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:

• The response letters were generated by a data base used to track the content of all public

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.

• The content of each comment letter was divided into topic areas and assigned a unique

Comment ID. Additionally, one or more Comment Codes (i.e., unique topic area ID) was assigned to each discrete point raised by a commenter. This information was added to

the data base. To inform final rulemaking decisions, all comments and information

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

construction requirements).

• 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.Eastman Chemical Company P. O. Box 511, B-54D Kingsport, Tennessee 37662-5054 Telephone: 423-229-1863

Fax: 423-229-4864 e-mail: rguinn@eastman.com

November 24, 2008

Re: Proposed Rule for Geologic Storage of CO 2 (Docket EPA–HQ–OW–2008–0390)

Eastman Chemical Company is pleased to provide the following comments on USEPA’s Proposed Rule for Geologic Storage of CO 2 (73 F.R. 43492. July 25, 2008). Eastman Chemical Company was founded in 1920 and is a FORTUNE 500 company with 2007 sales of $6.8 billion and approximately 10,500 employees. Eastman headquarters are located in Kingsport,

Tennessee.

Eastman Chemical Company has over two decades of industry-leading gasification experience and knowledge. In 1983, Eastman commercialized the first coal gasification facility in the United States at its Kingsport, Tenness ee, plant site to produce chemicals from syngas. In addition, Eastman owns and operates a gasification facility at its Longview, Texas, site to produce syngas from natural gas. Eastman has one of the stronge st gasification operating records in the industry and is world renowned for its gasification ex pertise. Eastman also has over 80 years of experience building, owning and operating large inte grated industrial chemical plant sites.

Gasification is recognized as the leading clean a lternative for utilizing ou r nation's abundant coal and petroleum coke reserves while addressi ng environmental concerns such as water conservation, acid rain, mercury emissions, a nd global warming. By utilizing abundant

domestic resources in an envi ronmentally friendly manner to cr eate a wide variety of energybased products, gasification can help provide a solution to the energy and raw materials crisis facing the U.S. and can help to stem the tide of moving our industries and their associated jobs

overseas.

Industrial gasification is a chemi cal process that reduces criteria pollutants and is capable of capturing and sequestering the vast majority of its carbon dioxide, one of the leading contributors to gases often associated with global warming. With Eastma n’s long-term commitment to gasification technology the compa ny has a vested interest in the geologic storage of CO 2 that is important for the continued viability of gasifi cation facilities. Eastman Chemical Company supports the following comments on the propos ed rule generated by the Gasification Technologies Council.

Sincerely,

Richard J. Guinn, Ph.D.

Technical Associate Corporate Health, Safety, E nvironment, and SecurityPage 1 of 16 

## Gasification Technologies Council

4301 North Fairfax Drive, Suite 300 Arlington, VA 22203 Ph (703) 276-0110 Fx (703) 276-0141 Email jchildress@gasification.org

Water Docket, Environmental Protection Agency

Mailcode: 2822T, 1200 Pennsylvania Ave., NW., Washington, DC 20460

RE: EPA Docket EPA–HQ–OW–2008–0390 FRL–8695–3

Dear Sir:

The Gasification Technologies Council (GTC ) is pleased to provide its comments on EPA’s Proposed Rule for Geologic Storage of CO 2 (Docket EPA–HQ–OW–2008–0390 FRL–8695–3) 73 F.R. 43492 (July 25, 2008).

GTC represents 80 companies involved in the development, licensing, and use of gasification technologies. Th e GTC’s mission is to promot e a better understanding of how gasification can provide the power, ch emical and refining industries with economically competitive and environmentally conscious technology options to produce electricity, fuels, and chemicals. Our members represent 95% of the world’s gasification capacity

Gasfication is an important technology for the conversion of coal, biomass, petroleum coke, municipal solid waste (MSW) and ot her carbonaceous feed stocks to power,

chemicals, fertilizers and cleaner fuels. With gasification, CO 2 can be captured using commercially available technologies. Du e to its inherent carbon capture capability, gasification can serve a major role in Car bon Capture and Storage (CCS) projects. GTC’s interest in EPA’s proposed regulation deri ves from the importance of CCS to achieving future goals of CO 2 emissions reduction while using secu re and indigenous resources to meet our growing national need for chemical s, fertilizers, liqui d fuels, hydrogen, and electricity.

EPA is commended for taking th is action that begins the pr ocess of providi ng regulatory clarity to a complex and important topic. In its decision process, EPA needs to consider the importance of CCS to the success of the nation’s overall climate change, energy independence and economic growth strategies . Any rule for geologic storage of CO 2 needs to provide an unambiguous framewor k that promotes the development and deployment of CCS while protecti ng the environment. Als o, given the current state of experience in geologic sequestration , any prescription needs to be flexible and adaptive.

In addition to regulatory clarit y, climate change policy will be needed to define a value

for CO 2 in order to drive deployment of CCS . After policy, cost will determine how quickly and widely CCS can be deployed. Currently, the value of CO 2 is principally limited to its use in Enhanced Oil Recovery (E OR). The cost of CCS needs to be reducedPage 2 of 16 by implementing requirements that are necessary and sufficient while not compromising the protection of drinking water.

These are our principal concerns with the draft regulation:

1. EPA needs to categorically exclude CO 2 specifically intended for geologic storage from the definition of RCRA hazardous waste.

2. EPA must emphatically conclude that CO 2 containing trace contaminants does not open any regulatory pathways to s ubjecting a geological storage site to Superfund liability.

3. CLASS VI (Underground Injection Contro l (UIC) permits need to identify the potential for hazardous s ubstances that might be generated in geologic formations after facility decommissi oning and well closure so that should releases occur, they would be federally-permitted.

4. Secondary confinement/containm ent should not be required.

5. CO 2 injection should not be restricted onl y to formations below the lowermost underground source of drinking water.

6. EPA needs to clarify how to demons trate financial responsibility; the proposed regulation leaves too mu ch discretion to the Director.

7. EPA should not adopt a pay-in period of three years.

8. The period of post-injection site mana gement should be performance-based and not be arbitrarily set at 50 years. .

9. EPA should increase its state stakehol der effort towards uniformity of technical requirements; disparate require ments and processes will increase the time, cost, and complexity of projects.

10. EPA should not stigmatize geological storage of CO 2 such as can be inferred by having requirements for Class VI wells that are more restrictive than for

Class II wells.

11. Requirements for conversion of any well to a Class VI well should be site and risk dependent.

12. EPA’s implied 2017 date for completion of the final UIC regulations is too late to provide regulatory clarity face d by CCS project developers today.

These are the details supporting th ese concerns and recommendations:

Discussion

#1: Potential Applicability of CFR 40 Part 261 (RCRA). (Ref: page 43503, Section I)

In the preamble to the ANPR, EPA poses the question of whether injected CO 2 might be considered a RCRA hazardous waste, but does not answer the question. Any ambiguity concerning the applicability of complex and expensive regulatory regimes such as RCRA and CERCLA will be a major disincentive to the development and deployment of CCS. Regulatory clarity and certainty are critical to companies facing multi-billion dollar investment decisions regardi ng gasification facilities and CO 2 sequestration projects.Page 3 of 16 EPA should explicitly address th ese issues in th e final rule and no t leave open any implication that RCRA and CERCLA may or may not apply to CCS. The presence of low

levels of hazardous contaminants in CO 2 as a result of the carbon capture process should not limit the storage of the CO 2 using Class VI wells, especially taking into account the diminimus risk of exposure associ ated with the disposition of CO 2 into deep geological formations under the stringent controls required by this proposed regulation. We strongly recommend that EPA provide a categorical exclusion in this rulemaking, that

CO 2 streams that are specifically intended to be stored in geologic structures are not

RCRA hazardous wastes. Such an exclusion would be an alogous to the provision of 40 CFR §261.4(b)(5), which excludes drilling flui ds, produced waters, and other wastes associated with the development, or production of crude oil, natural gas or geothermal energy, and therefore can be in jected into Class II wells.

In terms of its approach, we recommend that EPA consider captured CO 2 -- inclusive of transport, the injection facility and within inje ction wells -- as material that constitutes a stream that is contained within a process and therefore, not a solid waste. Within this scope, protection of health and the environm ent will be provided by controls required under other regulatory domains such as OSHA and NESHAPS.

For purposes of evaluating the poten tial RCRA status of the captured CO 2 that may be injected in Class VI wells , the CO2 streams trigger none of the RCRA hazardous waste criteria. Specifically, captured CO 2 is not a “listed” hazardous waste as set forth in 40 C.F.R. §261.31 - .35, nor is it “characteristically” hazardous pursuant to 40 C.F.R. § 261.20 - .24. It is neither “ignitable” nor “co rrosive”, and the TCLP test used to

determine whether a waste is characteristica lly “toxic” cannot be used on the supercritical liquid CO 2 stream. In any event, the level of trace contaminants in the CO 2 is so low that TCLP levels are not even approached when m easured on an absolute concentration basis.

Next, the CO 2 stream is not “reactive,” since the injected CO 2 stream will not generate toxic gases in a quantity sufficient to present a danger to human health or the environment. For example, th e levels of hydrogen sulfide li kely to be present in the CO 2 stream (generally less than 0.3%) are an or der of magnitude less than those typically present in the “acid gas” that is widely injected into Cla ss II underground injection wells in the U.S., which have an average hydroge n sulfide concentratio n of approximately

40%. See Kleweki (Cadmus Group), Kobelski (U .S. EPA), Karimjee (U.S. EPA), and Sham (Cadmus Group): Acid Gas Injection In The United States (Presentation on May 8,

2006 at the Fifth Annual Conference On Car bon Capture & Sequestration). U.S. EPA continues to encourage the underground injection of “acid gas” streams, recently including such a requirement in a proposed consent decree that would resolve an enforcement case brought under the Clean Air Act. U.S. v. Merit Energy Company, Civil Action No. 1:08-CV-917 (W.D. Mich.), propos ed Consent Decree lodged on September 30, 2008 (73 Fed. Reg. 58267 (Oct. 6, 2008) (U.S. EPA’s October 1, 2008 press release

in this matter stated that the underground injection of the acid gas would re sult in “zero sulfur dioxide emissions.”)

EPA should take into account the specific disposition of the CO 2 that the ruling is focused on (i.e., deep underground storage). A well permitted under th is rule will be protective of underground sources of drinking water. The minimum depth of injection required to maintain CO 2 in a supercritical state is ap proximately 2,500 fe et. This, inPage 4 of 16 conjunction with the controls and safegua rds required by this rule throughout the injection and post-injection period, will ensure that CO 2 injected into a Class VI well

poses de minimus risk. There is very little like lihood for hazardous constituents to be released where they would pose a risk to hum an health or the environment. (See, e.g., Final Risk Assessment for the FutureGen Project Environmental Impact Statement, DOE, April, 2007)

Finally, much higher H 2 S levels than will be used in CCS have been successfully and safely used for EOR injection with Class II wells. For example, in Canada, there are 45 ongoing projects where high le vels (up to 68%) of H 2 S in CO 2 are being injected into saline aquifers or producing oilfields 1,2,3 for disposal purposes. These combined gas

streams of H 2 S and CO 2 are commonly referred to as acid gas and originate from purification of sour natural ga s, are highly toxic and in some cases of high concentration, flammable. These projects have been studi ed in detail and their success is well

documented 3,4 . In addition, there have never been any significant safety incidents reported, since the start of the first injection of acid gas into a depleted oil reservoir on

the outskirts of the c ity of Edmonton, Alberta in the early 1990’s. Nor have there ever been any reports of leakage of H 2 S from these operations 4

. Accordingly, EPA has sufficient information now to conclude that captured CO 2 streams are not RCRA hazardous wastes and do not pose greater risks that many streams than are already being routinely injected in Class II and other UIC we lls as non-hazardous wastes.

Indeed, to conclude otherw ise would create the nonsensical result of suggesting that sequestering a material in deep geological fo rmations poses more hazards than emitting it

into the air. It is very impor tant that EPA make this determination as soon as possible to remove the implication that CCS might be subject to RCRA regula tion, an implication that would be extremely damaging to the futu re of CCS, and to th e goal of significantly reducing the carbon footprint of the nation’s energy sector.

Concern #2: Scope of Class VI Permits and th e Potential Applicability of Superfund to

CCS. (Ref: page 43503, Section J)

EPA raises, but does not answer, the questi on of whether the unde rground inje ction of

CO 2 might trigger Superfund and associated natural resource damages liabilities, and appears to suggest that Cla ss VI permits might be writte n to allow future Superfund liability associated with CCS. EPA must emphatically conclude that CO2 containing trace contaminants does not open any regulat ory pathways for subjecting a geological storage site to Superfund liabi lity. As with RCRA, any am biguity on applicability of CERCLA will be potentially fatal to the development and deployment of CCS. It is highly unlikely that CCS will be implemented on a meaningful scale if there is a possibility that CCS might trigger Superfund.

CERCLA expressly excludes from Superfund lia bility “federally permitted releases.” Further, “any injecti on of fluids authorized under the Federal underground injection control programs or State programs submitted for Federal approval . . . pursuant to part C of the Safe Drinking Water Act” are “fed erally permitted releases.” 42 U.S.C. § 9601(10)(G) (CERCLA Section 101(10)(G )). Therefore, any captured CO 2 stream that is injected in a Class VI well pursuant to a Fede ral or State permit is a “federally permitted release” and not subject to Superfund liability (including natural resource damages). ItPage 5 of 16 would be inconsistent with ex isting practice in the UIC progra m, impractical, and fatal to the future of CCS to limit Class VI permits solely to the CO 2 portion of the stream and explicitly exclude any trace contaminants.

By its inherent nature, gasification will provide a stream of >90% CO 2 having extremely low levels of both organic and inorganic hazardous air pollutants (HAPS). There are several mechanisms that provide this: 1) de struction of organic HAPS within a gasifier due to the extreme (~2,500 oF) gasification temp erature, 2) removal of inorganic content in the melting and slagging proc ess, 3) particulate scrubbi ng or filtration, 4) activated carbon beds to remove mercury and other co ndensed metals;, and finally 5) cooling followed by acid gas scrubbing. The combination of these HAP reductions is very effective. As a point of reference, the tota l inorganic HAPS that would be injected with captured CO 2 from an IGCC or gasification pro cess over 30 years of CCS operation will be at least an order-of-magnitude lower than the annual limits (both total and individual components) of NSPS.

Concern #3: Potential releases from the well which are outside the scope of the Class VI permit. (Ref: page 43504, Section J)

Class VI UIC permits must also be carefully written to identify and address the potential post-injection releases of hazardous subs tances, or the generation of hazardous

substances from the chemical interaction of the CO 2 with the geological storage formation (e.g. – leaching of metals) so that they would be federally permitted releases. If the potential release or ge neration of such hazardous su bstances is viewed as beyond the scope of Class VI permits, CCS sites coul d be subjected to th e threat of long—term Superfund liability, a threat th at could be fatal to the vi ability of CCS.

With respect to releases from the well itself, the primary source of such releases could occur during injection operation through fa ilure of well seals, fla nges and gaskets, piping breaches, liners, valve packing and other mech anical components or failure to follow operational and safety procedures. Such releas es will likely be confined to the injection period. During operation and the measuremen t, monitoring, and validation (MMV) period, the injection facility (metering, distribution and in jection systems), should be classified as a production facility where industrial safety standards, design and operating procedures (e.g., – HAZOPS reviews) will appl y. Appropriate regula tion will be derived from permits under the Clean Air Act that are is sued to the facility along with protection of operating personal as required by OSHA.

Concern #4: Requirement for secondary confinement/containment. (Ref: page 43505, 1- Proposed Geologic Siting Requirements)

The proposal would provide the Director the discretion to require the owner or operator to identify and char acterize additional c onfining and containm ent zones above the primary (i.e., lowermost) confining zone th at could further impede vertical fluid movement and allow for pressure and dissipation. Secondary containment (multiple confining structures) should not be required to prevent leakage of CO 2 . If required, this will prevent geologic storage in certain but im portant geographic regions. It also raises doubt concerning procedures a nd protocols to characterize and validate safe geologic storage formations and containment where ther e is not secondary containment. Under thePage 6 of 16 proposed rule, there are measures that provide adequate assurance of formation integrity and require operators to demonstrate that their project will not endanger underground sources of drinking water (USDWs). If a seco ndary containment is present, it will be detected during site characterization and risk assessment. Such a special case could be analyzed to evaluate the potential risks to USDWs and to devel op additional evaluation criteria to be applied to permit geological storage w ithout going through the aquifer exemption process.

Concern #5: Restriction of injection to formations below the lowermost underground source of drinking water or USDW. (Ref: page 43512, 3. Proposed Injection Well Construction Requirements)

This requirement is not necessary for the protection of USDWs. It is in-fact overly restrictive and will eliminate many suitable and safe geologic formations for CO 2 sequestration or permanent storage. It will also render geological storage impractical (pumping power and well costs) for states in the western United States where the drinking water aquifers are many thousands of feet deep and well isolated from overlying regions. Also, industry has demonstrated that it can operate CO 2 injection wells for EOR without endangering USDWs that are located below the injection zone (e.g., the Salt Creek EOR project in Wyoming, having a USDW below the injection zone).

Concern #6 Demonstration of financial responsibility. (Ref: page 43520, 9. Proposed Financial Responsibility and L ong-Term Care Requirements)

EPA needs to provide clarifying guidance on how to demonstrate financial responsibility. The proposed regulation leaves too much to the discretion of the Director. Such openended requirements will effectively discourage carbon capture projects and the development of financial pro formas . Of particular concer n are those assurances necessary to cover the costs of potential long-term stewardship or the potential to have to perform remediation at sites that have b een previously certified as closed. This uncertainty may increase the perceived risk expo sure to levels that serve as a barrier to investment. A potential approach to share risk and overcome this barrier is the Interstate Oil and Gas Compact Commission (IOGCC) 5 proposal for an industry-funded and stateadministered trust fund to provide the stew ardship during the Post-Closure Period. The trust would be funded through an injection fee assessed to the site operator and calculated on a per-ton basis, at the point of custody transfer of the CO 2 from the generator to the site operator.

Concern #7. EPA is considering a guidance approach that would recommend adopting a pay in period of three years for GS projects, consistent with other similar programs in the Agency. (Ref: page 43521, Sec. 9. Proposed Fi nancial Responsibility and Long-Term Care Requirements, Pay-in period for trust funds )

We strongly urge that the EPA not adopt this approach. CCS pr ojects will be subject to their highest financial strain in the first se veral years of operati on. During this period, commissioning, systems integration and debuggi ng of mechanical and process systems will need to be completed w ith potential loss of plant operation, production and revenue. Projects will likely be burdened with additio nal initial capital coverage of an alreadyPage 7 of 16 expensive facility to contend with an accelerated payment. We therefore recommend that any payment schedule be based on a per-ton fee over an amortization period equal to the expected operational life of the project and in a framework as recommended by the IOGCC (ref: Concern #6).

Concern #8: The owner or opera tor shall continue to conduct monitoring as specified in the Director-approved post-injection site care and site closure plan for at least 50 years following the cessation of injection. At th e Director’s discreti on, the monitoring will continue until the geologic sequestration pr oject no longer poses an endangerment to

USDWs. (Ref: page 43519, Sec. 8. Post-In jection Site Care Timeframe)

The time required for post-injection site manage ment should not be ar bitrarily set at 50 years. Criteria for defining the time for post-injection management should be performance based and site specific. The choi ce of 50 years is arbitr ary and does not take into account the data and knowledge and m odeling verification obtai ned over a preceding operating and injection period of years and likely decades. The maximum post-injection monitoring period should be defined on reason able but quantitative, performance-based metrics - for example, that the validated mode l predicts that 95% of the plume is or will be trapped and that a sensitiv ity analysis predicts a comfortable margin of safety to minimize approach to any USDWs, thus preventing potential endangerment.

Concern #9: On-going state efforts to regulate GS. (Ref: page 43497, Sec. C. Who Implements the UIC Program?)

Although we recognize that state primacy is integral to the UIC program, we strongly

recommend that EPA drive its state stakeholde r activities towards the goal of unanimity and uniformity of technical requirements. Disparate requirements and processes will increase cost, delay, and complexity and ma ke the permitting process less predictable.

Individual states should not de velop regulations that are subs tantially more restrictive or prescriptive than that required by the EPA. Many states will also not have technical resources that are comparable to that of the US EPA. EPA’s stakeholder technical workshops had good representation from the EPA regions, but it appears that many states have not yet been engaged. To avoid this and the prob lems from a patchwork of permitting regulations, EPA should carefully bu t quickly consider and integrate input from a majority of state environmental prot ection and conservation and natural resource

offices.

Concern #10: Continuation of Class II for EOR. (Ref: page 43502, Sec. G)

By proposing different and more restrictive requirements for Class VI wells, EPA will create economic or operational barriers that prevent a seamless transition from EOR and storage operations to wholly storage operati ons. EOR can make a si gnificant contribution to offset the cost of early CCS demonstra tion projects. For example, EOR can contribute to the investment in pipeline infrastructure helping to enable pure CCS operations. Also,

CO 2 storage operations may continue after EO R has ceased, thus reducing the cost of storage, site characterization and developm ent. These benefits should be viewed as especially significant in light of the difficulties in secu ring sufficient funds to initially deploy CCS. EOR projects could quite feasib ly bring CCS deployment forward by manyPage 8 of 16 years as a considerable quantity of CO 2 remains underground during such operations. This will reduce the number of target formations where CO 2 could be stored.

Concern #11: Grandfathering of construction requ irements at the Director’s discretion for existing Class I, Class II, a nd Class V wells seeking to co nvert to Class VI wells, and whether additional construction requirements would be necessary to prevent endangerment to USDWs from the GS of CO 2

. (Ref: page 43497, Sec. G)

Requirements for conversion of any well to a Class VI well should be site and risk dependent. EPA should consider expanding grandfathering scope to more than construction requirements and no t a-priori require that all other permitting requirements be redone. Existing permit holders should be allowed to provide data on the experience

and characteristics of their site demonstrating that it is su itable for long-term storage of carbon dioxide without endangering underground s ources of drinking water. This could be more acceptable with an end date for gr andfathering wells (e.g., - operational before

2012).

Concern #12: EPA’s schedule for promul gation of its proposed UIC regulation. (Page

43499 Sec. E3)

We reference the following statement from the preamble section of the proposed rule: "During the Deployment Phase (2008–2017), the [RCSP] partnerships will conduct large volume carbon storage tests to demonstrate that large-scale CO 2 injection and storage can be achieved safely and economically. EPA will us e the data collected from these projects to support decisions in the final GS rule." This statement suggests that a final GS rule may not be issued until 2017. We believe that this is too late to clear the regulatory uncertainty that CCS project developers are fa cing today. If this re flects EPA’s intention, we recommend that EPA abandon a prescriptive approach and instead, favor general and performance-based requirements until thes e demonstration tests are completed.

Other concerns expressed by our membership and recommendations for improvement of the proposed rulemaking are given in Appendix A. Should the EPA have further questions, please fell free to contact me.

Very truly yours,

James Childress

Executive Director Gasification Technologies CouncilPage 9 of 16 References

1 Keushnig, H. (1995); Hydrogen sulfide – if you don’t like it, put it back. J. Canadian

Petroleum Technology. 34: 18-20.

2 Longworth, H.L., G.C. Dunn, M. Semchuck (1996); Underground disposal of acid gas

in Alberta, Canada: Regulatory concer ns and case histor ies. SPE 35584. pg 181-192.

3 Bachu, S., K. Haug (2005) In situ characterist ics of acid-gas injecti on operations in the

Alberta Basin, Western Cana da: Demonstration of CO 2 geological storage. in Carbon Dioxide for Storage in Deep Geological Formations. Vol. 3. ed. D.C. Thomas, S.M. Benson. Elsevier Ltd. pg 867-876.

4 Bachu, S., W.D. Gunter; Overview of Ac id-Gas Injection Operations in Western

Canada. In Proceedings of 7th International Conference on Greenhouse Gas Control Technologies. Volume 1: Peer-Reviewed Pape rs and Plenary Presentations (E.S. Rubin, D.W. Keith and C.F. Gilboy, ed.), IEA Greenhouse Gas Programme, Cheltenham, UK,

2005.

5 The Interstate Oil and Gas Compact Comm ission Task Force on Carbon Capture and

Geologic Storage, Storage of Carbon Dioxide in Geologic Structures - A Legal and Regulatory Guide for States and Provinces , September 25, 2007Page10of16APPENDIX AAdditional Comments and Recommendations§146.81 Applicability. (b) “This subpart applies to wells used to inject carbon dioxide specifically for the purpose of geologicsequestration, i.e., the long-termcontainment of a gaseous, liquidor supercritical carbon dioxidestream in subsurface geologicformations.”We recommend striking out"gaseous, liquid or supercritical carbon dioxide stream"and replacing with "gaseous, liquid, supercriticalor co-mixed carbon dioxide stream"This change will allow for injection of carbon dioxide that is pre-dissolved with water to preventphase separation in the injection zone or with inclusion of flow or pumping enhancement components.§146.82 Required Class VI permit information.(b) “A map showing the injection well(s) for which a permit is sought and theapplicable area of review. Within the areaof review, the map must show the number,or name and location of all injection wells,producing wells, abandoned wells, plugged wellsor dry holes, deep stratigraphic boreholes, State or EPA approved subsurfacecleanup sites, surface bodies of water,springs, mines (surface and subsurface), quarries, water wells and other pertinent surfacefeatures including structures intended for human occupancy and roads. The map should alsoshow faults, if known or suspected.Only information of public record isrequired to be included on this map;”The note that "only information ofpublic record is required tobe included on this map" may leave out deep oil and gas wells,particularly older wells. The presence ofsuch non-public but "known" information may be eligible for inclusion as "known" under144.55(a).§146.82 Required Class VI permit information (e) “A tabulation of all wells within the area of review which penetrate the injection orconfining zone(s). Such data must includea description of each well's type, construction, date drilled, location, depth, record ofplugging and/or completion, and any additional information the Director may require;”We recommend striking out "all wells" and replacing with "all known wells". Requiring that all wells or other artificial penetrationsinto injection or confining zones within the AoR be identifiedand information on depth and closure be provided can be costly andsometimes accurate information is difficult to obtain for olderwells within the AoR. EPA's assistance in obtaining and storingthisinformation would be helpful to CCS operators.Page11of16§146.84 Area of review and corrective action. (c) (1) “Predict, using computational modeling, the projected lateral and verticalmigration of the carbon dioxide plume and formation fluids in the subsurface from the commencement of injection activities until theplume movement ceases, pressure differentialssufficient to cause the movement of injected fluids or formation fluids into a USDWare no longer present, or after a fixed time period as determined by the Director.”We recommend striking out "Predict, using computational modeling, the projected lateral and vertical migration of the carbon dioxideplume"and replacing with "Using computational modeling, provideprojected potential ranges of lateral and vertical migration of thecarbon dioxide plume"The use of multiphase groundwater flow and transportmodels is to predict the composition and movement ofeach phase state (e.g., liquid, gas,supercritical fluid) of CO2in the subsurface, as well as fluid pressures, to define the AoR. One of theconcerns with the use of such complex models is that the sitemay not be fully characterized withrespect to hydro-geologic properties.There may be significant uncertainty in one or more hydraulic processes/parameters. Therefore, it is possibleto obtain a wide-range ofmodel outcomes from different model parameters. The uncertainty in model parameters and sensitivity of model results to parameterselection should be addressed.§146.84 Area of review and corrective action. (c) (2) “Using methods approvedby the Director, identify all penetrations, includingactive and abandoned wells and underground mines,in the area of review that may penetrate the confining zone. Provide adescription of each well’s type, construction, date drilled, location, depth,record of plugging and/or completion, and any additionalinformation the Director may require; and...”We recommend striking out "approved"and replacing with "prescribed". We recommend deleting the second sentence and replacingwith "Where such information is available or can be obtained, providea description of each well’stype, construction, date drilled,location, depth, record of plugging and/orcompletion, and any additional information prescribed by the director, and...”Acceptablemethods for identifying deep wellsinto confining zones within theAoR should be prescribed by theEPA as part of the regulation.Accurate information is difficult to obtain for older wells withinthe AoR. Examples of other information that could be required by theDirector should be clearly stated.§146.86 Injection well construction requirements. (b) (2) “Surface casing must extend through the base of the lowermost USDW andbe cemented to the surface.”We recommend striking out thisrequirement in its entirety. This will be prohibitively expensive in deep wells, and may not benecessary at all sites.Page12of16§146.90 Testing and monitoring requirements.(d) Periodic monitoring of the groundwater quality and geochemical changes abovethe confining zone(s) that may be a result of carbon dioxide movement through the confining zone or additional identified zones: .We recommend changing to “ Periodic monitoring of the ground water quality and geochemical changes between the confiningzone(s) and the USDW that may be a result of carbon dioxide movement through the confining zone or additional identified zones:“This rewording is consistent with allowingfor injection either above or below USDWs§146.90 Testing and monitoring requirements. (g) “Testing and monitoring to track the extent of the carbon dioxide plume and theposition of the pressure front by either monitoring for pressure changes in the firstformation overlying the confining zone orusingindirect, geophysical techniques (e.g., seismic, electrical, gravity, or electromagnetic surveysand/or down-hole carbon dioxidedetection tools);”We recommend deletion of this requirement inits entirety and replacing with “Testing and monitoring to track the extent of thecarbon dioxide plume.” Tracking the precise position of a moving pressurefront will require a large number of expensive and deeplylocated probes. A limited number of pressuremonitors that can provide information on pressures affecting the confinement layers aremore valuable. The Proposed Rule also requires well owners to monitor periodically groundwater quality and geochemical changesabove the confining zone. The requirements for such deep monitorwells could be costly. Requiring both pressure and geochemicalmonitoring will be costly and provide questionable additional information or warning.§146.90 Testing and monitoring requirements. (h) “At the Director’s discretion, surfaceair monitoring and/orsoil gas monitoring todetect movement of carbon dioxide that could endanger a USDW.”We recommend deletion of this requirement in its entirety. Whilethis requirement may be suitable for determining potential airleakage relevant to monitoring of CO2in a greenhouse gas policy context, this requirement does not provide any additional protectionto migration to USDW as surfacebreakthrough will only occur well after the deep-surface migration of CO2to a USDW. Surfacemonitoring to detect CO2has high uncertainty and seasonal variability that islikely to result in many false positives and operationaldistractions. Seismic methods of tracking the CO2plume are more effective than soil gas monitoring of CO2, which is affected bymany other factors and thusis highly variable.Page13of16§146.93 Post-injection site care and site closure (b)(3) “Prior to authorization for site closure, the owner or operator must submit tothe Director a demonstration, based on monitoring and other site-specific data, that the carbon dioxide plume and pressure fronthave stabilized and that no additional monitoring is needed to assure that the geologic sequestration project does not pose anendangerment to USDWs.”Clarification of the term "stabilized" is needed. We recommendthat the term "stabilized" does not necessarily mean the plume andpressure front are no longer moving, but that the rate and direction as defined by confinement zones no longer place an USDW atrisk.Long-term monitoring should have an "end point" defined. Often termed an "exit strategy", thisis a key point that is agreed upon byall parties about what is a "stable condition". Monitoring dataincludes a prescribed amount oferror , thus statistics or other analysesmay be required to define a "stable condition".EPA seeks comment on allowing the use of proprietary models for GS sites. EPA Notice 68.Proprietary models should be acceptable providedthat supporting data for validation are submitted.EPA seeks comment on the applicability of computational fluid flowmodels for delineating the AoR of GS sites. EPA Notice 69.Computational fluid flow models should be permitted for delineating the AoR of GS sites providedalso that data are providedsupporting their validation in similar complex structures and flow regimesEPA seeks comment on requiring the reevaluation of the site AoR on a periodic basis, under what conditions the AoR should bereevaluated, and the appropriateness of a 10-year minimum fixed frequency for AoR reevaluation. EPA Notice 72.10 years is a reasonable period of time toreevaluate the site AoR during injection.EPA seeks comment on the proposed GS well requirements for depthof surface casing, the cementing of long-string casing, andconstruction with a packer set oppositea cemented interval. EPA Notice 78..The requirements for construction of the proposed Class VI CO2injection wells should be similar to the Class II wells used for EOR.This will expedite the transition of EOR projects to CCS projects. This requirement also unnecessarily stigmatizes CO2.Page14of16EPA seeks comment on the merits of horizontalwell drilling techniques for GS wellsand the applicability of well constructionrequirements discussed in this proposal. EPA Notice 80.Horizontal wells should be permitted for injection of CO2. The use of horizontal wells may minimize the number of wells required forinjection. A reduced number of wells will reduce bothcost and may also reduce potential leakage paths.EPA is requesting comment on the extent and scope to which hydraulic fracturing shouldbe allowed during GS injection, and whetherthe use of fracturing for the purposes of well stimulation is appropriate. EPA Notice 85.Fracturing of GS formations should be permitted, provided confining structures are not negativelyimpacted and fracturing is limitedto the injection zone. Exclusion of fracturing of storage formations would often require unnecessary drilling of new injectionwells.The oil industry has sufficient experiencein using fracturing technology to avoid negatively impacting confining structures (e.g.,caprock).EPA seeks comment on whether the Agency should set a minimum injection depth requirement for CO2GS, rather than require thatsuch injection take place below the lowermost USDW. EPA Notice 93.EPA should neither require injection below the lowermost USDW nor alternately require a minimum depth requirement as geologicstructures are likely to be encountered thatprovide for secure and safe storage.Examples of such storage that should be acceptableare domes and caverns.EPA’s proposal allows Directors’ discretion on whether to requirethe use of tracers, and if so,what types of tracers. EPA seekscomment on the use of tracers in CO2GS operations, and any potential impact of tracers on human health or ecosystems as theyrelate to USDWs. EPA Notice 95.Tracers should be permitted, but not required. They are commonly and safely used in the oil and gas industry.EPA seeks comment on the appropriate amount and types of monitoringthat should be conducted at a GS site. Specifically, EPA seekscomment regarding the usefulnessof indirect geophysical monitoring and surface air and soil gas monitoring. In addition, EPA seekscomment regarding the use of a Director-approvedmonitoring plan for GS sites. EPA Notice 111Page15of16Surface air and soil gas monitoring are notuseful. Seismic methods of tracking the CO2plume are more effective than soil gasmonitoring of CO2, which is affected by many other factors and thus ishighly variable. Surface breakthrough represents an “after-thefact” event. While this requirement may be suitable for determining potential air CO2leakage relevant tomonitoring of CO2in a GHGcontext, this requirement does notprovide any additional protection tomigration to USDW as surface CO2breakthrough will onlyoccur well after the deep-surface migration of CO2to a USDW. Surface monitoring to detect CO2has high uncertainty and seasonalvariability that is likely to result in many false positives, operational distractions and unduly raise public concern.EPA is proposing that permit applications for GS sites include several plans not currently required under existing UIC regulations.These plans include a monitoring and testing plan, an AoR and corrective action plan,and a post-injection site care and site closureplan. EPA seeks comment on the merits of requiring plans for monitoring, AoR, and post-injection site care as part of a permitapplication. EPA Notice 112.We believe that requiring a monitoring plan is reasonable. However, the EPA should develop suchrequirements with recognition of adistinct end to operations and monitoring following closure, and consider specific representations and codicils that recognizean end of“in-perpetuity” responsibilityfor the operator or owner.EPA seeks comment on the requirement for electronic reporting in its proposed rule. EPA Notice 115.We recommend that EPA allow electronic reporting as an alternative to hardcopy submittals. The benefits are speed, efficiency,reduced cost and burden of paperwork, ease of document retrieval, public access, search and storage.Although EPA has not included a requirementfor this report in its proposal, EPA seeks comment regarding the necessity for suchanannual report. EPA Notice 115.While reports on status are worthwhile, activity and changes in status are not goingto be significant on an annual basis. Following areport after the first year of operation to ensure that requirements for later reporting are being met, once every 10 years coincident withthe periods for AoR review should be adequate.In addition, EPA seeks comment on whether the Director shouldbe allowed to shorten the timeframe based on performanceinformation, and whether EPA should requirea shorter or longer post injection periodif data suggests the time frame should beadjusted. EPA Notice 125-26.Page16of16EPA should allow the Director to shorten the timeframe based on performance information. However, an open-ended time periodresults in a high degree of uncertainty regarding cost exposure to a project developer.It also leaves a site open to future liability from"reopeners" by the regulatory community. Toavoid this latter scenario,a maximum monitoring period should be defined in termsofclear, performance-based risk metrics - for example, that the validated model predicts that 95% of the plume is or will be trapped andthat a sensitivity analysis predicts a comfortable margin of safety and diminimus risk of endangerment to any USDWs.Current UIC regulations for Class I hazardous waste injection allow for the use of insurance for purposes of demonstrating financialresponsibility. However, insurance was notincluded as part of the guidance providedfor Class II injection because this insurancemechanism was and still is, rarely used for the purpose of demonstrating financial assurance for injection wells. EPA is assessingwhether to provide guidance on the use of insurance providers and, if so, whether to update eligibility requirements for insurers forGS wells consistent with other current Federal agency practices. EPA Notice 131.The role of insurance needs to bedefined and especially, what is being insured and for what events and risks. We interpret this asbeing limited to insurance related to decommissioning, plugging ofwells and closure of the site. Such costs and insurance coveragemay change as additional wells are needed or the scope of theAoR changes. Absent of Federal or state assumption of long termliability, and regulatory clarity on the inapplicability of CERCLA, and events and their mitigation, it will be difficult for insurers toprovide coverage for any more than a limited scope.EPA is assessing whether a financial ratings threshold for all companies using a self-guarantee, similarto those used by otherFederal agencies, is appropriate. The Agency also is considering what constitutes an appropriate financialrating threshold, andwhether a financial rating greater than BBB orBaa (i.e., the current rating thresholdestablished under the UIC regulations) isappropriate for GS wells. EPA Notice 133.Allowing for self-insurance definitely will behelpful to provide another avenue for CCS projects to be deployed. However, as we’veexperienced in the recent economic crisis, there are no guaranteesof financial continuity for either insurers or other economic entities.EPA is requesting comments on whether financial responsibility mechanismsto be recommended in EPAguidance should be adjustedin the manner described, whether additional instruments shouldbe included, and whether otheradjustments to the financialresponsibility mechanisms should be considered, all subject to EPA’s authority under the SDWA. EPA Notice 133.EPA needs to consider and define how it will deal with and allow transfer of financial responsibility between private entitiesand alsopotentially to Federal agencies or other sovereign entities such as states or commonwealths.Letter ID: 0210

Commenter: Richard Guinn Organization: Eastman Chemical Company

Letter ID: 0210 Comment ID: 22690 Letter Lines: 46 to 50 ; 71 to 79

Comment Code: 1330 1.1.3.1 Support use of GS in general

Comment: warming. With Eastman’s long-term commit ment to gasification technology the company has a vested interest in the geologic storage of CO2 that is important for the continued viability of gasificati on facilities. Eastman Chemical Company supports the following comments on the proposed rule generated by the Gasification Technologies Council.

Gasfication is an important technology for the conversion of coal, biomass, petroleum coke, municipal solid waste (MSW ) and other carbonaceous feedstocks to power, chemicals, fertilizers and cleaner fuels. With gasification, CO2 can be captured using commercially available tec hnologies. Due to its inherent carbon capture capability, gasification can serve a major role in Carbon Capture and Storage (CCS) projects. GTC’s interest in EPA’s proposed regulation derives from the importance of CCS to achieving future goals of CO2 emissions reduction while using secure and indigenous resources to meet our growing national need for chemicals, fertilizers, liquid fu els, hydrogen, and electricity.

Individual Response: EPA clarifies that GHG emissions reduc tions and the use of integrated gasification combined cycle technologies are out side the scope of the UIC GS rulemaking. The purpose of the GS rule is to ensure that, where GS is deployed, the projects are permitted sited, constructed, operated, and closed in a manner th at protects USDWs from endangerment. The requirements apply to owners or operators of in jection wells used to inject CO2 for long-term

storage.

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: 0210 Comment ID: 22691 Letter Lines: 74 to 94

Comment Code: 1250 1.1.1.4 Flexibility is needed (p erformance-based standards)

Comment: captured using commercially available tec hnologies. Due to its inherent carbon capture capability, gasification can serve a major role in Carbon Capture and Storage (CCS) projects. GTC’s interest in EPA’s proposed regulation derives from the importance of CCS to achieving future goals of CO2 emissions reduction while using secure and indigenous resources to meet our growing national need for chemicals, fertilizers, liquid fu els, hydrogen, and electricity.

1EPA is commended for taking this action that begins the process of providing regulatory clarity to a complex and importa nt topic. In its decision process, EPA needs to consider the importance of CCS to the succes s of the nation’s overall climate change, energy independen ce and economic growth strategies. Any rule for geologic storage of CO2 needs to provide an unambiguous framework that promotes the development and deployment of CCS while protecting the environment. Also, given the current state of expe rience in geologic sequestration, any prescription needs to be flexible and adaptive. In addition to regulatory clarity, climate change policy will be needed to define a value for CO2 in order to drive deployment of CCS. After polic y, cost will determin e how quickly and widely CCS can be deployed. Currently, th e value of CO2 is principally limited

to its use in Enhanced Oil Recovery (EOR). The cost of CCS needs to be reduced by implementing requirements that are necessary and sufficient while not compromising the protecti on of drinking water.

Individual Response: EPA clarifies that the Class VI GS requirements are designed to ensure that, where deployed, GS is conducted in a ma nner that protects USDWs from endangerment. The requirements apply to owners or operators of injection wells used to inject CO2 for permanent storage, and do not apply to genera tors of CO2. Encouraging investment in CCS projects, addressing climate chan ge, and setting a price for carbon are outside the scope of the GS rulemaking.

See the remainder of EPA's responses to this comment and the final rule and preamble for additional information on EPA's regulatory approach.

Letter ID: 0210 Comment ID: 22692 Letter Lines: 98 to 99

Comment Code: 1630 1.3.3 RCRA/hazardous waste i ssues (seeking comment)

Comment: 1. EPA needs to categorically exclude CO 2 specifically intended for geologic storage from the definition of RCRA hazardous waste.

Individual Response: EPA received many comments regardi ng the applicability of the RCRA regulations and statute to CO2 st reams that are geologically seque stered under the final Class VI UIC well requirements. As a result, EPA has deci ded to initiate a sepa rate proposed rulemaking specifically to examine the issue of RCRA appl icability to CO2 streams being geologically sequestered, including the possible option of a conditional exemption from the RCRA requirements for CO2 GS in Class VI wells. EPA will consider these comments as part of its development of that proposal. The Agency will consider issues pa rticular to RCRA in the context of that separate rulemaking, and recommends that the commenter read that proposed rule when it is published. The Agency notes that comment ers who wish to submit comments on the RCRA proposal will need to do so during the comment pe riod for that rule. Finall y, EPA also notes that the final GS rule, which adds ne w regulations for Class VI wells under the Safe Drinking Water Act (SDWA), is not making any changes to the RCRA regulations.

2EPA clarifies that the GS rule requires owner or operators of Class VI we lls to characterize their injection stream prior to injection, and throughout the operational life of the injection facility. Since the GS rule, at §146.81(d), prohibits CO2 st reams that meet the definition of a hazardous waste under 40 CFR part 261, owners or operators w ill need to characterize their CO2 stream as part of their permit application to determine if the injectate is a RCRA hazardous waste. If so, injection may only occur in a Class I hazardous waste injection well.

Letter ID: 0210 Comment ID: 22693 Letter Lines: 101 to 103

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

Comment: 2. EPA must emphatically conclude that CO2 containing trace contaminants does not open any regulatory pathways to subj ecting a geological st orage site to Superfund liability.

Individual Response: CO2 itself is not listed as a hazardous substance under CERCLA however, the CO2 stream may contain a listed hazardous substance (such as mercury) or may

mobilize substances in the subsurface that could react with ground water to produce listed hazardous substances (such as sulf uric acid). Whether such subs tances may result in CERCLA liability from a sequestration f acility depends entirely on the composition of the specific CO2

stream and the environmental media in which it is stored (e.g., soil or ground water). CERCLA exempts from liability, under CERCLA section 107, 42 U.S.C. 9607, certain “federally permitted releases” (FPR) as defined in CERCLA, 42 U.S. C. 9601(10). Class VI permits will need to be carefully structured to ensure that they prevent potential releases from the well which are outside the scope of the Class VI permit.

EPA clarifies that, while the Administrator re serves the right to promulgate regulations designating additional substances as hazardous under §102 of CERCLA, EPA intends to avoid any potential overlap of SDWA and CERCLA authority through its comprehensive Class VI requirements.

Letter ID: 0210 Comment ID: 22694 Letter Lines: 105 to 108

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

Comment Code: 5460 2.9.2 Comments on transfer of lia bility for long-term care

Comment: 3. CLASS VI (Underground Inje ction Control (UIC) permits need to identify the potential for hazardous substances that might be generated in geologic formations after facility decommissioni ng and well closure so that should releases occur, they would be federally-permitted.

Individual Response: As described above, CERCLA exempt s from liability, under CERCLA section 107, 42 U.S.C. 9607, certain “federally permitted releases” (FPR) as defined in CERCLA, 42 U.S.C. 9601(10). Class VI permits will need to be carefully structured to ensure that they prevent potential releases from the we ll which are outside the scope of the Class VI

3permit.

Regarding long term liability, once an owner or operator has met all regu latory requirements

under Part 146 for Class VI wells and the Dire ctor has approved site closure pursuant to requirements at §146.93, the owner or operato r will generally no longer be subject to enforcement for regulatory noncompliance. Furtherm ore, their financial instrument as required under §146.85 will be released if it was not used. However, even if a site closure is approved under §146.93, an owner or operator may be held liable for regulatory noncompliance (including violation of 40 CFR 144.12) in ce rtain circumstances. For example, an owner or operator may be held liable for regulatory noncompliance even afte r site closure was approved if the Director relied on erroneous information (e.g., erroneous modeling data) provid ed by the owner or operator when approving site closure.

Separate from EPA’s authority to enforce regul atory compliance, an owner or operator may be subject to a §1431 response orde r even after proper site cl osure is approved under §146.93. Under §1431 the Administrator may require an ow ner or operator to take necessary response

measures if he or she receives information that a contaminant is present or is likely to enter a public water system or an USDW, which may pres ent an imminent and s ubstantial endangerment to the health of persons, and the appropriate Stat e and local authorities ha ve not acted to protect the health of such persons. Th e action may include issuing admi nistrative orders or commencing a civil action for appropriate relief against the ow ner or operator of a Class VI well. If the owner or operator fails to comply with the order, they may be subject to a civil penalty for each day in

which such violation occurs or failure to comply continues.

Furthermore, after site closure an owner or ope rator may remain liable under tort and other remedies, or under other federal statutes includi ng, but not limited to, Clean Air Act, 42 U.S.C. §§7401-7671; CERCLA, 42 U.S.C. §9601-9675; and RCRA, 42 U.S.C. §6901-6992. EPA does not have authority to transfer SD WA or other legal liability for Class VI wells to the State or federal government or a third-party fund. See the final rule preamble for further discussion of EPA's final approach.

Letter ID: 0210 Comment ID: 22695 Letter Lines: 110 to 110

Comment Code: 3120 2.1.2 Need to identify additional confining and containment zones (seeking comment)

Comment: 4. Secondary confinement/containment should not be required.

Individual Response: EPA retains the requirement to iden tify additional containment/confining zones, if required by the Di rector, as proposed (e.g., §146.83(b)). The Agency's decision is supported by commenters representing states, wate r associations, and an electric utility who assert that these requirements (at §146.83(b)) pr omote a flexible, risk-based, site-specific approach to characterizing and perm itting a site for GS projects.

The Agency believes that providing the Director di scretion will allow consideration of a range of sites for GS, based on site-specific conditions and ensure USDW protection. EPA believes that

4requiring appropriate site ch aracterization by the owner or operator (under §146.82) and providing an appropriate de gree of flexibility to the Director to evaluate site-specific geologic data will afford the greatest protec tion of USDWs from endangerment.

Letter ID: 0210 Comment ID: 22696 Letter Lines: 112 to 113

Comment Code: 4324 2.4.4.1.2 Comments opposed to requiring injection below the lowermost

USDW

Comment: 5. CO2 injection should not be restricted only to formations below the lowermost underground source of drinking water.

Individual Response: EPA acknowledges that there are lim ited circumstances where injection above the lowermost USDW can be performe d in a manner that protects USDWs from endangerment, as long as appropriate protections are in place. The final GS rule at §146.95 establishes a process by which owne rs or operators can seek a waiv er of the Class VI injection depth requirements for injecti on into non-USDW formations a bove and/or between USDWs.

Letter ID: 0210 Comment ID: 22697 Letter Lines: 115 to 116

Comment Code: 5430 2.9.1 Comments on proposed financia l responsibility requirements (40 CFR 146.85)

Comment: 6. EPA needs to clarify how to demons trate financial responsibility; the proposed regulation leaves too much discretion to the Director.

Individual Response: EPA has clarified the financial responsibility requirements in the final GS rule, and has included at §146.85(a) a list of qualifying financia l responsibility instruments, including trust funds, surety bonds, letters of cred it, insurance, self insurance, escrow accounts, or any other instrument(s) satisfactory to the Dire ctor. Owners or operators have the flexibility to choose from a variety of financial instruments to meet their financial re sponsibility obligations. Owners or operators may use one or multiple fi nancial responsibility instruments for well plugging and PISC (§146.85(a)(6)). However EPA will not allow for a separate financial responsibility demonstration for well plugging and PI SC (i.e., a demonstration submitted prior to well plugging and the beginning of the post-injection site care peri od rather than with the permit application). A demonstration of fi nancial responsibility for all phases of the GS project will be required prior to the issuance of a Class VI permit (§146.85(a)(5)(i)).

See the final rule and preamble for further discussion of EPA's final approach to financial responsibility. EPA is also developing guidance on financial responsibil ity for Class VI wells that will provide information about the appropriateness of various financial instruments. This guidance is available on EPA's website at http://water.epa.gov/type/groundwater /uic/wells_sequestration.cfm.

5Letter ID: 0210 Comment ID: 22698 Letter Lines: 118 to 118

Comment Code: 5432 2.9.1.1 Need to adjust financial responsibility mechanisms (seeking comment)

Comment: 7. EPA should not adopt a pay- in period of three years.

Individual Response: EPA acknowledges that there may be several possible approaches to setting pay-in periods for trust funds. The final rule requires that the Di rector approve the use and length of pay-in periods. EPA is devel oping guidance (available on EPA's website at http://water.epa.gov/type/groundwat er/uic/wells_sequest ration.cfm) that describes the types of financial instruments that owners or operato rs can use to meet financial responsibility requirements for GS wells. Specifically, the guida nce will discuss pay-in periods and provide guidance for Directors to use in determining an appropriate pay-in period. EPA adds that owners or operators may choose from a variety of fi nancial instruments to meet their financial responsibility needs.

Letter ID: 0210 Comment ID: 22699 Letter Lines: 120 to 121

Comment Code: 5240 2.8.2.2 Post injection timeframe (seeking comment)

Comment: 8. The period of post-injection site mana gement should be performance-based and not be arbitrarily se t at 50 years.

Individual Response: EPA agrees with commenters that th ere will be circumstances where it can be demonstrated in less than 50 years that the plume and pressure front no longer pose a risk of endangerment to USDWs. For this reason, the GS rule offers owners or operators flexibility regarding the duration of the PISC timeframe by: (1) allowing the Director discretion to shorten or lengthen the PISC timeframe during the pos t-injection period based on site-specific data, pursuant to requirements at §146.93(b) ; or (2) affording the Director discretion to allow a Class VI well owner or operator to demonstrate, during the permitting process based on substantial data, that an alternative PISC timeframe may be appropriate if it ensu res non-endangerment of USDWs pursuant to requirements at §146.93(c).

EPA believes however, that to ensure USDW protection from enda ngerment, a default timeframe for post-injection site care will be necessary in al l but a limited number of cases. This default 50 year post-injection site care ti meframe represents a reasonable and protective monitoring period based on a review of research studies, industr y reports, and existing environmental programs, and evaluation of public comments.

EPA believes that a default post-injection site car e timeframe of 50 years, with flexibility to adjust the timeframe for a limited number of GS projects during the permitting process where

substantial data exists to demonstrate that an alternative timeframe would be protective of USDWs, or based on data collected during the PISC period, is appropriate to address the range of sites where GS is anticipated to occur, to ac commodate site-specific circumstances and various

6geologic conditions, and addre sses commenters’ concerns, wh ile ensuring USDW protection. Both approaches will utilize si te-specific data, and be based on pressure monitoring and USDW impacts. EPA disagrees that the post-injection site care time frame of 50 years in the final rule is excessive in most cases or arbitrary. In determining the post-i njection site care-time frame for the proposed regulation, EPA reviewed industry reports, exis ting environmental programs, and initial GS research studies. EPA provided a synthesis of pe rtinent results from GS modeling studies in the preamble to the proposed regulation. Further expl anation of this analysis was included in an EPA-prepared background document that is available in the federal docket, titled "Computational Modeling of Unde rground Injection of Carbon Di oxide for Determination of Area-of-Review and Potential Risk to Underg round Sources of Drinking Water." Based on review of these studies, modeling results indicate that the CO2 plume stabilization may occur on the timeframe of 10-100 years after the cessati on of injection. EPA be lieves that a 50-year default post-injection site care timeframe is a reasonable midpoint for most GS projects and available data, including data submitted by commenters, do not support a different default timeframe, and has retained th is in the final regulation.

Letter ID: 0210 Comment ID: 22700 Letter Lines: 123 to 125

Comment Code: 1930 1.4.4.2 Consultations with State, Tr ibal, and local A ssociations (e.g., GWPC, IOGCC)

Comment: 9. EPA should increase its state stake holder effort towards uniformity of technical requirements; disparate require ments and processes will increase the time, cost, and complexity of projects.

Individual Response: EPA will continue to consult with a variety of stakeholders, including the National Drinking Water Advisory Council, associations and orga nizations, ORD, and experts; review permits; and continue to hold workshops to build expertise and ensure that that implementation of the national program is based on the best available science. The Agency plans to collect and review data every six years on GS projects to determine whether the appropriate amount and types of information and appropria te documentation are being collected, and to determine if modifications to the requ irements are appropriate or necessary.

The GS rule provides flexibility to determine the suitability of a proposed site based on extensive, site-specific data. EPA believes that requiring appropriate site characterization by the owner or operator and providing an appropriate degree of flexibility to the Director to evaluate site-specific geologic data will afford the greate st protection of USDWs. The issuance of a UIC Class VI permit is determined based on evaluation of site-specific permit information pursuant to the requirements at §§146.82 and 146.83.

Letter ID: 0210 Comment ID: 22701 Letter Lines: 127 to 129

7Comment Code: 1680 1.3.8 Don't overstate ris k, don't stigmatize CO2

Comment: 10. EPA should not stigmatize geological stor age of CO2 such as can be inferred by having requirements for Class VI wells that are more restrictive than for

Class II wells.

Individual Response: EPA disagrees that the requirements in the GS regulation will stigmatize GS. EPA recognizes that injecting large volumes of CO2 for GS poses unique challenges that, if not properly managed, could endang er drinking water sources and have 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 believes that injection for th e primary purpose of long term storage is sufficiently different from Class II ER operations and warrants tailor ed requirements. For example, the volume of CO2 anticipated to be injected in Class VI wells is significantly greater than for Class II wells. Reservoir pressure conditions wi ll also be different, with Cla ss VI injection operations involving large volumes of CO2 and likely having higher pressures within th eir storage formations than Class II ER projects.

Letter ID: 0210 Comment ID: 22702 Letter Lines: 131 to 132

Comment Code: 2060 1.5.3 Comments on grandfathering of existing wells (seeking comment)

Comment: 11. Requirements for conversion of any well to a Class VI well should be site and risk dependent.

Individual Response: EPA agrees that a cautious approach to grandfathering is appropriate, particularly given that the convert ed well will be used for a substa ntially different process, which involves increased reservoir pre ssures associated with large volumes of stored CO2 and the corrosivity of CO2 in the presence of water. Th e final GS rule provides for the construction of these wells to be grandfathered (per 146.81(c)). EPA has included a requirement in the final GS rule that owners or operators seeking to c onvert existing wells for long term storage must demonstrate to the Director that the grandfathe red wells were engineered and constructed meet the requirements at §146.86(a) and ensure prot ection of USDWs, in lieu of requirements at §146.86(b) and §146.87(a). EPA clarifies that only the construction requirements are grandfathered and that all other Class VI requirements (reporting, monitoring, mechnical integrity testing, etc.) must be met following a determination under §146.81(c). Conversion of

the well is at the Director's discretion follo wing an evaluation of a ll other site-specific information about the well and the project, e.g., modeling, monitoring, and other data. EPA expects that any wells that have deteriorated due to contact wi th incompatible injected or formation fluids would not be approved for conversion.

8Letter ID: 0210 Comment ID: 22703 Letter Lines: 134 to 136

Comment Code: 1210 1.1.1 Comments about the proposed rule

Comment: 12. EPA’s implied 2017 date for completion of the final UIC regulations is too late to provide regulatory clarity faced by CCS project developers today. These are the details supporting these co ncerns and recommendations:

Individual Response: EPA believes that sufficient data have been collected to inform the final GS rule. In addition to laboratory studies a nd modeling research that provide relevant information on GS, the Agency is also collect ing and analyzing GS project data and permit information from a variety of sources. Most not ably, EPA has evaluated permits and reviewed operational data and information associated with the seven regiona l carbon sequestration partnerships funded by the U.S. Department of Energy and coordinated through the National Energy Technology Laboratory. EPA believes that thes e projects form a solid basis for finalizing the GS requirements, and there is no reason to wa it until all phases of the DOE demonstration tests are complete. Nevertheless, EPA anticipates th at future experimental and full-scale projects will continue to inform the technology, and is therefore using an adaptive rulemaking approach. EPA plans, every six years, to collect and review data on GS projects to determine whether the appropriate amount and types of information a nd appropriate documentation are being collected, and to determine if modifications to the requir ements are appropriate or necessary. EPA believes that the completion of the DOE pilots in 2017 wi ll allow the incorporation of results of these projects into the first review of the rule.

Letter ID: 0210 Comment ID: 22704 Letter Lines: 140 to 161

Comment Code: 1630 1.3.3 RCRA/hazardous waste i ssues (seeking comment)

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

Comment: #1: Potential Applicability of CFR 40 Part 261 (RCRA). (Ref: page 43503, Section I) In the preamble to the ANPR, EPA poses the question of whet her injected CO2 might be considered a RCRA hazardous wast e, but does not answer the question. Any ambiguity concerning the applicability of complex and e xpensive regulatory regimes such as RCRA and CERCLA will be a major disincentive to the development and deployment of CCS. Regulatory clar ity and certainty ar e critical to companies facing multi-billion dollar investment decisions regarding gasification facilities and CO 2 sequestration projects.

EPA should explicitly addre ss these issues in the fina l rule and not leave open any implication that RCRA and CERCLA may or may not apply to CCS. The presence

of low levels of hazardous contaminants in CO2 as a result of the carbon capture process should not limit the storage of th e CO2 using Class VI wells, especially taking into account the diminimus risk of exposure associated with the disposition of CO2 into deep geological formations unde r the stringent controls required by this proposed regulation. We strongly recommend that EPA provide a categorical exclusion in this rulemaking, th at CO2 streams that are specifically

9intended to be stored in geologic struct ures are not RCRA hazardous wastes. Such an exclusion would be analogous to the provision of 40 CFR §261.4(b)(5), which excludes drilling fluids, produced waters, a nd other wastes associated with the development, or production of crude oil, natural gas or geothermal energy, and therefore can be injected into Class II wells.

Individual Response: EPA received many comments regardi ng the applicability of the RCRA regulations and statute to CO2 st reams that are geologically seque stered under the final Class VI UIC well requirements. As a result, EPA has deci ded to initiate a sepa rate proposed rulemaking specifically to examine the issue of RCRA appl icability to CO2 streams being geologically sequestered, including the possible option of a conditional exemption from the RCRA requirements for CO2 GS in Class VI wells. EPA will consider these comments as part of its development of that proposal. The Agency will consider issues pa rticular to RCRA in the context of that separate rulemaking, and recommends that the commenter read that proposed rule when it is published. The Agency notes that comment ers who wish to submit comments on the RCRA proposal will need to do so during the comment pe riod for that rule. Finall y, EPA also notes that the final GS rule, which adds ne w regulations for Class VI wells under the Safe Drinking Water Act (SDWA), is not making any changes to the RCRA regulations.

CO2 itself is not listed as a hazardous substan ce under CERCLA; however, the CO2 stream may contain a listed hazardous substance (such as mercury) or may mobilize substances in the subsurface that could react with ground water to produce listed hazardous substances (such as sulfuric acid). Whether such substances may result in CERCLA liability from a sequestration facility depends entirely on th e composition of the specific CO2 stream and the environmental media in which it is stored (e.g., soil or gr ound water). CERCLA exempts from liability, under CERCLA section 107, 42 U.S.C. 9607, certain “feder ally permitted releases” (FPR) as defined in CERCLA, 42 U.S.C. 9601(10). Class VI permits will need to be carefully structured to ensure that they prevent potential releases from the we ll which are outside the scope of the Class VI permit.

Letter ID: 0210 Comment ID: 22705 Letter Lines: 163 to 230 ; 446 to 462

Comment Code: 1630 1.3.3 RCRA/hazardous waste i ssues (seeking comment)

Comment: In terms of its approach, we recommend that EPA consider captured CO2 -- inclusive of transport, the injection faci lity and within injection wells -- as

material that constitutes a stream that is contained within a process and therefore, not a solid waste. Within th is scope, protection of health and the environment will be provided by controls required under other regulatory domains

such as OSHA and NESHAPS.

For purposes of evaluating the potential RCRA status of the captured CO2 that may be injected in Class VI wells, the CO2 streams trigger none of the RCRA hazardous waste criteria. Specifically, captu red CO2 is not a "listed" hazardous waste as set forth in 40 C.F.R. §261.31 - .35, nor is it "characteristically" hazardous pursuant to 40 C.F.R. § 261.20 - .24. It is neither "ignitable" nor

10"corrosive", and the TCLP test used to determine whether a waste is characteristically "toxic" cannot be used on the supercritical liquid CO2 stream. In any event, the level of trace contaminants in the CO2 is so low that TCLP levels are not even approached when measured on an absolute concentration basis. Next, the CO2 stream is not "re active," since the injected CO2 stream will not generate toxic gases in a quan tity sufficient to present a danger to human health or the environment. For example, the levels of hydrogen sulfide likely to be present in the CO2 stream (g enerally less than 0.3%) are an order of magnitude less than those typically pres ent in the "acid gas" that is widely injected into Class II under ground injection wells in th e U.S., which have an average hydrogen sulfide concentration of approximately 40%. See Kleweki (Cadmus Group), Kobelski (U.S. EPA), Karimjee (U.S . EPA), and Sham (Cadmus Group): Acid Gas Injection In The United States (P resentation on May 8, 2006 at the Fifth Annual Conference On Carbon Capture & Se questration). U.S. EPA continues to encourage the underground injection of " acid gas" streams, recently including such a requirement in a proposed cons ent decree that would resolve an enforcement case brought under the Clean Air Act. U.S. v. Merit Energy Company, Civil Action No. 1:08-CV-917 (W.D. Mic h.), proposed Consent Decree lodged on September 30, 2008 (73 Fed. Reg. 58267 (Oct . 6, 2008) (U.S. EPA’s October 1, 2008 press release in this matter stated that the underground injection of the acid gas would result in "zero sulfur dioxide emissions.")

EPA should take into account the specific disposition of the CO2 that the ruling is focused on (i.e., deep underground stor age). A well permitted under this rule will be protective of underground sources of drinking water. The minimum depth of injection required to maintain CO2 in a supercritical state is approximately 2,500 feet. This, in conjunction with th e controls and safeguards required by this rule throughout the injection and pos t-injection period, will ensure that CO2 injected into a Class VI well poses de minimus risk. There is very little

likelihood for hazardous consti tuents to be released where they would pose a risk to human health or the environment. (See, e.g., Final Risk Assessment for the FutureGen Project Environmental Im pact Statement, DOE, April, 2007)

Finally, much higher H2S levels than will be used in CCS have been successfully and safely used for EOR injection with Cl ass II wells. For example, in Canada, there are 45 ongoing projects where high leve ls (up to 68%) of H2S in CO2 are being injected into saline aquifers or producing oilfields [ 1,2,3] for disposal purposes. These combined gas streams of H2 S and CO2 are commonly referred to as acid gas and originate from pur ification of sour natural gas, are highly toxic and in some cases of high concentration, flammable. These projects have been

studied in detail and their success is well documented [3,4]. In addition, there have never been any significant safety incidents reported, since the start of the first injection of acid gas into a de pleted oil reservoir on the outskirts of the city of Edmonton, Alberta in the early 1990’s. Nor have there ever been any reports of leakage of H2S from these operations [4].

11Accordingly, EPA has sufficient informati on now to conclude that captured CO2

streams are not RCRA hazardous wastes a nd do not pose greater risks that many streams than are already being routinely injected in Class II and other UIC wells as non-hazardous wastes. Indeed, to conclude otherwise would create the nonsensical result of suggesting that sequest ering a material in deep geological formations poses more hazards than em itting it into the air. It is very important that EPA make this determina tion as soon as possible to remove the implication that CCS might be subject to RCRA regulation, an implication that would be extremely damaging to the fu ture of CCS, and to the goal of significantly reducing the carbon footprin t of the nation’s energy sector.

1 Keushnig, H. (1995); Hydrogen sulfide -- if you don’t like it, put it back. J. Canadian Petroleum Technology. 34: 18-20.

2 Longworth, H.L., G.C. Dunn, M. Semchuc k (1996); Underground disposal of acid gas in Alberta, Canada: Regulatory c oncerns and case histories. SPE 35584. pg

181-192.

3 Bachu, S., K. Haug (2005) In situ ch aracteristics of aci d-gas injection operations in the Alberta Basin, Western Ca nada: Demonstration of CO2 geological storage. in Carbon Dioxide for Storage in Deep Geological Formations. Vol. 3. ed. D.C. Thomas, S.M. Benson. Elsevier Ltd. pg 867-876.

4 Bachu, S., W.D. Gunter; Overview of Acid -Gas Injection Operations in Western Canada. In Proceedings of 7th Interna tional Conference on Gr eenhouse Gas Control Technologies. Volume 1: Peer-Reviewed Pa pers and Plenary Presentations (E.S. Rubin, D.W. Keith and C.F. Gilboy, ed.), IEA Greenhouse Gas Programme, Cheltenham, UK, 2005.

Individual Response: EPA received many comments regardi ng the applicability of the RCRA regulations and statute to CO2 st reams that are geologically seque stered under the final Class VI UIC well requirements. As a result, EPA has deci ded to initiate a sepa rate proposed rulemaking specifically to examine the issue of RCRA appl icability to CO2 streams being geologically sequestered, including the possible option of a conditional exemption from the RCRA requirements for CO2 GS in Class VI wells. EPA will consider these comments as part of its development of that proposal. The Agency will consider issues pa rticular to RCRA in the context of that separate rulemaking, and recommends that the commenter read that proposed rule when it is published. The Agency notes that comment ers who wish to submit comments on the RCRA proposal will need to do so during the comment pe riod for that rule. Finall y, EPA also notes that the final GS rule, which adds ne w regulations for Class VI wells under the Safe Drinking Water Act (SDWA), is not making any changes to the RCRA regulations.

EPA supports the use of CO2 captu re technologies that minimize impurities in the CO2 stream. However, the GS rule does not apply to CO2 sources.

12Letter ID: 0210 Comment ID: 22706 Letter Lines: 232 to 256

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

Comment: Concern #2: Scope of Class VI Permits and the Potential Applicability of Superfund to CCS. (Ref: page 43503, Section J)

EPA raises, but does not answer, the question of whether the underground injection of CO2 might tri gger Superfund and associated natural resource damages liabilities, and appears to suggest that Class VI permits might be written to allow future Superfund liability associat ed with CCS. EPA must emphatically conclude that CO2 containing trace contam inants does not open any regulatory pathways for subjecting a geological stor age site to Superf und liability. As with RCRA, any ambiguity on applicability of CERCLA will be potentially fatal to the development and deployment of CCS. It is highly unlikely that CCS will be implemented on a meaningful scale if th ere is a possibility that CCS might trigger Superfund.

CERCLA expressly excludes from Supe rfund liability "fed erally permitted releases." Further, "any injection of fluids authorized under the Federal underground injection control programs or State programs submitted for Federal approval . . . pursuant to part C of the Sa fe Drinking Water Act" are "federally permitted releases." 42 U.S.C. § 9601( 10)(G) (CERCLA Section 101(10)(G)). Therefore, any captured CO2 st ream that is injected in a Class VI well pursuant to a Federal or State permit is a "feder ally permitted release" and not subject to Superfund liability (including natura l resource damages). It would be inconsistent with existing practice in th e UIC program, impractical, and fatal

to the future of CCS to limit Class VI permits solely to th e CO2 portion of the stream and explicitly exclude any trace contaminants.

Individual Response: As described above, whether the presen ce of hazardous substances in the CO2 may result in CERCLA liability from a se questration facility depends entirely on the composition of the specific CO2 stream and the environmental media in which it is stored (e.g., soil or ground water). CERCLA exempts from lia bility, under CERCLA section 107, 42 U.S.C. 9607, certain “federally permitted releases” (FPR ) as defined in CERCLA, 42 U.S.C. 9601(10). Class VI permits will need to be carefully structured to ensure that they prevent potential releases

from the well which are outside the scope of the Class VI permit.

EPA adds that promoting the use of GS is outsi de the scope of the GS rule. Rather, the purpose of the GS regulation is to ensu re that, where deployed, GS is c onducted in a manner that protects USDWs from endangerment.

Letter ID: 0210 Comment ID: 22707 Letter Lines: 258 to 269

Comment Code: 1614 1.3.1.2 Impurities in captured CO 2; purity standards for CO2

13Comment: By its inherent nature, ga sification will provide a str eam of >90% CO2 having extremely low levels of both organic and inorganic hazardous air pollutants (HAPS). There are several mechanisms th at provide this: 1) destruction of organic HAPS within a gasifier due to the extreme (~2,500 oF) gasification temperature, 2) removal of inorgani c content in the melting and slagging process, 3) particulate scrubbing or fi ltration, 4) activated carbon beds to remove mercury and other condensed metals ;, and finally 5) cooling followed by acid gas scrubbing. The combination of thes e HAP reductions is very effective. As a point of reference, the total inorga nic HAPS that would be injected with captured CO2 from an IGCC or gasificati on process over 30 years of CCS operation will be at least an order-of-magnitude lower than the annual limits (both total and individual components) of NSPS.

Individual Response: EPA recognizes that many CO2 str eams may be relatively pure, and

research indicates that the estimated amounts of impurities in a CO2 stream are likely to be low. However, these estimates are based on limited in formation, and uncertainties remain about the expected concentrations of impurities from the va rious types of CO2 streams. The concentrations

of minor and trace elements in CO2 streams for GS projects are likely to vary by facility, coal composition, plant operating conditions, and pollution removal technologies.

The GS rule does not set generic purity standa rds for CO2 injectate streams (e.g., a percent CO2). Instead, the GS rule addresses the quality and quantity of impurities by requiring owners or operators to submit information on the sour ce of the CO2 and its physical and chemical properties. Specifically, the GS rule requires the owner or operator to subm it data about the site, including an analysis of the chemical and physical characteristics of the CO2 stream, as required at §146.82(a)(7)(iv), and information on the compatib ility of the CO2 stream with fluids in the injection zone and minerals in both the injection and the confini ng zones and the materials used to construct the well, per §146.82(c)(3). This info rmation can help the Director determine the potential for geochemical reactions between the injectate (CO2) and the host geologic formations, which could result in the plugging of pore spaces orthe dissolution of formation

minerals.

Letter ID: 0210 Comment ID: 22708 Letter Lines: 271 to 281

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

Comment: Concern #3: Potential releases from the well which are outside the scope of the Class VI permit. (Ref: page 43504, Section J)

Class VI UIC permits must also be carefu lly written to identify and address the potential post-injection releases of hazar dous substances, or the generation of

hazardous substances from the chemical interaction of the CO2 with the geological storage formation (e.g. - leaching of metals) so that they would be federally permitted releases. If the potential release or generation of such hazardous substances is viewed as beyond the scope of Class VI permits, CCS sites could be subjected to the thr eat of long-term Superfund liability, a

14threat that could be fatal to the viability of CCS.

Individual Response: As described above, whether the presen ce of hazardous substances in the CO2 may result in CERCLA liability from a se questration facility depends entirely on the composition of the specific CO2 stream and the environmental media in which it is stored (e.g., soil or ground water). CERCLA exempts from lia bility, under CERCLA section 107, 42 U.S.C. 9607, certain “federally permitted releases” (FPR ) as defined in CERCLA, 42 U.S.C. 9601(10). Class VI permits will need to be carefully structured to ensure that they prevent potential releases

from the well which are outside the scope of the Class VI permit.

Letter ID: 0210 Comment ID: 22709 Letter Lines: 283 to 293

Comment Code: 1660 1.3.6 Ecosystem impacts (soil, air, surface water)

Comment: With respect to releases from the well itself, the primary source of such

releases could occur duri ng injection operation through failure of well seals, flanges and gaskets, piping breaches, liners, valve packing and other mechanical components or failure to follow operational and safety procedures. Such releases will likely be confined to the injection period. During operation and the measurement, monitoring, and validation (MMV) period, the inje ction facility (metering, distribution and injection sy stems), should be classified as a production facility where industrial safe ty standards, design and operating procedures (e.g., - HAZOPS reviews) will a pply. Appropriate regulation will be derived from permits under the Clean Air Ac t that are issued to the facility along with protection of operating personal as required by OSHA.

Individual Response: EPA acknowledges that there are potent ial risks associated with GS. The purpose of the Class VI requirements is to minimize and mitigate potential/identified risks through proper site characterization, well cons truction, operation, monitoring, post-injection site care, and site closure and to ensure protection of USDWs. Th e Agency clarifies that, under SDWA authority, the requirements do not explicitly protect agains t CO2 leakage to the surface. However, the GS rule requires that CO2 injected for GS remain confined in the injection zone. Leakage outside of the injection zone/to the surface would be a permit violation.

The Agency clarifies that compliance with OSHA gui delines for GS is outside of the scope of the GS rule. However, EPA believes that the measures in the GS rule that mitigate the possibility of CO2 leakage out of the injection zone will also mitigate the risks to humans, both on-site and

off-site.

Letter ID: 0210 Comment ID: 22710 Letter Lines: 295 to 313

Comment Code: 3120 2.1.2 Need to identify additional confining and containment zones (seeking comment)

Comment: Concern #4: Requirement for secondary confinement/containment. (Ref: page

1543505, 1- Proposed Geologic S iting Requirements)

The proposal would provide the Director th e discretion to require the owner or operator to identify and characterize addi tional confining and containment zones above the primary (i.e., lowermost) confin ing zone that could further impede

vertical fluid movement and allow fo r pressure and dissipation. Secondary containment (multiple confining structures ) should not be required to prevent leakage of CO2. If required, this will pr event geologic storage in certain but important geographic regions. It also ra ises doubt concerning procedures and protocols to characterize and validate sa fe geologic storage formations and containment where there is not secondary containment. Under the proposed rule, there are measures that provide adequate assurance of formation integrity and require operators to demonstrate th at their project will not endanger underground sources of drinking water (USD Ws). If a secondary containment is present, it will be detected during site characterization and risk assessment. Such a special case could be analyzed to evaluate the potential risks to USDWs and to develop additional evaluation criteria to be applied to permit geological storage without going through the aquifer exemption process.

Individual Response: EPA clarifies that secondary confini ng zones are not required for all GS sites. Rather, secondary confini ng zones are required when the Di rector determines that these zones are needed to maximize the protection of USDWs from endangerment. EPA retains the requirement to identify additional containment/confining zones, if required by the Director, as proposed (e.g., §146.83(b)). EPA believes that, in some situations, the presence of additional confining and containment zones above the pr imary (i.e., lowermost) confining zone can improve USDW protection. These layers could fu rther impede vertical fluid movement and allow for pressure dissipation, and also provide additional sites for monitoring, mitigation, and remediation. EPA disagrees that the requirement would reduce the number of sites available for GS. The intent of this requirement is to ensure that a proposed site pr ovides adequate protection of USDWs from endangerment; if this protection cannot be demonstrated, the Director would not issue a permit for GS at the site.

Letter ID: 0210 Comment ID: 22711 Letter Lines: 315 to 327

Comment Code: 4324 2.4.4.1.2 Comments opposed to requiring injection below the lowermost

USDW

Comment: Concern #5: Restriction of injection to formations below the lowermost underground source of drinking water or USDW. (Ref: page 43512, 3. Proposed Injection Well Construction Requirements)

This requirement is not necessary for th e protection of USDWs. It is in-fact overly restrictive and will eliminate many suitable and safe geologic formations for CO2 sequestration or permanent storag e. It will also re nder geological storage impractical (pumping power and well costs) for states in the western

16United States where the drinking water aqui fers are many thousands of feet deep and well isolated from overlying regions. Also, industry has demonstrated that it can operate CO2 injection wells for EO R without endangering USDWs that are located below the injection zone (e.g., the Salt Creek EOR project in Wyoming, having a USDW below the injection zone). Concern #6 Demonstration of financial

Individual Response: EPA acknowledges that there are lim ited circumstances where injection above the lowermost USDW can be performe d in a manner that protects USDWs from endangerment, as long as appropriate protections are in place. The final GS rule at §146.95 establishes a process by which owne rs or operators can seek a waiv er of the Class VI injection depth requirements for injecti on into non-USDW formations a bove and/or between USDWs.

EPA believes that these requirements will ensure USDW protection while providing flexibility to UIC program Directors and owne rs or operators who undertak e CO2 injection for GS. The Agency believes this approach: 1) responds to co ncerns about local and re gional geologic storage capacity limitations imposed by th e proposed injection depth require ments; 2) allows for a more site-specific assessment of injection depth for GS projects; 3) accommodates injection into different formation types; 4) a llows for injection of CO2 for GS into non-USDWs above and/or between USDWs when appropriate and where it can be demonstrated that USDWs will be protected; and 5) responds to concerns about the use of aqui fer exemptions for GS. Finally, EPA’s approach to addressing injection depth va riability through a waiver process responds to concerns about future drinking wa ter resource availability and the need to ensure that high quality water remains available in sufficient qua ntities to supply drinking water needs. For additional information on the waiver approach, pleas e see the final rule and preamble, as well as EPA's responses to comments on the Notice of Data Availability and Request for Comment.

Letter ID: 0210 Comment ID: 22712 Letter Lines: 327 to 344 ; 464 to 466

Comment Code: 5430 2.9.1 Comments on proposed financia l responsibility requirements (40 CFR 146.85)

Comment: having a USDW below the injection zone). Concern #6 Demonstration of financial responsibility. (Ref: page 43520, 9. Proposed Financial Responsib ility and LongTerm Care Requirements)

EPA needs to provide clarifying guidan ce on how to demonstrate financial responsibility. The proposed re gulation leaves too much to the discretion of the Director. Such openended requirements will e ffectively discourage carbon capture projects and the development of financial pro formas. Of partic ular concern are those assurances necessary to cover the co sts of potential long -term stewardship or the potential to have to perform re mediation at sites that have been previously certified as closed. This uncer tainty may increase the perceived risk exposure to levels that serve as a barr ier to investment. A potential approach

to share risk and overcome this barrier is the Interstate Oil and Gas Compact Commission (IOGCC)[5] pr oposal for an industry-funded a nd state-administered trust fund to provide the stewardship during th e Post-Closure Period. The trust would

17be funded through an injection fee assessed to the site operator and calculated on a per-ton basis, at the point of custody transfer of the CO2 from the generator to the site operator.

5 The Interstate Oil and Gas Compact Comm ission Task Force on Carbon Capture and Geologic Storage, Storage of Carbon Dioxide in Geologic Structures - A Legal and Regulatory Guide for States a nd Provinces, September 25, 2007

Individual Response: EPA believes that minimum financia l responsibility requirements are necessary to hold well owners or operators accountable for the safe operation, site closure, and post-injection site care of wells while protec ting USDWs and avoiding extra public expense. EPA anticipates that the availabi lity of a variety of financial responsibility providers and thirdparty GS financial instruments will grow in response to demand for GS technology.

EPA believes that the financial responsibility requ irements provided in the final rule do not leave

too much discretion to the Direct or. Owners or operators may choos e from a variety of financial instruments to meet their financial responsib ility obligations under the rule, provided the Director determines that the operator's propos ed financial responsibil ity demonstration is adequate to protect USDWs from endangerment th roughout the life of the project. The final GS rule specifies at §146.85(a)(1) the permitted types of financial responsibility instruments. See the final rule and preamble for further discussion of EPA's final approach to financial responsibility.

EPA is developing guidance on financial responsibility for GS wells that will provide information about the appropriateness of various financial instruments. The guidance will be

available on EPA's website at http://water.epa.gov/type/groundwat er/uic/wells_sequest ration.cfm. This guidance will consider the recommendations in the Office of the Insp ector General report on fi nancial assurance and will include recommendations to help permitting authorities determine whether an owner or operator's plan for financial responsibility is adequate.

Under SDWA, EPA has the general authority to set financial responsibility requirements for injection well owners or operators . However, this authority does not extend to allowing the Agency to create a financial instrument with EPA as the trustee, due to the restrictions of the Miscellaneous Receipts Act (MRA). The MRA re quires that EPA deposit the funds it receives for the use of the government into the Treasury, therefore funds would not necessarily be available for GS financial responsibility. Addi tionally, EPA does not have authority under SDWA to establish a trust fund for purposes of fina ncial responsibility for Class VI projects. The Agency clarifies that the trust funds that are addr essed as financial respon sibility instruments in the GS rule are set up by indivi dual owners or operators and ar e different from a national-level trust described by the commenters that woul d cover large numbers of GS projects.

Under SDWA authority, owners or operators of injection well s must ensure protection of USDWs from endangerment and are subject to liab ility for enforcement under the Act. The final rule requires that an owner or operator conduct monitoring as specified in the Director-approved PISC and site closure plan following the cessation of injection until he or she can demonstrate to the Director that the geologic sequestration project no longer pose s an endangerment to USDWs.

18For additional information about the PISC and site closure requirements, see the preamble to the

final GS rule.

Once an owner or operator has met all regulator y requirements under Part 146 for Class VI wells and the Director has approved site closure pur suant to requirements at §146.93, he or she will generally no longer be subject to enforcement for regulatory noncompliance. Furthermore, the financial instrument required under §146.85 will be released if it has not been used. However, even if site closure is approved under §146.93, an owner or operator may be held liable for regulatory noncompliance (includi ng violation of 40 CFR 144.12) in certain circumstances, for example if the Director relied on erroneous information provided by the owner or operator when approving site closure.

Additionally, an owner or operator may always be subject to any action the Administrator deems necessary to protect the health of persons under §1431 of the SD WA after site closure if there is unanticipated migration towards or into a US DW that causes or threatens imminent and substantial endangerment to public health. The action may include issuing administrative orders or commencing a civil action for appropriate relief. If the owner or operator fails to comply with the order, he or she may be subj ect to a civil penalty for each day in which such violation occurs or failure to comply continues.

The Agency clarifies that Class VI well permits may be transferred to another owner or operator pursuant to §144.38 whereby generally all other regulatory re sponsibilities are transferred to that new owner and operator, includ ing all potential liabilities a ssociated with meeting the requirements of that permit.

Furthermore, after site closure an owner or ope rator may remain liable under tort and other remedies, or under other federal statutes includi ng, but not limited to, Clean Air Act, 42 U.S.C. §§ 7401-7671; CERCLA, 42 U.S.C. § 9601-9675; and RCRA, 42 U.S.C. § 6901-6992. EPA does not have authority to transfer SDWA or other legal liability for Class VI wells to the State or federal government or a third-party fund. See the final rule preamble for further discussion of EPA's final approach.

Letter ID: 0210 Comment ID: 22713 Letter Lines: 346 to 360

Comment Code: 5432 2.9.1.1 Need to adjust financial responsibility mechanisms (seeking comment)

Comment: Concern #7. EPA is considering a guidance approach that would recommend adopting a pay in period of three years for GS pr ojects, consistent with other similar programs in the Agency. (Ref: page 43521, Sec. 9. Proposed Financial Responsibility and Long-Term Care Require ments, Pay-in period for trust funds)

We strongly urge that the EPA not adopt this approach. CCS pr ojects will be subject to their highest financial strain in the first several years of operation. During this period, commissioning, systems integration and debugging

19of mechanical and process systems will n eed to be completed with potential loss of plant operation, production and revenue. Projects will likely be burdened with additional initial capital coverage of an already expensive facility to contend with an accelerated payment. We therefore recommend that any payment schedule be based on a per-ton fee over an amortization period equal to the expected operational life of the project and in a framework as recommended by the IOGCC (ref: Concern #6).

Individual Response: EPA acknowledges that there may be several possible approaches to setting pay-in periods for trust funds. The final rule requires that the Di rector approve the use and length of pay-in periods. EPA is devel oping guidance (available on EPA's website at http://water.epa.gov/type/groundwat er/uic/wells_sequest ration.cfm) that describes the types of financial instruments that owners or operato rs can use to meet financial responsibility requirements for GS wells. Specifically, the guida nce will discuss pay-in periods and provide guidance for Directors to use in determining an appropriate pay-in period. EPA adds that owners or operators may choose from a variety of fi nancial instruments to meet their financial responsibility needs.

Letter ID: 0210 Comment ID: 22714 Letter Lines: 362 to 378

Comment Code: 5260 2.8.2.3 Adjusting the post-injecti on timeframe (seeking comment)

Comment: Concern #8: The owner or operator shall continue to conduct monitoring as specified in the Director-approved post-i njection site care and site closure plan for at least 50 years following the cessation of in jection. At the Director’s discretion, the monitoring will continue until the geologic sequestration project no longer poses an endangerment to USDWs. (Ref: page 43519, Sec. 8. Post-Injection Site Care Timeframe)

The time required for post-injection site management should not be arbitrarily set at 50 years. Criteria for defining the time for post-injection management should be performance based and site specific. The choice of 50 years is arbitrary and does not take into account the data and knowledge and modeling verification obtained over a preceding opera ting and injection period of years and likely decades. The maximum post-inj ection monitoring period should be defined on reasonable but quantitative, perf ormance-based metrics - for example, that the validated model predicts that 95% of the plume is or will be trapped and that a sensitivity analysis predicts a comfortable margin of safety to minimize approach to any USDWs, thus pr eventing potential endangerment. Concern

Individual Response: EPA agrees that there will be circumst ances where it can be demonstrated in less than 50 years that the plume and pressure front no longer pose a risk of endangerment to USDWs. For this reason, the GS ru le offers owners or operators flexibility regard ing the duration of the PISC timeframe by: (1) allowing the Direct or discretion to shorten or lengthen the PISC timeframe during the post-injecti on period based on site-specific da ta, pursuant to requirements at §146.93(b); or (2) affording the Director discretion to allow a Class VI well owner or operator

20to demonstrate, during the permitting process based on substantial data, that an alternative PISC timeframe may be appropriate if it ensu res non-endangerment of USDWs pursuant to requirements at §146.93(c).

EPA believes however, that to ensure USDW protection from enda ngerment, a default timeframe for post-injection site care will be necessary in most cases. The default 50 year post-injection site care timeframe represents a reasonable and prot ective monitoring period based on a review of research studies, industry reports, and existing environmental programs, and evaluation of public

comments.

EPA disagrees that a post-injection site care timeframe of 50 years is excessive in most cases or arbitrary. EPA proposed a default post-injection site care timeframe of 50 years based on a review of research studies, indus try reports, and existing environm ental programs. This analysis was included in an EPA-prepared background docume nt that is available in the federal docket, titled Computational Modeling of Underground Injection of Car bon Dioxide for Determination

of Area-of-Review and Potential Risk to Unde rground Sources of Drinking Water. EPA assessed

various default timeframes based on additional re view of research stud ies and evaluation of public comments. While numerous commenters s uggested that EPA shorten the monitoring timeframe, none of the commenters provided suff icient data or other evidence to warrant a change in the proposed timeframe. While the 10 - or 30-year timeframe suggested by some of these commenters may be within the timefra me suggested in some studies, there are circumstances (e.g., little development of mine ral trapping of CO2) under which the potential risks of endangering USDWs will likely not decline within these timeframes and available data, including data submitted by commenters, do not support a different default timeframe.

EPA believes that a default post-injection site car e timeframe of 50 years, with flexibility to adjust the timeframe for a limited number of GS projects during the permitting process where

substantial data exists to demonstrate that an alternative timeframe would be protective of USDWs, or based on data collected during the PISC period, is appropriate to address the range of sites where GS is anticipated to occur, to ac commodate site-specific circumstances and various geologic conditions, and addre sses commenters¿ concerns, wh ile ensuring USDW protection. Both approaches will utilize si te-specific data, and be based on pressure monitoring and USDW impacts.

EPA recognizes that there are chal lenges associated with assuring funding for activities that will occur far in the future. However, the Agency be lieves that operators must demonstrate that financial resources are available to plug the inje ction well and provide po st-injection care at the point in time that the first CO2 is injected. EP A also recognizes the conc erns associated with assuring financial responsibility for the long tim e frames over which post-injection site care will be conducted. EPA is developing guidance on financ ial responsibility to assist owners or operators in evaluating the requi rements of §146.85 and to assist Directors in evaluating financial responsibility demonstrations. The guidance descri bes the types of financial mechanisms that operators may choose to use when evaluating th e financial responsibility requirements for GS

wells and it will also include a section on how to estimate costs to support accurate financial responsibility demonstrations. The guidance will be available at http://water.epa.gov/type/groundwater /uic/wells_sequestration.cfm.

21Letter ID: 0210 Comment ID: 22715 Letter Lines: 378 to 394

Comment Code: 1530 1.2.3.1 State regulatory effort s on GS (seeking comment)

Comment: minimize approach to any USDWs, thus preventing potential endangerment.

Concern #9: On-going state efforts to regula te GS. (Ref: page 43497, Sec. C. Who Implements the UIC Program?)

Although we recognize that state primacy is integral to the UIC program, we strongly recommend that EPA drive its state stakeholde r activities towards the goal of unanimity and uniformity of technical requirements. Disparate requirements and processes will increase cost, delay, and complexity and make the permitting process less predictable. In dividual states should not develop regulations that are substantially more re strictive or prescriptive than that required by the EPA. Many states will also not have technical resources that are comparable to that of the US EPA. EPA’ s stakeholder technical workshops had good representation from the EPA regions, but it appears that many states have not yet been engaged. To avoid this and the problems from a patchwork of permitting regulations, EPA should carefully but quickly consider and integrate input from a majority of state environmental pr otection and conservation and natural

resource offices.

Individual Response: EPA agrees that a consistent approa ch to regulating GS activities across the United States is important. For this r eason, the Agency has finalized minimum federal requirements for GS projects that owners or operators of Class VI (GS) wells must meet. EPA clarifies that states and tribes seeking to impl ement the Class VI program may apply for primary enforcement responsibility (primacy) under Secti on 1422 of SDWA. States a nd tribes must meet EPA's minimum federal requireme nts for UIC programs by establishing permitting, geologic site characterization, AoR and correc tive action, well construction, ope ration, mechanical integrity testing, monitoring, financial res ponsibility, injection well pluggi ng, post-injection site care, and site closure of GS well owners or operators. Following primacy approval, programs will need to implement these minimum requirements.

EPA clarifies that SDWA, under section 1422(b)(3)(9)(A), requires that the regulations of the Administrator "permit or provide for varying geologic, hydrological , or historical conditions in

different states and in different areas within a state." EPA has pr ovided the Director discretion in applying the GS requirements, taking into account varying conditions, particul arly with regard to

the evaluation of site characteristics.

To promote consistency while providing the Dire ctor with an appropria te level of discretion, EPA is developing guidances for states and tribes that describe the process of applying for and receiving primacy for GS Class VI wells under Section 1422 of SDWA, as well as the technical

and administrative issues associat ed with developing GS regulations that are the equivalent of

22minimum federal criteria and requirements. These are available on EPA’s website at http://water.epa.gov/type/groundwater /uic/wells_sequestration.cfm.

Letter ID: 0210 Comment ID: 22716 Letter Lines: 396 to 409

Comment Code: 2046 1.5.2.3 Continuing to classify CO2 in jection for EOR/EGR as Class II/ dividing line between Class II and Class VI (seeking comment)

Comment: Concern #10: Continuation of Class II fo r EOR. (Ref: page 43502, Sec. G)

By proposing different and mo re restrictive requirements for Class VI wells, EPA will create economic or operational barrier s that prevent a seamless transition from EOR and storage operations to who lly storage operations. EOR can make a significant contribution to offset the cost of early CCS demons tration projects. For example, EOR can contribute to the investment in pipeline infrastructure helping to enable pure CCS operations. Als o, CO2 storage operations may continue after EOR has ceased, thus reducing the cost of storage, site characterization and development. These benefits should be viewed as especially significant in light of the difficulties in securing suffi cient funds to initially deploy CCS. EOR projects could quite feasibly bring CCS deployment forward by many years as a considerable quantity of CO2 remains underground during such operations. This will reduce the number of target formations where CO2 could be stored.

Individual Response: EPA believes that injection for the primary purpose of long term storage is sufficiently different from Class II ER opera tions and warrants tailored requirements in order to protect USDWs from endangerment. For exam ple, the volume of CO 2 anticipated to be injected in Class VI wells is significantly great er than for Class II wells. Reservoir pressure conditions will also be different, with Class VI injection operations involving large volumes of CO2 and likely having higher pressure s within their storage formations than Class II ER projects.

The final Class VI regulations re quire that any owner or operato r injecting CO2 for the primary purpose of long term storage obtain a Class VI pe rmit with some special consideration for the fact that they are transitioning from a well not or iginally designed to meet Class VI requirements. The Director has the authority to determine at wh at point a Class VI permit is required for those projects that are transitioning from the primar y purpose of EOR to long term storage of CO2. The final regulation provides a set of technical factors for the Direct or to evaluate in making this determination, at §144.19. EPA believes that this approach provides su fficient protection of

USDWs when there is an increased risk to USDWs as compared to traditi onal Class II operations while allowing for site-specific flexibility.

EPA is developing guidance on transitioning perm its from Class II to Class VI. The guidance will assist Directors in determining whether an injection project should be transitioned from Class II where the primary purpose is oil and gas production to Class VI where the primary purpose is long-term storage of large volumes of CO2. The guidance describes recommended methods the Director may use to evaluate change s in risk to USDWs from projects, and how the Director may determine whether a project should be regulated within th e Class II or Class VI

23UIC program. This guidance will be available on EPA’s website at http://water.epa.gov/type/groundwat er/uic/wells_sequest ration.cfm. For more information, please

see the discussion on transition of Class II well s in the preamble to the final GS rule.

In response to the comment that establis hing a new well class will create economic and operational barriers, EPA clarifies that the purpose of the GS rule is to ensure protection of USDWs from endangerment and not to promot e or incentivize GS. However, the Agency believes that establishing a regulatory framework for the future development and deployment of CCS technology can provide the regulatory and jurisdictional certainty needed to foster development and deployment of CC S while ensuring USDW protection.

Letter ID: 0210 Comment ID: 22717 Letter Lines: 411 to 422

Comment Code: 2060 1.5.3 Comments on grandfathering of existing wells (seeking comment)

Comment: Concern #11: Grandfathering of constructi on requirements at the Director’s discretion for existing Class I, Class II, and Class V we lls seeking to convert to Class VI wells, and whether additiona l construction requirements would be necessary to prevent endangerment to USDW s from the GS of CO2. (Ref: page 43497, Sec. G) Requirements for conversion of any well to a Class VI well should be site and risk dependent. EP A should consider expanding grandfathering scope to more than construction requirements and not a-priori require that all other permitting requirements be redone. Existing permit holders should be allowed to provide data on the experience and charac teristics of their site demonstrating that it is suitable for long-term storag e of carbon dioxide wi thout endangering underground sources of drinking water. This could be more acceptable with an end date for grandfathering wells (e .g., - operational before 2012).

Individual Response: EPA disagrees that other require ments (e.g., MITs, siting, monitoring, operational, and AoR requirements) should also be grandfathered. Following re-permitting of the project as GS, many of the unique factors of GS sites (e.g., increased reservoir pressures associated with large volumes of stored CO2 a nd the corrosivity of CO2 in the presence of water) will result in an increased risk profile, warra nting the specific requirements in the final GS rule. Therefore, following re-permitting as Class VI wells, these projects must be subject to the operational, MIT, monitoring, reporting, plugging, a nd post-injection site ca re and site closure requirements in the final GS rule. See the discus sion of EPA's final regulatory approach in the preamble to the GS rule for additional detail on these requirements.

EPA does not plan to institute an "end date" fo r this requirement since conversion is a sitespecific decision. EPA encourages owners or op erators and Directors to coordinate on repermitted wells to ensure that all wells used for GS are constructed and operated in a manner that protects USDWs from endangerment.

Letter ID: 0210 Comment ID: 22718 Letter Lines: 424 to 439

24Comment Code: 1210 1.1.1 Comments about the proposed rule

Comment: Concern #12: EPA’s schedule for promulga tion of its proposed UIC regulation. (Page 43499 Sec. E3)

We reference the following statement from the preamble section of the proposed rule: "During the Deployment Phase (2008- 2017), the [RCSP] partnerships will conduct large volume carbon storage tests to demonstrate that large-scale CO2 injection and storage can be achieved sa fely and economically. EPA will use the data collected from these projects to s upport decisions in the final GS rule." This statement suggests that a final GS rule may not be issued until 2017. We

believe that this is too late to clea r the regulatory uncertainty that CCS project developers are fa cing today. If this reflects EPA’s intention, we

recommend that EPA abandon a prescriptive approach a nd instead, favor general and performance-based requirements un til these demonstration tests are completed. Other concerns expressed by our membership and recommendations for improvement of the proposed rulemaking are given in Appendix A. Should the EPA have further questions, pleas e fell free to contact me.

Individual Response: EPA believes that sufficient data have been collected to inform the final GS rule. In addition to laboratory studies a nd modeling research that provide relevant information on GS, the Agency is also collect ing and analyzing GS project data and permit information from a variety of sources. Most not ably, EPA has evaluated permits and reviewed operational data and information associated with the seven regiona l carbon sequestration partnerships funded by the U.S. Department of Energy and coordinated through the National Energy Technology Laboratory. EPA believes that thes e projects form a solid basis for finalizing the GS requirements, and there is no reason to wa it until all phases of the DOE demonstration tests are complete. Nevertheless, EPA anticipates th at future experimental and full-scale projects will continue to inform the technology, and is therefore using an adaptive rulemaking approach. EPA plans, every six years, to collect and review data on GS projects to determine whether the appropriate amount and types of information a nd appropriate documentation are being collected, and to determine if modifications to the requir ements are appropriate or necessary. EPA believes that the completion of the DOE pilots in 2017 wi ll allow the incorporation of results of these projects into the first review of the rule.

Letter ID: 0210 Comment ID: 22719 Letter Lines: 473 to 483

Comment Code: 1220 1.1.1.1 Terminology and definitions

Comment: §146.81 Applicability. (b) "This subpart applies to wells used to inject carbon dioxide specifically for the purpose of geologic sequestration, i. e., the long-term containment of a gaseous, liquid or supercritical carbon dioxide stream in subsurface geologic

formations."

We recommend striking out "gaseous, li quid or supercritical carbon dioxide

25stream" and replacing with "gaseous, li quid, supercritical or co-mixed carbon dioxide stream" This change will allow fo r injection of carbon dioxide that is pre-dissolved with water to prevent phas e separation in the in jection zone or with inclusion of flow or pumping enhancement components.

Individual Response: EPA disagrees with the suggested edit. The Agency has modified §146.81(b) to read as follows: “This subpart applie s to any wells used to inject carbon dioxide specifically for the purpose of geologic sequest ration, i.e., the long-term containment of a gaseous, liquid, or supercritical carbon dioxide stream in subsurface geologic formations.”

Based on its evaluation of all public comments and input on the proposed rule and the NODA and Request for Comment EPA has made many revisions to the Cla ss VI GS rule. Please see the final rule and preamble for additional information.

Letter ID: 0210 Comment ID: 22720 Letter Lines: 485 to 512

Comment Code: 3150 2.1.5 Comments on required permit information (40 CFR 146.82)

Comment: §146.82 Required Class VI permit information. (b) "A map showing the injection well(s) for which a permit is sought and th e applicable area of review. Within the area of review, the map must show the number, or name a nd location of all injection wells, producing wells, abandoned wells, plugged wells or dry holes, deep stratigraphic boreholes, State or EPA approved subsurface cleanup sites, surface bodies of water, springs, mines (surface and subsurface), quarries, water wells and other pertinent surface f eatures including structures intended for human occupancy and roads. The map should also show faults, if known or suspected. Only information of public reco rd is required to be included on this map;"

The note that "only information of public record is required to be included on this map" may leave out deep oil and ga s wells, particularly older wells. The presence of such non-public but "known " information may be eligible for inclusion as "known" under 144.55(a).

§146.82 Required Class VI permit informati on (e) "A tabulation of all wells within the area of review which penetrat e the injection or c onfining zone(s). Such data must include a description of each well's type, construction, date drilled, location, depth, r ecord of plugging and/or completion, and any

additional information the Director may require;"

We recommend striking out "all wells" and replacing with "all known wells". Requiring that all wells or other artificial penetrations into injection or confining zones within the AoR be id entified and information on depth and closure be provided can be costly and sometimes accurate information is

difficult to obtain for older wells w ithin the AoR. EPA's assistance in obtaining and storing this information would be helpful to CCS operators.

26Individual Response: EPA believes that a determination a bout whether information necessary (for a specific GS project) is outside or within the public record will be site-specific and based on knowledge of the site, data availability, and data quality. For inst ance, in meeting the requirement to tabulate information on wells in the AoR, the Director has the discretion to require the owner or operator to supplement a data records search if ther e is reason to believe that the incompleteness of available informa tion could compromise USDW protection from endangerment.

Letter ID: 0210 Comment ID: 22721 Letter Lines: 514 to 534

Comment Code: 3330 2.2.1.3 Applicability /adequacy of computational models (seeking comment)

Comment: §146.84 Area of review and corrective action. (c) (1) "Predict, using computational modeling, the projected late ral and vertical migration of the carbon dioxide plume and formation fluids in the subsurface from the commencement of injection activities until the plume m ovement ceases, pressure

differentials sufficient to cause the moveme nt of injected fluids or formation fluids into a USDW are no longer presen t, or after a fixed time period as determined by the Director."

We recommend striking out "P redict, using computationa l modeling, the projected lateral and vertical migration of the ca rbon dioxide plume" and replacing with "Using computational modeling, provide proj ected potential ranges of lateral and vertical migration of the carbon diox ide plume" The use of multiphase groundwater flow and transport models is to predict the composition and movement of each phase state (e.g., liquid, gas ,supe rcritical fluid) of CO2 in the subsurface, as well as fluid pressures, to define the AoR. One of the concerns with the use of such complex models is that the site may not be fully characterized with respect to hydro-g eologic properties. There may be significant uncertainty in one or mo re hydraulic processes/parameters. Therefore, it is possible to obtain a wide-range of mode l outcomes from different model parameters. The uncertainty in model parameters and sensitivity of model results to parameter selection should be addressed.

Individual Response: EPA has clarified this language in the final rule. It now reads, “Predict, using existing site character ization, monitoring and operati onal data, and computational modeling, the projected lateral and vertical migr ation of the carbon dioxide plume and formation

fluids in the subsurface from the commence ment of injection ac tivities until the plume movement ceases, until pressure diffe rentials sufficient to cause the movement of injected fluids or formation fluids into a USDW are no longer pres ent, or until the end of a fixed time period as determined by the Director.”

EPA agrees that modeling results are prone to varied degrees of uncertainty. As discussed in the preamble to the proposed GS regulation and the associated background document

27"Computational Modeling of Unde rground Injection of Carbon Dioxide for Determination of Area-of-Review and Potential Risk to Undergrou nd Sources of Drinking Water" (cited in the proposed rule preamble as USEPA, 2008d), model predictions depend larg ely on the values of key parameters. Often these parameter values are estimated or averaged from several data sources. EPA also agrees that sensitivity anal yses and "worst case scenario" modeling runs should be presented by the owner or operator and evaluated by the Direct or. If during the permit review, the Director determines that modeling results are too wide-rang ing, further information will be required of the owner or operator.

EPA clarifies that models are to ols to help predict the movement of a CO2 plume over long time frames. However, EPA recognizes that it cannot be expected that modeling something as complex as a CO2 plume can be done with comple te certainty; therefore EPA is also requiring that the AoR be reevaluated to verify the CO2 plume is moving as predicted and to allow for model calibration and necessary revisions to the required GS project plans (e.g., AoR and corrective action, test ing and monitoring, injection well plugging, post-injection site care and site closure, and emergency and reme dial response). EPA believes th at near-term predictions (e.g., over the subsequent 5 years) will have the high est degree of certainty. Periodic model calibration will allow refinement to the AoR delineation based on real-world conditions and operating data and monitoring results, and thus increase confiden ce in the modeled predictions. EPA adds that the final GS regulation includes a requirement at §146.84(e) that th e AoR be reevaluated at least every 5 years (an adjustment from the ten year interval in the proposal), which should further

address the commenters' concerns regarding model uncertainty.

Letter ID: 0210 Comment ID: 22722 Letter Lines: 536 to 552

Comment Code: 3200 2.2 Proposed Area of Review and Corrective Action Requirements (40 CFR 146.84)

Comment: §146.84 Area of review and corrective acti on. (c) (2) "Using methods approved by the Director, identify all penetrations , including active and abandoned wells and underground mines, in the area of revi ew that may penetrate the confining zone. Provide a description of each well’ s type, construction, date drilled, location, depth, record of plugging and/ or completion, and any additional

information the Director may require; and..."

We recommend striking out "approved" a nd replacing with "prescribed". We recommend deleting the second sentence and replacing with "Where such

information is available or can be ob tained, provide a description of each well’s type, construction, date drille d, location, depth, record of plugging and/or completion, and any additional info rmation prescribed by the director, and..." Acceptable methods for identifyi ng deep wells into confining zones within the AoR should be prescribed by the EPA as part of the regulation.

Accurate information is difficult to obta in for older wells within the AoR. Examples of other information that could be required by the Di rector should be

28clearly stated.

Individual Response: The final rule retains the langua ge in 146.84(c)(2) as proposed. EPA disagrees that the Director shoul d prescribe the correc tive action methods to be used. Instead, all corrective action must be perf ormed pursuant to the approved AoR and corrective action plan,

which affords the Director the discretion to review and approve planned corrective action techniques and require any additional information needed to ensure that all necessary corrective action is performed (e.g., information that is not publically available). EPA is issuing guidance on how to identify all wells th at require corrective action. The guidance describes EPA's recommended approaches for the data to be c onsidered in an initial AoR delineation, how to apply computational modeling to delineate the Ao R, performing corrective action at GS sites, and, when appropriate, completing AoR reevalua tions. The guidance will be available on EPA's web site, at http://water.epa.gov/type/g roundwater/uic/wells _sequestration.cfm.

EPA clarifies that any well that penetrates the co nfining zone, even if it does not extend all the way through the confining formation, is to be in cluded in the tabulation. EPA is issuing guidance on how to identify all wells that require corrective action. EPA a dds that the Director has the discretion to require the owner or operator to supplement a data records search, including requiring ground or airborne surveys for wells, if there is reason to beli eve, based on knowledge of the site or of available data bases, that the incompleteness of available information could compromise USDW protection from endangerment.

Letter ID: 0210 Comment ID: 22723 Letter Lines: 554 to 558

Comment Code: 3822 2.3.1.1 Depth of surface casing (seeking comment)

Comment: §146.86 Injection well construction requireme nts. (b) (2) "Surface casing must extend through the base of the lowermost USDW and be cemented to the surface."

We recommend striking out this requirem ent in its entirety. This will be prohibitively expensive in deep wells, and may not be necessary at all sites.

Individual Response: EPA disagrees with the suggested ed it. Protection of USDWs, regardless of their depth or stratigraphic location, is the primary mission and mandate of the UIC program—as specified by Congress in the SDWA—and the purpose of all requirements for injection wells. Any injection activity must be de monstrated to not endanger USDWs, regardless of their depth, and if such a demonstration cannot be made, then the activity will not be allowed under UIC requirements or the SDWA. Water agen cies commenting on the proposed rule noted that diminishing water supplie s are requiring water utilities to use deeper and more saline sources, and the SDWA mandates EPA to se t regulations that protect USDWs from endangerment.

The final GS rule at §146.86(b)(2) requires that surface casing extend through the base of the

lowermost USDW and be cemented to the surface through the use of a single string or multiple strings of casing and cement. It does not, however, specify how cementing must be

29accomplished, and it allows the owner or operator to propose alternate methods that provide a

sufficient amount of cement to meet the standard that USDWs are protected from endangerment. EPA notes that there are many potential ways to meet the requirement, such as the use of staged cementing.

EPA recognizes concerns regardi ng construction of Class VI wells where the lowermost USDW is very deep. To further address comments on d eep injection wells, the final GS rule at §146.95 includes requirements for owners or operators that seek a waiver of the injection depth requirements. Owners or operators of wells opera ting under injection depth waivers must comply with additional construction require ments to ensure that wells used to inject above or between USDWs are protective. See the discussion of the wa iver approach in the preamble to the final GS

rule for additional information.

Letter ID: 0210 Comment ID: 22724 Letter Lines: 560 to 571

Comment Code: 4660 2.6.6 Geochemical monitoring

Comment: §146.90 Testing and monitoring requirements . (d) Periodic monitoring of the ground water quality and geochemical change s above the confini ng zone(s) that may be a result of carbon dioxide movement through the confining zone or

additional identified zones:

We recommend changing to " Periodic m onitoring of the ground water quality and geochemical changes between the confining zone(s) and the USDW that may be a

result of carbon dioxide movement thr ough the confining zone or additional

identified zones: "

This rewording is consistent with allowi ng for injection either above or below

USDWs

Individual Response: Regarding monitoring locations, se ction §146.90(d) requ ires periodic monitoring of the ground water qua lity and geochemical changes above the confining zone(s). EPA clarifies that this monitoring requirement does not include the confining layer itself. Monitoring above the confining layer will provide an indication of upward movement of CO2 that might endanger a USDW. The exact number of formations to be tested must, however, be based on site-specific characteri stics and vulnerabilities and desc ribed in the Director-approved testing and monitoring plan.

Letter ID: 0210 Comment ID: 22725 Letter Lines: 573 to 589

Comment Code: 4650 2.6.5 CO2 plume and pressure fr ont tracking (seeking comment)

Comment: §146.90 Testing and monitoring requirements . (g) "Testing and monitoring to track the extent of the carbon dioxide pl ume and the position of the pressure front by either monitoring for pressure changes in the first formation overlying

30the confining zone or using indirect, geophysical techniques (e.g., seismic, electrical, gravity, or electromagnetic su rveys and/or down-hole carbon dioxide detection tools);"

We recommend deletion of this requirement in its entirety and replacing with "Testing and monitoring to track the ex tent of the carbon dioxide plume." Tracking the precise position of a moving pressure front will require a large number of expensive and deeply locate d probes. A limited number of pressure monitors that can provide information on pressures affecting the confinement layers are more valuable. The Proposed Rule also requires well ow ners to monitor periodically groundwater qua lity and geochemical changes above the confining zone. The requirements for such deep m onitor wells could be costly. Requiring both pressure and geochemical monitoring wi ll be costly and provide questionable additional information or warning.

Individual Response: EPA maintains that plume tracking and pressure monitoring are key components of monitoring at GS sites. A ri gorous plume tracking and pressure monitoring scheme, such as one that meets the requireme nts at §146.90(g), is imperative for ensuring that the CO2 plume is contained within the injection zone. Pressure monitoring in the injection zone is necessary to track the development and moveme nt of the pressure front and CO2 plume. When combined with information on temperature, pressure data provide an indication of the phase (e.g., gas, supercritical) and distribution of the injected CO2 (73 FR 43515). Monitoring can also identify needed remedial actions, provide i nputs for AoR reevaluation modeling, evaluate predictions of plume movement, and target additional geochemical and surface monitoring

needs.

EPA recognizes that installation of monitoring wells entails additional resources. However, the Agency believes that such monitoring is necessary to ensure that GS projects are appropriately operated and monitored and to protect USDWs from endangerment. Knowledge of the location of the CO2 plume and the associated pressure fr ont will assure the public that GS projects are proceeding according to plan, provide sufficien t information to the owner or operator and Director, or allow for appropr iate actions to address any indication that USDWs may be endangered.

Letter ID: 0210 Comment ID: 22726 Letter Lines: 591 to 603

Comment Code: 4670 2.6.7 Surface air monitoring and/or soil gas monitoring (seeking comment)

Comment: §146.90 Testing and monitoring requirements. (h) "At the Director’s discretion, surface air monitoring and/or soil gas mon itoring to detect movement of carbon

dioxide that could e ndanger a USDW."

We recommend deletion of this requirement in its entirety. While this requirement may be suitable for determin ing potential air leakage relevant to monitoring of CO2 in a greenhouse gas polic y context, this requirement does not

31provide any additional protection to migr ation to USDW as surface breakthrough will only occur well after the deep-surface migration of CO2 to a USDW. Surface monitoring to detect CO2 has high uncertain ty and seasonal variability that is likely to result in many false positives and operational distra ctions. Seismic methods of tracking the CO2 plume are more effective than soil gas monitoring of CO2, which is affected by many other f actors and thus is highly variable.

Individual Response: EPA acknowledges that surface air and soil gas measurements are subject to variability and may not be suitable in all settings as a method to ensure USDW protection. However, EPA does not believe that this should en tirely preclude their use. The decision to use surface monitoring and the selecti on of monitoring methods will be site-specific (e.g., may be influenced by geology, injection depth, and operational conditions) and must be based on potential risks to USDWs within the AoR. The Agency believes that surface air and soil gas monitoring, when coupled with subsurface monitori ng, may be appropriate at some GS projects to ensure USDW protection.

The final rule at §146.90(h) retains the allowance for surface air and soil gas monitoring at the

discretion of the Director as a means of identif ying leaks that may pose a risk to USDWs and informing emergency notification of a Class VI ow ner or operator and UIC Director in the event of a USDW endangerment, pursu ant to requirements at §146.91(c). EPA cl arifies that the decision to use surface monitoring and the selecti on of monitoring methods will be site-specific (e.g., may be influenced by geology, injection depth, and operational conditions) and must be based on potential risks to USDWs within the AoR.

Letter ID: 0210 Comment ID: 22727 Letter Lines: 605 to 619

Comment Code: 5300 2.8.3 Site closure activities (40 CFR 146.93)

Comment: §146.93 Post-injection site care and site cl osure (b)(3) "Prior to authorization for site closure, the owner or opera tor must submit to the Director a demonstration, based on monitoring and othe r site-specific data , that the carbon dioxide plume and pressure front have stabilized and th at no additional monitoring is needed to assure that the geologic sequestration project does not pose an endangerment to USDWs."

Clarification of the term "stabilized" is needed. We recommend that the term "stabilized" does not necessarily mean th e plume and pressure front are no longer moving, but that the rate and dire ction as defined by confinement zones no longer place an USDW at risk. Long-term monitoring should have an "end point" defined. Often termed an "exit strategy", this is a key point that is agreed upon by all parties about what is a "stabl e condition". Monitoring data includes a prescribed amount of error , thus statis tics or other analys es may be required

to define a "stable condition".

Individual Response: EPA acknowledges that many site-sp ecific factors will influence the determination of when the CO2 plume and pressu re front no longer pose a risk of endangerment

32to USDWs. It is for this reason that EPA believe s that individual UIC Dir ectors, in consultation with operators, will be in the best position to determine whether additional post-injection site care is needed. EPA expects this decision to be made based on relevant site data and in consultation with all potentia lly impacted parties.

EPA agrees that a complete cessa tion of plume movement may not occur at some sites for long time periods due to density differences, natura l formation flow grad ients and diffusion. EPA clarifies that a complete cessati on of plume movement is not requi red, only a demonstration that the plume and pressure front no longer pos e a risk of endangerment to USDWs.

EPA is developing guidance to assist owners or operators in evaluating well plugging, postinjection site care, and site closure requirements of §146.92 and §146.93. Additionally, the guidance will assist Directors in evaluating propo sed well plugging plans a nd post-injection site care and site closure plans under §146.92 a nd §146.93. The guidance describes recommended approaches for how an owner or operator coul d plug injection and m onitoring wells; perform post-injection monitoring; dem onstrate non endangerment; and perf orm site closure activities. The guidance will be available at http://water.epa.gov/type/groundwater /uic/wells_sequestration.cfm.

Letter ID: 0210 Comment ID: 22728 Letter Lines: 622 to 626

Comment Code: 3350 2.2.1.5 Use of proprietary models for GS sites (seeking comment)

Comment: EPA seeks comment on allowing the use of pr oprietary models for GS sites. EPA

Notice 68.

Proprietary models should be acceptable provided that supporting data for

validation are submitted.

Individual Response: EPA agrees with commenters that av ailable proprietary models may meet the complex needs for calculating the AoRs of GS sites, and shar es their concern about the need to evaluate the inputs and assumptions used. EP A will allow the use of proprietary models in meeting the requirements for the GS regulation, as long as GS well operators using a proprietary model clearly disclose, to the Director's satisf action, the code assumptions, relevant equations,

and scientific basis. EPA adds that its Confid ential Business Information requirements at 40 CFR 144.5 will apply to the use of proprietary models.

In response to comments suggesting that histor y matching or validation of these models is needed, EPA believes this is true for any mode l. EPA notes that the GS rule requires at §146.84(e) that the AoR be reevaluated to verify the CO2 plume is moving as predicted and to allow for necessary revisions to the AoR and co rrective action, testing and monitoring, injection well plugging, post-injecti on site care and site closure, a nd emergency and remedial response plans. EPA clarifies, however, that the Agency will not perform independent validation of individual modeling products.

33The Agency plans, every six years, to collect and review data on GS projects to determine whether the appropriate amount and types of information and appropriate documentation are being collected, and to determine if modificatio ns to the requirements are appropriate or

necessary.

Letter ID: 0210 Comment ID: 22729 Letter Lines: 629 to 634

Comment Code: 3330 2.2.1.3 Applicability /adequacy of computational models (seeking comment)

Comment: EPA seeks comment on the applicability of computational fluid flow models for delineating the AoR of GS sites. EPA Notice 69.

Computational fluid flow models should be permitted for delineating the AoR of GS sites provided also that data are provided supporting their validation in similar complex structures and flow regimes

Individual Response: EPA agrees that a detailed geologic a ssessment is essential to evaluating the presence and adequacy of a proposed site to receive and confin e the CO2. The AoR and corrective action plan required at §146.84(b) must describe the site ch aracterization data on

which the model will be based. The Director has discretion to require the use of existing data if it is not initially included.

The Agency believes that predicting the comp lex multiphase buoyant flow of the CO2, coinjectates, and compounds that may be mobilized due to injection require s the sophistication of computational models. Models can predict CO2 fate and transport, as well as changes in formation pressure, in three dimens ions, as a function of time in or der to delineate the subsurface storage site and the AoR. Models can account fo r site-specific and pred icted operating conditions as well as geologic heterogeneitie s and potential migration through fa ults, fractures, and artificial penetrations.

EPA clarifies that the model i nputs must include act ual geologic information, data collected during the site characterization process (e.g., information about artificial penetrations), and anticipated operating parameters (e.g., injection rates) submitted with the permit application under §146.82. Models will be revised and recalibr ated during subsequent AoR reevaluations,

which must account for all avai lable monitoring and operational data, as required at §146.84(e).

Letter ID: 0210 Comment ID: 22730 Letter Lines: 637 to 643

Comment Code: 3530 2.2.3.1 AoR reevaluation fre quency (seeking comment)

Comment: EPA seeks comment on requiring the reevalua tion of the site AoR on a periodic basis, under what conditions the Ao R should be reevaluated, and the

34appropriateness of a 10-year minimum fixe d frequency for AoR reevaluation. EPA

Notice 72.

10 years is a reasonable period of time to reevaluate the site AoR during injection.

Individual Response: Based on evaluation of the public comments on this topic, EPA has changed the minimum frequency for the AoR reev aluation at §146.84(e) from 10 years to at least every 5 years. EPA believes that this revised fre quency addresses concerns raised by commenters representing water associations, an energy co mpany, associations, industries, states, and environmental groups about the inherent uncerta inties in modeling CO2 movement, the emerging nature of GS technology, risk-based targeting of monitoring activities, an d the unique nature of

CO2 GS.

The 5-year reevaluation frequency, particularly du ring early stages of GS deployment, will also support EPA's adaptive approach to the GS rule making. EPA is using an adaptive approach to regulating GS. The Agency plans, every six years, to collect and review data on GS projects to determine whether the appropriate amount a nd types of information and appropriate documentation are being collected, and to determ ine if modifications to the requirements are appropriate or necessary.

Letter ID: 0210 Comment ID: 22731 Letter Lines: 646 to 653

Comment Code: 3820 2.3.1 Well construction procedures

Comment: EPA seeks comment on the proposed GS well requirements for depth of surface casing, the cementing of long-string casing, and construction with a packer set opposite a cemented interval. EPA Notice 78.

The requirements for construction of the proposed Class VI CO2 injection wells

should be similar to the Class II wells us ed for EOR. This will expedite the transition of EOR projects to CCS projects. This requirement also unnecessarily stigmatizes CO2.

Individual Response: EPA recognizes that many early GS pr ojects will be in depleting or depleted oil and gas fields and that grandfatheri ng of wells used for ER, where appropriate and protective, can facilitate the transition from ER to GS.

However, EPA believes that injection for the prim ary purpose of long term storage is sufficiently different from Class II ER operations and warrant s tailored requirements for Class VI wells at §146.86. For example, the volume of CO2 anticipated to be injected in Class VI wells is significantly greater than for Class II wells. Reser voir pressure conditions will also be different, with Class VI injection opera tions involving large volumes of CO2 and likely having higher pressures within their storage forma tions than Class II ER projects.

35The final Class VI regulations re quire that any owner or operato r injecting CO2 for the primary purpose of long term storage obtain a Class VI pe rmit with some special consideration for the fact that they are transitioning from a well not or iginally designed to meet Class VI requirements. The Director has the authority to determine at wh at point a Class VI permit is required for those projects that are transitioning from the primar y purpose of EOR to long term storage of CO2. The final regulation provides a set of technical factors for the Direct or to evaluate in making this determination, at §144.19. EPA believes that this approach provides su fficient protection of

USDWs when there is an increased risk to USDWs as compared to traditi onal Class II operations while allowing for site-specific flexibility.

The final GS rule, at §146.81(c), allows the co nstruction of ER wells to be grandfathered, provided the owner or operator can demonstrate to the Director that the wells were engineered and constructed to meet the requirements at §146. 86(a) and ensure protec tion of USDWs, in lieu of requirements at §146.86(b) and §146.87(a). Only the cemented-in-place construction requirements would be grandfathered under the fi nal GS rule; following conversion, these wells must be permitted as Class VI wells and be subject to the operational, MIT, monitoring, reporting, plugging, and post-in jection site care and site closur e requirements in the final GS

rule.

EPA is developing guidance on transitioning from Class II to Class VI. The guidance will assist Directors and owner/operators in evaluating where a project may fit within a Class II to Class VI transition. The guidance describes the methods ava ilable for the Director to determine the risk posed to USDWs from a GS/ER project, and how th e Director may determine if a project should be regulated by a Class II or Class VI UIC program. The guidance will be available on EPA's web site, at http://water.epa.gov/type/g roundwater/uic/wells _sequestration.cfm.

EPA disagrees that the constr uction requirements for Class VI wells will stigmatize CO2. Although the requirements are based on the existing regulatory framework for deep wells, including Class I wells, EPA believes that GS is sufficiently different from other injection operations to warrant the ta ilored requirements Class VI Class VI wells at §146.86.

Letter ID: 0210 Comment ID: 22732 Letter Lines: 656 to 662

Comment Code: 3840 2.3.2 Horizontal well drilling techniques (seeking comment)

Comment: EPA seeks comment on the merits of horiz ontal well drilling t echniques for GS wells and the applicability of well constructi on requirements discussed in this proposal. EPA Notice 80.

Horizontal wells should be permitted for in jection of CO2. The use of horizontal wells may minimize the number of wells re quired for injection. A reduced number of wells will reduce both cost and may also reduce potential leakage paths.

Individual Response: In the final rule, EPA allows the use of horizontal wells at GS projects. In the proposed rule, EPA sought comment on the appr opriateness of horizonta l drilling techniques for Class VI wells, and commenters representing energy companies, el ectric utilities, the oil and

36gas industry, CCS associations, states, and the public, unanimously suppo rted the concept and provided many reasons why horizonta l wells could be beneficial at GS sites. Based on an evaluation of these comments and additional research by EPA, the Agency has concluded that horizontal wells that are properly constructed, logged, and tested for mechanical integrity (i.e., to meet the requirements of the GS rule) can ensu re the protection of USDW s from endangerment.

Letter ID: 0210 Comment ID: 22733 Letter Lines: 665 to 674

Comment Code: 4120 2.4.1.2 Allowing hydraulic fracturing during GS (seeking comment)

Comment Code: 4130 2.4.1.3 Appropriateness of using fractur ing for well stimulation (seeking comment)

Comment: EPA is requesting comment on the extent and scope to which hydraulic fracturing should be allowed during GS injection, and whether the use of fracturing for the purposes of well stimulation is appropriate. EPA Notice 85.

Fracturing of GS formations should be permitted, provided confining structures are not negatively impacted and fracturi ng is limited to the injection zone. Exclusion of fracturing of storage form ations would often require unnecessary drilling of new injection wells. The oil industry has sufficient experience in using fracturing technology to avoid negatively impacti ng confining structures (e.g., caprock).

Individual Response: EPA recognizes that there may be well completions which require intermittent treatments that include stimulation to improve wellbore injectivity. Stimulation of the injection zone during a well workover will be permissible, if a pproved by the Director (operators seeking to use stimul ation must submit the proposed stimulation program as part of the permit application under §146.82(a)(9) where in jection pressure limits will be set). EPA has also added a requirement that owners or operators notify the Director in advance of any planned stimulation activities, as speci fied at §146.91(d). During injection, the injection pressure must not exceed 90 percent of the fracture pressure, as specified in §146.88(a). EPA clarifies that the injection pressure limit at §146.88(a) applies only to the period of injectio n, not well stimulation.

Letter ID: 0210 Comment ID: 22734 Letter Lines: 677 to 684

Comment Code: 4324 2.4.4.1.2 Comments opposed to requiring injection below the lowermost

USDW

Comment Code: 4344 2.4.4.2.2 Comments opposed to setting a minimum injection depth

Comment: EPA seeks comment on whether the Agency should set a minimum injection depth requirement for CO2 GS, rather than require that such injection take place below

the lowermost USDW. EPA Notice 93.

EPA should neither require injection belo w the lowermost USDW nor alternately require a minimum depth requirement as ge ologic structures ar e likely to be

37encountered that provide for secure and sa fe storage. Examples of such storage that should be acceptable are domes and caverns.

Individual Response: EPA agrees that it is not appropriate to set a mi nimum injection depth for GS projects and the Agency believes that a determ ination of site-suitabili ty for GS (i.e., that

subsurface formations will receiv e and confine injected CO2) s hould be made on a site-specific basis. The GS rule, at §146.82, requires the owne r or operator to provide extensive site- and project-specific information to the Director to demonstrate that the site meets the minimum site criteria at §146.83, that the CO2 will be contai ned within the injection formation, and that USDWs will be protected from endangerment.

EPA acknowledges that there are limited circum stances where injectio n above the lowermost USDW can be performed in a manner that protec ts USDWs, as long as appropriate protections are in place. The final GS rule at §146.95 establis hes a process by which owners or operators can seek a waiver of the Class VI injection de pth requirements for in jection into non-USDW

formations above and/or between USDWs. The waiver approach requires the submission of extensive, site-specific information (in conjunc tion with the permit appl ication submission) to demonstrate that injection of CO2 into a non-US DW that is above or between USDWs can be done in a manner that is protective of USDWs. Th e requirements are designed to ensure that the owner or operator, the Director, and the Regional Administrator cons ider, on a site specific basis, the implications, benefits, and challenges associat ed with GS and ensuring water availability and USDW protection. For additional information on the waiver approach, please see the final rule and preamble, as well as EPA's responses to comments on the Notice of Data Availability and Request for Comment.

Letter ID: 0210 Comment ID: 22735 Letter Lines: 687 to 693

Comment Code: 4490 2.4.5 Use of tracers and potential im pact on human health or ecosystems (seeking comment)

Comment: EPA’s proposal allows Direct ors’ discretion on whether to require the use of tracers, and if so, what types of tr acers. EPA seeks comment on the use of tracers in CO2 GS operations, and any potential impact of tracers on human health or ecosystems as they relate to USDWs. EPA Notice 95.

Tracers should be permitted, but not require d. They are commonly and safely used in the oil and gas industry.

Individual Response: EPA agrees that the use of tracers shoul d not be required at all GS sites, but should be available as an option. For this reason, EPA does not require the use of tracers at all GS sites; however, the Director has discretion to require their us e if he/she determines that the use of tracers could improve monitoring of the site and enhance USDW protection from endangerment. The rule will also allow their use if proposed by the owner or operator and approved by the Director.

38Letter ID: 0210 Comment ID: 22736 Letter Lines: 696 to 711

Comment Code: 4670 2.6.7 Surface air monitoring and/or soil gas monitoring (seeking comment)

Comment: EPA seeks comment on the appropriate amount and types of monitoring that should be conducted at a GS site. Specificall y, EPA seeks comment regarding the usefulness of indirect geophysical monitoring and surface air and soil gas monitoring. In addition, EPA seeks commen t regarding the use of a Directorapproved monitoring plan for GS sites. EPA Notice 111

Surface air and soil gas mon itoring are not useful. Seis mic methods of tracking the CO2 plume are more effective than soil gas monitoring of CO2, which is affected by many other factors and thus is highly variable. Surface breakthrough represents an "after-the-fact" event. While this requirement may be suitable for determining potential air CO2 leakage re levant to monitori ng of CO2 in a GHG context, this requirement does not pr ovide any additional protection to migration to USDW as surface CO2 breakth rough will only occur well after the deep-surface migration of CO2 to a USDW . Surface monitoring to detect CO2 has high uncertainty and seasonal variability that is likely to result in many false positives, operational distractions and unduly raise public concern.

Individual Response: EPA agrees that subsurface geochemical and pressure monitoring in the

subsurface formations are the first line of m onitoring that would allow detection of potential endangerment to USDWs from GS ac tivities (this is required at al l GS sites, as described at §146.90(d)). The Agency also believes that surf ace air and soil gas monitoring, when coupled with subsurface monitoring, may be appropriate at some GS projects to ensure USDW protection.

EPA clarifies that surfac e air and soil gas monitoring are not required at all GS sites. However, the GS rule at §146.90(h) gives th e Director discretion to require surface air and/or soil gas monitoring as a means of iden tifying leaks that may pose a risk to USDWs and informing emergency notification of a Class VI owner or operator and UIC Director in the event of a USDW endangerment, pursuant to requirements at §146.91(c). EPA clarifies that the decision to use surface monitoring and the se lection of monitoring methods will be site-specific (e.g., may be influenced by geology, injection depth, and operational conditions) and must be based on potential risks to USDWs within the AoR.

Letter ID: 0210 Comment ID: 22737 Letter Lines: 714 to 725

Comment Code: 4710 2.7.1 Proposed submissions required for permit applications (seeking comment)

Comment: EPA is proposing that permit applications for GS sites include several plans not currently required under existing UIC re gulations. These plans include a monitoring and testing plan, an AoR a nd corrective action plan, and a post39injection site care and site closure pla n. EPA seeks comment on the merits of requiring plans for monitoring, AoR, and post- injection site care as part of a permit application. EPA Notice 112.

We believe that requiring a monitoring pl an is reasonable. However, the EPA should develop such requirements with recognition of a di stinct end to operations and monitoring following cl osure, and consider specific representations and codicils that r ecognize an end of "in-perpetuity" responsibility for the operator or owner.

Individual Response: EPA clarifies that the owner or operator's approved testing and monitoring plan and post-in jection site care and site closure plan will be incorporated as a condition of the UIC permit. GS well operators w ill be required to perform monitoring pursuant to the plans throughout the life of the facility (i.e ., the duration of the Class VI permit). EPA adds that §146.93(b) requires operators to perform pos t-injection site monitoring until it can be demonstrated that the CO2 and pressure front no longer pose a risk of endangerment to USDWs. EPA notes that the post-injection monitoring ma y be different from monitoring that occurs during the operational phase (i.e., as required at §146.90). Once this demonstr ation is made, site closure may be authorized and monitoring is no longer required. EPA adds that owners or operators must maintain financial responsibil ity until site closure has been authorized.

Please see the final rule and preamble, includi ng the discussion of post-injection site care monitoring and financial responsibil ity for additional information.

Letter ID: 0210 Comment ID: 22738 Letter Lines: 728 to 733

Comment Code: 4740 2.7.4 Electronic reporting (seeking comment)

Comment: EPA seeks comment on the requirement for electronic reporting in its proposed

rule. EPA Notice 115.

We recommend that EPA allow electronic re porting as an alternative to hardcopy submittals. The benefits are speed, efficiency, reduced cost and burden of paperwork, ease of document retrieval, public access, search and storage.

Individual Response: EPA agrees and believes that electronic formatting is the most appropriate format for submitting Class VI project informa tion to the Director, and based on comments received on the proposed rule, the majority of Class VI well owne rs or operators will have the capability to report electronically, and requires this at §146.91(e).

EPA is developing guidance for states that describes the recordkeeping, reporting, and additional data management needs associated with GS act ivities and provides recommended guidelines on the types of data to be collected for tracki ng GS projects, reporti ng to EPA for compliance tracking, and transfer of data to EPA's GS data system. The recordkeeping and reporting guidance will be available on EPA's web site, at http://water.epa.gov/type/groundwater /uic/wells_sequestration.cfm.

40Letter ID: 0210 Comment ID: 22739 Letter Lines: 736 to 743

Comment Code: 4750 2.7.5 Comments on the merit of a nnual reports (seeking comment)

Comment: Although EPA has not included a requirement for this report in its proposal, EPA seeks comment regarding the necessity for such an annual report. EPA Notice 115.

While reports on status are worthwhile, ac tivity and changes in status are not going to be significant on an annual basis. Following a report after the first year of operation to ensure that requirem ents for later reporting are being met, once every 10 years coincident with th e periods for AoR review should be adequate.

Individual Response: EPA is requiring semi-annual repo rting in addition to periodic reevaluations of required Class VI projects pl ans. The final GS rule, at §§146.84(c), 146.90(j), and 146.94(d), requires owners or op erators to review and update the AoR and corrective action plan, the testing and monitoring plan, and the emergency and re medial response plan throughout the life of the project. Owners or operators must review each plan and identify necessary amendments to the plan or demonstrate to the Director that no amendment is needed. These reviews must be performed within one year of an AoR reevaluation, following any significant changes to the facility (e.g., the addition of mon itoring or injection wells) , or when required by

the Director. In no case can reviews occur less ofte n than once every five years. EPA adds that it has modified the AoR reevaluation frequency in the final rule, from 10 years to 5 years. For additional information, please see the final rule an d the preamble for a discussion of EPA's final approach to AoR and corrective action.

Letter ID: 0210 Comment ID: 22740 Letter Lines: 746 to 759

Comment Code: 5240 2.8.2.2 Post injection timeframe (seeking comment)

Comment Code: 5260 2.8.2.3 Adjusting the post-injecti on timeframe (seeking comment)

Comment: In addition, EPA seeks comment on whether the Director should be allowed to shorten the timeframe based on performan ce information, and whether EPA should require a shorter or longer post injec tion period if data suggests the time frame should be adjusted. EPA Notice 125-26.

EPA should allow the Director to shorte n the timeframe based on performance information. However, an open-ended time period results in a high degree of uncertainty regarding cost exposure to a project developer. It also leaves a site open to future liability from "r eopeners" by the regulatory community. To avoid this latter scenario, a maximum monitoring period should be defined in terms of clear, performance-based risk metr ics - for example, that the validated model predicts that 95% of the plume is or will be trapped and that a sensitivity analysis predicts a comfortabl e margin of safety and diminimus risk of endangerment to any USDWs.

41Individual Response: EPA disagrees that the Director should not have discretion to shorten or lengthen the post-injection site care monitoring period. Because of the variety of site-specific circumstances at GS sites, EPA believes that Dire ctors, in consultation with operators, will be in the best position to determine whether additional post-injection site care m onitoring is needed (or whether the timeframe may be shortened), based on the circumstances of a particular project. EPA expects this decision to be made based on re levant site data and in consultation with all potentially impacted parties to ensure USDW protection. The final GS regulation retains the provision that the Director may, at his or her discretion, shorten the pos t-injection site care timeframe if the owner or operator can demons trate that the GS project does not pose an endangerment to USDWs, as specified in §146.93(b)(2). Alternatively, the final rule at §146. 93(c), also allows the Director to approve an alternative postinjection site care timeframe where an owner or operator can demonstrate during the permitting process that an alternative post-in jection site care timeframe, othe r than the 50 year default, is appropriate and ensures non-endangerment of USDWs. The demonstration must be based on site-specific information, includ ing the results of site-specifi c computational modeling; the predicted timeframe for pressure decline; the pr edicted rate of carbon dioxide plume migration; site-specific chemical processes that will result in carbon dioxide trapping; the predicted rate of carbon dioxide trapping; characteriza tion of the confining zone(s); laboratory analyses or studies to verify the information on trapping; the presence of potential conduits for fluid movement and the quality of abandoned well plugs within the Ao R; the distance between the injection zone and the USDWs above and/or below the injection zone; and any additional site-specific factors determined by the Director. The demonstration must meet the criteria at §146.93(c)(2) for ensuring the quality and accuracy of the data a nd models on which the demonstration is based. This demonstration would be submitted as part of the permit application, per §146.82(a)(18), in

addition to the PISC and site clos ure plan required at §146.82(a)(17).

EPA believes that a default post-injection site car e timeframe of 50 years, with flexibility to adjust the timeframe for a limited number of GS projects during the permitting process where

substantial data exists to demonstrate that an alternative timeframe would be protective of USDWs, or based on data collected during the PISC period, is appropriate to address the range of sites where GS is anticipated to occur, to ac commodate site-specific circumstances and various geologic conditions, and addre sses commenters’ concerns, wh ile ensuring USDW protection. Both approaches will utilize si te-specific data, and be based on pressure monitoring and USDW impacts.

Letter ID: 0210 Comment ID: 22741 Letter Lines: 762 to 791

Comment Code: 5432 2.9.1.1 Need to adjust financial responsibility mechanisms (seeking comment)

Comment: Current UIC regulations for Class I hazar dous waste injection allow for the use of insurance for purposes of demonstrat ing financial respons ibility. However, insurance was not included as part of the guidance provided for Class II injection because this insurance mechanism was and still is, rarely used for the purpose of demonstrating financial assu rance for injection wells. EPA is

42assessing whether to provide guidance on th e use of insurance providers and, if so, whether to update eligibility requir ements for insurers for GS wells

consistent with other current Fede ral agency practices. EPA Notice 131.

The role of insurance needs to be define d and especially, what is being insured and for what events and risks. We interp ret this as being limited to insurance related to decommissioning, plugging of we lls and closure of the site. Such costs and insurance coverage may change as additional wells are needed or the scope of the AoR changes. Absent of Fe deral or state assumption of long term liability, and regulatory clar ity on the inapplicability of CERCLA, and events and their mitigation, it will be difficult fo r insurers to provide coverage for any more than a limited scope.

EPA is assessing whether a financial rati ngs threshold for all companies using a self-guarantee, similar to those used by ot her Federal agencies, is appropriate. The Agency also is considering what cons titutes an appropriate financial rating threshold, and whether a financial rati ng greater than BBB or Baa (i.e., the current rating threshold es tablished under the UIC regul ations) is appropriate

for GS wells. EPA Notice 133.

Allowing for self-insurance definitely will be helpful to provide another avenue for CCS projects to be deployed. However, as we’ve experienced in the recent economic crisis, there are no guarantees of financial continuity for either

insurers or other economic entities.

Individual Response: EPA will retain self insurance as an option for financial responsibility for

Class VI wells. EPA believes that if properly used, the financial te st can be an appropriate option for some owners or operators. EPA recognizes that it is important for sel f-insurers to be creditworthy, otherwise USDWs may not be adequately protected. Owner or operators who choose to

self-insure and use the financial test must be ab le to demonstrate profit ability, with a margin sufficient to cover contingencie s and unknown obligations, and stab ility. If the owner or operator meets corporate financial test criteria, this is an indication that the owner or operator can guarantee its ability to satisfy fi nancial obligations based solely on the strength of the company’s

financial condition. If an operator or operator is not able to meet the corporate financial test criteria may arrange a corporate guarantee by dem onstrating that its corporate parent meets the financial requirements on its behalf.

Additionally, owners or operators may choose from a variety of financial instruments to meet their financial responsibility obligations under the rule, provided the Director determines that the operator's proposed financial responsibility dem onstration is adequate to protect USDWs from endangerment, which means the ability of the owner or operator to pay for each activity for which financial responsibility must be demonstr ated, including correctiv e action on wells in the AoR, injection well plugging, PISC and site cl osure, and emergency and remedial response throughout the life of the project. The final GS rule specifies at §146.85(a)(1) the permitted types of financial responsibility instru ments. See the final rule and pr eamble for further discussion of

43EPA's final approach to financial responsibility.

EPA is developing guidance that describes th e types of financial instruments, including insurance, that owners or opera tors can use to meet financia l responsibility requirements for

Class VI wells. The financial res ponsibility guidance will include considerations for Directors regarding how best to evaluate the appropriateness of a sp ecific financial responsibility instrument for a given project, such as potential concerns regarding companies with relatively small capitalization or the experi ences of states in approving se lf-insurance instruments. The guidance will also include consideration of how best to evaluate the appropriateness of a specific financial responsibility instrument for a proj ect. This guidance will be available on EPA's website at http://water.epa.gov/type/gr oundwater/uic/wells_sequestration.cfm.

EPA agrees that it is important for the owner or operator to reassess the needs for coverage when there are changes at th e site. The GS regulation, at §146.85(c), requires the owner or operator to provide annual updates to the cost estimate to account for any amendments to the AoR and corrective action plan, the injection well plugging plan, the PISC and site closure plan, and the emergency and remedial response plan.

Letter ID: 0210 Comment ID: 22742 Letter Lines: 775 to 778

Comment Code: 5460 2.9.2 Comments on transfer of lia bility for long-term care

Comment: scope of the AoR changes. Absent of Fe deral or state assumption of long term liability, and regulatory clar ity on the inapplicability of CERCLA, and events and their mitigation, it will be difficult fo r insurers to provide coverage for any more than a limited scope.

Individual Response: EPA acknowledges the commenter’s con cern regarding the applicability of multiple statutes to GS projects and the need for a single clear liability regime for owners or operators. EPA is working to create a nationally c onsistent financial responsibility regime within its authority to ensure that fi nancial resources are available to protect USDWs throughout the life of the GS project. However, the authority under the SDWA does not extend to release owners or operators from long-term responsib ility for the potential economic costs of impacts unrelated to USDWs. EPA does not have authority to transfer liability from one entity to another and SDWA does not provide for the creation of a third party fi nancial instrument where EPA is the trustee. In the UIC program, liability under SDWA §1423 remain s with the owner or operator for all well classes until all regulatory requirements have been met. EPA understa nds that Congress is considering legislation that may address the liability issue.

As described above, whether the presence of hazardous substances in the CO2 may result in CERCLA liability from a seque stration facility depends enti rely on the composition of the specific CO2 stream and the environmental medi a in which it is stored (e.g., soil or ground water). CERCLA exempts from liability, under CERCLA section 107, 42 U.S.C. 9607, certain “federally permitted releases” (FPR) as defined in CERCLA, 42 U.S.C. 9601(10). Class VI permits will need to be carefully structured to ensu re that they prevent potential releases from the well which are outside the scope of the Class VI permit. Class VI permits will need to be

44carefully structured to ensure that they prevent potential releases from the well which are outside the scope of the Class VI permit.

The UIC program Director has authority under SDWA §1423 to address potential compliance issues (e.g., potential releases that may endanger USDWs) resulting from injection violations in the unlikely event that a remedi al response is necessary. Although EPA anticipates that the need for emergency or remedial actions at GS sites wi ll be rare, the GS rule requires, at §146.94, that emergency and remedial response plans be deve loped and updated to address such events and that owners or operators demonstr ate that financial resources are set aside to implement the plans if necessary, per §146.85. As described above, once an owner or operator has met all regulatory requirements under Part 146 for Class VI wells and the Director has approved site closure pursuant to requirements at §146.93, the owner or operator will no longer be subject to enforcement under specific sections of the Act as they relate to the UIC regulatory requirements. Furthermore, their financial instrument will be released if was not used. However, the Agency clarifies that an owner or operator may be held liable, even after site closure is approved under §146.93, under §1423 of the SDWA for violating §144.12.

Letter ID: 0210 Comment ID: 22743 Letter Lines: 794 to 802

Comment Code: 5460 2.9.2 Comments on transfer of lia bility for long-term care

Comment: EPA is requesting comments on whether financial responsibility mechanisms to be recommended in EPA guidance should be ad justed in the manner described, whether additional instruments should be included, and whether other adjustments to the financial responsibility mechanisms should be considered, all subject to EPA’s authority under the SDWA. EPA Notice 133.

EPA needs to consider and define how it will deal with and allow transfer of financial responsibility be tween private en tities and also potentially to Federal agencies or other sovereign enti ties such as states or commonwealths.

Individual Response: Under the final GS rule, once an owne r or operator has met all regulatory requirements under Part 146 for Class VI wells and the Director has approved site closure pursuant to requirements at §146.93, the owner or opera tor will generally no longer be subject to enforcement for regulatory noncompliance. Furtherm ore, their financial instrument as required under §146.85 will be released if it was not used. However, even if a site closure is approved under §146.93, an owner or operator may be held liable for regulatory noncompliance (including violation of 40 CFR 144.12) in ce rtain circumstances. For example, an owner or operator may be held liable for regulatory noncompliance even afte r site closure was approved if the Director relied on erroneous information (e.g., erroneous modeling data) provid ed by the owner or operator when approving site closure.

Separate from EPA’s authority to enforce regul atory compliance, an owner or operator may be subject to a §1431 response orde r even after proper site cl osure is approved under §146.93. Under §1431 the Administrator may require an ow ner or operator to take necessary response

4546 measures if he or she receives information that a contaminant is present or is likely to enter a public water system or an USDW, which may pres ent an imminent and s ubstantial endangerment to the health of persons, and the appropriate Stat e and local authorities ha ve not acted to protect the health of such persons. Th e action may include issuing admi nistrative orders or commencing a civil action for appropriate relief against the ow ner or operator of a Class VI well. If the owner or operator fails to comply with the order, they may be subject to a civil penalty for each day in

which such violation occurs or failure to comply continues.

Furthermore, after site closure an owner or ope rator may remain liable under tort and other remedies, or under other federal statutes includi ng, but not limited to, Clean Air Act, 42 U.S.C. §§ 7401-7671; CERCLA, 42 U.S.C. § 9601-9675; and RCRA, 42 U.S.C. § 6901-6992. EPA does not have authority to transfer SDWA or other legal liability for Class VI wells to the State or federal government or a third-party fund. See the final rule preamble for further discussion of EPA's final approach.