The Government of Canada has adopted the Canada’s Net Zero Emissions Accountability Act in 2021 which sets an ambitious emissions reduction target of 40-45% below 2005 levels and net zero by 2050, followed by the introduction of the 2030 Emissions Reduction Plan on March 29, 2022 to achieve these legislative requirements. In this regard, the transition to net zero exposes all sectors of the economy to disruption and, together with the upstream oil and gas sector, face heightened scrutiny of their business operations, including environmental, social and governance.
The International Energy Agency has identified carbon capture, use and storage (CCUS) as a critical component to achieving zero emissions goals. Compared to other technologies, CCUS offers a unique value proposition as it can reduce emissions directly from business operations and also remove emissions from the atmosphere. The key to the success of CCUS is to ensure that carbon dioxide (CO2) is permanently stored in the geological formations. Policies and procedures for measuring, monitoring, and verifying (MMV) injected CO2 are critical to establishing permanent storage. Alberta has relatively advanced MMV requirements and actual experience using MMV for commercial scale projects.
Alberta as benchmark jurisdiction for carbon sequestration operations
With an abundance of geological formations suitable for carbon sequestration, the Province of Alberta has developed significant expertise in CCUS activities, including with respect to MMV plans. Such expertise was demonstrated on March 8, 2021, when the Government of Canada announced the formation of the CCUS Alberta-Canada Steering Committee that would build on the initial leadership of CCUS Alberta.
In 2010, the Government of Alberta changed the Mines and Minerals Act reserve pores in the subsoil for carbon sequestration activities, followed by the enactment of the Carbon Sequestration Tenure Regulations (CSTR) to regulate these activities. Subsequently, the Government of Alberta supported the development of CCUS infrastructure, including a commercial-scale CCUS project to address carbon emissions – the Shell Canada Energy Quest project (Project Quest), which is designed to capture one million tonnes of CO2 emissions per year. According to the 2020 annual summary report published by Shell in 2021 for the Quest project (Shell Quest report), the Quest project has exceeded more than five million tonnes of CO2 sequestered since the start of injection activities in 2015.
MMV plans must be filed and approved by the Minister of Energy. The Alberta Energy Regulator (AER) will also consider the MMV plan when considering applications and approvals for the development of a CCUS project.
The MMV Plan as an Essential Part of Carbon Sequestration Operations
A fundamental and necessary part of any proposed carbon sequestration operation is the establishment and implementation of a robust MMV plan throughout the operational lifecycle of a CCUS project. The purpose of an MMV plan is to confirm and verify that CO2 is permanently and stably captured, injected and stored in the injection formation. An MMV plan also provides early warning for leaks and for CO2 migration underground that is inconsistent with the original design and containment modeling expectations.
An MMV plan requires the collection and analysis of data to optimize sequestration operations, as well as the reliability of the measurement of the volumes of CO2 injected, the monitoring of the migration and sequestration of the plume of CO2 and the management of the integrity of the geological formation. Under the CSRan MMV plan must also sufficiently demonstrate that the proposed CCUS project will not interfere with the recovery of other minerals.
The CSR allows two types of disposals for sequestration activities, both of which require approval of an MMV plan. The first is an assessment permit, which allows a proponent to drill wells to assess the suitability of geological formations for carbon sequestration.
The second is a sequestration lease, which allows a proponent to drill wells for assessment and testing for the purposes of carbon injection and sequestration. The CSR imposes additional requirements on an MMV plan for a sequestration lease compared to an assessment permit: the MMV plan must be submitted in greater detail for approval, an annual report must be provided to the Government of Alberta regarding findings and observations of the lease holder’s MMV activities, and the MMV plan must be renewed and approved every three years.
Under Article 19(3) of the CSRa successfully proposed MMV plan will also be a necessary requirement for the ultimate transfer of long-term responsibility to the Province of Alberta following issuance of a Certificate of Closure.
MMV Lessons from Quest Decision and Directive 065
The AER has several directives defining the requirements for the transport and injection of CO2. The review and approval process associated with Project Quest further provides valuable insight into what information should be presented in an MMV plan and its evaluation by the AER.
For your information, from the date of the initial application to the publication of the decision, the regulatory approval process took approximately 19 months, including a public hearing. Initial applications for the Quest project were filed in December 2010 with the Energy Resources Conservation Board (ERCB), formerly established as AER. There were two rounds of requests for additional information and a four-day public hearing, which were followed by a decision issued by the ERCB on July 10, 2012 (Quest Decision).
One of the key findings of the Quest decision was the importance of an MMV plan to prevent serious environmental impacts. The ERCB viewed Shell’s MMV plan as extremely important for each operational phase of the Quest project and equally important for its post-operation and post-closure phases.
The main concern raised during the public hearing was the proper containment of the injected CO2. However, the ERCB has determined that the risk of a containment breach is extremely low, in particular due to Shell’s MMV plan for early detection and the proposed measures to be implemented to mitigate any potential impact of a containment breach. confinement.
The ERCB agreed with the process proposed by Shell and that the MMV plan would be adaptive, flexible and responsive to the operational phases of the Quest project. In approving Shell’s MMV plan, the ERCB considered extensive baseline data collection and offered to monitor groundwater chemistry, wellbore integrity, general containment, extent and movement of the CO2 plume, pressure front and ground uplift, surface leakage with periodic reporting to the Government of Alberta and ERCB.
The ERCB also included several conditions, such as requiring an annual report on operational performance and immediate reporting of a loss of containment. Thus, Quest project approval focused on meeting the MMV plan and reporting operational performance to ensure CO2 containment, regulatory compliance, and compliance with model predictions and baseline studies. According to the Shell Quest report, the MMV data indicated no migration of sequestered carbon out of the Basal Cambrian Sands injection reservoir and no insurmountable operational challenges to date.
On May 30, 2022, the AER released a revised Draft Directive 065 (Draft Directive 065) which offers details that the AER will consider when evaluating CCUS project applications and development approvals. (comments accepted until July 10, 2022). Draft Directive 065 provides information on requirements for various aspects of a CCUS project application, including containment of the maximum expected fluid plume, safety of CCUS project operations, and reporting.
MMV Lessons from Alberta CCUS Hub RFPP and MMV Guidelines
The Request for Full Project Proposals for CCUS Hubs (CCUS Hub RFPP) recently provided by the Government of Alberta on March 3, 2022, provides additional insight into the information required for a robust MMV plan. It states that an MMV plan should contain information regarding the project execution plan and project design details. In addition, to reduce risks and mitigation measures, the MMV plan should identify key project and sequestration risks, as well as anticipate mitigation measures. The CCUS Hub RFPP also adds that an MMV plan should have an initial assessment including information such as planned capacity targets and potential impacts on the activities of other underground pore space users as well as the impact on the biosphere. , the geosphere, the atmosphere and the hydrosphere. . Additionally, the MMV plan should include information regarding the project plan, schedule, modeling and site characterization. Finally, an assessment of MMV techniques and technology should also be included.
Following the release of the CCUS Hub RFPP, on March 16, 2022, the Government of Alberta released a document that provided additional guidance on what information to present in an MMV plan (MMV Guidelines). The MMV guidelines specify a number of key principles, such as regulatory compliance, the ability to monitor the four spheres (geosphere, hydrosphere, biosphere and atmosphere), risk-based analysis and adaptation, and the use of the best available technologies economically available. The MMV guidelines present the required criteria of an MMV plan for each operational life cycle of a CCUS project: all stages of the project, pre-injection (for an assessment license), pre-injection (for a sequestration), exploitation/injection and closure period .
MMV plans will continue to be a key component of applications for future CCUS projects required to obtain regulatory approvals. The views of the ERCB (now the AER) in the Quest decision are instructive in assessing the issues that may be raised with respect to submitted MMV plans. The Shell Quest report and previously released annual reports are instructive in assessing operational issues that MMV plans should consider proactively addressing. The recently released CCUS Hub RFPP, MMV Guidelines and Draft Directive 065 illustrate the importance of submitting a strong MMV plan for approval of a CCUS project. During the operational phase of a CCUS project, MMV’s plans will confirm that CO2 is contained in a manner consistent with original designs, regulatory approvals and other legal requirements, including compliance with environmental and regulatory laws. Ultimately, the MMV plan will support the closure of a CCUS project and long-term handover.