Carbon capture and storage: what�s in it for the offshore industry?
  from: Offshore Engineer
  by: Dr Martin Grant
  Friday, June 20, 2008

With the offshore industry likely to be at the heart of a future UK carbon capture and storage strategy, Atkins managing director Martin Grant identifies the key issues and looks at what steps can be taken to begin analysing the potential for CCS now.

Most battle-hardened offshore industry players could be forgiven for putting the issue of carbon capture and storage (CCS) to the bottom of their pile of concerns in 2008. Sure, the UK government has recently announced its intention to fund a CCS demonstration project; but we seem a very long way from the moment when CCS is an economically viable undertaking which companies at different points in the value chain can regard as a commercial opportunity.

Quite understandably, therefore, most people are sitting on their hands until the government sorts out the large number of legal and economic hurdles which need to be overcome before CCS can become a major carbon abatement technology in the UK.

And yet, there is more and more evidence that offshore storage of CO₂ will be the most viable solution for CCS. A report produced in 2007 by the Department for Business, Enterprise & Regulatory Reform (BERR) spelled out the scale of the opportunity and the enormous role which the offshore industry could play in the development of CCS ¹.

First, there is the fact that oil and gas fields are �eprime potential sites�f for CO₂ storage because: �

• They have a proven seal which has retained high pressure fluids, in many cases for millions of years.
• Over the course of conventional exploration and production, much knowledge has been accumulated about the geological and engineering characteristics of oil and gas fields.
• There are the dual benefits of enhanced oil or gas recovery (EOR) - injecting CO₂ into the rocks and extracting more core product. Indeed, the report sketches a scenario where a persistently high oil price could lead to significant expansion of EOR in the North Sea and create the potential for CO₂ storage on a much bigger scale.

Second, there is substantial capacity in the North Sea, enough to handle the UK�'s CO₂ emissions for many years. According to BERR'fs figures, the total gross capacity for geological storage of CO₂ in the North Sea is 35.5Gt,which is broken down as in shown in the table overleaf. Some of the oil and gas fields in this survey are already closed for production; others would close at some point in the decade ahead,while the rest could benefit from enhanced oil or gas recovery. The remaining storage capacity - a significant proportion - comes from the saline aquifers under the UK and Norwegian North Sea; although the report authors admit it's largely guesswork because so little study has been carried out in this area.

Third, according to the BERR, there is the compelling fact that we already have an extensive oil and gas pipeline network,which could potentially be re-used as part of a North Sea-based CO₂ storage infrastructure, dramatically reducing the capital costs of any national carbon capture & storage solution.

Elsewhere, more technical analysis recently has reinforced the case for looking very seriously at the North Sea as a major storage ground for CO₂. A lot of work is being conducted regarding reservoir integrity . examining whether old oil and gas fields have the necessary geological characteristics for carbon dioxide storage on a large scale. The results so far are encouraging. A study from a team at Leeds University, published last year in Geology magazine, concluded:

'The safety case for CO₂ storage in such reservoirs is greatly facilitated if it can be shown to react with the host pore waters and rocks on a human time-scale; and the results of this study indicate that this is indeed the case.'

It is research like this which moves big industry figures, such as former Shell chairman Lord Oxburgh, to call on the offshore industry to take CCS much more seriously. In a recent speech to industry players, Lord Oxburgh said that managing carbon capture and storage projects could be one of the major roles for oil and gas companies in the future. He also said that it would be ideal to trial CCS in the southern North Sea, although it would require 'detailed geological/geophysical work, marine support facilities, heavy steel fabrication, new/refurbished pipelines and an east of England CO₂ pipeline system'.

In other words, there will have to be significant new national infrastructure spending before we can even think about CCS seriously in the North Sea. It's very difficult to make economic sense of CCS without a substantial contribution from the public sector. Therefore, the message to the offshore industry, once again, must surely be that it makes sense to wait for all of these decisions to be taken before moving at all?

Reviewing some of the research again indicates that this might not be the case; that it might be prudent to start building CCS into future planning scenarios, and investment decisions which have to be made here and now, in 2008. Let's assume that a market mechanism will be established that is sufficiently large and longterm enough to reward carbon abatement using CCS, and that the complex legal issues (especially regarding offshore storage) are resolved. If this does happen, given the kind of evidence which we have touched on here, it seems there is a chance that the government will kick-start CCS with some kind of national infrastructure programme, and that it will look to the offshore industry to participate in a major way.

Exactly when that will happen, no one can be sure, although the BERR report pinpoints 2013 as a 'realistic start date' for UK or Norwegian CCS projects.

It might be wise, therefore, to consider some technical analysis of the following:

1. What impact would different CCS scenarios have on life-cycle planning for existing installations? If, as we are suggesting, depleted oil fields have a major role to play in any future CCS solution,what decisions should operators make about the infrastructure which currently serves those fields? If a platform is 40 years old, it's likely to require substantial upgrading before it's ready for CCS. In some cases, it might be more economical to do that, in others to build an entirely new one next door or use subsea technology. Alternatively, CCS cost benefit analysis might indicate extending the lifetime of an installation when previously it would have been rational to close it down. .
2. What would the implications be for planned close of production dates at existing fields, given that these are highly uncertain and based on any number of complex technical and economic factors? Might there be different decisions made for fields which are expected to end their current useful lives in the next five years?
3. How do CCS scenarios impact on decisions about enhanced oil or gas recovery in the North Sea? The industry has had a cautious attitude towards major EOR spending, even with rising prices. And it's fair to say that, so far, carbon storage is considered to be incidental to the main EOR objective of extracting more core product. CO₂ injection is just one of the techniques for EOR, and not always the most economical or technically superior. But a national commitment to CCS would change that. A price for carbon in the future could combine with even-steeper crude prices to make EOR economical where it wasn't before. Analysis of this issue is especially urgent because, as the authors of the BERR report indicate, many of the fields which would be suitable for EOR are reaching the end of their lives, and decisions will have to be taken sooner rather than later. If it makes sense to re-use existing oil and gas infrastructure for CCS, much more focus on the pros and cons of EOR decisions is needed.
4. Is existing pipeline infrastructure in good shape for CCS? Although the legacy oil and gas pipeline infrastructure has good potential for re-use in a new CCS solution certain issues require careful consideration including:

• he residual life expectancy of the pipeline given that it may be anything from 20 to 40 years old;
• the inspection and maintenance regime required to ensure integrity;
• the risk of corrosion should there be water ingress to the CO₂ stream;
• the potential for excessive swelling or explosive decompression of elastomeric seals - requires careful consideration of any components such as valves that are being re-used
• increased risk of propagating brittle fracture.

1. Would it be sensible to conduct much more detailed analysis of those saline aquifers in the North Sea, given the potential storage capacity for CO₂? As the BERR report stresses,we can only guess how much carbon dioxide could be stored in those aquifers, but it¡¯s likely to be substantial. Much more research and data in this area could open up significant new business opportunities for the offshore business in the decade ahead.

Conclusion

Making CCS an economic and technical reality is like putting together the pieces of a giant jigsaw puzzle. A large number of players are involved in this game of which the offshore industry is just one. Although the temptation is to wait, and let the others put down their pieces - so your own role becomes more defined, it is probably sensible to start building CCS analysis into industry planning in 2008. The UK government is giving pretty strong signals now that it favours CCS as a major carbon abatement strategy, and is thinking about how this will become a reality. The offshore industry seems to be at the centre of that thinking, and that the North Sea will be a major part of a future CCS strategy. OE

Reference

1 Development of a CO₂ transport and storage network in the North Sea. Report to the North Sea Basin, Task Force: BERR.

About the author

Dr Martin Grant, is managing director of the Energy division of leading European engineering consultancy Atkins. The Energy division employs 750 technical personnel worldwide, working across the oil & gas, nuclear, renewable and power sectors. A fellow of the IMechE, Grant holds a 1st class honours & PhD in mechanical engineering.

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