How CO2 Leakage May Impact the Role of Geologic Carbon Storage in Climate Mitigation

Among CCUS technologies (Carbon Capture Utilization and Sequestration), geological storage of CO2 has a large potential to mitigate greenhouse gas emissions, but confidence in its deployment is often clouded by the possibility and cost of leakage. In this study, we took the Michigan sedimentary basin as an example to investigate the monetized risks associated with leakage, using the Risk Interference of Subsurface CO2 Storage (RISCS) model. The model accounts for spatial heterogeneity and variability of hydraulic properties of the subsurface system and permeability of potential leaking wells. In terms of costs, the model quantifies the financial consequences of CO2 escaping back to the atmosphere as well as the costs incurred if CO2 or brine leaks into overlying formations and interferes with other subsurface activities or resources. The monetized leakage risks derived from the RISCS model were then used to modify existing cost curves by shifting them upwards and changing their curvatures. The modified cost curves were used in the integrated assessment model - GCAM (Global Change Assessment Model), which provides policy-relevant results to help inform the potential role of CCUS in future energy systems when carbon mitigation targets and incentives are in place. The results showed that the extent of leakage risks has a significant effect on the extent of CCUS deployment. Under more stringent carbon mitigation policies such as a high carbon tax, higher leakage risks can be afforded and incorporating leakage risks will have a smaller impact on CCUS deployment. Alternatively, if the leakage risks were accounted for by charging a fixed premium, similar to how the risk of nuclear waste disposal is treated, the contribution of CCUS in mitigating climate change varies, depending on the value of the premium.