INTRODUCTIONUnderground storage of carbon dioxide (CO 2 ) in permeable formations, such as deep saline aquifers, depleted oil and gas reservoirs, and coal seams, has been suggested as an important potential method for reducing the emission of greenhouse gases to the atmosphere (DOE 1999). The injection would take place at a depth below 800 m, so that the CO 2 would be within the temperature and pressure range of a supercritical fluid. As a supercritical fluid, CO 2 behaves like a gas with low viscosity but with a liquid-like density of 200-900 kg/m 3 , depending on pressure and temperature. Because supercritical CO 2 is less dense than water, deep underground disposal requires a sufficiently impermeable caprock above an underground storage zone to trap the injected CO 2 .Caprock integrity and reservoir leakage is a key issue for both short-and long-term performance of geological CO 2 storage. In the short term, leakage is an important safety issue during active CO 2 injection. In the long term, leakage impacts the sequestration effectiveness of the once-injected CO 2 . In general, two kinds of leakage mechanisms can be identified (Yamamoto and Takahashi, 2004): 1) Steady or slow leakage processes of buoyancy-driven gas flow at a rate that depends on formation permeability and fluid capillarity 2) Dynamic or rapid leakage processes along fluid paths created by interaction between formation and injected CO 2 For the slow-leakage mechanism, the fluid travels through the rock matrix, fractures, and abandoned boreholes present in the storage volume. The fluid path can be regarded as fixed in the short term, but may change slowly over the long term. Because of the limited toxicity of CO 2 , a slow leakage of CO 2 is allowable from the viewpoint of short-term safety. However, such leakage may reduce long-term usefulness of CO 2 sequestration. The second, rapid leakage mechanism has been observed in nature, caused by external forces such as earthquakes. Such rapid changes could include a breach in a caprock caused by mechanical changes such as hydraulic fracturing or fault slip. For CO 2 sequestration, a rapid change in the geologic system may increase CO 2 leakage so significantly that it may be detrimental to both short-term safety and long-term environmental conservation.In considering a site for CO 2 sequestration, it will be important to evaluate the effects of CO 2 storage on the formation, so as to minimize the risk of a breach occurring in the 1 system. First, injection of CO 2 will result in an increase in formation fluid pressure, especially around the injection source. Such a fluid pressure increase will causes locatel changes in the stress field, which, in turn, will induce mechanical deformations and possible irreversible mechanical failure in the caprock. This mechanical failure may involve shear along many of the existing fractures or creation of new fractures that reduce the sealing properties of the caprock system. Second, replacing the native formation fluid with CO 2 may cause changes in rock mechanic...