Knowledge Sharing Conference
Stakeholders in Asia Enrich Understanding of CCS Technology and Lessons from Shell and the Quest CCS Project
The 10th Knowledge Sharing Virtual Conference, 12 September 2023: Energy company Shell is actively engaged in supporting the global need for cleaner energy solutions and in achieving net zero by 2050. Shell is actively developing carbon-reducing technologies including Carbon Capture and Storage (CCS), as evident in its Canada-based Quest CCS project. Quest is the first commercial-scale CCS project in the world and can store over one million tonnes (MT) of carbon dioxide (CO2) annually - equivalent to the emissions released from nearly 250,000 cars. Since 2015, Quest has successfully captured and safely stored over 8MT of CO2. Through this experience, the company has garnered a wealth of valuable knowledge and insights to share with key stakeholders in Asia to develop, deploy, and operate CCS facilities. The 10th ACN Knowledge Sharing Conference focused on the prerequisites, challenges, and opportunities of investing in CCS technologies. The event was hosted by the Economic Research Institute for ASEAN and East Asia (ERIA) which serves as the secretariat of the Asia CCUS Network (ACN).
Mr Shigeru Kimura, Special Advisor to the President on Energy Affairs, ERIA gave the Opening Remarks in which he shared ERIA’s plan to introduce more existing CCS projects conducted by private and public companies in the Asia-Pacific region. The objective is to establish a mutually beneficial solution between companies with the national and local governments that would further propel the initiative to kickstart a CCS business in Asia. Mr Kimura explained that Shell’s experience with the Quest project provides the audience with wide-ranging information concerning the technical and economic aspects of CCS technology.
Event moderator, Mr I Gusti Suarnaya Sidemen, Expert on CCS/CCUS, ERIA provided background information about Quest and additionally introduced the main event speaker, Dr Owain Tucker, Manager, Shell CCS Capability, Assurance and Project. Dr Tucker’s presentation, entitled “The Quest for Less CO2: Lessons from Shell’s Quest CCS Project”, covered numerous essential topics ranging from political and policy support to technical information. Shell operates the Quest facility in Alberta, Canada ‘on behalf of the Athabasca Oil Sands Project (AOSP) owners’ and its venture partners.
Dr Tucker detailed how Quest captures over 1MT of CO2 annually from three hydrogen-manufacturing units at the Scotford refining and chemicals facility, that have been retrofitted, in Alberta, Canada. The three units have been equipped with a flue gas recycling unit, a capture unit, and Shell’s solvents. Further, the dried and compressed carbon is then sent along a 16-mile pipeline and stored 2 kilometres underground in the Basal Cambrian Sandstone. The endeavour created jobs for about 2,000 people, hence, helping to support the local and regional economy.
Since Quest’s initial days, the carbon price in Canada has risen which was facilitated by government and policy initiatives. For example, Alberta’s federal government announced plans to increase the carbon price by C$15 annually starting in 2023, and thus, what started at C$30 per tonne of CO2 in 2020 is expected to reach C$170 per tonne of CO2. Based on the Technology Innovation Emissions Reduction system, the carbon price reached C$30 per tonne of CO2 in 2020 and C$40 per tonne of CO2 in 2021. By improving carbon pricing, projects will not require direct subsidies from governments as ‘the playing field becomes level again and everybody is exposed to the carbon pricing.’ Additionally, around $30B of investment has been attracted into the region since Quest commenced operations, hence, helping to protect jobs and ‘creating decarbonised industrial heartland for Alberta.’
The success of the project cannot be separated from legislative as well as government stability and support, namely the partnership among industry players, including Shell, and the governments of Canada and Alberta in addition to the Athabasca Oil Sands Project (AOSP). Shell delivered a pioneering and competitive decarbonisation solution and the associated parties proved that CCS works. Dr Tucker added that establishing a strong regulatory framework is equally important. As such, stakeholders must consider a multitude of aspects such as ownership of the pore space, monitoring requirements, long-term liability, permanent closure planning, type of credit stream, and quantification schemes. On the latter, for example, the US has a 45Q tax credit that focuses on stored emissions. Meanwhile, in Alberta, it is centred on avoided emissions.
To ensure a smooth project delivery, the Alberta government created a coalition of industry, academics, governments, and non-governmental organisations that put forward more than 70 recommendations that were included in legislation and regulations. Among the regulatory successes included the CCS Statutes Amendment Act which modified and integrated five acts. Before Quest was introduced, ‘it was actually not clear who owned the pore space,’ however, the CCS Statutes Amendment Act provided greater clarity on essential issues such as long-term liability. Another crucial aspect of Quest’s ground-breaking endeavour was Shell and its partners’ relationship with the stakeholders. These included ‘everybody where the pipeline was going to go across, the people under whose land we were storing the CO2, and the people around the upgrader.’ Dr Tucker stated, ‘So once the project started construction, there were no surprises.’
On geology, Dr Tucker stressed the importance of selecting the right site. In Shell’s case, the company chose a site that had excellent geology including three well pads, and engaged the residence and communities along the pipeline to ensure their concerns were heard and addressed . Each pad has one injection well which features casings that have been cemented all the way to the surface to ensure there are no leak paths, a monitoring well, and multiple shallow underground wells; a fibre optic is placed outside the casing allowing for a new acoustic sensing for Shell’s seismic and monitoring process. Before developing a CCS facility, it is necessary to identify the critical components for measurement, monitoring, and verification (MMV). MMV plans should show that everything is contained and that there are no leakages. Shell updates its MMV plan for the Quest facility every three years on top of regular annual reports sent to the regulator which encompass the MMV results.
Regarding long-term liabilities, Dr Tucker stated that a state actor is in the best position to steward the carbon storage sites – expected to remain in storage for at least a millennium – as they have the longevity to do so. Canada’s CCS Act issued in 2010 reflected this notion. As part of the act, an operator can apply for a closure certification post-closure, hence, the government will take on the liability of the site and ownership for the CO2. Further, the Alberta government has the Post-Closure Stewardship Fund which aims to protect the state from any costs. Dr Tucker explained, ‘This is a fund that the operator pays per tonne into it and the fund allows the operator to build the government a quantity of money to pay for post-closure monitoring.’ He concluded his presentation by stipulating, ‘We believe CCS will be essential to helping society achieve net-zero emissions. Our ambition is to collaborate with governments, customers, and partners like the ACN to unlock the potential of CCS around the world and with public and private support for the next generation of CCS projects.’
During the Open Discussion session, Mr Sidemen put forward a question on the effectiveness of innovations and the Canadian government in reducing the effects of greenhouse gas (GHG). Dr Tucker believes that the actors have played an effective role considering how the regulations that arose from the partnership between the AOSP partners and the government made it possible to remove 8MT of CO2 from the atmosphere since 2015. Concerning the duration of obtaining a sequestration lease, Dr Tucker explained that it took six months to have it approved while approval for Directive 65 on CO2 disposal, which includes MMV requirements, took up to one year.
Dr Tucker also answered Mr Sidemen’s question concerning the requirements for containment in which there are several ways. Quest’s storage complex is based on a bowtie model in which the plume and the monitoring aspects create ‘the evidence in support that the CO2 will not leave our storage complex.’ There is also daily monitoring of Quest’s injection wells and facilities. Furthermore, each part of the chain is responsible for ensuring the containment, thus, Quest features many block valves on the pipeline if there were ever a leak. He underlined the need to demonstrate containment free of leaks as part of the monitoring process in addition to being a prerequisite for any GHG permit.
The biggest lesson taken from the Quest project was mostly on monitoring where some monitoring technologies were removed as the pilot project was under development. The company stopped shooting 3-dimentional timelapse surveys and opted for timelapse vertical seismic profiles which is more cost-effective to implement. Dr Tucker finds that, ultimately, being able to adapt and change over time is the most significant lesson gained from the Quest project experience.
To close the Open Discussion session, Mr Sidemen reiterated that the Quest facility ‘is considered one of the best examples of CCS development, deployment, and operation’ which has proven that CO2 storage for emissions reduction is technically and economically feasible. He believes that the project’s success can be replicated in Indonesia, Malaysia, and other ASEAN Member-States. By learning from Shell’s and the AOSP's pioneering work, stakeholders in Asia would gain insights into the necessary conditions to develop CCS.
Dr Han Phoumin, Senior Energy Economist, ERIA provided the Closing Remarks where he underscored the significance of government support and strong policy frameworks in facilitating Shell’s Quest endeavour and subsequently, improving Canada’s carbon price. Dr Phoumin encourages countries in Asia and ASEAN to continue accelerating the development of the Carbon Capture, Utilisation, And Storage (CCUS) value chain. Moreover, he calls for resolving the existing hurdles hampering the development of CCUS technology, including regulatory frameworks and permit licenses for CCUS safety.