LIABILITY

What seems to be the problem?

Who has the financial liability for the CO2 -storages in the short and long term?

The liability issue concerns financial responsibility for stored CO2 in the short and long term. IPCC estimates that more than 99% of the stored CO2 is "very likely" to remain in storage after 100 years and that over 99% of the stored CO2 is "likely" to remain in storage after 1000 years. (IPCC Special Report on CCS, 2005, p. 246)

In spite of this assessment leakages and accidents can happen and these must be covered financially by the store manager. The history of technology abounds with events that could not happen did happen anyway. The timescale of climate problems and the durability of storage go far beyond a traditional business perspective, which raises the question of long-term liability for storage maintenance, monitoring and coverage when leakages occur. The future store operators will be financially motivated to pass on liabilities to public authorities as soon as possible or as soon as the stores are full. If this happens, future generations of taxpayers will have to pay all costs that may arise in relation to stores.

Although the security issue and the time horizon is not readily comparable to that of disposal of radioactive waste from nuclear power plants both of these large scale technologies assume that societies will remain stable for thousands of years at a high technical and financial level to ensure that monitoring and possible actions can take place in case of leakages or accidents and so that future generations is guarded against grave dangers.

How does the EU tackle the issue of storage liability ?

Storage liability in the EU

The EU Directive on the geological storage of carbon dioxide stipulates that installing, operating and monitoring of CO2-stores is the task of private operators (predominantly large energy companies).

The private operators will be responsible for the stored CO2 until stores after approval by the competent authority i.e. the governments in each of the member states can be shut down safely.

It is stated in the Directive in Article 18 about the Transfer of responsibility:

“ Transfer of responsibility

1. Where a storage site has been closed pursuant to points (a)or (b) of Article 17(1), all legal obligations relating to monitoring and corrective measures pursuant to the requirements laid down in this Directive, the surrender of allowances in the event of leakages pursuant to Directive 2003/87/EC and preventive and remedial action pursuant to Articles 5(1) and 6(1) of Directive2004/35/EC, shall be transferred to the competent authority on its own initiative or upon request from the operator, if the following conditions are met:

(a) all available evidence indicates that the stored CO2 will be completely and permanently contained;

(b) a minimum period, to be determined by the competent authority has elapsed. This minimum period shall be no shorter than 20 years, unless the competent authority is convinced that the criterion referred to in point (a) is complied with before the end of that period;

(c) the financial obligations referred to in Article 20 have been fulfilled;(d) the site has been sealed and the injection facilities have been removed. …

2. The operator shall prepare a report documenting that the condition referred to in paragraph 1(a) has been met and shall submit it to the competent authority for the latter to approve the transfer of responsibility. This report shall demonstrate, at least:

(a) the conformity of the actual behaviour of the injected CO2 with the modelled behaviour;

(b) the absence of any detectable leakage;

(c) that the storage site is evolving towards a situation of long-term stability

8. Where a storage site has been closed pursuant to Article 17(1)(c), transfer of responsibility shall be deemed to take place if and when all available evidence indicates that the stored CO2 will be completely and permanently contained, and after the site has been sealed and the injection facilities have been removed.“

What does this mean?

It means that operators are responsible as long as stores are in operation. After shutdown, which includes sealing and removal of injection equipment, the public takes over responsibility for closed stores. How long responsibility remains with the operators depends on the storage capacity and quantities of captured CO2 from associated point sources. The liability period of the private operator will probably typically be a couple of decades equalling the 20 years minimum mentioned in the Directive after which the government takes over all liabilities. How much this is going to cost taxpayers in the future is impossible to say. It depends on the extent of leakages and the future price of CO2.

Gary Shaffer

In July 2010, Professor Gary Shaffer, Niels Bohr Institute in Copenhagen, published an article that attracted much attention because it presented a critical assessment whether the stored CO2 would remain sufficiently safe in the storage in the very long term. If more than 1% leaks from the storage in the course of one thousand years, storing CO2 will not have a positive effect compared to a low emission scenario without CCS.

"The dangers of carbon sequestration are real and the development of this technique should not be used as an argument for continued high fossil fuel emissions. On the contrary, we should greatly limit CO2 emissions in our time to reduce the need for massive carbon sequestration and thus reduce unwanted consequences and burdens over many future generations from the leakage of sequestered CO2" said Gary Shaffer (Source: Sydney Morning Herald)

Gary Shaffer: “Long-term effectiveness and consequences of carbon dioxide sequestration”, published in Nature Geosciences, 27 June 2010.

JJ Dooley: Response to: “Long-term effectiveness and consequences of carbon dioxide sequestration” by Gary Shaffer; published by Pacific Northwest National Laboratory, US Department of Energy; July 2010

Dooley’s reply largely rejects Shaffer's reasoning.

NOAH's position on storage liability