Risk Management in CO2 Geologic Storage Projects RECS 2016, Birmingham, AL
Sources and Acknowledgements CSA z741-2012 ISO CCS standard to be issued 2017-2018 ISO 31000, Project Management Institute, NIST, ANSI, IEAGHG National Energy Technology Lab, RCSP program: BSCSP (Kevin Dome), Westcarb (Kimberlina), MGSC (Illinois Basin Decatur Project), SWP (Farnsworth) ... PurGen (NJ), Pioneer (AB), Aquistore (SK), Cemex (TX), Big Springs (NE), CarbonNET (VIC, AU) ... Schlumberger Carbon Services TechPlace, 74 Orion St. Brunswick, ME 04011
[email protected] (508)395-2730
GHG Underground
ISO CCS Standard (~2017)
“Geological Storage”: One of 3-5 Standards to be issued in 2017-2018.
Modules 1. Risk Management is ... 2. Information, Gaps, and Uncertainties 3. Risk Targets and Risk Tolerance > Defining risk targets 4. Severity and Likelihood > Defining S&L scales 5. Risk Elements: Features, Events, and Processes > Collecting FEPs and Scenarios 6. Expertise > Expertise self-evaluation 7. Workshop: Risk Evaluation 8. Risk Treatment
Definitions of Risk 1. The effect of uncertainty upon objectives 2. The probability of a loss or drop in value 3. Exposure to the possibility of loss, injury, or other adverse or unwelcome circumstance; a chance or situation involving such a possibility 4. The probability or threat of quantifiable damage, injury, liability, loss, or any other negative occurrence that is caused by external or internal vulnerabilities 5. An uncertain event or condition that, if it occurs, has an effect on at least one project objective 6. The product of the consequence and probability of a hazardous event or phenomenon 7.
Additional Factors RISK = Severity X Likelihood; R = S*L RISK = Consequences X Probability; R = C*P Additional factors sometimes used: R = S*L*X X = f( ... ) Uncertainty* Controllability or Treatability Surprise vs. Anticipatable Horror factor / Shock Value / Direness Voluntariness *Aleatory vs. Epistemic uncertainty: Randomness/unknowability vs. Lack of knowledge
Risk Management for a project: three questions (1) How much don’t we know? (2) How badly could what we don’t know hurt? (3) What are we going to do about it?
How much don’t we know?
FEPs –
Features, Events, and Processes:
Categories of things we need to know about a proposed CCS project. To the extent we don’t know about these things, there’s risk. https://www.quintessa.org/co2fepdb/v2.0.0/
181 FEPs for CCS!
This description is a FEP – not a Scenario – because it is not a chain of events with impact(s). More on FEPs vs Scenarios later.
Uncertainties Create Risks 1. Project’s physical environment > Tornadoes, fires, and floods here? What are we drilling into? 2. “Baseline” physical states of the systems we do plan to affect > Enough porosity? Nice thick caprock? Pressures and stresses OK? 3. “Baseline” physical states of the systems we do not plan to affect > What depths have drinkable groundwater? What’s their chemistry now? 4. Changes in physical states > Can we track the injected CO2? What else will change, and can we measure it? 5. Financing and budget > Can we convince investors; can we prove storage? Can we do it under budget? 6. Project’s social license to operate > The opinions of the project’s neighbors and other stakeholders matter. 11
181 FEPs, ∞ Uncertainties ... ... are we done?
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HAVE WE IDENTIFIED
ALL THE RISKS? 13
The Fuzzy Universe of Risk
?????????????????????????????????????????? What can our project affect? ?????????????????????????????????????????? What can our project be affected by? Where in the world do we look for risks? How do we know when we’ve looked enough? ?????????????????????????????????????????? What in the world could “All The Risk” be? How do we say what pieces of “All” to look at? ?????????????????????????????????????????? Is “All” greater than the sum of the pieces, or less? ?????????????????????????????????????????? ?????????????????????????????????????????? 14
Ways to Subdivide the Universe of Risk
a) Project Phases or Scope Elements b) Professional Expertise Areas c) Risk Targets / Project Values / Elements of Concern d) Subject Areas (FEPs) e) Scenarios f) Rumsfeldianistically Obvious graphic metaphor
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Rumsfeldian Epignostic Quadrantology
Known Unknown Unknowns Unknowns Known Unknown Knowns Knowns
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Modules 1. Risk Management is ... 2. Information, Gaps, and Uncertainties 3. Risk Targets and Risk Tolerance > Defining risk targets 4. Severity and Likelihood > Defining S&L scales 5. Risk Elements: Features, Events, and Processes > Collecting FEPs and Scenarios 6. Expertise > Expertise self-evaluation 7. Workshop: Risk Evaluation 8. Risk Treatment
Information sharing on a real project whose risks we will evaluate Or we construct a hypothetical project. Notes will be a useful reference later. ~10 minutes.
Modules 1. Risk Management is ... 2. Information, Gaps, and Uncertainties 3. Risk Targets and Risk Tolerance > Defining risk targets 4. Severity and Likelihood > Defining S&L scales 5. Risk Elements: Features, Events, and Processes > Collecting FEPs and Scenarios 6. Expertise > Expertise self-evaluation 7. Workshop: Risk Evaluation 8. Risk Treatment
Risk Targets – Project Values – Elements of Concern Canadian Standards Association (CSA) z741-12 Appropriate elements of concern shall be identified by the project operator for each project and [shall] include human health and safety, the environment, and system performance (e.g., injectivity, capacity, containment, and service reliability). The elements of concern should include cost, schedule, and reputation and may include industry stewardship, project financing, monitoring capacity, licensing and regulatory approval, research objectives, and public support.
What values are at risk? Project Value Goal Project Management Safety & Health
Plan and execute within budget and on schedule. No one’s health impaired by the project, on or off site.
Environment
No adverse environmental impacts.
CO2 Storage
Inject and retain a commercial-scale mass of CO2.
Progress toward Through monitoring and modeling, track injection progress and effects and closure progressively develop confidence in permanent site stability.
Reputation
The participating organizations are viewed positively by the public as a result of their roles in the project. 22
Defining Risk Tolerance: The point is to spur action. Risk evaluation criteria distinguish risks as acceptable, tolerable, or unacceptable. These distinctions can be based on a combination of internal or external requirements or expectations, explicit policy statements, and regulatory requirements. Risks are reduced by implementing risk controls. Before the project reaches a stage where the risk scenario can occur, risks previously determined to be unacceptable must be re-evaluated as acceptable or tolerable.
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-25 to -20
BLACK
-16 to -10
RED
-9 to -5
NPPD
NON-OPERABLE: Evacuate the zone and or area/country
INTOLERABLE: Do not take this risk
YELLOW UNDESIRABLE: Demonstrate ALARP before proceeding
-4 to -2
GREEN
-1
BLUE
ACCEPTABLE:
Proceed carefully, with continuous improvement
NEGLIGIBLE:
Safe to proceed
Possible
Likely
Probable
PREVENTION
Unlikely
Control Measures
Improbable
MITIGATION
1
2
3
4
5
LIKELIHOOD -1
Serious
-2
Major
-3
Catastrophic
-4
Multi-Catastrophic -5
SEVERITY
Light
-1
-2
-3
-4
-5
1L
2L
3L
4L
5L
-2
-4
-6
-8
-10
1S
1S
3S
4S
5S
-3
-6
-9
-12
-15
1M
2M
3M
4M
5M
-4
-8
-12
-16
-20
1C
2C
3C
4C
5C
-5
-10
-25
1MC
2MC
-15 -20 Schlumberger 3MC 4MC
5MC
Scott McKay, AICPA
White arrow indicates decreasing risk
Risk Tolerance “heat maps”
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Modules 1. Risk Management is ... 2. Information, Gaps, and Uncertainties 3. Risk Targets and Risk Tolerance > Defining risk targets 4. Severity and Likelihood > Defining S&L scales 5. Risk Elements: Features, Events, and Processes > Collecting FEPs and Scenarios 6. Expertise > Expertise self-evaluation 7. Workshop: Risk Evaluation 8. Risk Treatment
Severity Scale
(a specific project)
Scales of potential negative impact to project values from project activities Project Value Project Management
Safety & Health
Environment
Reservoir Characterization
Monitoring
Prove the Buffering Concept (*assuming flow-rate demand for CO2)
Scales of potential negative impact to project values -1 -2 -3 -4
-5
10% Impact on Annual 40% Impact on Annual 75% Impact on Annual >125% Impact on 5% Impact on Annual Budget; 3 Days Budget; 2 Weeks Budget; 1 Month Annual Budget; 1 Budget; ~1 Day Unplanned Downtime; Unplanned Downtime; Unplanned Downtime; Season Unplanned Unplanned Operations 2 Month Injection 6 Month Injection 12 Month Injection Downtime; 18 Month Downtime Delay Delay Delay Injection Delay Temp. Disability, Perm. Disability, Lost Minor Injury or Illness, Hospital to 1 day, Lost Days >100, Intensive First Aid Days 1-100 Care >1 day Minor Temporary Impact Limited to Project Worksite
Fatality
Multi-Fatality
Significant Temporary Significant Long-Term Significant Long-Term Major Long-Term Impact On or Near Impact On or Near Impact upon 1/4 sq mi Impact upon 1 sq mi Project Worksite Project Worksite
Significant Failure in 2 Minor Loss of Core, 1 1 Failed Core Run, Significant Failure in 1 Characterization Very Little Decision Log Partially Fails, 1 Log, or Test; 1 Dataset of Coring, Logging, Programs; Much Data Support Gained from Unrepresentative of Testing, Poor Test, Minor Questionably Characterization Reservoir Representativeness Seismic Coverage Gap Representative Pre-drill modeling provides only weak guidance for monitoring.
Sparsity of prePoor agreement Monitoring results Injection permit injection data impairs between simulations leave major doubt renewal denied due to seeing injection and monitoring about fate of injected uncertainty about CO2 fate. change. results. CO2.
After years of CO2 flow short 5% of CO2 flow short 15% of CO2 flow short 50% of CO2 flow short 75% of injection, little salable demand. demand. demand. demand. CO2 flow or no ops learning.
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Severity Scale
(Project X)
Scales of potential negative impact to project values from project activities
Ranking Factor
Severity of Negative Impact (S)
5
Catastrophic
Multiple fatalities. Damages exceeding $100M. Project shut down.
4
Serious
One fatality. Damages $10M-$100M. Project lost time greater than 1 year.
3
Significant
Injury causing permanent disability, Damages exceeding $1M to $10M. Project lost time greater than 1 month. Permit suspension. Area evacuation.
2
Moderate
Injury causing temporary disability. Damages $100k to $1M. Project lost time greater than 1 week. Regulatory notice.
1
Light
Minor injury or illness. Damages less than $100k. Project lost time less than 1 week. 27
Severity: Upper Bound & Best Guess (Sub, Sbg) FEP Group
Gp ID
Example
0
Neighbors, stakeholders, permitting Neighbors, stakeholders, permitting
Risk area (FEP) Meteorites
Potential scenarios and failure modes (examples of things that could go wrong, be harmed, or be sources of harm)
Sub
Sbg
Meteorite or falling space debris lands inside project footprint area.
5
2
L of RISK = Sbg Sbg * L 1
2
A01 Permits, Obtaining
Project cannot obtain new permits; delay occurs.
0
A02 Social and institutional developments
Change in zoning laws, land use. environmental legislation, demographics or loss of public records needed by project
0
Why both? Heuristics. Rules of Thumb. Cognitive anchoring. So that we separate our images of “worst-case scenarios” from our reasonable judgments of what’s more likely to happen. See work by Tversky, Slovik, Kahneman (Thinking Fast and Slow)... and especially Nicholas Nassim Taleb (The Black Swan). 28
Heuristics and Cognitive Pitfalls Heuristics: Ways to make decisions under uncertainty; rules of thumb
Anchoring
(The first-stated value influences later choices, even illogically)
Availability (Personal experience outweighs judgment of a general situation) Bandwagon (Others’ judgments are overvalued as information) Simulation (An event seems more likely if it is easier to understand or conceive) Confirmation Bias (New information is filtered to support existing ideas and models) REPRESENTATIVENESS Judgments based on discrete characteristics of the present situation ... that can be compared among many similar situations ... whose outcomes are known.
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Good Anchoring We need to know which way is upstream. So there’s a proper order:
1. Sub 2. Sbg 3. Lbg
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(Project X)
Likelihood Scale Likelihood of negative impact during the project Very Unlikely
Unlikely
Medium Likelihood
Likely
Very Likely
PROBABILITIES
=90%
CATEGORICAL VALUES
1
2
3
4
5
TERMS
• •
Design, Construction, Operations, Post-Operations Monitoring (Closure) Phases Greater than 90% chance is beyond the realm of “risk” – just call it a “fact”!
Notice the roughly exponential expansion. This mimics how we feel quantitative distinctions – how we actually judge magnitudes under uncertainty. 31
Likelihood • Why don’t we just look up how often these things happen?? • Why do we need these vague “L” categories when “we can just model it”??
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Modules 1. Risk Management is ... 2. Information, Gaps, and Uncertainties 3. Risk Targets and Risk Tolerance > Defining risk targets 4. Severity and Likelihood > Defining S&L scales 5. Risk Elements: Features, Events, and Processes > Collecting FEPs and Scenarios 6. Expertise > Expertise self-evaluation 7. Workshop: Risk Evaluation 8. Risk Treatment
FEPs • a Feature is a static attribute of a system. - Reservoir porosity. - Depth. • an Event is a sudden change in the system or its environment. - Lightning strikes the dehydration equipment. - An external emergency requires injection shutdown. • a Process progressively changes the system attributes or conditions. - Injected CO2 displaces formation brine near the injection well, ... or migrates updip away from the injection well, ... or partially dissolves into formation brine. - Manufactured components degrade over time.
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FEPs Are Conceptual, Scenarios are Concrete FEPs
Scenarios
General, Conceptual, Overlapping; even Redundant
Specific, Concrete, Well Bounded
Nouns and adjectives
Complete Sentences: subject, verb, object
Conducive to broad thinking of connections, relationships, integration
Conducive to focused thinking of isolated chains of events
Can “paint the universe”
N Scenarios Nx gaps
Durable / Eternal / Persistent / Repeatable
Interruptible / Preventable / Mitigable
Evaluated using your easy & associative System 1
Evaluated using your effortful & calculating System 2
(Kahneman, 2011)
FEPs are semantic clouds that float in the firmament of reality.
(Kahneman, 2011)
Scenarios are actionable proxies for what actually happens. 35
We don’t start with Scenarios because … Specific detailed scenarios can become cognitively compelling, [so] that people overlook other pathways to the same end-points. It is often best to “cut the long causal chains” and focus on the possible range of a few key variables [that] can most affect [the] outcomes of interest. Morgan et al, 2009
Scenarios must be concrete so that they point toward treatments.
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Modules 1. Risk Management is ... 2. Information, Gaps, and Uncertainties 3. Risk Targets and Risk Tolerance > Defining risk targets 4. Severity and Likelihood > Defining S&L scales 5. Risk Elements: Features, Events, and Processes > Collecting FEPs and Scenarios 6. Expertise > Expertise self-evaluation 7. Workshop: Risk Evaluation 8. Risk Treatment
Expertise Level
Topic Groups 1- Container 2- Fluids
General Description
Comment
5
High confidence and independent judgment – plus a few gray hairs
A few participants will have 1 or more 5’s
4
High confidence and independent judgment from extensive relevant experience; thorough knowledge of project facts in the topic area
Most participants will have 1 or several 4’s
3
Mid-career worker and/or broad knowledge in fields relevant to the topic area and project
2
Some acquaintance with the subject area; entrylevel or small amount of experience
1
“Person on the Street” opinion; judgments based entirely on what a trusted expert says
Nearly all participants will have a couple of 1’s
3- Wells 4- Function 5- Execution
“What level of expertise do I have to evaluate risks in each topic group of FEPs or Scenarios?”
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Expertise results 78
Monitoring or modeling plume and pressure
5 5 4 4 4 4 4 4 4 4 4 3 3 3 3 3 2 2 2 2 2 2 1 1 1 1 1
78
Reservoir and caprock geology and petrophysics
5 5 4 4 4 4 4 4 3 3 3 3 3 3 3 3 3 2 2 2 2 2 2 2 1 1 1
71
Geomechanics geochemistry of CO2 injection
5 5 4 4 4 4 4 3 3 3 3 3 2 2 2 2 2 2 2 2 2 2 2 1 1 1 1
70
Regional geology physical environment
5 4 4 4 4 3 3 3 3 3 3 3 3 2 2 2 2 2 2 2 2 2 2 2 1 1 1
68
EOR aspects of CCS project
5 5 4 4 3 3 3 3 3 3 3 3 2 2 2 2 2 2 2 2 2 2 2 1 1 1 1
67
Project and program management
5 5 5 4 4 4 4 3 3 3 3 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1
61
Well drilling and completions
4 4 4 3 3 3 3 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 1 1 1
58
Health and safety hazard ID
5 4 4 4 4 3 3 3 2 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1
51
CO2 supply system design operation
4 4 3 3 3 3 2 2 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1
50
Neighbors stakeholders permitting
4 3 3 3 3 3 2 2 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 39
Modules 1. Risk Management is ... 2. Information, Gaps, and Uncertainties 3. Risk Targets and Risk Tolerance > Defining risk targets 4. Severity and Likelihood > Defining S&L scales 5. Risk Elements: Features, Events, and Processes > Collecting FEPs and Scenarios 6. Expertise > Expertise self-evaluation 7. Workshop: Risk Evaluation 8. Risk Treatment
Project X: Top 20 Risk-Ranked FEPs Sbg
Lbg
avg 2.94
avg 3.06
3.00
3.37
3.00
3.00
Legal/regulatory: lawsuits
3.15
2.70
CO2 injectate effects: Groundwater contamination: Public perception
3.21
2.93
Contracting
2.93
3.13
Placement and Performance of Production Wells
3.16
2.63
2.75
3.00
Legal/regulatory: Permits: Drilling and injection
3.05
3.10
Undefined specifications
3.00
2.67
Startup/shutdown operations
2.50
3.00
Characterization: Ability to characterize reservoir
2.33
3.00
Workover
2.00
4.00
2.67
2.33
Construction and operations activities (project) other than drilling
2.50
3.00
Legal/regulatory: Area of review
2.89
2.47
2.75
2.65
Adequate risk characterization
3.00
2.40
Legal/regulatory framework
3.00
2.33
Staffing and staff competency
2.50
2.81
FEP Schedule and planning
Practices, Procedures, Training
On-road driving
Quantitative analysis
CO2 Delivery System: Source Composition
Physical measurements
Reservoir injectivity
Monitoring and modeling
Seismicity (project-induced earthquakes)
Accidents and unplanned events (project)
Practices, Procedures, Training
Risk
Rank
9.3 9.0 9.0 8.5 8.5 8.4 8.4 8.3 8.2 8.0 8.0 8.0 8.0 7.7 7.5 7.5 7.5 7.4 7.3 7.3
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Higher-Risk Scenarios Addressed by Monitoring Technologies Technology
Location
ASSURANCE MONITORING
In Existing Plan
Baseline Complete
Additional MMV/ Installation Required
Scenarios Addressed
Tables prepared also for Operational Monitoring (well integrity and flow)
Soil gas and soil gas flux
2.5 km radius around injection well
Yes
No
Additional stations, Completion of Baseline
G05-10, G10-39, G10-19, G05-11, G09-38, G05-71, G10-59
Geochemical analysis for soil gas
Selected sampling stations
Yes
No
Completion of baseline and sample analysis
G05-10, G10-39, G10-19, G05-11, G09-38, G05-71, G10-59
Isotope analysis for soil gas
Subset of geochemical analysis
Yes
No
Completion of baseline and sample analysis
G05-10, G10-39, G10-19, G05-11, G09-38, G05-71, G10-59
Groundwater monitoring
3 km radius around injection well
Yes
No
Additional stations, Completion of Baseline
G05-10, G10-39, G10-19, G05-11, G09-38, G05-71, G10-59
Geochemical analysis for groundwater
Selected sampling stations
Yes
No
Completion of baseline and sample analysis
G05-10, G10-39, G10-19, G05-11, G09-38, G05-71, G10-59
Isotope analysis for groundwater
Selected samples
Yes
No
Completion of baseline and sample analysis
G05-10, G10-39, G10-19, G05-11, G09-38, G05-71, G10-59
Surface water sampling
Reservoir, Inflow stream
No
No
Baseline sampling
G10-58
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Last Slide ... Once in a while, a question has a right answer! Try this one: Farmers Insurance will sell you a policy that pays beneficiaries $1.5 million in the event you are abducted by aliens. What do they charge per year to insure you against that risk?
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GHG Underground TechPlace, 74 Orion St., Brunswick, ME 04011
[email protected] (508)395-2730
