Liability Insurance Bailouts Needed For Carbon Capture and Sequestration (CCS) Industry?


Elephant Room, Image credit:Flickr,Foole's Photostream

The 'Elephant in the other room,' according to the blog called ClimateIntel, is long-term liability insurance needed for Carbon Capture and Sequestration (CCS) projects. (ClimateIntel offers good background posts on this topic.)

Long, complex, boring story made short: here's the deal. For CCS projects in the USA, we're either talking about statutory protection from long term liability suits following a Big Leak ; or, Congress will somehow need to cover the first costs of insurance for the CCS industry as the technology goes through a shake-down period (hopefully not ending in a C02 blow-out or carbonic acid intrusion into municipal wells or surface waters!).

EPA’s failure to resolve long-term liability issues at CCS facilities remains a significant weakness in the proposed framework. While underground injection of carbon dioxide has been used for decades in oil and gas production, the science supporting long-term geologic sequestration of large quantities of carbon dioxide is still in the demonstration phase. CCS projects face lingering uncertainties associated with unintended release, migration or chemical reaction of substances injected into geologic formations. Managing these risks facilitates commercialization of CCS.

Possible Scenarios?
The utility industry will need to lobby Congress for the needed statutory authority for EPA to manage the risk, and/or to be exempted from the need for insurance. It's already such an expensive technology that insurance could be the sinker collar.

Alternatively, CCS entrepreneurs might try to outsource field injection trials to places where long term liability insurance requirements are nominal to non-existent.

Yo...Alberta! Yous guys require long-term liability insurance, hey?

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Tags: Clean Coal

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