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Risk assessment and risk management associated with Carbon Capture and Storage (CCS) - Literature review Example

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Presently, the greatest environmental threat facing the globe is climate change (‘‘Carbon capture and storage in the light of circulation economics", 2008, p. 115). Climate change is caused by increased levels of greenhouse gases sin the atmosphere with carbon dioxide being the significant gas causing global warming…
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Risk assessment and risk management associated with Carbon Capture and Storage (CCS)
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?RISK ASSESSMENT AND RISK MANAGEMENT ASSOCIATED WITH CARBON CAPTURE AND STORAGE (CCS) s 0 Introduction Presently, the greatest environmental threat facing the globe is climate change (‘‘Carbon capture and storage in the light of circulation economics", 2008, p. 115). Climate change is caused by increased levels of greenhouse gases sin the atmosphere with carbon dioxide being the significant gas causing global warming. This gas is produced from industries, vehicle emissions and households. Reduction in the amount of carbon dioxide released from industries would lead to significant cuts in the levels of carbon dioxide in the atmosphere thereby helping to control global warming and save the environment from the devastating impacts of global warming. One option explored in reducing the industrial carbon emission is the carbon capture and sequestration (CCS) (Gerard and Wilson, 2009, p. 1097). They describe carbon capture and sequestration as the process where carbon will be captured from industrial sources and it’s ultimately disposal it by storing it in underground geologic reservoirs rather than releasing it to the atmosphere (Stephens, 2006, p. 4). Carbon capture and storage is an attractive option as it will allow industries to continue using fossil fuels as it helps to stabilize the atmospheric levels of carbon emissions (Newmark, Friedmann & Carroll, 2010, p. 651). Moreover, CCS is both commercially viable and technologically feasible. Although CCS remains a viable option in helping stabilize the atmospheric carbon levels, it still has to demonstrate it is a feasible option in terms of cost and harmlessness to the environment ("Warning on carbon capture liability", 2007, p. 8). This means that it is possible to understand the risks associated with this technology and diverse strategies to manage this risk with include risks to the environment and human health and safety (Farret et al., 2011, p. 4193). The technology of carbon capture and storage is a system with four interrelated elements which should be studied in understanding the risks of the technology. These elements include capture, transport, injection and storage (Farret et al., 2011, p. 4193). In the CCS industry, the public, regulatory agencies, customers, governments and in-plant personnel require that companies must demonstrate a commitment to control possibilities of incidents and hazards by conducting environmental, health and health related risks assessment. There are several methods that can be used in analysing risks involved such as Fault Tree Analysis technique (FTA), Life Cycle Assessment, Environmental Impact Assessment (EIA) among others. Some of this techniques have been used other industries such as nuclear, chemical and oil and gas industries but have not been incorporated in analysing the risks associated with CCS although the risks are similar.FTA is an example of these methodologies which have successfully been used in risks assessment in nuclear and chemical industries although it has not been incorporated in CCS. Purpose of the Study This paper will review available literature addressing the risks assessment sand risk management of carbon capture and storage. The main aim of this study is to quantify the main risks associated with CCS project by the use of FTA method. This will consequently be used by the insurance companies to calculate the probability of an undesired event, identify safety critical functions/components/phases and assess the effects of design changes. This will in-turn be used to enable them adjust their present terms and premium rates when insuring CCS projects against risks. Moreover, the findings of this paper will help regulators and policy makers to better tailor the legislations to address the risks associated with CCS. 2.0 Qualitative Risk Assessment "Environmental Risk Assessment’’ (2004, p. 1) explains that risk has varying meanings depending on different contexts. To a common man, risks imply the concept of probability and severity of an outcome. The article further expounds that people do not view death from the impact of asteroid as risky since the likelihood of such event occurrence is considered as very small. However, people consider death and injury from criminal related activities as very risky and are widely feared since the occurrence of these events is frequent as reported in the media. Risks involve both adverse results and uncertainty of their occurrence (‘‘Environmental Risk Assessment’’, 2004, p. 2). Risk changes as more information becomes more specific where as more information on a certain event becomes clearer, the risk associated with the event may increase or reduce (Diakaki, Grigoroudis and Stabouli, 2006, p. 128). The term risk is used in everyday conversation to mean the chance of a disaster (‘‘Environmental Risk Assessment’’, 2004, p. 2). When the term is applied in risk assessment process; it implies a more specific definition. The widely accepted definition of risks is a combination of chance, or frequency of occurrence of a defined hazard and the magnitude of the consequences of the event (Schwartz, Bellinger & Glass, 2011, p. 88). On the other hand, a hazard is described as a potential to cause ham. It is also defined as a situation or property that in specific circumstances could lead to harm. Risk assessment is used in a variety of professions and in environmental management it is used in examining environmental problems. Problems such as environmental contamination due to introduction of toxic substances in the environment are complex situations that results in worldwide effects (‘‘Environmental Risk Assessment’’, 2004, p. 2). For a long time environmental risk assessment methodologies have emphasised examination of the impacts of a problem to the health of humans but more efforts are being made to ensure that risk assessments methodologies assesses the ecological effects of any undertaking. Environmental risk assessment evaluates the chances that undesirable effects occur on the environment or the human health as a result of exposure to chemical, biological or physical agents. The evaluation requires an understanding of the undesirable impacts that could result from exposure to chemical agents. In addition, the evaluation requires the knowledge of the duration and intensity required to cause adverse impacts on the environment sand the population (‘‘Environmental Risk Assessment’’, 2004, p. 2). Risk assessment is a necessary tool for organizing, structure and compiling scientific information to enhance the ability of identifying hazardous situations, predict potential problems and set out priorities. It also helps provide a foundation for regulatory control and identification of corrective actions (‘‘Environmental Risk Assessment’’, 2004, p. 2). According to Environmental Risk Assessment (2004, p. 3), the basic principle in risk assessment holds that some risks can be tolerated given that nothing is usually wholly safe. Risk assessment process involves a series of actions starting from hazard identification, exposures assessment, dose-response assessment and risk characterization. Hazard identification entails identifying the potential adverse impacts that a substance has a capacity to cause (Environmental Risk Assessment, 2004, p. 2). Exposure assessment involves an estimation of the concentrations which humans such as workers and consumers, different parts of the environment are or could be exposed. Dose-response assessment involves analysis of the relationship between the level of exposure to a given substance, the frequency and the impact of the effect (White, 2000, p. 17). Risk characterization is described as an estimation of the frequency and severity of an adverse effect which is likely to happen to the human population or part of the environment following actual or envisaged exposure to substance. Risk characterization is simply defined as the quantification of the probable occurrence of a hazard following exposure to a particular substance (Environmental Risk Assessment, 2004, p. 2). As described earlier, carbon capture and storage is a system having four elements; capture transport, injection and storage stages (Farret et al., 2011, p. 4194). Capture stage involves tapping carbon produced from industrial facilities to ensure that these emissions are not released into the atmosphere. On the other hand, in the transportation stage, carbon dioxide is condensed or compressed and carried by a pipe to the storage area where it will be injected. When using a pipe to transport the gas, valves, transitional storage and re-compression stages could be used to operate the pipe or to ensure the safety of the system (Farret et al., 2011, p. 4194). Transportation is followed by transportation and Farret et al. (2011, p. 4194) explains that the study of the injection stage is important as it joins the injection well to the main tube used to transport the gas. When drilling a well, there is a particular zone within the rock which appears known as excavation damaged zone (EDZ) which may act a leakage path in future in addition to the gates used in the transportation pipe (Amann, et. al, 2009, p. 76). The storage stage is the last component of CCS system and the main issue that should be considered here is on long-term development of the storage reservoir. This takes into assesses the feasibility in using this process and assesses the risks (Farret et al., 2011, p. 4194). This brings the need to understand the type of system used sin CCS as this helps predicts the behaviour of the system. Kirchsteiger (1999, p. 400) describes deterministic system as one which is predictable since they follow a well known rule. In a deterministic system the components of the system can be described at any time in the future and the past. The other type of systems is known as probabilistic system which has some degree of uncertainty in telling how they will behave in future (Glessner, & Young, 2008, p. 36). A CCS is a probabilistic since the behaviour of the system cannot be clearly described and this can only be predicted through the use past knowledge or experience (Kirchsteiger (1999, p. 400). The other type of systems is known as chaotic systems which are hard to predict since they depend on small variations in the current state. Risks arising from systems failure to humans and the environment result from external forces acting on the system, resisting its goals and trying to divert the system from its objective (Ondrey, 2011, p. 15). Risk analysis from a system involves defining what can go wrong, how likely this event can occur and its consequences. The biggest risks identified sin geological storage such the one used in CCS and nuclear and chemical waste management is leakage. Leakage can occur because of poor quality or aging injection well completion (DiCosmo, 2011). Leakage can also happen in abandoned wells or due inadequate caprock characterization. Moreover, inconsistent and inadequate monitoring can also lead to risks leakage (Bode, & Jung, 2006, p. 173). In addition to the potential risks of leakage of carbon dioxide from the geologic reservoirs therefore making CCS not achieve the envisioned role of atmospheric greenhouse gases stabilization, (Gerard and Wilson, 2009, p. 1099) describe other risks to the environment. Given the volume and the properties of carbon dioxide, the risks associated with CCS will vary depending with the stage of CCS and the local and regional geology. Rootzen, Kjarstad and Johnsson (2011, p. 23) observes that the risks of CCS may reduce with passage of time. Large surface leakages of carbon dioxide can result in direct risks to the health of humans, both through immediate deaths resulting from asphyxiation or impacts of prolonged exposure to high concentrations of carbon dioxide (Graus et al, 2011, p. 790). Seepage of carbon dioxide over a long period of time into the subsurface would result in devastating harm to the fauna and flora of the area (Gerard and Wilson, 2009, p. 10100). Consequently, this could disrupt the local ecology and agriculture. This is because living organisms play a critical role in breaking down the organic materials to provide the required nutrients for plant growth. However, these microorganisms require oxygen for respiration as they are aerobic. The other potential risks associated with carbon capture and storage is that the although the gas can stay in the reservoir for a long time it has a potential of displacing saline water into the potable groundwater aquifers (Gerard and Wilson, 2009, p. 1099). Moreover, injecting of carbon dioxide into geologic reservoirs can trigger ground heave and seismic events. Gerard and Wilson (2009, p. 1099) observe that the probability of the risks described occurring as low, however, they assert that managing CCS injection to guarantee human and ecological safety is critical for the successful program success. 3.0 Addressing Specific Liability Issues 3.1 Liability for a release of stored CO2 under the ETS and CCS Directives Wilson and Klass (2009, p. 4575) notes that creating a liability regime for CCS must strike a balance between risks and benefits of technology and this could influence the deployment of CCS. They argue that the certainty, clarity and extent of legal liability could affect technology adoption, or specifically new technology deployment. Companies which may be considering adoption of a new technology may be deterred by uncertain or potentially unlimited liabilities associated with technological problems new to industrial scale (Wilson and Klass, 2009, p. 4575). Secure liability terms as a guide for company investments as well as those of the shareholders. Legal liability is critical for the government and regulatory authorities to promote adoption of the CCS technology as it helps ensure a party with the highest information on the risks and solutions to those risks take the appropriate measures to avoid adverse consequences (Selmer-Oslen, 2006, p. 13). In addition, transparent and clear liability system enhances the ability of the public to understand the risks and have confidence that these risks to the human health and the surrounding environment are being actively managed and in case an accident happens, it will be effectively remediated and they will be adequately compensated (Selmer-Oslen, 2006, p. 16). Under the CSC directives and ETS, the liabilities associated with carbon exposure deal with the impacts of carbon to climate change in case its leaks to the surface. This therefore calls for the companies to continuously monitor and evaluate the storage site to ensure that they take appropriate actions to prevent leakage of carbon throughout the system (Haan-Kamminga, Roggenkamp and Woerdman, 2010, p. 240). This liabilities deal with the measures that should be adopted by the companies to protect human health and the protection of the environment. Currently, regulations for underground injection only address the operational phase and fail to specify future monitoring and risk management issues (Wilson and Gerard, 2007, p. 1012). They explain that when the storage site gets to its storage capacity, it is critical to implement to close up the site and monitor the site to ensure that the material injected remains there. According to Figueredo et al. (n.d, p. 1) liability for carbon capture and storage can be looked from the operational liability and post-injection liability. At the operational stage, liability includes the environmental, health and safety risks associated involved in the capture of carbon, transportation, and injection. Post-injection liability in the CCS refers to the liability that comes up the in the storage of carbon after its injection into the geological reservoir (Zheng, et al., 2009, 359). Carbon capture liability during the storage stage can either be in-situ liability or climate related liability. In-situ liability results from the potential risks of harm to the environment, human health, and property. Climate related liability on the other hand deals with liability arising from the leakage of carbon from geological reservoirs and the resulting impacts to climate Figueredo et al. (n.d, p. 1). Climate liability is a function of the international and national policies formulated to address greenhouse gas. Post-injection liabilities present unique challenges given that the projected carbon dioxide volumes to be stored in geologic reservoirs are too high; 103-590 GtC between 2000 and the year 2100 (Figueredo et al., n.d, p. 1). Moreover, the risks of carbon dioxide leakage may take long before manifesting themselves and there are uncertainties in the geophysical system. Given the above challenges, a private liability may not be effective in addressing the risks of CCS (Durrant, 2011, p. 128). As time passes, the risks of carbon stored in geological reservoirs could become safer due to geochemical and geophysical trapping (Ha-Duong & Keith, 2003, p. 181). When liability is fully placed on the private sector, the potential unbounded liability can make deployment of CCS unlikely. When the public sector is made to bear the liability for any future leakage can affect the safety measures taken by companies in the near term (Ha-Duong & Keith, 2003, p. 181). Potential risks can either result from leakage of carbon into the surface or subsurface (Figueredo et al., n.d, p. 3). However, the most probable cause for loss of containment is neglected wells. Well designed reservoirs have the ability to contain carbon dioxide long after it is abandoned. Figueredo et al. (n.d, p. 3) observe that poorly completed reservoirs are more likely to lead to carbon escaping into the atmosphere. The other ways through which carbon dioxide can be released include leakage via pores of low-permeable caprocks when the injection is done at a high pressure. Figueredo et al. (n.d, p. 3) note that there are five categories of risk resulting from carbon dioxide storage liability. These include toxicological effects, environmental effects, subsurface trespass, induced seismic actions, and effects to the climate. Toxicological effects are directly related to the concentrations and period of exposure. The liability related to climate risk is basically a contractual liability for non-performance (Figueredo et al., n.d, p. 3). Compensation to victims in an event of risk may be difficult given that carbon dioxide can remain in the ground for too long before it escapes and by that time the companies responsible may have been out of business. Consequently, seeking for compensation for such risks may be difficult given that the afflicted would have to identify defendants. Moreover, even when the defendants are identified, afflicted party may difficulties in demonstrating the particular causation or that the storage site of the defendant is responsible for causing the injuries suffered (Figueredo et al., n.d, p. 4). The role of governments in the liability scheme has also been explored. Figueredo et al., (n.d, p. 3) argues that CCS may not take off without the government policies restricting carbon dioxide emissions. Governments could implement incentives that will encourage the private sector adopt carbon dioxide emission reductions. In addition, governments have the responsibility of imposing wide and long term private liabilities (Marston and Moore, 2008, p. 423). 4.0 Quantitative Risk Assessment Storage of carbon in the deep underground geological reservoirs uses many technologies that have already been developed for use in the nuclear, oil and gas industry. Past experience from oil and gas production, natural gas storage and acid disposal forms a basis from which the risks of geological storage can be evaluated (Benson, 2006, p. 14). He further explains that industrial use of carbon dioxide in various applications offers guidelines for safe of handling of carbon dioxide (Benson, 2006, p. 14). Assessment of the risks of CCS is informed by wide knowledge developed over the last century on effects of carbon dioxide on humans, the occupational safety in handling CO2 in industrial settings. In addition, studies on carbon release in volcanic settings have also enhanced risk assessment in CCS projects (Aksu, Kaymakci-Basaran and Egemen, 2010, p. 682). In risk assessment, two quantitative methods are used to estimate the risks of a constructed structure to man and the environment. These are probabilistic and deterministic approaches as described by (Kirchsteiger, 1999, p. 340). In assessing the risks, the first step is to dissect the whole system into the basic elements and then it is aggregated. The idea behind this approach is that a system’s behaviour can be understood clearly from the basic elements that make up the whole system because of lack of adequate data on the behaviour of a system (Kirchsteiger, 1999, p. 341). As described earlier risks from systems to humans and the environment results when external forces act on the system and resists the objectives of the system. In a CCS project, external forces such as a leak can act on the system preventing it from containing the carbon in the geologic reservoir. This calls for development of methodologies that can be used to respond to the questions of what can go wrong, how likely is it that an event can occur and in case it happens what are the consequences (Ingelson, Kleffner and Nielson, 2010, p. 431). In reality, we assume that physical systems flow in a deterministic way. Thereby this method assumes that causes have effects and likewise effects have causes which results in a deterministic flow of events which facilities perfect prediction of risks without having to use probabilities. The deterministic flow of events is shown in the figure below Deterministic ‘flow’ deterministic ‘flow’ Causes/Evolution of Causes Accident Accident consequences Time Risk (Analysis) Reconstruction of reality Reconstruction of Reality Figure 1. Flow of physical reality versus reconstruction of reality by risk analysis Risk assessment calls for reconstruction of the reality by responding to the three questions described above either by quantitative way or by a qualitative methods. To respond to the question of what can go wrong requires a qualitative analysis which enhances the ability to identify and rank all the possible failure events which can result in system failure (Nordhaus and Pitlick, 2009, p. 87). In the second and third questions, qualitative and quantitative analyses are employed. Consequently, deterministic and probabilistic methods can be used in risk assessment. Kirchsteiger (1999, p. 401) explains that probabilistic methods are used to reconstruct the reality in cases where incomplete information on the initial conditions of a flow of events is available. 4. 1 Advantages And Disadvantages of the Two Methods of Risk Assessment Deterministic Risk Analysis The main advantage of deterministic approach is that the resulting assessment and the process of decision making are usually relatively clear and simple. In this method system analysis and the calculations are well defined and the answer to decision makers is either safe or not safe (Kirchsteiger, 1999, p. 411). The second advantage of deterministic risk assessment method is that it is relatively easy to conduct with little effort. The method is suitable to be used by engineering personnel with a wide knowledge of the design of the plant and operations although it is not a condition that this people must have experience in risk analysis ("Lignite-fired power plant uses activated carbon to capture mercury", 2010, p. 11). Probabilistic Risk Assessment The main advantage of this method is that it integrative and quantitative thereby it allows ordering of results and issues, and explicitly considers and treats all types of uncertainties. Kirchsteiger (1999, p. 411) argues that use of probabilistic methods is cost effective to the regulatory authorities since it ensures that resources are directed in dealing with the critical safety issues. The other advantage in using probabilistic methods is that it can be used to enhance safety and manage the operations of a system. The results of the assessment can be communicated clearly and on a well defined basis. Kirchsteiger (1999, p. 412) explains that probabilistic methods can be used even when the amount of data is small. She further expounds that the issue of absolute accuracy is not usually an issue even when the information is limited thereby it helps to make well informed decisions in choosing operation or design alternatives. Disadvantages of the Two Methods Deterministic Approach The main weakness of deterministic method of risk assessment is that it relies on the experience which in most cases is usually held by a particular person or company (Ondrey, 2011, p. 13). In deterministic risk assessment, there lacks an explicit consideration of the different types of probabilities and there lacks consistent information on the particular criteria or assessment results are more or less relevant in relation to the safety level. In a deterministic method, it is not possible to rank the risks. Moreover, Reinelt and Keith (2007, p. 101) argues that since deterministic method relies on the worst case scenario, there a danger that systems evaluated using this method are over-stated in terms of the safety levels or protection levels. Kirchsteiger (1999, p. 411) describes that the other weakness of deterministic approach to risk assessment is that the method is only sufficient for crude identification of internal safety management but can not be used for risk assessment of events with off-site consequences. This makes the approach not feasible for use in the assessment of risks from CCS project since this can be widespread. The main weakness of probabilistic approach in risk assessment is that it is time consuming and a complex method in decision making. Consequently, the assumptions, methods and results used in risk analysis require a person with a background in mathematics. 5. 0. Fault Tree Analysis Fault Tree Analysis is a method that has been employed successfully in assessing the impacts of other projects with similar risks as those involved with carbon capture and storage. Consequently, this method can be used in analysing the impacts of carbon capture and storage especially after it has been injected into the reservoir. The fault tree analysis is a presentation of the events that can have devastating impacts to humans’ health and the environment at large (Sharma, 2008, p. 181). The events are connected to bring out the relationship of the events to the risks. The figure below represents use of fault tree in CCS. Figure 2 showing a fault tree analysis in CCS Source: (Farret et al., 2011, p. 4196) In the fault tree analysis represented above, all the events that can lead to diffusion of the stored carbon dioxide into the subsurface. The consequence of high pressure during the injection is likely to induce fracturing of the subsurface rocks. However, the impact of this leakage could be localised and limited in time given that pressure is expected to get diminished after a few decades of after injection stops. Furthermore, the sub surface rock could fracture at the interface of the storage and caprock leading to leakage of carbon through the caprock (Van, 2006, p. 28). The fault tree above clearly shows that overpressure could lead to reopening of previously existing fractures and especially were pre-existing but had not been identified. At lower parts of the event tree, is a description of all the events and processes that could occur at the injection level taking both normal situations and altered situations. Normal situations are outlined by Farret et al. (2011, p. 4196) to include the degradation of the cement lining with passage of time, which may result from various reasons such as usual ageing, chemical reaction with brine while altered situations include poor quality of cement and the junctions on the injection and storage interface. A fault tree shows the probable interactions which may occur; consequently initiating migration of carbon during storage. The second advantage of the analysis is that it can help in defining interactions between activities and occurrences before they are integrated into a numeric model. The software used in fault tree analysis is usually linked to a database where occurrences can be categorized effectively (Farret et al., 2011, p. 4197). These categories could include mechanical processes, chemical processes, thermal processes or categories of those events which could occur in the short term and those which take long to be witnessed. Assessment of Risks from Similar Industries and Insurances Available Oil and Gas Industries There are numerous risks associated with the oil and gas industries. These risks emanate from the extraction of these resources, transportation, use and disposal. During transportation of gas or oil care must be observed to ensure that it is not split or no leakage as this poses a threat to the human health and safety and that of the environment. To deal with the risks involved in the industry, several types of insurance have been developed. Vehicles transporting oil or gas are insured against potential risks of fire in addition to other risks that are faced during transportation of these sources of energy (Broderick, Lavoie and Perel, 2000, p. 10). In case hazards results during production of gas, litigation on who pays for the losses suffered makes an assessment on whether the contamination could have been avoided or it was accidental (Tjernshaugen, 2008, p. 21). The amounts paid in insurance vary across the nations given the legal and institutional framework guiding the process (Pritchard, 2005, p. 27). Nuclear Power Plants Support nuclear power plants from the public declined following the Fukushima and Nagasaki crisis. Some of risks in nuclear plants include the radio active radiations which can alter the genetic make-up of humans in addition to resulting to other significant health concerns (Wood, 2006, p. 21). The risks experienced in this industry emanate from issues of storage of wastes from nuclear power plants, leakage in at the industry and earthquakes (Smith and Maremont, 2011). This leakage could lead to devastating impacts to the human health and environment. This emissions may be taken up by plants and bio accumulate in living organisms thereby the impacts of any leakage would continue being experienced long even after an accidents. Leakage could result from accidents in the industry. Insurance in Carbon Capture and Storage Projects Given the risks of this technology and its relative advantages in controlling climate change, it is critical that the technology is implemented in a wide scale. However, it is critical to offer insurance as an incentive to companies adopting the technology since they will be able to share the liabilities resulting from any of the risks. Moreover, provision of insurance will give confidence to the people that they would be adequately compensated in case of any failure in the technology (Pritchard, 2005, p. 27). Ruquet (2010, p. 27) observes that insurance companies are realigning themselves to offer insurance for risks on carbon storage and capture in case the technology becomes the primary method of controlling climate change. He describes that commercial insurance coverage purchased to cover power, utility and energy clients could be converted into a service to cover CCS clients against the risks. He however noted that these discussions are still at an early stage. Conclusion Carbon capture and storage holds a great potential in helping to cut carbon emissions to the environment and consequently controlling climate change. However, this technology it still at early stage and requires an assessment of the risks and propose risk management strategies. CCS is a process that starts from transportation, injection and finally storing of carbon dioxide in underground geological storage reservoirs. This system poses several risks which could result from leakage of the gas. This can lead to direct deaths of human and living organisms. Moreover, long term exposure to carbon dioxide may pose heath problems on the mankind. A probability of seismic occurrence has also been identified as a risk associated with CCS. To manage these risks, post closure monitoring of the storage is important. 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