De-risking the well permitting process for CCUS projects

Carbon capture and storage (CCUS) projects are essential to the energy transition and momentum is growing in recent years with hundreds of projects set to be in operation by 2030.  In GHD’s global research report SHOCKED, quantitative opinion research and qualitative interviews were conducted with energy leaders across the globe. Based on these surveys, three-fifths said their company is deploying CCUS projects, a critical technology for net-zero scenarios. These projects involve the geologic sequestration of carbon dioxide. The US Environmental Protection Agency (EPA) developed a permitting process in 2010 for geologic sequestration (Class VI) wells. The Class VI well permit application is a federal requirement designed to protect underground sources of drinking water.

The Class VI well-permitting application process can be a daunting one, with ten sections and hundreds of pages necessary for the final application document. So, what makes a good permit application? The more complete your application is when you submit, the less likely major revisions will be required and the quicker your project will be approved. Here are nine important factors to consider before you begin the application process that will reduce risk and help your project move forward:

Before the process begins
1. Ensure your site doesn’t have any fatal flaws
Some factors will stop a project in its track before it is even off the ground. A project sited too close to a major fault or a poor cement job in an offset well could be dealbreakers for a project to advance. Understanding and scanning for any immediate factors that will cause your application to be rejected will save your time and investment.

2. Complete the necessary studies in advance
Countless studies contribute to the permit application. The EPA has a checklist for Class VI well permit applications that includes the various studies and data requirements. You should complete these in advance, but in line with the permit application. If all studies have not been completed up front, there may be an opportunity to do them ad hoc, working with a consultant who has the appropriate capabilities.

3. Understand the heavy lift required
One fundamental part of the permit application is project management, given the significant time and resources required to undertake the application. It could take up to a year to complete the application requirements. If the process is not managed properly, some steps could be skipped, resulting in potential delays. Working with a consultant who understands the technical and regulatory aspects, coupled with a strong administration team and a quality management system will set you up for success.

During the permitting process
4. Leverage a strong subsurface team’s expertise
The largest portion of the permit is subsurface evaluations. Some of the technical sub-surface considerations that help form a solid application include evaluating well construction for wells within the area of review, identifying faults and fractures, defining site geochemistry and geomechanics, interpreting seismic data, and modeling the reservoirs. Using the same subsurface team to complete your permit application ensures the right information is included.

5. Engage stakeholders at the right time
Stakeholder engagement is a critical piece of any CCUS project and often one of the biggest roadblocks to advancing a project.  Engaging the public through authentic, honest conversations on the energy transition cost, the effects of inaction and the infrastructure needed to reduce emissions is extremely important. Stakeholders must understand the why’s and how’s, along with the benefits and risks. A two-month public comment period is required as part of the application, however, proactive, early engagement will help ensure a positive outcome. Each project is unique. Thoughtful consideration of the timing of public engagement is paramount. More information on securing social acceptance to succeed is available on GHD’s website.

6. Liaise with regulatory authorities early on
Work collaboratively with regulators throughout the permitting application process. Though only two states currently have the authority to administer these Class VI permits, it is expected that several other states will gain primacy over these regulations in the coming years. Keeping up with these developments will be necessary to ensure the correct regulatory agencies, either regional EPA or state level, are engaged. In either case, early engagement and regular check-ins with regulatory staff can help detect application issues and anticipate additional requirements, keeping your application on schedule. Working with a team that has strong existing relationships with regulators allows you to be proactive with communications.

7. Look for opportunities to work permitting streams in parallel
There is a sequence of various permits to undertake depending on where your project is located. It’s necessary to establish permitting pathways and understand the most efficient order to complete them. The California Environmental Quality Act and Environmental Impact Assessments are examples of possible additional permits required. There are also additional Class VI permit requirements based on region, such as the Louisiana House Bill No. 571 requiring an environmental analysis submitted to the conservation commissioner under the state Department of Natural Resources and a notification to local governments of permit filings. Having a consultant with a strong geographic presence across regions helps you understand regional permitting applications needed for the process.

8. Provide evidence of financial assurance
Robust cost estimating and economics modeling defines subsurface costs, CO2 capture and transportation costs and the project’s ability to pay royalties and returns to the operator. Importantly, are cost estimates and procedures appropriate? Part of the permit application involves proving financial assurance - having funds available to account for site remediation costs. Providing a bond to the regulator assures the site can be remediated to its original state in the event of a shutdown.

After the permit submission
9. Leave time and resources available
The permit isn’t complete once you click submit. The EPA requires time to review and approve applications. Even the strongest of applications likely won’t escape without comment.  Leave additional time and resources to respond to questions or comments, pull additional data, and engage with the public.

As the CCUS permitting process is relatively new, it is important to do things right to ensure regulatory processes do not become even more rigid. We can elevate this relatively new CCUS industry through productive pioneer projects. Protecting the reputation of CCUS means having successful projects; and the backbone of these successful projects is a strong permitting application.
For more information on how GHD can help you with a Class VI well permit application or any of the studies necessary to start the process, contact us.

Author:
Michelle Pittenger
Director of Subsurface
[email protected]

Printed in Issue 2, 2023 of Carbon Capture Magazine

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