### 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.

# The Fertilizer Institute

Nourish, Replenish, Grow

William C

. Herz

Vice President,

Scientific Programs 

# DEC 2 4 2008

December 23, 2008

VIA HAND DELIVERY

Water Docket, EPA Docket Center (EPA/DC)

EPA West, Room

3334
1301 Constitution Ave

., N .W

. Washington, DC 20460

Re : The Fertilizer Institute Comments on EPA's Notice of Proposed Rulemaking
Entitled "Federal Requirements Under the Underground Injection Control (UIC) Program for Carbon Dioxide (CO,,) Geologic Sequestration (GS)
Wells Proposed Rule," Docket ID No

. EPA-HQ-OW-2008-0390

Dear Sir or Madam

:

The Fertilizer Institute (TFI), on behalf of its member companies, submits these comments in

response to the U

.S

. Environmental Protection Agency's (EPA) Notice of Proposed Rulemaking (NPRM) entitled "Federal Requirements Under the Underground Injection Control (UIC) Program

for Carbon Dioxide (C02) Geologic Sequestration (GS) Wells Proposed Rule," published in the Federal Register on July 25, 2008, and appearing at 73 Fed

. Reg

. 43,492

.

Statement of Interest

TFI is the national trade association representing fertilizer producers, retailers, wholesalers and importers

. Its members are served by a full-time Washington, D .C

. staff in various legislative, educational and technical areas, as well as with information and public relations programs

.
Although the rule is geared specifically towards well operators (73 Fed

. Reg

. 43,492), there are several components that may affect potential upstream industrial clients and are of interest to TFI members

. TFI members include several manufacturers that produce C02 and sell this byproduct via pipeline to oil and gas producers for enhanced oil and gas recovery in Class II wells

. Because the NPRM has the potential to affect future use of C02 pipelines for both enhanced oil and gas recovery and carbon sequestration, TFI and its members have an interest in EPA's solicitation of comments regarding the possible regulation of C02 GS wells under the UIC Program

.



# DEC 2 4 2008

Union Center Plaza 202 .962 .0490 820 First Street, NE Suite 430 202 .962 .0577 fax Washington, DC 20002 www .tfi .orgWater Docket, EPA Docket Center (EPA/DC)

December 23, 2008

Page 2

General Comments

TFI wishes to thank EPA for the opportunity to comment on the proposed requirements for underground injection of COZ under the Safe Drinking Water Act (SDWA), and for holding a public hearing on the subject

. TFI is generally supportive of the proposed rules, but would ask for additional regulatory clarification and/or guidance for potential upstream industrial clients

.
Specific Comments

Proposal to Create New Category of Injection Well
- Class VI Wells

EPA is proposing to create a new category of injection well under its existing UIC Program with new

federal requirements to allow for the injection of COZ for the purpose of GS

. EPA
proposes to tailor existing UIC program components so that they are appropriate for the unique nature of injecting large volumes of COZ into a variety of geological formations to ensure that underground sources of drinking water (USDW) are not endangered (73 Fed

. Reg

. 43,495)

.

TFI supports establishing a new class of well
- Class VI
- specifically for COZ geologic sequestration and maintaining injection of COZ for the purposes of enhanced oil and gas recovery under the Class II program, and the potential for an expanded UIC program to support development of a key climate change mitigation technology

. TFI generally agrees with the Agency's stated goal of providing "certainty to industry and the public about requirements that would apply to injection, by providing consistency in requirements across the U .S

., and transparency about what requirements apply to owners or operators" (73 Fed

. Reg

. 43,496)

. As discussed further in our comments, TFI requests additional clarification so that these regulations also provide certainty, consistency and transparency regarding which requirements apply to potential upstream industrial sources such as fertilizer manufacturers

.

Reclassification of Existing Wells as Class VI Wells

EPA seeks comment on its approach to grandfather construction requirements at the Director's discretion for existing Class I, Class II, and Class V wells seeking to convert to Class VI wells, and whether additional construction requirements would be necessary to prevent endangerment to USDWs from the GS of COz

. Additionally, EPA seeks comment on how the grandfathering approach for existing wells may affect compliance with the requirements in this proposal (73 Fed

. Reg

. 43,502)

.

TFI also supports provisions allowing Class I, II and V wells to be repermitted as Class VI wells

. We also support proposed language that would "grandfather" construction requirements for Class I or II wells seeking repermitting as a Class VI well

. TFI does not foresee the need for additional construction requirements or that grandfathering existing Class I, Class II, and Class V wells will affect compliance with the proposed Class VI regulations

.Water Docket, EPA Docket Center (EPA/DC)

December 23, 2008
Page 3

Target Geologic Formations for GS of C02

TFI agrees that other abandoned mines, including potash mines, are potential C02 storage options and would be willing to assist EPA in exploring this option further

. (73 Fed

. Reg

. 43,503)

Injected C02 as a Hazardous Waste under the Resource Conservation and Recovery Act (RCRA)

EPA seeks comment on defining "carbon dioxide stream" to exclude hazardous wastes (146 .81(d)) in order to assure that it would apply only to COZ streams that are not hazardous wastes as defined in 40 CFR Part 261

. As a result, today's proposed rule would preclude the injection of hazardous wastes in Class VI injection wells

. EPA also seeks comment on other considerations associated with the presence of impurities in the COZ stream

. (73 Fed

. Reg

. 43,503)

TFI understands EPA's concern with the potential for impurities in the COZ stream and the risk that contaminants such as hydrogen sulfide and sulfurous and nitrous oxides in the COZ stream could migrate into a USDW

. TFI also agrees that because the types of impurities and their concentrations in the COZ stream are likely to vary by facility, plant operating conditions and pollution removal technologies, EPA cannot make a categorical determination as to whether injected COZ is a hazardous waste under RCRA

.

TFI asks for greater guidance for potential upstream industrial clients of COZ wells

. TFI is concerned about the implications of considering the long-term storage of COz as "discard" as EPA suggests by stating that the COZ stream needs to be non-hazardous

. RCRA applicability to carbon sequestration activities would discourage industry from engaging in sequestration to avoid associated regulatory burdens and potential citizen suits

. EPA should therefore interpret its rule to exclude GS injectate from RCRA regulation to the greatest degree possible

. RCRA would apply only where the injectate meets the definitional criteria in 42 U .S .C

. § 6903(27)

.

GS injectate should not qualify as a "solid waste" under this definition because the injectate is not "discarded" but is recoverable and has commercial value, in particular in enhanced oil recovery operation

. In other regulatory situations EPA has exempted materials from RCRA where the materials are subject to a separate regulatory regime providing equivalent environmentally protective measures (such as UIC)

. EPA states in the NPRM that the UIC regulatory scheme is adequate to protect USDWs, and that "chronic and acute health effects from airborne exposure resulting from COZ injection activities even in the case of leakage or accidental exposure is minimal ." 72 Fed

. Reg

. at 43487-98

. EPA has relied on "contingent management" (management of materials outside of RCRA regulation where a separate regulatory regime provides equivalent protection) to great effect and in a manner which has been upheld by federal courts

. See Military Toxics Project v

. EPA, 146 F

. 3d 948 (D .C

. Cir

. 1998)

. As such, TFI requests that EPA interpret the injectate to not constitute a RCRA- regulated waste, or at least to apply contingent management to the injectate to avoid RCRA regulation

.Water Docket, EPA Docket Center (EPA/DC)

December 23, 2008
Page 4

Furthermore, to the extent they are not already expressly exempted, TFI requests that the final rule delineate monitoring and/or reporting requirements for upstream industrial clients that could provide RCRA liability relief

. TFI asks that upstream industrial clients providing COZ streams that are not hazardous wastes as defined in 40 CFR Part 261 be provided an exemption from RCRA liability

. Absent a RCRA exemption, TFI requests that EPA develop contaminant limits that would be allowed in COZ streams from upstream industrial clients .TFI also asks that EPA clarify that risks to USDWs from improperly managed GS projects
- including COZ migration into USDWs, causing the leaching and mobilization of contaminants (e .g

., arsenic, lead, and organic compounds), changes in regional groundwater flow, and the movement of saltier formation fluids into USDWs, causing degradation of water quality (73 Fed

. Reg

. 43,497)

- are solely the responsibility of the owner and/or operator of the well

.

Where not otherwise exempted from RCRA, delineation of contaminant levels, monitoring and recordkeeping requirements and liability protection are necessary to provide the certainty, consistency and transparency to potential upstream industrial clients

. TFI also is concerned about the consequences of COZ storage prior to injection as related to the potential implications for solid waste storage regulations as well as applicable state regulatory obligations on the injection of solid waste

.

Consideration of Injected COZ as a Hazardous Substance under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA)

TFI also asks for additional clarification on potential CERCLA liability

. We agree with EPA's interpretation in the proposed rule that the release of COZ, if the rule is adopted as proposed, would constitute a "federally permitted release" as defined in CERCLA, 42 U .S .C

. § 9601 (10), and that CERCLA exempts from liability releases in compliance with a UIC permit under SDWA (73 Fed

. Reg

. 43,503)

. However, we remain concerned about potential CERCLA liability for upstream industrial clients of sequestration wells, especially for comingled COZ streams and for injectate stream constituents that could react with groundwater to produce listed hazardous substances

.

If EPA, as it has stated, desires to encourage implementation of carbon sequestration technology by industry, it should exempt such activities from CERCLA liability

. If EPA should decide against such an exemption, TFI asks that EPA include regulatory language governing monitoring and/or reporting requirements for upstream industrial clients of sequestration wells that would provide CERCLA liability relief or exclusion in the promulgated rule

. For example, EPA could provide in the rule that upstream industrial clients providing COZ streams could make certain demonstrations of conditions under which EPA will not consider the injectate exempt from the purview of CERCLA

. This exemption should apply, by extension, to any claims brought against upstream clients of sequestration wells for natural resource damages

.

Furthermore, TFI requests that EPA develop monitoring report requirements which provide the basis of establishing the injectate as a "federally permitted release" as defined in CERCLA

. Where these reports indicate no presence of CERCLA hazardous substances, the injectateWater Docket, EPA Docket Center (EPA/DC)

December 23, 2008
Page 5

should be considered a "federally permitted release" exempt from CERCLA liability

. EPA should clarify in the rule that C02, absent impurities constituting hazardous substances or with the potential to react with groundwater constituents to form hazardous substances, is not itself a CERCLA hazardous substance

. This liability exemption for "federally permitted releases" should extend to upstream clients of sequestration wells even for accidental releases or where releases from

the well are not in accordance with the well operator's UIC permit

. As an alternative, EPA should establish contaminant limits in the injectate of upstream clients of sequestration wells

.

TFI requests clarification for upstream industrial clients as to the appropriate requirements for "analyz[ing] the COZ stream at a frequency sufficient to yield data representative of its chemical and physical characteristics" (73 Fed

. Reg

. 43,514 and 73 Fed

. Reg

. 43,549), as well as appropriate requirements for upstream industrial clients in terms of monitoring and recordkeeping

. TFI suggests a semi-annual monitoring report and a three-year post injectate or site closure data retention period for upstream industrial clients similar to that proposed for

owners or operators of Class VI wells (73 Fed

. Reg

. 43,517), regardless of the post-closure site
care period selected (73 Fed

. Reg

. 43,518)

.

TFI also asks that EPA include regulatory language providing liability protection or exclusion for upstream industrial clients in the event of potential future liability in the event of leaks, well failure or release of reaction products

.

Depth of COI Injection

EPA is soliciting comment on whether COZ injection should be allowed into an injection zone above the lowermost USDW, when the Director determines that geologic conditions (e .g

., thousands of feet of intervening formations between the injection zone and the overlying and/or underlying USDWs) exist that will prevent fluid movement into adjacent USDWs

. EPA is also requesting comments on whether aquifer exemptions should be allowed for the purpose of Class VI injection, and under what conditions should such aquifer exemptions be approved

. Finally, EPA seeks comment on whether the Agency should set a minimum injection depth requirement for COZ GS, rather than require that such injection take place below the lowermost USDW

(73 Fed

. Reg

. 43,512)

.

TFI agrees with the alternative under consideration allowing for the Director's discretion in allowing injection above or between USDWs in specific geologic settings where the depth of the

USDWs may preclude GS, make GS technically challenging, or significantly limit COZ storage capacity in permit applications in which it is demonstrated that USDWs would not be endangered (73 Fed

. Reg

. 43,512)

. A provision for the "Director's discretion" should be fully delineated in the final rule

. This provision should allow the Director to determine whether the confining system is "of sufficient regional thickness and lateral extent to contain the entire COZ plume and associated pressure front under the confining system following the plume's maximum

lateral expansion (73 Fed

. Reg

. 43,505) ." As EPA states later in the proposed rule, "[i]f the trapping mechanism is sufficiently protective, the injected C02 should be containedWater Docket, EPA Docket Center (EPA/DC)

December 23, 2008

Page 6

regardless of its phase (73 Fed

. Reg

. 43,511) ." TFI believes that aquifers associated with Class

VI injection should be able to be reclassified as exempt aquifers under Part 144 .7

.

Financial Assurance Instruments

TFI recommends that EPA implement a flexible approach to the types of financial assurance mechanisms authorized by the NPRM

. The broadest possible array of available instruments
would go furthest in promoting EPA's expressed policy to encourage carbon sequestration
while still avoiding, to the greatest extent possible, imposition of remediation costs on the public

. In addition to those instruments already addressed in the NPRM, EPA should allow
demonstration of financial assurance through trust funds, environmental insurance, corporate guarantees, and letters of credit

.

Definition of "Significant Leakage"

TFI requests that EPA define the term "significant leakage" in the context of mechanical integrity testing and quantify amounts to avoid misinterpretations and to prevent de minimus C02 leakage from

falling under this term

.

Conclusion

TFI has been pleased to submit these comments on EPA's NPRM

. TFI thanks EPA for advancing an important tool for future carbon sequestration with the Agency's proposed requirements under the SDWA for underground injection of COZ for the purpose of GS

. We

urge EPA to work with potential industrial clients to clarify the analysis, monitoring and record keeping requirements that will be necessary to minimize potential future liability in an effort to promote and facilitate implementation of this important carbon emissions mitigation technology
among industry

. Please contact me by telephone at (202) 515-2706 or via e-mail at wcherz(-)a,tfi .org if you would like to further discuss TFI's comments

.

Sincerely yours,

William C

. Herz
Vice President, Scientific Programs

### Letter ID: 0266

Commenter: William Herz Organization: The Fertilizer Institute

Letter ID: 0266 Comment ID: 22875 Letter Lines: 65 to 71

Comment Code: 1420 1.2.1.1 Support the GS rulemaking

Comment: General Comments

TFI wishes to thank EPA for the opportunity to comment on the proposed requirements for underground injection of CO 2 under the Safe Drinking Water Act (SDWA),and for holding a public hearing on the subject. TFI is generally supportive of the proposed rules, but would ask for additio nal regulatory clarification and/or guidance for potential upstr eam industrial clients.

Individual Response: EPA believes that the creation of a new injection well class (VI) under the existing UIC Program is necessary to enable the use of GS as a climate change mitigation technology in a manner that protects USDWs from endangerment. EPA agrees that the UIC Program, under the authority of the SDWA, provides a strong fram ework for regulating injection of CO2 for GS and adds that the GS regulati on tailors the UIC requirements to address the unique issues associated with large-scale GS including large injection volumes, the relative buoyancy of CO2, its corrosivity in the presence of water, the potenti al presence of impurities in captured CO2, and its mobility within subsurface geologic formations.

EPA agrees that input of and participation by a wide spectrum of stakeholders is a vital component of successful rulemaking. The Agen cy appreciates the degree of cooperation, participation, and active dialogue between the EP A and stakeholders and will continue to work with stakeholders and experts as it implements the GS rule.

EPA is developing a series of guidance docum ents to support the GS rulemaking. These are

available on EPA’s website at http://water.epa.gov/type/groundwater /uic/wells_sequestration.cfm.

Letter ID: 0266 Comment ID: 22876 Letter Lines: 75 to 95

Comment Code: 2020 1.5.1 Support Class VI designation

Comment: Proposal to Create New Category of Injection Well-Class VI Wells

EPA is proposing to create a new category of injection well under its existing UIC Program with new federal requirements to allow for the injection of CO2 for the purpose of GS. EPA proposes to tailor existi ng UIC program components so that they are appropriate for the unique nature of injecting large volumes of CO2 into a variety of geological formations to ensu re that underground sources of drinking

1

### water (USDW) are not endangered (73 Fed. Reg. 43,495).

TFI supports establishing a new class of well - Class VI - specifically for CO2 geologic sequestration and maintaining injection of CO2 for the purposes of enhanced oil and gas recovery under th e Class II program, and the potential for an expanded UIC program to support development of a key climate change mitigation technology. TFI generally agrees with the Agency's stated goal of providing "certainty to industr y and the public about requirements that would apply to injection, by providing consistency in requirements across the U.S., and transparency about what requi rements apply to owners or operators" (73 Fed. Reg. 43,496). As discussed further in our comments, TFI requests additional

clarification so that thes e regulations also provid e certainty, consistency and transparency regarding which requi rements apply to potential upstream

industrial sources such as fertilizer manufacturers.

Individual Response: EPA agrees that tailored requirements for Class VI wells are necessary to address the unique nature of in jecting large volumes of CO2 a nd to ensure that USDWs are protected from endangerment. The GS rule c ontains tailored requirements for the permitting, geologic site characterization, AoR and corre ctive action, well construction, operation, mechanical integrity testing, monitoring, well plu gging, post-injection site care, and site closure of GS wells that directly addre ss issues unique to the nature of large-scale CO2 injection for GS. EPA believes that the GS rulemaking does provide certainty, consistency and transparency for those parties who will be regulated under the rulemaking.

EPA also agrees that the nature and risks of CO2 injection for long term storage is different from Class II CO2 injection for ER. For this reason, the Agency tailored UIC requirements for Class VI wells that address the general risks deep injection may pose to USDWs and specifically address the unique nature of CO 2 GS (i.e., very large volumes, very long time-periods, and reservoir pressure conditions).

EPA clarifies that the Class VI requirements do not apply to the source of the CO2, only to the owner or operator of the injection well.

Letter ID: 0266 Comment ID: 22877 Letter Lines: 97 to 112

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

Comment: Reclassification of Existing Wells as Class VI Wells

EPA seeks comment on its approach to gra ndfather construction requirements at the Director's discretion for existing Cl ass I, Class II, and Class V wells seeking to convert to Class VI wells , and whether additional construction requirements would be necessary to prevent en dangerment to USDWs from the GS of CO2. Additionally, EPA seeks comment on how the grandfathering approach for existing wells may affect compliance with the requi rements in this proposal (73 Fed. Reg. 43,502).

2

### TFI also supports provisions allowing Class I, II and V wells to be repermitted as Class VI wells. We also support proposed language that would "grandfather" construction requirements for Class I or II wells seeking repermitting as a Class VI well. TFI does not foresee the need for additional construction requirements or that grandfathering existing Class I, Class II, and Class V wells will affect compliance with the proposed Class VI regulations.

Individual Response: EPA agrees that many Class I, Cl ass II, and Class V experimental technology wells are designed and constructed to withstand exposure to CO2. The final GS rule provides for the construction of these wells to be grandfathered per §146.81(c), provided the owner or operator can demonstrate to the Director that the wells were en gineered and constructed to meet the requirements at §146.86(a) and ensure protection of USDWs, in lieu of requirements at §146.86(b) and §146.87(a).

Letter ID: 0266 Comment ID: 22878 Letter Lines: 115 to 119

Comment Code: 2200 1.6.4 Other formation types

Comment: Target Geologic Formations for GS of CO2

TFI agrees that other abandoned mines, including potash mines, are potential CO2 storage options and would be willing to assist EPA in exploring this option further. (73 Fed. Reg. 43,503)

Individual Response: EPA clarifies that the GS rule does not categorically prec lude injection of CO2 into any non-USDW formation types. The purpose of the GS rule is to ensure protection of USDWs from endangerment, and the rule requires that owners or operators demonstrate that wells are sited in suitable systems with geologic formations to receive and confine injected CO2, required at §146.83 of the GS rule. The Cla ss VI siting, well cons truction and operation, monitoring and testing, and post-inj ection site care and site closur e requirements are designed to ensure that injected CO2 remains within the target formation. If an owner or operator can

demonstrate to the Director's satisfaction that GS in coal seams, basalts, salt domes, or shales can be accomplished in a manner that protects USDWs a nd meets all of the requirements of the GS rule, the project may be permitted as a Class VI well.

EPA acknowledges that there may be risks associat ed with GS, particularly regarding GS into formations such as coal seams, basalts, salt dom es, or shales, which have been the subject of limited experimental projects in the past. For this reason, the Agency is using an adaptive approach to regulate GS injecti on. EPA will collect and review proj ect data on early GS projects, including those that inject into various formation types, to determine whether the appropriate amount and types of information and documentati on are being collected. EPA plans, every six years, to collect and review data on GS projects to determin e whether the appropriate amount and types of information and appropriate documentation are being collected, and to determine if modifications to the requirements are appropriate or necessary.

3

### Letter ID: 0266 Comment ID: 22879 Letter Lines: 121 to 186

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

Comment: Injected CO2 as a Hazardous Waste under th e Resource Conservation and Recovery Act (RCRA)

EPA seeks comment on defining "carbon dioxide stream" to exclude hazardous wastes (146.81(d)) in order to assure that it w ould apply only to CO2 streams that are

not hazardous wastes as defined in 40 CF R Part 261. As a result, today's proposed rule would preclude the injection of h azardous wastes in Class VI injection

wells. EPA also seeks comment on other considerations associated with the presence of impurities in the CO 2 stream. (73 Fed. Reg. 43,503)

TFI understands EPA's concern with the poten tial for impurities in the CO2 stream

and the risk that contaminants such as hydrogen sulfide and sulfurous and nitrous oxides in the CO2 stream could migrate into a USDW. TFI also agrees that because the types of impurities and their concentrations in the CO2 stream are likely to vary by facility, plant op erating conditions and pollu tion removal technologies, EPA cannot make a categorical determinati on as to whether injected CO2 is a

hazardous waste under RCRA.

TFI asks for greater guidance for potentia l upstream industrial clients of CO2 wells. TFI is concerned about the implic ations of consider ing the long-term storage of CO2 as "discard" as EPA suggest s by stating that the CO2 stream needs to be non-hazardous. RCRA applicability to carbon sequestration activities would discourage industry from engaging in sequest ration to avoid asso ciated regulatory burdens and potential citizen suits. EPA should therefore interp ret its rule to exclude GS injectate from RCRA regulat ion to the greatest degree possible. RCRA would apply only where the injectate meets the definitional criteria in 42 U.S.C. § 6903(27).

GS injectate should not qualify as a "solid waste" under this definition because the injectate is not "discard ed" but is recoverable and ha s commercial value, in particular in enhanced oil recovery op eration. In other regulatory situations EPA has exempted materials from RCRA where the materials are subject to a separate regulatory regime providing e quivalent environmentally protective measures (such as UIC). EPA states in the NPRM that the UIC regulatory scheme is adequate to protect USDWs, and that "c hronic and acute health effects from airborne exposure resulting from CO2 in jection activities even in the case of leakage or accidental exposure is mi nimal." 72 Fed. Reg. at 43487-98. EPA has relied on "contingent management" (m anagement of materials outside of RCRA regulation where a separate re gulatory regime provi des equivalent protection) to great effect and in a ma nner which has been upheld by federal courts. See Military Toxics Project v. EPA, 146 F. 3d 948 (D.C. Cir.1998). As

4

### such, TFI requests that EPA interpret th e injectate to not constitute a RCRAregulated waste, or at leas t to apply contingent manage ment to the injectate to avoid RCRA regulation.

Furthermore, to the extent they are not already expressly exem pted, TFI requests

that the final rule delineate monitori ng and/or reporting requirements for upstream industrial client s that could provide RCRA lia bility relief. TFI asks that upstream industrial clients providi ng CO2 streams that are not hazardous

wastes as defined in 40 CFR Part 261 be provided an exemption from RCRA liability. Absent a RCRA exemption, TFI re quests that EPA develop contaminant

limits that would be allowed in CO2 stream s from upstream industrial clients. TFI also asks that EPA clarify that risks to USDWs from improperly managed GS projects -including CO2 migration into USDWs, causing the leaching and mobilization of contaminants (e.g., arsenic, lead, and organic compounds), changes in regional groundwater flow, and the movement of sa ltier formation fluids into USDWs, causing degradation of water quality (73 Fed. Reg. 43,497) -are solely the responsibility of the owner and/ or operator of the well.

Where not otherwise exempted from RCRA, delineation of contaminant levels, monitoring and recordkeeping requirements and liability protection are necessary to provide the certainty, consistency and transparen cy to potential upstream

industrial clients. TFI also is concerned about the consequences of CO2 storage prior to injection as related to the potential implications for solid waste storage regulations as well as applicab le state regulatory obligations on the injection of solid 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.

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: 0266 Comment ID: 22880 Letter Lines: 188 to 237

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

5

### Comment: Consideration of Injected CO2 as a Hazar dous Substance under the Comprehensive Environmental Response Compensati on and Liability Act (CERCLA)

TFI also asks for additional clarificat ion on potential CERCLA liability. We agree with EPA's interpretation in the proposed rule that the release of CO2, if the rule is adopted as proposed, would constitu te a" federally permitted release" as defined in CERCLA,42 U.S.C. § 9601 (10), and that CERCLA exempts from liability releases in compliance with a UIC permit under SDWA (73 Fed. Reg. 43,503). However, we remain concerned about pot ential CERCLA liability for upstream industrial clients of seques tration wells, especially fo r comingled CO2 streams and for injectate stream constituents th at could react with groundwater to produce listed hazardous substances.

If EPA, as it has stated, desires to encourage implementation of carbon sequestration technology by industry, it should exempt such activities from CERCLA liability. If EPA should decide agai nst such an exempti on, TFI asks that EPA include regulatory langua ge governing monitoring and/ or reporting requirements for upstream industrial client s of sequestration wells th at would provide CERCLA liability relief or exclusion in the pr omulgated rule. For example, EPA could provide in the rule that upstream indus trial clients providing CO2 streams could

make certain demonstrations of conditions under which EPA will not consider the injectate exempt from the purview of CERCLA. This exemption should apply, by extension, to any claims brought against upstream clients of sequestration wells for natural resource damages. Furtherm ore, TFI requests that EPA develop monitoring report requirements which provi de the basis of establishing the injectate as a "federally permitted releas e" as defined in CERCLA. Where these reports indicate no presence of CERCLA h azardous substances, the injectate should be considered a "federally permitted re lease" exempt from CERCLA liability. EPA should clarify in the rule that CO 2, absent impurities constituting hazardous substances or with the potential to reac t with groundwater constituents to form hazardous substances, is not itself a CERCLA hazardous subs tance. This liability exemption for "federally permitted releases" should extend to upstream clients of sequestration wells even for accidental rel eases or where releases from the well are not in accordance with the well operat or's UIC permit. As an alternative, EPA should establish contaminant limits in the injectate of upstream clients of sequestration wells.

TFI requests clarification for upstream indus trial clients as to the appropriate requirements for "analyz[ing] the CO2 str eam at a frequency su fficient to yield data representative of its chemical a nd physical characteristics" (73 Fed. Reg. 43,514 and 73 Fed. Reg. 43,549), as well as appropriate requirements for upstream

industrial clients in terms of monitoring and recordkeep ing. TFI suggests a semiannual monitoring report and a three-year post injectate or s ite closure data retention period for upstream industrial cl ients similar to that proposed for owners or operators of Class VI wells (73 Fed. Reg. 43,517), regardless of the

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### post-closure site care period selected (73 Fed. Reg. 43,518).

TFI also asks that EPA include regulator y language providing lia bility protection or exclusion for upstream industrial clie nts in the event of potential future liability in the event of leaks, well fa ilure or release of reaction products.

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.

Furthermore, 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

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### 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: 0266 Comment ID: 22881 Letter Lines: 239 to 265

Comment Code: 4410 2.4.4.3.1 Comments in favor of allowing injection above/between

USDWs in certain circumstances

Comment: Depth of CO2 injection

EPA is soliciting comment on whether CO2 in jection should be allowed into an injection zone above the lowermost USDW ,when the Director determines that geologic conditions (e.g.,thousa nds of feet of interveni ng formations between the injection zone and the overlying and/or underlying USDWs) exist that will prevent fluid movement into adjacent USDWs. EPA is also requesting comments on whether aquifer exemptions should be allowed fo r the purpose of Class VI injection, and under what conditions should such aqui fer exemptions be approved. Finally, 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(73Fed. Reg. 43,512).

TFI agrees with the altern ative under consideration allowing for the Director's discretion in allowing inj ection above or between US DWs in specific geologic settings where the depth of the USDWs may preclude GS, make GS technically challenging, or significantly limit CO2 st orage capacity in permit applications

in which it is demonstrated that US DWswouldnot be endangered (73 Fed. Reg. 43,512). A provision for the "Director's disc retion" should be fully delineated in the final rule. This provision should allow the Director to determine whether the confining system is "of sufficient regional thickness and lateral extent to contain the entire CO2 plume and associated pressure front under the confining system following the plume's maximum la teral expansion (73 Fed. Reg. 43,505)." As EPA states later in the proposed rule,"[i]f the trapping mechanism is sufficiently protective, the injected CO2 should be contained regardless of its phase (73 Fed. Reg. 43,511)." TFI believes that aquifers associated with Class VI injection should be able to be reclassified as exem pt aquifers under Part 144.7.

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### 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 above and/or between USDWs. The

final rule also establishes limited circumstances under which expansions of the areal extent of aquifer exemptions may be granted for owne rs or operators of Class II EOR/EGR wells transitioning to Class VI injec tion for GS. Additionally, the final GS rule does not categorically preclude or prohibit in jection into any type of formation.

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 aquifer exemptions for Class VI wells, please see the final rule and preamble, as well as EPA's responses to comments on the Notice of Da ta Availability and Request for Comment.

Letter ID: 0266 Comment ID: 22882 Letter Lines: 267 to 276

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

Comment Code: 5434 2.9.1.2 Need for additional instruments (seeking comment)

Comment: Financial Assurance Instruments

TFI recommends that EPA implement a flexible approach to the types of financial assurance mechanisms authorized by th e NPRM. The broadest possible array

of available instruments woul d go furthest in promoting EPA's expressed policy to encourage carbon sequestration while sti ll avoiding, to the greatest extent possible, imposition of remediation cost s on the public. In ad dition to those instruments already addressed in the NPRM, EPA should allow demonstration

of financial assurance thr ough trust funds, environmenta l insurance, corporate guarantees, and letters of credit.

Individual Response: EPA agrees that it is appropriate to al low a flexible approach for financial responsibility for purposes of this rule. Under the final GS rule Owners or operators may choose from a variety of financial instruments to meet their financial responsibil ity obligations under the rule, provided the Director determines that the operator's proposed financial responsibility

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### demonstration is adequate to pr otect USDWs from endangerment, which means the ability of the owner or operator to pay for each activity for which financial responsibility must be demonstrated, including correctiv e action on wells in the AoR, in jection well plugging, PISC and site closure, and emergency and remedial response throughout th e life of the project. The final GS rule specifies at §146.85(a)(1) the permitted type s of financial responsibility instruments. See the final rule and preamble for further discus sion of EPA's final a pproach to financial responsibility.

EPA is developing guidance to help owners or op erators, permitting authorities, and third parties choose and evaluate appropriate financial methods . Furthermore, states may set more specific financial responsibility requirements if they so choose and have authority to do so. This guidance

will be available on EPA's website at http://water.epa.gov/type/groundwater /uic/wells_sequestration.cfm.

Letter ID: 0266 Comment ID: 22883 Letter Lines: 278 to 282

Comment Code: 1220 1.1.1.1 Terminology and definitions

Comment Code: 4500 2.5 Proposed Mechanical Integrity Testing (MIT) Requirements (40 CFR 146.89)

Comment: Definition of "Significant Leakage"

TFI requests that EPA define the term "s ignificant leakage" in the context of mechanical integrity testing and quantif y amounts to avoid mi sinterpretations and to prevent de minimus CO2 leak age from falling unde r this term.

Individual Response: A properly designed and operated we ll should have no leakage in the casing, tubing, or packer and no fluid movement into a USDW th rough channels adjacent to the

wellbore. While the intent of MITs is to detect these types of pr oblems as early as possible, the goal of the well design and constr uction requirements at §146.86 is th e complete absence of such problems. EPA clarifies that the purpose of the "significant leakage" language in this narrow context is simply to avoid triggering corrective actions for essentially de minimis situations. Determining whether a MIT result should trigger follow-up action is necessarily a case and sitespecific situation; as a result, EPA does not believe it is appropriate to define the term "significant leakage" in the c ontext of MITs. In addition, EPA has not defined this term for purposes of other injection well classes and this has not been shown to hinder permitting authorities' and owners or operators' ability to assess whether injection wells have adequate mechanical integrity. EPA believes that this appro ach allows states flexib ility, will not interfere with the implementation of existing UIC program s, and maintains protection of USDWs from endangerment.

In keeping with its adaptive rule making approach, the Agency plan s to collect and review data every six years on early GS proj ects, including MIT da ta, to determine whether the appropriate amount and types of information and appropria te documentation are being collected, and to determine if modifications to the requirements are appropriate or necessary. For additional information, please see the discussion of MITs in the final rule preamble.

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### Letter ID: 0266 Comment ID: 22884 Letter Lines: 286 to 293

Comment Code: 1940 1.4.4.3 Consultations with Industry; experience with other wells

Comment: TFI has been pleased to submit these comments on EPA's NPRM. TFI thanks EPA

for advancing an important tool for future carbon sequestration w ith the Agency's proposed requirements under the SDWA for underground injection of CO2 for the purpose of GS. We urge EPA to work with potential industrial cl ients to clarify the analysis, monitoring and record keepi ng requirements that will be necessary to minimize potential future liability in an effort to promote and facilitate implementation of this important carbon emissions mitigation technology among industry. Please contact me by tele phone at (202) 515-2706 or via e-mail at

Individual Response: EPA acknowledges the comment and agrees that input of and participation by a wide spectrum of stakeholders is a vital component of successful rulemaking. The Agency appreciates the degree of coopera tion, participation, and active dialogue between EPA and stakeholders and will continue to work with stakeholders and experts as it implements the GS rule. EPA is developing several guidance manuals that will help owners and operators comply with the rule.

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