Finesses and Game-Changers in Frontier Project Development: The Case of Carbon Capture and Storage
Robert A. James
Program on Energy and Sustainable Development, Working Paper #87
Project development is particularly challenging in “frontier” environments where alternative technologies, conflicting laws and agencies, and uncertain benefits or risks constrain the knowledge or decisions of participants. Carbon capture and storage (“CCS”) projects by means of geologic sequestration are pursued in such an environment. In these circumstances, entrepreneurs can seek to employ two distinct types of tools: the game-changer, being an improvement to the status quo for all those similarly situated, generally achieved through collective or governmental action; and the finesse, being an individualized pursuit of an extraordinary project that is minimally affected by a given legal, business or technological obstacle. These techniques are illustrated in the case of CCS as to ownership of property rights, carbon dioxide (“CO2”) transportation economics, liability for stored CO2 following the closure of injection wells, inter-agency and federal-state conflicts, competing technologies, and uncertain economic or legal incentives. The finesse and the game-changer should also be useful concepts for creative solutions in other applications.