Gas Re-injection as CDM: CCS or not?

1
Gas Re-injection as CDM CCS or not?

• Paul ZAKKOUR
• ERM Energy Climate Change

2
Overview

• Eligibility of reinjection projects in CDM
• Drawing analogues with CO2 capture and storage
• Should reinjection be treated same as CCS?
• What next for gas reinjection and CDM

3
Eligibility issues

• Flare reduction projects eligible in CDM
• AM0009 sets precedent
• 14 or so projects in pipeline (10 in India? 2 x
  Nigeria 1 x Qatar 1 x Vietnam)
• All take flare gas to market or other use
• Some work done on reinjection but eligibility
  unclear
• Tends to draw analogue with CO2 capture and
  storage (CCS)

4
Analogue with CCS

• CCS involves long-term/permanent isolation of CO2
  from atmosphere
• COP12/MOP2 in Nairobi set big precedent for CCS
  in CDM
• Result not too positive, sticking points include
• Safety, legality, modalities, accounting issues
  etc, "PERMANENCE" probably major item

5
CCS in CDM Nairobi decision

• Request submissions of more methodologies and
  project design documents for CCS operations
  improve understanding
• Range of actors to participate in regional
  capacity building workshops for CCS
• NGOs to further clarify the outstanding issues by
  31st May 2007
• Parties to make submissions by 21st September
  2007 on outstanding issues
• Request SBSTA27 to prepare recommendations on CCS
  in the CDM for the COP/MOP3, and with a view to
  reaching a Decision on the matter by COP/MOP4
  (2008)

6
Is CCS a good analogue?

• An issue largely driven by purpose of the
  reinjection project

Here, permanence is an issue.
Here, permanence not such an issue as we know the
purpose of the project is near-term flare
abatement
CO2 capture and storage
Temporary CH4 storage
Permanent CH4 storage
Here, permanence could be an issue, although CH4
very different properties to CO2
7
Purpose of CH4 reinjection

• CH4 temporary storage to avoid flaring in the
  absence of a current market for associated gas
  (AG), or levelise supply, then may be appropriate
  to consider gas storage as a flare reduction
  activity
• CH4 permanent storage for the purpose of
  permanent climate change mitigation (i.e. to
  avoid release of CH4 to the atmosphere), then the
  analogue with CCS may be considered appropriate
• CH4 reinjected for enhanced oil recovery (EOR)
  additional issues around incremental hydrocarbon
  production
• Unclear how to handle a change in purpose

8
Current eligibility of flare projects
CDM Crediting Period
CO2 emissions
Displaced emissions. These emissions still occur
contemporaneously with the project, but outside
of the project boundary
Emissions reduction
Project emissions
Time
9
Temporary storage is it eligible?
CDM Crediting Period
Reinjected gas recovered and combusted at a later
date once a market is available. Emission
reductions are not contemporaneous with the
project
Emissions reduction
Project emissions
10
Other issues

• In respect of both AG reinjection and CCS, it is
  unclear what would constitute good site selection
• Unclear on monitoring requirements
• CH4 and CO2 have fundamentally different
  properties, and it is unclear whether it is
  credible to draw the analogue
• It is also unclear whether a DOE or host country
  regulator is sufficiently competent to approve
  such an application

11
Summary of issues and findings

• CH4 temporary storage to avoid flaring in the
  absence of a current market for associated gas
  (AG), or to levelise supply - may be appropriate
  to consider gas storage as a flare reduction
  activity
• CH4 permanent storage for the purpose of
  permanent climate change mitigation (i.e. to
  avoid release of CH4 to the atmosphere) - the
  analogue with CCS may be considered appropriate
• CH4 reinjected for enhanced oil recovery (EOR)
  additional issues around incremental hydrocarbon
  production
• Unclear how to handle a change in purpose
• Approvals may be a challenge on a number levels
  including site selection, monitoring and
  verification