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.December 19, 2008

EPA Docket Center (EPA/DC) 1200 Pennsylvania Ave., NW. Washington, DC 20460

Attention: Docket ID [EPA–HQ–OW–2008–0390, FRL–869 5–3]

Subject: Federal Requirements Under the Undergroun d Injection Control (UIC) Program for Carbon Dioxide (CO 2 ) Geologic Sequestration (GS) Wells

These comments are filed on behalf of the Independe nt Petroleum Association of America (IPAA), the International Association of Dr illing Contractors (IADC), the International Association of Geophysical Contractor s (IAGC), the National Stripper Well Association (NSWA), the Petroleum Equipment Supplie rs Association (PESA), the US Oil & Gas Association (USOGA) and the following org anizations:

Arkansas Independent Petroleum and Royalty Owners A ssociation California Independent Petroleum Association

Coalbed Methane Association of Alabama

Colorado Oil & Gas Association East Texas Producers & Royalty Owners Association

Eastern Kansas Oil & Gas Association Florida Independent Petroleum Association

Illinois Oil & Gas Association Independent Oil & Gas Association of New York Independent Oil & Gas Association of Pennsylvania Independent Oil & Gas Association of West Virginia Independent Oil Producers Agency Independent Oil Producers Association Tri-State Independent Petroleum Association of Mountain State s Independent Petroleum Association of New Mexico

Indiana Oil & Gas Association Kansas Independent Oil & Gas Association Kentucky Oil & Gas Association Louisiana Independent Oil & Gas Association Michigan Oil & Gas Association Mississippi Independent Producers & Royalty Associa tion

Montana Petroleum Association National Association of Royalty Owners Nebraska Independent Oil & Gas Association

New Mexico Oil & Gas Association

New York State Oil Producers Association

North Dakota Petroleum Council Northern Alliance of Independent Producers2 Ohio Oil & Gas Association Oklahoma Independent Petroleum Association Panhandle Producers & Royalty Owners Association Pennsylvania Oil & Gas Association

Permian Basin Petroleum Association Petroleum Association of Wyoming

Southeastern Ohio Oil & Gas Association

Tennessee Oil & Gas Association Texas Alliance of Energy Producers Texas Independent Producers and Royalty Owners Asso ciation Virginia Oil and Gas Association Wyoming Independent Producers Association

Collectively, these groups represent the thousands of independent oil and natural gas explorers and producers that will be the most signi ficantly affected by the proposed actions in these regulatory actions. Independent p roducers have the knowhow to drill and complete wells to depths beneath America’s USDWs. They drill about 90 percent of American oil and natural gas wells, produce over 65 percent of American oil, and more than 80 percent of American natural gas.

In addition to the specific comments made herein, w e support those comments submitted separately by the participants in these comments.

These comments address three primary – and interrel ated – concerns regarding the proposed federal regulatory scheme for CO 2 GS wells. Our primary interest in this proposal to create a Class VI well category is its interaction with the use of CO 2 for Enhanced Oil Recovery (EOR) under the Class II cate gory. CO 2 EOR offers both an existing technology and one with rapidly expanding application. In this context, the

utilization of CO 2 during EOR also provides for geologic sequestratio n. The decisions attendant to the Class VI proposal regarding the ch aracterization of CO 2 as a commercial chemical, a pollutant or a hazardous waste and rega rding the federal regulatory structure and impacts on state primacy are interrelated and o f significant concern.

First, EPA properly notes that CO 2 is used for EOR. The Department of Energy studied the potential for extended use of CO 2 and reported that at least six oil producing basins were potential EOR areas and that over 100 billion barrels of American oil could potentially be produced utilizing this technology ( Undeveloped Domestic Oil Resources:

The Foundation For Increased Oil Production And A V iable Domestic Oil Industry

, February 2006). In fact, when CO 2 EOR is used, a significant portion of the CO 2 remains in the oil reservoir and effectively becomes geolog ically sequestered. With recognition of the goals of sequestration, those volumes will d ramatically grow. At issue is whether the Class VI proposal would interfere with the EOR projects. We strongly urge EPA to

assure that CO 2 EOR and its attendant sequestration are not inhibit ed by the application of Class VI requirements to EOR operations. EPA re cognizes that the Class VI requirements should not be applied to Class II CO 2 EOR operations. We believe that the current process of shutting down oil field operatio ns (site closure) effectively protects the3

environment under existing regulatory structure and do not support changes that would discourage EOR activities by imposing new requireme nts at the end of the reservoir’s life. Such requirements would effectively discoura ge CO 2 EOR and result in less American oil production and less geologic sequestra tion of CO 2

.

Second, these concerns similarly arise regarding th e characterization of CO 2 in the GS process. Currently, for EOR operations, CO 2 is essentially treated as a commercial chemical. This characterization is significant bec ause of the connotation that characterization as a pollutant or a hazardous wast e implies. CO 2 has not been declared either a pollutant or a hazardous substance under a ny federal law. Suggesting that it should be so classified (or even a treatment in pol icy that would indirectly point to it as such) as a part of this rulemaking implies a risk t hat is not consistent with its use in EOR. Indeed, implicit in such an implication is a liabil ity threat that would chill further development of CO 2 EOR with no incremental environmental benefit. How ever, we do recognize that compositional controls over what is injected may be necessary. This does

not seem to be addressed in the draft rules.

EPA has requested comments on the application of th e Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA o r Superfund) to Class VI wells.

Because of the interrelation of Class VI and Class II CO 2 EOR operations, we offer the following observations. EPA states that CO 2 is not a listed hazardous substance under Superfund – nor should it be. Rather EPA focuses o n the potential for such substances to be included in a carbon capturing operation or for the presence of CO 2 to react in GS. We

do not believe that CO 2 GS operations reasonably fall under the scope of Su perfund. As long as compositional controls are specified, it is not a hazardous substance nor is it a pollutant or contaminant under the Superfund defini tion. Assuming that some other chemicals could be present and trigger Superfund’s application, UIC program operations fall under Superfund’s “federally permitted release s” limitations. This provision allows EPA to respond to a release or threat of a release assuring environmental protection. Recovery of the response costs would have to be sou ght under other federal or state laws rather than CERCLA. However, UIC operations under federal and state regulatory programs already provide for mechanisms to correct for failures and, in fact, these operations have proven to be very effective. Unfor tunately, we believe that EPA’s focus on the potential application of Superfund creates t he appearance of risks that will impede the development of GS wells. More importantly, as stated above, from our perspective the threat of new liability exposure can chill CO 2 EOR and risk both billions of barrels of American oil production and a valuable and expedien t mechanism for sequestration.

A third area of concern relates to the federal-stat e regulatory relationship and the process for a state to obtain primacy for Class VI wells. The Interstate Oil and Gas Compact Commission (IOGCC) has been actively developing a r egulatory framework for GS wells. We urge EPA to work closely and cooperative ly with IOGCC to develop a sound regulatory framework. IOGCC member states have a l ong history of managing UIC operations, particularly those related to CO 2 EOR. EPA needs to develop a structure that can be willingly sought by states.4

Class II wells provide an example of the risks that can arise. After enactment of the Safe Drinking Water Act (SDWA) in 1974, EPA developed a Class II regulatory structure that states were largely unwilling to adopt. Faced with a regulatory burden that EPA could not bear of permitting Class II wells throughout th e country, Congress enacted amendments in 1980 to the SDWA to provide for state s to obtain primacy for Class II wells based on equivalent environmental protection rather than adopting the EPA regulatory program itself. The Class VI program sh ould not result in a similar outcome. The SDWA is structured with the presumption that st ates will obtain primacy for the UIC program and manage the wells that must be developed . While EPA suggests that a national structure may be necessary to address inte rstate consistency, this dynamic would pale compared to the challenge for EPA to attempt t o develop the permitting expertise and daily regulatory management capability to run a national UIC Class VI program given the enormous volumes of captured carbon resul ting from the aggressive global climate initiatives currently proposed. Moreover, the history of the IOGCC shows that it can serve as a multistate management operation. Wh ile it has been decades since it has functioned to allocate oil and natural gas producti on among states, IOGCC’s original role was managing oil and natural gas production to avoi d wasted resources. This history works well in the context of coordinating the movem ent of captured carbon to state regulated UIC operations. Consequently, a close re lationship between IOGCC and EPA in crafting a workable structure where states will seek primacy is essential for a positive

national outcome.

Conclusion

We appreciate the opportunity to provide these comm ents. CO 2 use in EOR offers America the opportunity to produce billions of barr els of oil that would otherwise be imported from foreign nations. These are existing American subsurface assets we should strive to optimize and America deserves these dual benefits of its own resources. EPA’s search for a regulatory structure to manage the geo logic sequestration of CO 2 in the context of carbon capture initiatives has resulted in its proposal to create a new UIC category – Class VI. This approach reflects the re ality that GS wells do not fall readily

under the current UIC classes. Because of CO 2 use in EOR, EPA’s proposal must be balanced against any risk it poses to limit the use of CO 2 EOR. We have identified three specific concerns in these comments; others may be similarly significant. However, we believe that these three items – the relationship b etween Class II operations and the new Class VI GS wells, the threat of new liability risk s and the federal-state relationship – must be positively addressed to assure that America n can effectively produce its oil resources. If there are questions regarding these comments or if additional information is required, please contact Lee Fuller at IPAA, 202-85 7-4722.Letter ID: 0179

Commenter: Lee O. Fuller Organization: Independent Petroleum Association of America et al.

Letter ID: 0179 Comment ID: 23609 Letter Lines: 27 to 82

Comment Code: 1000 1. General and Administrative Comments

Comment: These comments are filed on behalf of th e Independent Petroleu m Association of America (IPAA), the International Associa tion of Drilling Contractors (IADC), the International Association of Geophysic al Contractors (IAGC), the National Stripper Well Association (NSW A), the Petroleum Equipmen t Suppliers Association (PESA), the US Oil & Gas Association (U SOGA) and the following organizations:

Arkansas Independent Petroleum and Royalty Owners Association California Independent Pe troleum Association

Coalbed Methane Association of Alabama

Colorado Oil & Gas Association East Texas Producers & Roya lty Owners Association

Eastern Kansas Oil & Gas Association Florida Independent Pe troleum Association

Illinois Oil & Gas Association Independent Oil & Gas Asso ciation of New York Independent Oil & Gas Asso ciation of Pennsylvania Independent Oil & Gas Associ ation of West Virginia Independent Oil Producers Agency Independent Oil Producers Association Tri-State Independent Petroleum Associ ation of Mountain States Independent Petroleum Asso ciation of New Mexico

Indiana Oil & Gas Association Kansas Independent Oil & Gas Association Kentucky Oil & Gas Association Louisiana Independent O il & Gas Association Michigan Oil & Gas Association Mississippi Independent Producer s & Royalty Association

Montana Petroleum Association National Association of Royalty Owners Nebraska Independent Oil & Gas Association

New Mexico Oil & Gas Association

New York State Oil Producers Association

North Dakota Petroleum Council Northern Alliance of Independent Producers

Ohio Oil & Gas Association Oklahoma Independent Petroleum Association Panhandle Producers & Royalty Owners Association

1Pennsylvania Oil & Gas Association

Permian Basin Petroleum Association Petroleum Association of Wyoming

Southeastern Ohio Oil & Gas Association

Tennessee Oil & Gas Association Texas Alliance of Energy Producers Texas Independent Producers and Royalty Owners Association Virginia Oil and Gas Association Wyoming Independent Producers Association

Collectively, these groups represent th e thousands of independent oil and natural gas explorers and producers that wi ll be the most significantly affected by the proposed actions in these regulator y actions. Independent producers have the knowhow to drill and complete wells to depths beneath America’s USDWs. They drill about 90 percent of American oi l and natural gas wells, produce over 65 percent of American oil, and more than 80 percent of American natural gas.

In addition to the specific comments made herein, we support those comments submitted separately by the participants in these comments.

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

Letter ID: 0179 Comment ID: 23610 Letter Lines: 84 to 93

Comment Code: 1480 1.2.2.2.2 CO2 is not a pollutant

Comment: These comments address three primary - and interrelated - concerns regarding the proposed federal regulatory scheme for CO 2 GS wells. Our primary interest in this proposal to create a Class VI well ca tegory is its interaction with the use

of CO2 for Enhanced Oil Recovery (EOR) under the Cl ass II category. CO2 EOR offers both an existing technology and one with rapidly expanding application. In this context, the utilization of CO 2 during EOR also provides for geologic sequestration. The decisions attendant to the Class VI propos al regarding the

characterization of CO2 as a commercial chemical, a pollutant or a hazardous waste and regarding the federal regula tory structure and impacts on state primacy are interrelated a nd of significant concern.

Individual Response: EPA clarifies that the GS rule does not address the status of CO2 as either a pollutant or a commodity. In addition, whether or not a fluid could be sold on the market as a commodity does not override EPA's authority under the SDWA to protect USDWs from endangerment.

Under the SDWA, the injection of any "fluid" is subject to the requirements of the UIC program. "Fluid" is defined under 40 CFR 144.3 as any mate rial or substance which flows or moves,

2whether in a semisolid, liquid, slud ge, gas or other form or state, and it includes liquids, gases, and semisolids (i.e., slurries) in jected into the subsurface.

Under §146.82(a)(7), owners or operators of GS wells must characterize their CO2 stream as part of their permit application. If the injectate is de termined to meet the definition of a hazardous waste under RCRA, and as defined in 40 CFR Part 261, the stringent UIC Class I hazardous waste requirements for injection of hazardous waste apply. Thus, injection of corrosive CO2 into Class VI wells is prohibited. In addition, owners or operators must peri odically monitor their injectate throughout injecti on operations under §146.90(a).

EPA stresses that the focus of the GS rule is to ensure that, where GS is deployed, it is conducted in a manner that protects USDWs.

Please see EPA's response below for additional info rmation on the final appr oach to transitioning permits from Class II to Class VI.

Letter ID: 0179 Comment ID: 23611 Letter Lines: 95 to 113

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: First, EPA properly notes that CO2 is used for EOR. The Department of Energy studied the potential for extended use of CO2 and reported that at least six oil producing basins were potential EOR areas and that over 100 b illion barrels of American oil could potentially be produced utilizing this technology (Undeveloped Domestic Oil Resources: The Foundation For Increased Oil Production And A Viable Domestic Oil Industry, Febr uary 2006). In fact, when CO2 EOR is used, a significant portion of the CO2 remains in the oil reservoir and effectively becomes geologically sequestere d. With recognition of the goals of sequestration, those volumes will dramati cally grow. At issue is whether the Class VI proposal would interfere with th e EOR projects. We strongly urge EPA to

assure that CO2 EOR and its attendant sequestration are not inhibited by the application of Class VI requirements to EOR operations. EPA recognizes that the Class VI requirements should not be app lied to Class II CO2 EOR operations. We believe that the current process of sh utting down oil field operations (site closure) effectively protects the environment under existing regulatory structure and do not support changes th at would discourage EOR activities by imposing new requirements at the end of th e reservoir’s life. Such requirements would effectively discourage CO2 EOR a nd result in less American oil production and less geologic sequestration of CO2.

Individual Response: EPA agrees that injection of CO2 for the primary purpose of enhancing oil and gas recovery should remain under the Cl ass II Program. However, EPA believes that the nature and risks of CO2 injecti on for long term storage is differe nt from Class II CO2 injection for ER, and that tailored requirements for GS wells are approp riate and necessary to protect USDWs from endangerment. For this reason, the Ag ency tailored UIC requirements for Class VI wells that address the general risks deep inj ection may pose to USDWs and specifically address

3the unique nature of CO2 GS (i.e., very larg e volumes, very long time-periods, and reservoir pressure conditions.

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 gu idance describes the 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 UIC 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.

Letter ID: 0179 Comment ID: 23612 Letter Lines: 115 to 126

Comment Code: 1480 1.2.2.2.2 CO2 is not a pollutant

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

Comment: Second, these concerns similarly arise rega rding the characterization of CO2 in the GS process. Currently, for EOR operati ons, CO2 is essentia lly treated as a

commercial chemical. This characterizat ion is significant because of the

connotation that characteriza tion as a pollutant or a hazardous waste implies. CO2 has not been declared either a pollu tant or a hazardous substance under any federal law. Suggesting that it should be so classified (or even a treatment in policy that would indirectly point to it as such) as a part of this rulemaking implies a risk that is not consistent w ith its use in EOR. Indeed, implicit in such an implication is a liability threat that would chill further development

of CO2 EOR with no incremen tal environmental benefit. However, we do recognize that compositional controls over what is injected may be necessary. This does

not seem to be addressed in the draft rules.

Individual Response: Under §146.82(a)(7), owners or operators of GS wells must characterize their CO2 stream as part of their permit applica tion. If the injectate is determined to meet the definition of a hazardous waste under RCRA, and as defined in 40 CFR Part 261, the stringent UIC Class I hazardous waste requirements for injection of hazardous waste apply. Thus, injection of corrosive CO2 into Class VI wells is prohibited. In additi on, owners or operators

4must periodically monitor th eir injectate througho ut injection operati ons under §146.90(a).

EPA adds that the requirements of the GS rule ar e tailored to the nature of the CO2 itself and risks imposed by the injection of CO2, and do not address the status of CO2 as either a pollutant, commodity, or waste.

Letter ID: 0179 Comment ID: 23613 Letter Lines: 128 to 150

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

Comment: EPA has requested comments on the a pplication of the Comprehensive

Environmental Response, Compensation, and Liability Ac t (CERCLA or Superfund) to Class VI

wells. Because of the interrelation of Cla ss VI and Class II CO2 EOR operations, we offer the following observations. EPA states that CO2 is not a listed hazardous substance under Superfund - nor should it be. Rather EPA focuses on the potential for such substances to be included in a carbon capturing operation or for the presence of CO2 to react in GS. We do not believe that CO2 GS operations reasonably fall under the scope of Superfund. As long as compositional controls are specified, it is not a hazardous substance nor is it a pollutant or contaminant under the S uperfund definition. Assuming that some other chemicals could be present and trigger Superfund’s application, UIC program operations fall under Superfund’ s "federally perm itted releases" limitations. This provision allows EPA to re spond to a release or threat of a release assuring environmental protection. Recovery of the response costs would have to be sought under other federal or st ate laws rather than CERCLA. However, UIC operations under federal and state regu latory programs alr eady provide for mechanisms to correct for failures and, in fact, these operations have proven to be very effective. Unfortunately, we be lieve that EPA’s focus on the potential application of Superfund creates the app earance of risks that will impede the development of GS wells. More importantly, as stated above, from our perspective

the threat of new lia bility exposure can chill CO2 EO R and risk both billions of barrels of American oil production and a valuable and expedient mechanism for sequestration.

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.

5Furthermore, EPA is promulgating the GS rule un der the authority of th e SDWA. To the extent the commenter is seeking interpretations of CE RCLA and its related pr ovisions, such as the definition of a federally permitted release, such interpretations are beyond the scope of this rulemaking.

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.

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: 0179 Comment ID: 23614 Letter Lines: 152 to 182

Comment Code: 5600 2.11 Comments related to UIC Program primacy for Class VI wells

6Comment: A third area of concern relates to the fe deral-state regulator y relationship and the process for a state to obtain primacy for Class VI wells. The Interstate Oil and Gas Compact Commission (IOGCC) has been actively developing a regulatory framework for GS wells. We urge EPA to wo rk closely and cooperatively with IOGCC to develop a sound regulatory framework. IOGC C member states have a long history of managing UIC operations, particularly t hose related to CO2 EOR. EPA needs to develop a structure that can be willingly sought by states.

Class II wells provide an ex ample of the risks that can arise. After enactment of the Safe Drinking Water Act (SDW A) in 1974, EPA developed a Class II regulatory structure that st ates were largely unwilling to adopt. Faced with a regulatory burden that EPA could not bear of permitting Class II wells throughout the country, Congress enacted am endments in 1980 to the SDWA to provide for states to obtain primacy fo r Class II wells ba sed on equivalent environmental protection rather than adop ting the EPA regulator y program itself. The Class VI program should not result in a similar outcome. The SDWA is structured with the presumption that states will obtain primacy for the UIC program and manage the wells that must be developed. While EPA suggests that a national structure may be necessary to address interstate consistency, this dynamic would pale compared to the challenge for EPA to attempt to develop the permitting expertise and daily regulator y management capability to run a national UIC Class VI program given th e enormous volumes of captured carbon resulting from the aggressive global climate initiatives currently proposed. Moreover, the history of the IOGCC shows that it can serve as a multistate management operation. While it has been decades since it has functioned to allocate oil and natural gas production am ong states, IOGCC’s original role was managing oil and natural gas production to avoid wasted resources. This history works well in the context of coordinating the movement of captured carbon to state regulated UIC operations. Consequen tly, a close relations hip between IOGCC and EPA in crafting a workable structure where states will seek primacy is essential for a positiv e national outcome.

Individual Response: EPA acknowledges the expertise of IOG CC, and notes that it coordinated with IOGCC throughout the rulemaking process. EPA also recognizes that State, Tribal, Territorial, and DI UIC Program Di rectors are in the best position to evaluate the unique issues related to well depth, geology, and hydrogeology that are posed by a Class VI well. The Agency believes that it is important for states to use thei r unique efficiencies to promote adoption of this burgeoning and important technology, while assuring that USDWs are protected from endangerment through the UIC regulatory framework. EPA encourages states to accept primacy for Class VI, and believes that, due to th e importance of implementing an effective, comprehensive, and seamless CCS program, States should be provided the flexibility to obtain primacy for Class VI only.

EPA also understands that the CO2 plumes for large GS projects may cross State, Tribal, Territorial, or EPA Regional boundaries. The fina l GS rule, at §146.82(a)(2), requires the owner or operator to identify all State, Tribal, and Te rritorial boundaries within the AoR. Based on this

7information, the Director must provide written notif ication to all States, Tribes, and Territories to inform them of the permit app lication, as specified in §146.82(b) , and ensure that they are involved in any necessary processes (e.g., develo pment of the emergency and remedial response plan, as specified in §146.94). The Agency enc ourages transparency in the permitting process and anticipates that State-State/State-Tribal communication on GS permitting will facilitate information sharing and encourag e safe, protective projects.

Letter ID: 0179 Comment ID: 23615 Letter Lines: 184 to 202

Comment Code: 1200 1.1 General comments about the rulemaking

Comment: Conclusion

We appreciate the opportunity to provide th ese comments. CO2 use in EOR offers America the opportunity to produce billi ons of barrels of oil that would otherwise be imported from foreign na tions. These are existing American

subsurface assets we should strive to optimize and America deserves these dual

benefits of its own resources . EPA’s search for a regulat ory structure to manage the geologic sequestration of CO2 in the context of carbon capture initiatives has resulted in its proposal to create a new UIC category - Class VI. This approach reflects the reality that GS wells do not fall readily under the

current UIC classes. Because of CO2 use in EOR, EPA’s proposal must be balanced against any risk it poses to limit the use of CO2 EOR. We have identified three specific concerns in these comments; ot hers may be similarly significant. However, we believe that these three ite ms - the relationship between Class II operations and the new Class VI GS wells, the threat of new liability risks and the federal-state relationship - must be positively addressed to assure that American can effectively produce its oil resources. If ther e are questions regarding these comments or if additi onal information is required, please contact Lee Fuller at IPAA, 202-857-4722.

Individual Response: EPA acknowledges the comment. Pleas e see the remainder of EPA's responses to this comment for further deta ils. For additional information on EPA's final regulatory approach, including the discussion of the repermitting of Class II/EOR wells for GS, please see the final rule and preamble as well as the rulemaking docket.

8