Risk Management in Carbon Sequestration: Case Studies from Unconventional Reservoirs in the Appalachian Basin

Risk management has taken on renewed vigor since the economic crisis of the late 2000s. The resources of governments, individuals, and corporations are being stretched to a point where only the most promising projects move forward. Risk management is a crucial part of the decision making process, yet it remains a broad term that includes disciplines from engineering to finance. A collaborative effort will be necessary to ensure that the most auspicious and appropriate projects are the ones moving forward. Risk management can be quantified to an extent by comparing the likelihood of an instance with the result of consequence of the instance occurring. In this manner it is possible to assign risk factors to instances and ultimately, begin to associate monetary value to the instance. Carbon sequestration is an emerging field that has a number of unique challenges. Risk management and mitigation must be an integral part of the overall picture. This begins with the planning and design phase, continues through implementation and production, site closure, and does not cease until termination of liability. The ability of carbon sequestration projects to successfully assess, mitigate, and recover from leaks will be a decisive characteristic of overall success. The costs of mitigation and failure will need to be analyzed on a test level, but will still need to be reliable enough to extrapolate to a commercial level operation. This paper will build a risk management profile based on case studies and field tests in Tennessee and Virginia. These tests are scheduled to commence in late 2013 and consist of small-scale injection tests in unconventional storage reservoirs with an emphasis on enhanced coalbed methane (ECBM) recovery and enhanced gas recovery. The ultimate goal will be to provide a clear and concise direction to move carbon sequestration from the test phase to commercial scale. While it is necessary from a risk management perspective to analyze all risk points, the scope of this paper will focus on pre-injection risk assessment for carbon dioxide (CO2) leakage potential. Despite the differences between the two tests, CBM compared to shale among other differences, a framework for analysis and mitigation can be developed pertaining to leakage risk. The probability of each type of failure will be assessed and analyzed, and plans to mitigate or reduce these risks will be reviewed.