The operations of Sleipner and Snøhvit gas projects highlight uncertainties in carbon capture and storage (CCS) and call into question the feasibility of scaling up offshore storage.
A report from the Institute for Energy Economics and Financial Analysis (IEEFA) highlights unforeseen difficulties encountered in two Norwegian gas projects that store carbon dioxide (CO2) beneath the seabed, raising concerns about the long-term feasibility of carbon capture and storage (CCS). The projects in question, Sleipner and Snøhvit subsea fields, were once considered success stories for CO2 storage, but the report argues that their operations cannot serve as definitive models for future CCS endeavors due to the unpredictability of subsurface conditions.
Grant Hauber, IEEFA’s Strategic Energy Finance Advisor and the author of the report, conducted a comprehensive review of technical studies and academic papers spanning several decades. His findings indicate that even with advanced data, science, and monitoring, unexpected subsurface conditions can emerge at any time. These findings have significant implications for the numerous CCS projects planned worldwide, emphasizing the need for field operators and regulatory bodies to prepare for unforeseen circumstances, establish detailed contingency plans, and secure funding to address potential risks.
Hauber explains that every project site has unique geological characteristics, and the subsurface conditions at any given location are specific to that place and subject to change over time. While the oil and gas industry is accustomed to dealing with uncertainties in exploration and production, the challenges are multiplied when attempting to sequester CO2 underground.
Sleipner and Snøhvit, managed by Norwegian state-owned energy company Equinor ASA, have been regarded as successful in terms of sequestering CO2. However, the report reveals significant variances from the initial design plans. At Snøhvit, storage conditions deviated dramatically within 18 months of CO2 injections, leading to major interventions and investments. In the case of Sleipner, CO2 migrated to an area that engineers had not identified despite extensive geological studies.
The report warns that more than 200 CCS and carbon capture, utilization, and storage (CCUS) proposals worldwide should not rely on Sleipner and Snøhvit as proxies for larger-scale projects. Hauber emphasizes that the two fields serve as cautionary examples of the technical and financial challenges inherent in long-term CCS operations, casting doubt on the world’s ability to sustainably sequester CO2 beneath the sea.
The complexities of Earth’s subsurface geology pose significant hurdles to the ambitions of CCS projects. IEEFA has previously released studies assessing the costs, benefits, and challenges of CCS projects, and this new report focuses specifically on subsurface geology. The author notes that despite the extensive research conducted on Sleipner and Snøhvit, scientists could not predict the geological challenges they would encounter until the CO2 injections began.
While Sleipner and Snøhvit have successfully sequestered their intended annual CO2 volumes, the report underscores the challenges associated with getting CO2 into the ground and ensuring its long-term containment. For example, at Sleipner, stored CO2 migrated upward over a three-year period, reaching a previously unknown geological stratum. The situation was temporarily stabilized, but uncertainties remain regarding the extent of containment. Similarly, at Snøhvit, unexpectedly high pressure in the CO2 deposit area necessitated emergency interventions and prompted the search for new storage areas.
The financial, regulatory, and magnitude implications of CCS projects are significant. The avoidance of the Norwegian Carbon Tax was a key driver for Sleipner and Snøhvit. However, in countries that rely on subsidies for CO2 removal, the absence of a market-based driver could lead to perpetual subsidies, potentially exposing the environment to budgetary uncertainties. The injection rates of CO2 at Sleipner and Snøhvit are smaller than many proposed CCS projects, raising doubts about the reliability of scaling up offshore storage projects.
The report cites examples from Chevron’s Gorgon CCS project in Australia, Petronas’ investment in CCS for the Kasawari field, proposed CCS hubs in the United Kingdom, and the establishment of a CO2 disposal network in the Gulf of Mexico, among others. These projects are often justified based on the experiences of Sleipner and Snøhvit, but the report argues that the challenges faced by the Norwegian fields underscore the need for continuous monitoring, comprehensive backup plans, and sufficient funding.
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From a regulatory perspective, CCS projects pose potentially indefinite contingent liabilities as they aim to ensure permanent CO2 storage. The report highlights that the duration of potential leakage risks varies among different jurisdictions, with liability periods ranging from 15 to 50 years. The need for regulators to ensure storage integrity raises concerns about the transfer of material risks to taxpayers.
Hauber concludes that subsurface CO2 storage involves a combination of probabilities and risks, some of which can be identified in advance, while others remain unknown until difficulties arise. The report calls for greater transparency and public discourse about the risks and costs associated with CCS projects, urging industry and governments to address these challenges in a more comprehensive manner.
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