying deposits of natural resources.
A well used to characterise storage
resources including their capacity,
containing features and performance.

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Extraction well:See Production well.

Fault:

A break or flat surface in a rock acrosswhich observable displacement is visible.

Field:

An accumulation, pool or group of pools ofnatural resources in the subsurface. An oilor gas field consists of one or morereservoirs in which hydrocarbons havebeen trapped by a caprock.

Formation:

A body of rock that is distinct andcontinuous to allow its mapping. A
formation is a fundamental unit instratigraphy.

Fracture:

A crack or break within a rock. If
displacement is visible on either side of
the break, then it is a fault rather than afracture.

Fracture pressure:

The pressure required to break a reservoir
or seal.

Geological formation:

See Formation.

Geological unit:

See Unit.

Greenfield:

Undeveloped sites, potentially notpreviously explored.
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Injection facilities:

The surface installations required toundertake injection activities at a storagesite.

Injection rate:

The rate at which CO2 (or anothersubstance) is injected into a reservoir.

Injection rate decline:

The rate at which injectivity declines.

Injection well:

Wells used to inject CO2 or other fluids.

Injectivity:

The ability to inject CO2 (or anothersubstance) into a reservoir at a required
rate over time.

Legacy well:

A previously drilled well in a region or
area. It can be actively producing,abandoned, orphaned or in an unknown
state.

Limestone:

A hard calcium carbonate richsedimentary rock often used as a building
material.

Local magnitude
scale (ML):

Commonly known as the Richter scale.
Based on the maximum amplitude ofground shaking.

Logging:

The process of making a detailed recordof well features and the different
formations the well crosses. Can be doneon cores from the well and by lowering
instruments down the well to takemeasurements.

Japanese
Meteorological
Agency Magnitude
Scale (MJMA):

A calculated scale based on the maximum
amplitude of ground motion used inJapan.

Lead:

A subsurface feature that has thepotential to trap oil, gas or CO2. Will
typically contain multiple prospects.

Mafic:Leak:

CO2 being released from the storage
complex in an unintended manner.

Igneous rocks rich in magnesium andiron. Basalts are mafic rocks andperidotites are ultramafic.

Magnitude:

Leakage:

The unintended release of CO2 from thestorage complex.

The overall strength or size of anearthquake.

Matched capacity:

An economic risked practical capacity thatis matched to emitting sources.

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Measurement,
monitoring andverification (MMV):

Plans and procedures for measuringreservoir properties and injected CO2,
monitoring how the reservoir and injected
CO2 behaves, and verifying thatbehaviour is in line with what is expected.
Also known as monitoring, reporting andverification (MRV).

Microseismicity:

Faint Earth movement.

Migration:

The movement of CO2 within the storage
complex.

Mineral trapping:

When dissolved CO2 reacts with minerals
in the reservoir to form solid minerals.

Mineralisation of
CO2:

The process during which CO2 reacts withmetal oxides to produce minerals.

Moment magnitude
scale (Mw):

Measurement of an earthquake's
magnitude based on its seismic moment.
It is the authoritative magnitude scale forearthquake ranking. Small earthquakes
will have a similar magnitude on this scale
and the local magnitude scale.

Monitorability:

The ability to monitor a CO2 storage site.

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Monitoring well:

Wells outfitted with the equipment needed
to monitor injected CO2, the reservoir andthe CO2 plume.

Mudstone:

A sedimentary rock formed fromcompacted mud and predominately
composed of clay minerals. Lacks thelaminations of shales.

Operator:

The holder or holders of an exploration
authorisation or a storage authorisation
for a storage site.

Orphaned well:

A well whose ownership cannot be
determined. Usually, orphaned wells are
not plugged or sealed properly.

Overburden:

The geological matter between thestorage complex and the surface
projection of the storage complex.

Peridotite:

A dark coarse-grained igneous rockcomposed mainly of magnesium-richsilicate minerals.

Permeability:

How easily a fluid can pass through amaterial.

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Permit:

An official written statement that permits
an activity. In some jurisdictions it may becalled a licence.

Play:

A group of resource prospects in thesame region that have the samegeological history.

Plug and abandon:

The process to prepare a well forpermanent closure. Cement plugs are
installed in the well at specific intervals toisolate different geological layers. Afterthe well top is removed and the area
remediated.

Practical capacity:

A capacity estimation that accounts fortechnical, legal and regulatory, andinfrastructure requirements andrestrictions.

Pre-competitive
exploration:

The phase of exploration that typicallydoes not require permits and rarely
involves physical interventions such as
drilling.

Production well:

A well used to recover (extract) a liquid orgas resource from the subsurface. A
production well can be for oil, natural gas,
water or other resources.

Plume:The volume of CO2 dispersing or
dispersed in the subsurface.

Project period:

The exploration period, operation period
and closure period.

Pool:

An accumulation of hydrocarbons in areservoir.

Prospect:

Pore space:

The free space between mineral grains.

An area with a probable economic
quantity of a resource (e.g. oil, gas,minerals or storage resource).

Porosity:

The proportion of rock pores compared tothe total rock volume.

Relative
permeability:

The ability of two or more fluids to passthrough a rock.

Post-closure:

The period from the granting by therelevant authority of a closure
authorisation.

Reserves:

Known quantities of a commodity that arecommercially recoverable.

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Reservoir:

Permeable and porous subsurface rockformation found both onshore andoffshore.

Seal:

A feature such as a fault or caprock thatprevents reservoir fluids from passing
through it.

Reservoir fluids:

The pressurised substances within areservoir which can flow or move throughit.

Sedimentary basin:

Geographic regions where thick layers of
sediment have accumulated.

Sedimentary rock:

One of the three primary rock types.
Formed when material is deposited andthen compacted at or near the Earth's
surface and when minerals are
precipitated at normal surface
temperatures.

Reservoir pressure:

The pressure of fluid within the pores of
the reservoir.

Residual trapping:

The trapping of CO2 in small pores byphysical (capillary) forces.

Resources:

Estimated amounts of a geologicalcommodity in a given geographic area.

Seismicity:

The spatial and temporal distribution ofearthquakes and their magnitudes.

Risk assessment:

The process of risk identification, risk
analysis and risk evaluation.

Shale:

A layered sedimentary rock formed from
mud and clays.

Saline aquifer:

Porous and permeable sedimentary rocks
that contain salty, non-potable watercommonly known as brine.

Siltstone:

A fine-grained sedimentary rock formed
from silt.

Sandstone:

A sedimentary rock formed of sand,quartz and other mineral grains that havebeen cemented together.

Solubility trapping:

When CO2 dissolves into formation fluids
causing it to be trapped by geochemicalmeans.

Source-sink
matching:

The process by which sources of CO2
such as emissions points are associatedwith CO2 storage resources. There are

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various ways to conduct source-sink
matching.

Supercritical CO2:

The state of CO2 when it is at or above its
critical temperature and critical pressure.

Static capacity:

A probabilistic estimation that accounts for
uncertainties such as reservoir quality.

Theoretical capacity:

A regional or national first approximationof storage resource capacity.

Storage complex:

The primary containment system and any
secondary containment systems.

Tubular:A term used to refer to the pipes andtubes used by the oil and gas industry.

Storage efficiency:

The proportion of pore space within atargeted reservoir that can be filled with
CO2. Roughly equivalent to the term"recovery factor" used by the oil and gas
sector.

Ultramafic:

Igneous rocks with a very high percentage
of dark coloured minerals high inmagnesium and iron. The main rock typefound in the Earth's mantle.

Unintended
migration:

Migration of the CO2 plume in a direction
different to planned or beyond the
expected/modelled boundaries.

Unit:

A volume of rock with defined andidentifiable characteristics.

Storage site:

The storage complex, overburden and thesurface projection of the storage complex
and injection facilities.

Store:

See Storage complex.

Stratigraphic
trapping:

See Structural trapping.

Well:

A deep hole in the ground, usually madevia drilling.

Stratigraphy:

The classification of different layers ofrocks.

Well abandonment:

See Plug and abandon.

Well completion:

The process during which a drilled well isprepared for its activity.

Wellbore:

The actual hole that forms the well.

Structural trapping:

The trapping of CO2 in a reservoir via
impermeable boundaries such as acaprock.

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Acknowledgements, contributors and credits
Nicola Clarke, Technology Collaboration Programme on
Greenhouse Gas R&D (GHG TCP/IEAGHG)

This report was prepared by the Carbon Capture, Utilisation andStorage Unit in the Energy Technology Policy Division at theInternational Energy Agency (IEA). The report was designed anddirected by Samantha McCulloch, former Head of the CCUS Unit.

Chris Consoli, Global CCS InstituteThe lead author was Rachael Moore. The report also benefited fromvaluable feedback from other experts within the IEA, including
Simon Bennett, Sara Budinis, Mathilde Fajardy, Carl Greenfield,
Timur Guel and Nasim Pour.

The report was edited by Justin French-Brooks.

Myles Culhane, Oxy
Valeria Di Francesco, Eni
Tim Dixon, Technology Collaboration Programme on Greenhouse
Gas R&D (GHG TCP/IEAGHG)
Ryan Edwards, Oxy
Roberto Ferrario, Eni
Kathryn Gagnon, Natural Resources Canada

Several experts from outside the IEA were consulted during thedevelopment of the report. Their contributions were incredibly
valuable. These experts included:

Eva Halland, CarbonGeo Consulting

Adam Baylin-Stern, Carbon Engineering

Arthur Lee, Chevron

Brendan Beck, World Bank

Nirvasen Moonsamy, Oil and Gas Climate Initiative

Thomas Berly, Aker BPJames Murphy, Santos

Chris Bolesta, European Commission

Owain Tucker, Shell

Andrew Garnett, The University of Queensland, Australia

PAGE | 125

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The IEA Communications and Digital Office assisted with andcontributed to the production of the final report and website
materials, particularly Astrid Dumond, Taline Shahinian, Allison
Leacu, Isabelle Nonain-Semelin and Therese Walsh.

James Craig, Technology Collaboration Programme on
Greenhouse Gas R&D (GHG TCP/IEAGHG)

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