Coupling risk of storage and economic metrics for CCS projects

Abstract This paper proposes a probabilistic method to evaluate CO2 injection designs for carbon capture and storage (CCS) projects according to their profitability and sub-surface risks. A key feature of the proposed method is that it incorporates the combined effects of geological, engineering and economic uncertainties. Estimating the viability of a CCS project is mainly determined by (a) storage formation properties and (b) economic parameters. Since these factors are uncertain, the most appropriate way to examine the project feasibility is to conduct probabilistic analyses that take into account both the storage formation and economic parameters at the same time. We illustrate this process with a simple hypothetical, but representative CCS project. We determine the project’s profitability, storage capacity and risks of CO2 leakage for 5 development injection designs. We assign probability distributions to the following parameters – storage formation thickness, storage formation areal extent, horizontal permeability, vertical to horizontal permeability ratio, storage price, capital costs, operating costs, escalation rates and discount rates. Then we use the storage formation property distributions to generate CO2 injection profiles and their associated probabilities. Finally, they are incorporated in a probabilistic economic model to generate a probability distribution of profitability, storage capacity and the risks of leakage. We propose a development index which combines the sub-surface risks and economic uncertainties associated with a specific development plan. This single number makes it easier for decision makers to compare different designs in an uncertain environment. The value of this index can vary according to the weights given to sub-surface risks and economic uncertainties.

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