Carbon Credit Trading Research Articles

Visualizing Energy's Future: Heavy Oil, Carbon Credit Trading, Resurgence of Megaprojects

More than 8,000 professionals expected in San Antonio, Texas, 24–27 September for the 2006 SPE Annual Technical Conference and Exhibition (ATCE) will get a comprehensive look into the future. What outlook is emerging? What are the causes and effects? Technical presentations will foretell the future of drilling and completions; projects, facilities, and construction; production and operations; reservoir description and dynamics; management and information; and health, safety, and environment. The following six presentations on imminent industry developments have been selected as some of the best papers and most representative of the industry future that is already taking shape. Elements of Well Integrity "At 0400 hours each morning, a computer program automatically starts and scans all pressure, well-test, and other data, and generates a ‘Well Integrity Diagnostic Report,’ "say the authors of paper SPE 102524. Managers accountable for particular areas, lead operators, and other responsible individuals are kept informed of well status through another report generated each morning. This "Area Management Report" includes sections listing wells with pressure greater than the maximum allowable working pressure, for example, or wells needing safety valves. It also provides Key Performance Indicators such as "Put on Production" times for new wells and water-injection targets. Cradle-to-grave well-integrity management (WIM) may be complex, but implementation of WIM initiatives are being proved attainable by BP at Prudhoe Bay, Alaska. The paper's authors discuss how a WIM system at Prudhoe Bay has been evolving since field startup in 1977 (Fig. 1). Because some wells have a lifetime of 100 years that entails sidetracks and a final abandonment that is expected to last forever, integrity management can be a daunting task. It can also present potential conflicts with production delivery contracts because of resources being diverted to well mechanical evaluations and wells being shut in. Also, interventions associated with mechanical anomalies that do not affect production may receive a lower priority and lead to backlogs of wells with anomalies. BP manages this integrity-management task in Alaska using a WIM system consisting of seven components—accountability and responsibility, well-operating procedures, well-intervention procedures, a tubing-and-casing-integrity program (Fig. 2), wellhead and tree maintenance, safety-valve maintenance, and knowledge of standards. The focus of this paper is on the well-operations and -interventions phases. The authors review the rationale behind implementation of the WIM system in Prudhoe Bay, pointing out that engineering aspects of well integrity are receiving increasing attention; the issue of sustained casing pressure is also shaping current well-integrity practices and lessons learned. The authors review well integrity as defined in the NORSOK Standard D-010 (developed by the Norwegian petroleum industry) with its effective summary of the facets of "application of technical, operational, and organizational solutions to reduce risk of uncontrolled release of formation fluids throughout the life cycle of a well." According to the authors, the rigorous conditions in Prudhoe Bay offered an excellent opportunity to institute a WIM program that is clearly not just a paper exercise. The WIM system daily addresses BP's 1,330 wells on the North Slope of Alaska. The field includes 416 gas lift, 591 natural flow, and 323 injector wells. Daily monitoring and reporting combine BP's needs with those of the primary state regulatory agency, the Alaska Oil and Gas Conservation Commission; address local events; and chronicle implemented solutions.

Land area for establishing biofuel plantations

Traditional household fuels involving crop residue and animal dung have severe adverse impacts on soil quality, air quality, water quality, climate and human health. The use of crop residues for fuel and non-use of animal dung for manure have exacerbated the problem of soil and environmental degradation. The attendant decline in soil quality, reduction in agronomic productivity and environment moderation capacity are biophysical processes driven by socio-economic and political forces. The problem is widespread in developing countries where extractive farming practices of mining soil fertility are widely used by resource-poor farmers. Biomass productivity of these degraded soils/wasteland is too low and uneconomic. With rapid increase in population in Asia and Africa, the per capita arable land area is decreasing and is already 0.1 ha in several densely populated countries, and arable land cannot be converted to biofuel plantations. Establishing biofuel plantations ( e.g. , Jatropha, Pongamia) on degraded soils can be a win-win strategy provided that these soils are adequately restored and specific problems (e.g., nutrient and water imbalance, loss of topsoil, shallow rooting depth, drought stress, salinization, compaction, crusting) are alleviated. Another strategy is to adopt practices of land-saving technologies, such as agricultural intensification on prime agricultural lands to improve crop yields, so that surplus land can be converted to biofuel plantations. Production of biofuels can reduce net emissions of greenhouse gases into the atmosphere and advance food security, while achieving energy security, improving environment quality and sequestering carbon in biota and soil. The global potential for soil carbon sequestration is 0.7 to 1.5 Pg C/yr, which can offset 20 to 40 % of the annual increase in atmospheric concentration of CO 2 . Trading carbon credits under the CDM or World Bank funds can provide another source of income for resource-poor farmers. The sustainability of a biofuel production system must be assessed through evaluation of the ecosystem carbon budget, accounting for carbon-based inputs in all on-farm operations and industrial processes.

Perspectives of Stirling engines use for distributed generation in Brazil

This work presents an evaluation of the development of Stirling engines and the advantages and the main obstacles against their widespread introduction in energy-generation practices. It also shows how the economic, technical and environmental characteristics presented by these engines support their insertion in the energy sector. An economic and environmental evaluation of this technology aiming at introducing it in the Brazilian energy scenario is also presented. Changes in legislation, financing and technology within the next few years must encourage the implementation of alternative generation technologies that present lower environmental impacts. Also, tendencies and economical studies are presented, trying to find the optimal condition for this technology to be feasible. The option regarding the trading of carbon credits when biomass is used as fuel is analyzed as well.

Improvements in financing for sustainability in solid waste management

Contributing elements toward the development of a sustainable solid waste management system in Tucumán, Argentina, are described. Changes in the working environment for the wastepickers have been instrumental in providing a livable wage and diminished health and environmental risks to the wastepickers and to neighboring residents. Income levels to the wastepickers are now approximately 1.75 times minimum wages in Tucumán and are being driven almost entirely by the recycling of plastics. Educational improvements in Tucumán, which are assisting sustainability of the solid waste system, are being significantly improved by the operation of a pilot scale project, by demonstrating opportunities to government officials and school children. Improved financial sustainability to the solid waste management system is also potentially available from carbon credit trading opportunities, presenting the opportunity for 1.2 times the income available from recycling efforts.

Towards a Shared Vision

Lewis and Clark were, arguably, the first official Federal scientists. It was fitting, therefore, that the Heads of three science-based agencies (Chief Dale Bosworth, US Department of Agriculture Forest Service; Director Charles G Groat, US Geological Survey [USGS]; and Administrator Conrad C Lautenbacher, National Oceanic and Atmospheric Administration [NOAA]) addressed the ESA membership during a Special Plenary session at this year's Annual Meeting in Portland, Oregon, to consider the role of science in the Federal Government. As I sat in the audience, I realized I was hearing the same message about ecological science and its influence on decision making from all three speakers. More importantly, the message sounded as though it had sprung from the recently published Ecological Visions report, “Ecological Science and Sustainability for a Crowded Planet: 21st Century Vision and Action Plan for the Ecological Society of America” (Science 2004; 304: 1251–52). So, how does the Visions Committee report align with what I heard? Vision 1: Informing Decisions with Ecological Knowledge. There was a clear recognition that ecosystems are complex and must be considered at multiple scales. For NOAA, this recognition has led to a matrix organizational approach that brings multiple disciplines together around goals. This change is clearly forcing the agency to think and act in an integrated manner. The direct result can be seen in the creation of the White Water to Blue Water Initiative, which Administrator Lautenbacher described as “an international effort to promote the practice of integrated watershed and marine ecosystem-based management in support of sustainable development”. Chief Bosworth challenged the Forest Service to “…focus on entire ecosystems…and take an ecosystem-based, landscape-scale approach to management”, while at the same time recognizing the societal context for those ecosystems. Vision 2: Advance Innovative and Anticipatory Research. The Heads of both USGS and NOAA highlighted the new technological tools being made available to enhance ecosystem monitoring and to support ecological forecasting – another ESA Visions priority. From seismic monitoring to global observatories, these agencies are responding to the need for timely data about changing ecosystem conditions. Emphasis was also placed on long-term studies that are the result of deliberate investment by the Federal agencies in locations such as the Hubbard Brook and HJ Andrews Experimental Forests, and Everglades National Park. These locations, and other experimental forests and rangelands, have the advantage of a “protected” status and can form the core of a national long-term network for ecological science. Another innovation spotlighted by both the Ecological Visions report and the speakers is the need for a science that supports ecosystem valuation. This concept has been put into practice in the marketplace through carbon credit trading, but are there other opportunities for environmental credit trading that consider water, biodiversity, and pollinators, to name a few? The integration of ecology and economics is not new, but widespread application is. Vision 3: Stimulate Cultural Changes for a Forward-Looking and International Ecology. The Visions report challenges ecologists to get out of the lab and to engage other scientists and practitioners in new and innovative partnerships. The report also identifies the need for the public to better understand and internalize the value of ecosystems in their daily lives. All three speakers echoed that theme and indicated that a cultural change is occurring within their agencies, to bridge the gap between research and management – with some pain, but a lot of promise. Equally important was the challenge to be more effective communicators. The Federal plenary speakers stressed the importance of translating science into information that could be put into the hands of the people who use it. As Director Groat said, “Both scientists and managers need to learn each other's language and culture…we must demonstrate the value that science adds by communicating effectively”. The ability of scientists to convey their findings in multiple venues is one of our greatest challenges, and one that the ecological community is addressing in a number of ways, through initiatives such as the Aldo Leopold Leadership Program and communications training workshops at ESA Annual Meetings. As the speakers stated, the users are ready to listen if we can get the scientists to the table. I believe that the remarkable alignment between the main ideas expressed in the Ecological Visions report and the themes explored by Chief Bosworth, Director Groat, and Administrator Lautenbacher is not a coincidence. This is a clear indication of the maturation of ecological science and the enormous need for decision makers to integrate sound science into their thinking. The agencies are willing partners in bringing ecological science to natural resource decision making. This ecologist is excited! Ann M Bartuska, Deputy Chief, Research and Development, USDA Forest Service

THE ECONOMICS OF GEOLOGICAL STORAGE OF CO2 IN AUSTRALIA

The economics of the storage of CO2 in underground reservoirs in Australia have been analysed as part of the Australian Petroleum Cooperative Research Centre’s GEODISC program. The economic analyses in the paper are based on cost estimates generated by a CO2 storage technical/economic model developed at the beginning of the GEODISC project. The estimates rely on data concerning the characteristics of geological reservoirs in Australia. The uncertainties involved in estimating the costs of such projects are discussed and the economics of storing CO2 for a range of CO2 sources and potential storage sites across Australia are presented.The key elements of the CO2 storage process and the methods involved in estimating the costs of CO2 storage are described and the CO2 storage costs for a hypothetical, but representative storage project in Australia are derived. The effects of uncertainties inherent in estimating the costs of storing CO2 are shown.The analyses show that the costs are particularly sensitive to parameters such as the CO2 flow rate, the distance between the source and the storage site, the physical properties of the reservoir and the market prices of equipment and services. Therefore, variations in any one of these inputs can lead to significant variation in the costs of CO2 storage. Allowing for reasonable variations in all the inputs together in a Monte Carlo simulation of any particular site, then a large range of total CO2 storage costs is possible. The effect of uncertainty for the hypothetical representative storage site is illustrated.The impact of storing other gases together with CO2 is analysed. These gases include methane, hydrogen sulphide, nitrogen, nitrous oxides and oxides of sulphur, all of which potentially could be captured together with CO2. The effect on storage costs when varying quantities of other gases are injected with the CO2 is shown.Based on the CO2 storage cost estimates and the published costs capturing CO2 from industrial processes, the economics are shown of combined capture and storage (that is, the sequestration process as a whole) for the major CO2 generation sites across Australia combined with potential compatible storage sites. Examples are shown of the volumes of CO2 that could be sequestered economically depending on the level of the carbon credit in a hypothetical carbon credit trading regime. Purely as an illustration, assuming hypothetically that a real carbon credit of US$50 per tonne applied and that the cost of capture was US$40 per tonne across the board, then preliminary indications are that, ignoring tax considerations, it would be economic to store about 180 million tonnes per year of CO2. This is equivalent to about 70% of the annual CO2 emissions from stationary sources in Australia in 2000.

The long way from Kyoto to Marrakesh: Implications of the Kyoto Protocol negotiations for global ecology

AbstractThe Sixth and Seventh Conference of the Parties (COP 6 and 7) at The Hague, Bonn and Marrakesh came to a final Agreement on the Kyoto Protocol, which is thus ready for ratification by the individual nations. The Agreement was only achieved by allowing countries to offset their fossil fuel emission targets (on average 95% of the 1990 emissions) by increasing biological carbon sequestration, and by trading carbon credits. Activities that would count as increasing biological carbon sequestration include afforestation and reforestation, and changes in management of agriculture and forestry. According to the Agreement reached in Marrakesh, biological carbon sequestration may reach an offset of up to 80% of the required reduction in fossil fuel emissions (4% of the 5% reduction commitment). We explain why the allowable offset rose as high during the course of the negotiations. It is highlighted that major unintended consequences may be a result of the policy as it stands in the Marrakesh Accord. Major losses of biodiversity and primary forest are expected. We present scientific concerns regarding verification, which lead to scientific doubts that the practices encouraged by the Agreement can actually increase sequestration under a full carbon accounting scheme. We explain that there is a ‘win‐win’ option that would protect high carbon pools and biodiversity in an economically efficient way. But, this is not supported by the Agreement. Despite the very positive signal that most nations of the United Nations will devote major efforts towards climate protection, there remains a most urgent need to develop additional rules to avoid unintended outcomes, and to promote the ‘win‐win’ options that we explain.