This comment letter response contains two parts:

(1) The original submittal from the commenter. (2) A data base printout of EPA’s response to each point raised by the commenter.

Notes about the response letters:

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comment submittals and ensure that the Agency responds to each. Each comment letter

was assigned a Letter ID that corresponds to the last four digits of the docket number of the

original comment (as posted on www.regulations.gov).

• Each response letter includes: comment text; an EPA

‐ assigned comment code; and an

individual response. These are described and explained below.

• The data base contains Comment text from the letters submitted by commenters.

Many hard copy letters were scanned into electronic format for inclusion in the data

base. As a result, there may be some typographical errors attributable to optical

character recognition issues. However, all original submittals were reviewed in the

process of drafting responses to ensure that the comment content was understood and

appropriately addressed.

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received on a given topic were reviewed by technical experts in each rule area (e.g., on

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• Following decisions on the final rule requirements, Individual responses were drafted

by topic area to ensure completeness and consistency of the responses with the final

rule and other responses to similar comments. Each discrete point made by a

commenter was given a unique response.

• Upon completion of comment responses, all information was entered into the data base.

Each letter response is a compilation of each comment and its individual response, compiled in the order of the original comment letter. As a result of this process, there is

repetition in the response text. The Agency believes this approach ensures completeness

and attention to each comment letter that was submitted.

• All comments in a topic area were reviewed, evaluated, and responded to concurrently.

Responses on each topic area are compiled and are also available in the rulemaking docket.Electronic Filing

Docket ID No. EPA–HQ–OW–2008–0390

December 24, 2008

Water Docket U.S. Environmental Protection Agency

Mailcode 2822T 1200 Pennsylvania Avenue, NW Washington, DC 20460

RE: AGA Comments on Proposed Federal Requirements Under the Underground Injection Control (UIC) Program for Carbon Dioxide (CO2) Geologic Sequestration (GS) Wells, 40 C.F.R. Parts 144 and 146, 73 Fed. Reg. 43492 (July 25, 2008)

Dear Sir or Madam:

The American Gas Association (AGA) appreciates the opportunity to comment on the Environmental Protection Agency's (EPA) proposal to establish the regulatory framework for geologic sequestration (GS) of carbon dioxide (CO 2 ) under the Underground Injection Control (UIC) Program pursuant to the Safe Drinking Water Act (SDWA). 73 Fed. Reg. 43492 (July 25, 2008).

The American Gas Association, founded in 1918, represents 202 local energy companies that deliver natural gas throughout the United States. There are nearly 70 million residential, commercial and industrial natural gas customers in the U.S., of which 92 percent — more than 64 million customers — receive their gas from AG A members. Today, natural gas meets almost onefourth of the United States' energy needs. For more information, please visit www.aga.org

.

AGA member companies have particular exper tise regarding underground storage in geological formations. AGA’s Underground Storage Committee (USC) includes engineering representatives of more than 30 companies that operate underground natural gas storage facilities in the United

States and Canada.

AGA is a member of the Utility Solid Waste Activities Group (USWAG). We support and have joined in comments filed by USWAG on EPA’s CO 2 geologic sequestration proposed rule. We submit this separate comment letter to highlight our specific technical concerns relating to potential impacts on the operation of natural gas underground storage facilities. The storage of hydrocarbon natural gases is exempt from current UIC regulations of injection

activities. However, geologic sequestration of CO 2 could have direct and indirect impacts on many current or future underground natural gas storage fields in the U.S., depending on how the new GS facilities are located and designed.AGA Comments on EPA CO2 Sequestration Proposed Rule

December 24, 2008 Page 2

2 Gas storage fields in the United States can be divided into two major types: porous rock reservoirs and salt caverns. Gas storage has been developed in many of the major sedimentary basins throughout the U.S. Because many of the areas and geologic formations considered for GS will be in the same basins and will occur in the geologic section either above, below, or in some cases, within the same formation as natural gas storage fields, there is a potential for natural gas storage fields to be directly or indirectly impacted by GS . Gas storage is a very important part of natural gas supply in the U.S., because it provides up to 50% of the winter heating season peak consumption of 50 Bcf per day to residential and co mmercial customers when there is typically not enough flowing capacity in pipelines to meet the winter surge in demand.

We ask EPA to address the potential impacts on gas storage operations in crafting the final rule with respect to the following issues.

• Minimum criteria for siting: We request that EPA revise proposed section 146.83(a) to say that “Owners or operators of Class VI wells must demonstrate to the satisfaction of the Director that the wells will be sited in areas with a suitable geologic system, and in a manner that will not adversely impact the safe operation of nearby natural gas underground storage facilities, in compliance with applicable safety regulations and guidelines of the Department of Transportation .” (Requested amended language in italics.) Further, the required geologic assessment should include analysis of potential leak paths through faulting, fracturing, or other migration paths from injected CO 2 in formations in close proximity above or below a natural gas storage formation.

• Require Analysis before Hydraulic Fracturing for GS Wells Near Gas Storage: Before hydraulic fracturing of a GS injection well, the GS operator should perform an analysis to consider the proximity, both laterally and vertic ally, of the GS zone to existing natural gas storage reservoirs, and should analyze the fracturing design to examine the potential for communication with a natural gas storage reservoir. This could be added to the injection well construction requirements in section 146.86.

• Ensure Collaborative Process for GS Construction in Gas Storage Fields: Gas storage operators have particular expertise regarding their natural gas storage fields, and can help prevent problems if EPA helps to ensure their participation in the process of the site evaluation and construction of GS wells in natural gas storage fields. We ask you to

revise sections 146.86 and 146.87 so as to authorize the Director to ensure the coordination between gas storage operators and GS well owners/operators in circumstances where the GS construction will occur in natural gas storage fields. Such coordination can involve, for example, obtaining input from the gas storage operators on the unique circumstances associated with the gas storage field where the GS well will be constructed. To assist in this process, gas storage field operators should have ready access to GS well records, well logs and cementing records for any GS construction activity that occurs in a gas storage field.

As noted in our joint comments with USWAG, many complex technical and legal issues will have to be resolved before geologic sequestration of CO 2 can become a reality, and this will require a cooperative effort among several federal agencies, including EPA, the Department of Transportation, and the Federal Energy Regulatory Commission. The General Accounting Office (“GAO”) recently issued a report entitled "Climate Change – Federal Actions Will Greatly Affect the Viability of Carbon Capture and Storage As a Key Mitigation Option" (GAO-08-1080, SeptemberAGA Comments on EPA CO2 Sequestration Proposed Rule

December 24, 2008 Page 3

3 2008) (“GAO Report”), which emphasizes that significant technological barriers involving CO 2 capture technologies, as well as regulatory and legal uncertainties involving CO 2 storage, leakage, and ownership issues, must be resolved before a successful CO 2 CCS program of the scale envisioned by policymakers can be achieved. GAO Report at 3-5. A National Academy of Sciences ("NAS") report emphasized that a large-scale CO 2 UIC program cannot be successful "if a significant fraction of the public views it as dangerous or unacceptable" and, therefore, CO 2 storage technologies must not only be safe and effective, they must be presented "to the public and the regulatory community in such a way as to instill confidence that they are in fact safe and

effective.” Id . at 49 (citing NAS, Prospective Evaluation ). We offer the foregoing comments in an effort to help ensure the safety and effectiveness of geologic carbon sequestration when it is located in or near natural gas storage fields, and to ensure that the interaction of the GS well and the natural gas storage field does not pose a threat to underground sources of drinking water.

AGA appreciates the opportunity to comment.

Respectfully submitted,

AMERICAN GAS ASSOCIATION

By: Pamela A. Lacey Senior Managing Counsel

American Gas Association 400 North Capitol St. N.W. Suite 450 Washington, D.C. 20003 (202) 824-7340

December 24, 2008Letter ID: 0228 Commenter: Pamela A. Lacey Organization: American Gas Association

Letter ID: 0228 Comment ID: 21802 Letter Lines: 62 to 75

Comment Code: 1000 1. General and Administrative Comments

Comment: Gas storage fields in the United States can be divided into two major types: porous rock reservoirs and salt caverns. Ga s storage has been developed in many of the major sedimentary basins throughout the U.S. Because many of the areas and geologic formations considered for GS will be in the same basins and will occur in the geologic section either above, below, or in some cases, within the same formation as natural gas storage fi elds, there is a potential for natural gas storage fields to be directly or in directly impacted by GS. Gas storage is a very important part of natural gas s upply in the U.S., because it provides up

to 50% of the winter hea ting season peak consumption of 50 Bcf per day to

residential and commercial customers when there is typically not enough flowing capacity in pipelines to meet the winter surge in demand.

We ask EPA to address the potential im pacts on gas storage operations in crafting the final rule with resp ect to the following issues.

Individual Response: EPA clarifies that the Class VI requir ements apply only to wells that are injecting CO2 into the subsurface for the purpo se of GS, and not to natural gas storage operations, and that natural gas storage operations are out of the scope of the UIC program's authority.

Please see the remainder of EPA's responses to th is comment for further details. For additional information on EPA's final regulatory approach, pl ease see the final rule and preamble as well as the rulemaking docket.

Letter ID: 0228 Comment ID: 21803 Letter Lines: 77 to 86

Comment Code: 1240 1.1.1.3 Suggested changes/ed its to rule language

Comment Code: 3100 2.1 Proposed Geologic Siting Requirements (40 CFR 146.83)

Comment: - Minimum criteria for siting: We request that EPA revise proposed section 146.83(a) to say that "Owners or operators of Class VI wells must demonstrate to

the satisfaction of the Director that th e wells will be sited in areas with a suitable geologic system, and in a manner that will not adversely impact the safe operation of nearby natural gas underground storage facilities, in compliance with applicable safety regulat ions and guidelines of the Department of Transportation." (Requested amended language in italics.) Further, the required geologic assessment should include analysis of potential leak paths

1through faulting, fracturing, or other migr ation paths from injected CO2 in formations in close proximity above or below a natural gas storage formation.

Individual Response: EPA believes that the extensive requirements for geologic site characterization (at §146.82), AoR evaluation (§1 46.84), and testing of the well during drilling (§146.87) are appropriate to ensure that permitting authorities have the necessary information to evaluate whether a specific site will allow safe injection of CO2. EPA adds that submittal and review of monitoring data (as required at §146.90) and the AoR reevaluation process (§146.84(e)) will provide an opportunity for an ongoing review of the site and a dialogue

between the Director and the owne r or operator to ensure that th e project is being operated in a manner that protects USDWs from endangerment. EPA believes that any natural gas storage operations would be found in si te characterization as would any faults or fractures.

Letter ID: 0228 Comment ID: 21804 Letter Lines: 88 to 94

Comment Code: 3800 2.3 Proposed Injection Well Construction Requirements (40 CFR 146.86)

Comment Code: 4140 2.4.1.4 Use of fracturing for GS in specific geologic settings (seeking comment)

Comment: - Require Analysis before Hydraulic Fracturing for GS Wells Near Gas Storage: Before hydraulic fracturing of a GS injection well, the GS operator should perform an analysis to consider the proxi mity, both laterally a nd vertically, of the GS zone to existing natural gas stor age reservoirs, and should analyze the fracturing design to examine the potential for communication with a natural gas storage reservoir. This could be adde d to the injection well construction requirements in section 146.86.

Individual Response: EPA clarifies that all stimulation, in cluding hydraulic fracturing, must be approved by the Director. Owners or operators must submit a proposed stimulation program as part of the permit application (§146.82(a)(9)); the plan must de monstrate that any stimulation activities will not compromise the integrity of th e confining zone. The Director will evaluate the owner or operator's proposed stimulation plan in the context of all information about the site, and the owner or operator must perfor m stimulation only as approved.

The final rule also requires that the owner or operator notify the Director 30 days before performing stimulation during injection opera tions (§146.91(d)(2)); this will provide an additional opportunity for the Director to review the owner or operator' s plans for stimulation and add other requirements as needed. EPA clarifies that UIC regulations prohibit fracturing of the confining zone at any time dur ing injection or stimulation.

EPA believes that the extensive requirements for geologic site char acterization (at §146.82), AoR evaluation (§146.84), and testing of the we ll during drilling (§146.87) are appropriate to ensure that permitting authorities have the necessary information to evaluate whether a specific site will allow safe injection of CO2. EPA belie ves that any natural gas storage operations will be identified during site characterization pur suant to requirements at §146.82 and §146.83 as will

2any faults or fractures.

Letter ID: 0228 Comment ID: 21805 Letter Lines: 96 to 108

Comment Code: 3800 2.3 Proposed Injection Well Construction Requirements (40 CFR 146.86)

Comment Code: 3866 2.3.3.3 Logging and testing requirements (40 CFR 146.87)

Comment: - Ensure Collaborative Process for GS Construction in Gas Storage Fields: Gas storage operators have particular expert ise regarding their natural gas storage fields, and can help prevent problems if EPA helps to ensure their participation in the process of the site evaluation a nd construction of GS wells in natural gas storage fields. We ask you to revise sections 146.86 and 146.87 so as to

authorize the Director to ensure the c oordination between gas storage operators and GS well owners/operators in circum stances where the GS construction will occur in natural gas storage fields. Such coordination can involve, for example, obtaining input from the gas storage ope rators on the unique circumstances associated with the gas storage field where the GS well will be constructed. To assist in this process, gas storage fi eld operators should have ready access to GS well records, well logs and cementi ng records for any GS construction activity that occurs in a gas storage field.

Individual Response: EPA agrees that GS owners and ope rators and gas storage operators should coordinate when deciding where to locate their facilities. EPA expects that the permitting authority will be involved in this decision dur ing the permit application process and when approving the permit. The permit a pplication requires at §146.82(a)(2 ) that owners or operators submit a map showing all injection wells, which would include wells used for gas storage. The permitting process also requires at 124.10(c)(1)(xi) the notification of the state oil and gas agency and state mineral recovery agency, among others, when the draft permit is available for comment. The draft permit will also include th e permit application. EPA believes that those agencies that should be involved in the decision will be properly informed under the final rule application and notification procedures.

Letter ID: 0228 Comment ID: 21806 Letter Lines: 110 to 121

Comment Code: 1200 1.1 General comments about the rulemaking

Comment Code: 1500 1.2.2.2.4 Some other agency should regulate GS

Comment: As noted in our joint comments with US WAG, many complex te chnical and legal

issues will have to be resolved before geologic sequestration of CO2 can become a reality, and this will require a cooperative effo rt among several federal agencies, including EPA, the Department of Transportation, and the Federal Energy Regulatory Commission. The General Accounting Office ("GAO") recently

3issued a report entitled "Climate Change - Federal Actions Will Greatly Affect the Viability of Carbon Capture and St orage As a Key Mitigation Option" (GAO-08-1080, September 2008) (" GAO Report"), which emphasi zes that significant technological barriers involving CO2 captu re technologies, as well as regulatory and legal uncertainties involving CO2 stor age, leakage, and ownership issues,

must be resolved before a successful CO 2 CCS program of the scale envisioned by policymakers can be achieved. GAO Report at 3-5. A National Academy of Sciences

Individual Response: Regarding the need for a CCS agency to coordinate across agencies, EPA is coordinating with and will continue to f acilitate communication among federal and state agencies during the implementati on phase of the GS regulation.

Letter ID: 0228 Comment ID: 21807 Letter Lines: 121 to 127

Comment Code: 1680 1.3.8 Don't overstate ris k, don't stigmatize CO2

Comment: policymakers can be achieved. GAO Report at 3-5. A National Academy of Sciences ("NAS") report emphasized that a larg e-scale CO2 UIC program cannot be successful "if a significant fraction of the public views it as dangerous or unacceptable" and, therefore, CO2 storage t echnologies must not only be safe and effective, they must be presented "to th e public and the regulatory community in such a way as to instill confidence that they are in fact safe and effective." Id. at 49 (citing NAS, Prospective Evaluati on). We offer the foregoing comments

Individual Response: EPA disagrees that the GS regulation overstates the risk of CO2 injection. EPA recognizes that injecting large volumes of CO2 for GS poses unique challenges that, if not properly managed, could endanger drinking water sources and ha ve other adverse impacts. However, with proper site sele ction, the final, tailored, Class VI requirements address the large volumes of CO2 injected, its buoyancy, potential corrosivity in the presence of water, and potential impurities in the CO2 stream. In addition, EPA expect s the tailored permitting, siting, construction, operation, monitoring, and post-injection site care re quirements in the GS rule to prevent leakage from injection formations and protect USDWs.

EPA does not agree that the tailored requirements will create a negative public perception of GS. The Agency believes that a demonstration to th e public that GS projects are meeting the GS rule's tailored requirements would likely improve confidence in the project and help address public questions and concerns.

Letter ID: 0228 Comment ID: 21808 Letter Lines: 127 to 131

Comment Code: 1000 1. General and Administrative Comments

Comment: Id. at 49 (citing NAS, Prospective Evaluati on). We offer the foregoing comments in an effort to help ensure the safety and effectiveness of geologic carbon sequestration when it is located in or near natural gas storage fields, and to

45 ensure that the interaction of the GS well and the natural gas storage field does not pose a threat to underground sources of drinking water.

Individual Response: EPA acknowledges the comment. Pleas e see the remainder of EPA's responses to this comment letter for further de tails. For additional information on EPA's final regulatory approach, please see the final rule and preamble as well as the rulemaking docket.