Annex 1
GAP ANALYSIS FOR REGULATIONS RELEVANT TO
CARBON DIOXIDE CAPTURE AND STORAGE IN THE UK
SUMMARY
This gap analysis is an initial investigation
to examine how existing regulations in the UK would cover carbon
dioxide capture and storage (CCS), and hence to identify issues
for and shortcomings in regulatory regimes. The objective is to
provide input to the Carbon Sequestration Leadership Forum's production
of guiding principles for regulatory frameworks for CCS. The Environment
Agency is the primary environmental regulator in the UK, and a
meeting was held with DTI, a range of relevant Environment Agency
(EA) staff and British Geological Survey on 31 Mar 2004. The
meeting provided the significant input to the gap analysis, and
helped identify and prioritise the issues that CCS raises for
the EA. A further meeting was held on 11 June 2004 with the DTI
Licensing and Consents Unit (LCU), which regulates onshore and
offshore oil and gas activity in the UK. Input was also received
from the Department of Environment, Food and Rural Affairs (DEFRA).
The following summarises the findings of this exercise.
Relevant Competent Authorities (CA) for regulating
CCS activities
The following authorities were identified as
those that would be relevant for regulating CCS in the UK:
— Environment Agency (EA) is the CA
for onshore Pollution Prevention and Control, also for the EU
Emissions Trading Scheme nd the Waste and Water Framework Directives
when they come into force.
— The Department of Trade and Industry
(Licensing and Consents Unit) is the CA for regulating onshore
and offshore oil and gas extraction activities, for offshore Pollution
Prevention and Control, and for hazards to oil and gas reservoirs.
— Local Authorities are CAs for the
Town & Country Planning system, covering planning permissions,
and the EA is a statutory consultee.
— The Health & Safety Executive
is CA for the Control of Major Accident Hazards regulation onshore
and for offshore Safety Case Regulation.
— The Maritime and Coastal Agency regulates
offshore shipping.
— The Pipeline Authority regulates
the construction, operation and maintenance of pipelines
Key gaps for the UK
— There is ambiguity over the nature
of CO2 and therefore if and how it is covered by the
existing legislatory and regulatory framework. In particular,
Defra will need to consider whether it is to be regarded as waste.
If it is, it could be liable for landfill tax if placed underground
onshore.
— The Government will also need to
consider short-term and long-term liability issues connected with
the storage of CO2. For example, who owns the storage
site? The government owns oil and gas geological structures, which
suggests ownership for EOR but not for storage in saline aquifers.
What happens to liability in the case of bankruptcy? Should there
be a requirement for CCS implementing companies to carry insurance
against liability issues? These issues should be resolvable, as
similar issues are dealt with by the oil and gas sector. In offshore
oil and gas, current regulation states that liability for residual
facilities after abandonment remains with the owner, not the state.
— There is a need for planning advice
or guidance for operators in selecting suitable CO2
storage sites. Similarly, criteria for local authorities in judging
and assessing planning applications will need to be developed
and agreed. In terms of site selection, a GIS record needs to
be established and maintained of likely CCS sites with information
on relevant features such as existing boreholes etc. This could
build on the DTI's register of boreholes and the BGS's incomplete
datasets.
— The Pollution Inventory Notice would
need to be amended to ensure that operators measure and report
(to the EA) the quantities of CO2 captured at source
and stored.
— There is a need to develop monitoring
and reporting guidelines for CCS under the EU Emissions Trading
Scheme. In collaboration with EC and EU stakeholders, DTI has
recently started work to scope the issues, and further work is
underway in the EC.
— A review of the requirements of Pollution
Prevention and Control (PPC) permits and PPC guidelines for operators
is needed so they cover CCS activities.
— Given that aquifers can spread across
land/sea boundaries, the traditional onshore/offshore jurisdictions
of Competent Authorities in the UK may need to be reconsidered
for the regulation of CCS.
— There is a need to check health and
safety regulations as they apply to public risks and operational
health and safety in the context of CCS.
In addition to the regulatory gaps, in terms
of environmental impact assessment, the EA identified that the
impacts of CO2 leakage, including ecosystem impacts
and the complex chemical reactions that can take place between
industrial contaminants and sediments and the surrounding ecological
envelope, is relatively poorly understood. The EA would want further
work in this area so as to inform environmental impact assessment.
UK REGULATORY GAP ANALYSIS TABLE
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| Event/Risk | Impact
| Owner | Existing Regulation/ Issues/Comments
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CAPTURE
Pre-construction planning
for CCS
| Safety Environment Planning Permitting |
Operator
Construction contractor |
—Planning applications for new developments are submitted to Local Authorities (LA). EA would be a statutory consultee for new energy intensive installations, pipelines and storage sites. Comments would be made on EA regulated issues, in particular emissions to air, land and water; water resources; water quality, waste management and flood risk.
—Operators apply to EA for Pollution Prevention and Control (PPC) permits. CO2 is not yet a prescribed pollutant under IPPC Directive. However, the disposal of scrubbing solvents would be covered. WFD is likely to impose tighter standards on levels of pollutants emitted to air, land and water. These will take over from the current levels set by PPC.
—Operator applies to EA for waste management consents. Defining CO2 as waste may be significant in that it could fall under waste regulations and taxes.
—For storage sites, operator should need to satisfy the Health & Safety Executive (HSE) that it is complying with Control of Major Accident Hazards (COMAH) Regulations, although CO2 is not explicitly listed in its schedule yet.
—Environment Impacts Assessments would have to be undertaken by operators in parallel to its planning application. This would form part of the Local Authorities' decision on the application.
—Likewise, the operator would need to carry out a Drainage Assessment for the LA to consider with the planning application.
—Operators would be required to carry out an Habitats Assessment, covering scope of the planning application, PPC application and Waste application.
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| Capture | Safety Environment
| Operator | —It may be necessary to amend the EA's Pollution Inventory (PI) Notice to instruct PPC regulated installations on how to report on the quantities of CO2 captured at source and stored. This data gets submitted to the European Commission and contributes to the UK National Greenhouse Gas Inventory, submitted under the UN Framework Convention on Climate Change.
—Guidelines for CCS will need to be written into the Monitoring and Reporting (M&R) guidelines for the EUETS. Meeting these standards will need to be a requirement of the EU ETS permit. The DTI/European Commission is undertaking work to develop interim M&R guidelines for CCS, pending the Special Report on CCS being prepared by the International Panel on Climate Change.
—Emissions data from the capture phase would need to be provided to the UK Greenhouse Gas inventory, using methodology guidelines reviewed under the UNFCCC Inventory Review process.
—Monitoring and reporting protocols for emissions to land and water may also need to be reviewed. This may require additional reporting for both the EA and operators to satisfy water quality and habitats regulation. Regulations already exist for monitoring environmental impacts in other countries, which could serve as examples.
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| Event/Risk | Impact
| Owner | Existing Regulation/ Issues/Comments
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TRANSPORT
Transport | Safety Environment Land access
| Operator Transport contractor | —CO2 transport most likely to be by pipeline, though it is possible that a demonstration project would employ road, rail and sea. The Maritime and Coastal Agency would be involved for shipping off the coast. EA and British Waterways would be involved for inland waterways.
—The Pipeline Authority would regulate operation/maintenance of pipelines.
—EA may need to extend monitoring to take into account possible contamination to land/water from non-corrosive materials used to make pipelines
—Precedents already exist of the EA being called in when a pipeline bursts and causes environmental damage. However, this is unlikely to happen in this case because CO2 is easily dispersed into the atmosphere.
—Emissions data from the transport phase would need to be provided to the UK Greenhouse Gas inventory, using methodology guidelines reviewed under the UNFCCC Inventory Review process
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| Event/Risk | Impact
| Owner | Existing Regulation/ Issues/Comments
|
|
INJECTION
Offshore Injection | Safety Environment
| Owner/operator of injection facility Operator?
| —Petroleum Act 1998—DTI LCU regulates all offshore activities related to oil and gas extraction, this covers EOR and storage. This includes protection of oil and gas reservoirs.
—Offshore Chemical Regulations 2002 covers EOR.
—HSE regulates offshore safety, using Safety Case Regulations. Formal risk analysis may be needed
—EA's role extends 6 miles offshore for fisheries; 3 miles offshore (or from the end of a pipe extending into controlled waters) for discharges from land based sources; and 1 nautical mile from land for the WFD.
—Given that aquifers can (and do) spread across land/sea boundaries, the traditional onshore/offshore jurisdictions of Competent Authorities in the UK may need to be reconsidered for the regulation of CCS. This would enable the EA to protect onshore water resources from possible migrations of CO2 injected into deep-saline aquifers offshore. Formal risk analysis may be needed
—Emissions data from offshore injection would need to be provided to the UK Greenhouse Gas inventory, using methodology guidelines reviewed under the UNFCCC Inventory Review process.
|
| Onshore injection | Safety Environment Land access
| Owner/operator of injection facility Operator?
| —Petroleum Act 1998—DTI LCU regulates all onshore activities related to oil and gas extraction, this covers EOR and storage. This includes protection of oil and gas reservoirs.
—Pollutants discharged during injection into the water column (even into non-permeable acquifers) need to be regulated. Standards would be set by WFD and activities could not compromise "good ecological status" given to water bodies. Formal risk analysis may be needed
—Criteria for assessing planning applications need to take into account the potential future uses (potable and non-potable) for aquifers. Formal risk analysis may be needed
—There is poor understanding of the potential chemical reactions between industrial contaminants and sediments. This leaves uncertainty over the environmental impacts of CO2 injection and makes risk assessments difficult to undertake.
—Chemical Regulations cover EOR.
—Emissions data from onshore injection would need to be provided to the UK Greenhouse Gas inventory, using methodology guidelines reviewed under the UNFCCC Inventory Review process
|
| Site selection and pre-closure storage |
Safety Environment Planning and permitting for onshore
Land access
| Owner/operator of injection facility Operator?
| —Natural gas is already stored underground and can therefore can provide a good analogue for CO2 storage. It would be useful to consider the EU natural gas storage standards and to contact the British Standards Institute.
—If CO2 a waste, the Landfill Directive would cover it. This would require an operator to state the capacity of a storage site and may be eligible for tax.
—Underground space is not a "common right", so who would own a storage site? Would this affect the liability of operators or their ability to get liability insurance?
—EA should develop planning guidelines for operators to advise on the suitability of storage sites. These need to include methodologies for demonstrating the integrity of sites using a combination of modelling and demonstration techniques.
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| Site selection and pre-closure storage (continued)
| | | —Government would need to establish an appropriate Competent Authority to set criteria for assessing planning applications for CO2 storage sites. These need to consider the full range of spatial, environmental, technological and safety considerations.
—There is a need for the Government or relevant Authority to establish and maintain a UK GIS database which maps storage sites so we know where they are. This would be important for abstraction licensing and other planning issues. The GIS database could build on the DTI register of boreholes and BGS datasets. However these are not comprehensive in their current form and do not include quality information about decommissioning.
—Abandonment of Offshore Installations (Petroleum Act 1998 Part IV). Requirement to prepare and agree plans with DTI LCU to secure and make safe old oil and gas installations, including those under seabed, including plugging of wells, thought to cover offshore CO2 injection and storage.
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| Event/Risk | Impact
| Owner | Existing Regulation/ Issues/Comments
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POST-CLOSURE
Post closure | Safety Environment Land access
| Short-medium term—Owner/operator of injection facility Operator?
Longer-term—State liability
| —Abandonment of Offshore Installations (Petroleum Act 1998 Part IV). DTI LCU regulation to ensure secure and safe old oil and gas installations, including those under seabed, thought to cover offshore CO2 injection and storage. Formal risk analysis may be needed.
—Long term liability for storage sites is a legal and regulatory issue that needs to be considered. Current regulations states that liability for offshore oil and gas residual facilities post-abandonment resides with owners (not state) although not yet tested in practice. Lessons could perhaps be learnt from storage of nuclear waste. The ownership, and therefore liability, of CO2 storage sites may change hands. It is important that there are mechanisms to track liability and ensure that consistent monitoring standards are maintained.
—Long-term monitoring protocols will need to be developed. Questions such as how long operators are required to monitor closed storage sites, appropriate sampling frequencies and what are acceptable leakage rates will need to be answered. Risk assessments should inform monitoring requirements. Any emissions data from the post-closure phase would need to be provided to the UK Greenhouse Gas inventory, using methodology guidelines reviewed under the UNFCCC Inventory Review process
—Maintenance standards for operators will need to be established and made a requirement of the PPC / EUETS permit. This will provide Competent Authorities with rights to enforce standards and seek remediation for pollution incidents or explosions.
—Where operators go bankrupt or cease to trade, liability for CO2 storage sites may need to fall to another party. How would liability be reassigned?
—There is a need to explore the role of liability insurance to protect operators against unforeseen losses through leakages and/or explosions, which would leave them financially exposed under the EU ETS.
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