Calibrating and Quantifying Subsurface Risk in CO2 Storage Projects

Abstract This paper introduces a workflow for quantifying risks encountered in subsurface CO2 storage projects. While there are many qualitative techniques available for this purpose (including risk registers, bow-tie diagrams and risk matrices) the workflow described herein provides a quantitative, innovative approach to carbon storage risk analysis. The techniques combined for this purpose include Monte Carlo simulation, aggregation, and calibration to known frequencies. The workflow consists of three steps. Step One is to define a list of potential events and their annual chance of occurrence. Step Two is to define the scale (from incidental to catastrophic) and the corresponding range of monetary impact for each event. Step Three is to conduct a Monte Carlo simulation that aggregates all potential events and their monetary impacts on an annual basis. By extending this process over the life of the project, we can create a robust chance-weighted project risk profile. This profile can be displayed in terms of annual or cumulative risk and reveals periods of peak risk (such as near the end of injection) where exposure to events is greatest. Although any single event may have a low chance of occurring in a given year, when we consider a project life of many decades, low-probability occurrences become more likely, demanding our attention and action. This quantitative approach informs the design of Measurement, Monitoring and Validation (MMV) techniques that are essential for detecting early warning signs of potential events and providing relevant data to update mitigation and response strategies. The approach also has utility in the insurance sector, where risk quantification is essential to crafting policies that shield companies from liability. Given the implications of a breach of storage security, the process described herein should be embraced as an essential component of project management.