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.14785 Preston Road, Suite 1100 • Dallas, Texas 75254- 7891 • 972-239-2625 • Fax 972-387-1328 • www.nacoal.com D ENNIS J AMES Direct Dial: (972) 448-5473 Manager of Technology e-mail:dennis.james@nacoal.com

November 26, 2008 Water Docket, EPA Docket Center (EPA/DC)

U. S. EPA West

Room 3334

1301 Constitution Ave., NW. Washington, DC 20460

Attn: Docket ID No. EPA–HQ–OW–2008–0390

Re : 40 CFR Parts 144 and 146 Federal Requirements Under the Undergr ound Injection Control (UIC) Program for Carbon Dioxide (CO2) Geologic Sequest ration (GS) Wells; Proposed Rule Friday, July 25, 2008 Federal Register / Vol. 73, No. 144



### Via Electronic Delivery

Ladies & Gentlemen:

The North American Coal Corporation (NAC), a subsidiary of NACCO Industries, Inc. (NYSE:NC), mines and markets lignite coal prim arily as fuel for power generation and provides selected value-added mining services for ot her natural resources companies. Corporate headquarters are located in Dallas, Texas. NAC operates six surface lignite mines in North Dakota, Louisiana, Mississippi, and Texas, a nd also provides dragline mining services for independently owned lime rock quarries in Florid a. NAC also supplies all the coal to the Dakota Gasification Company in Beulah, North Dakota; the only synfuels plant in the U.S. and the carbon dioxide producer for the Wa yburn Project. The proposed rulemaking will have direct impact on our customers and will vitally affect NAC as a coal and lime rock producer.

Our comments are organized into two sections:

I. A general statement of NAC’s interest and involvement in this proceeding; II. NAC’s comments regarding the above referenced proposed rule.Page 2 of 6

November 20, 2008

14785 Preston Road, Suite 1100 • Dallas, Texas 75254-78911100 • 972-239-2625 • Fax 972-387-1328 • www.nacoal.com I. General Statement:

The North American Coal Corporat ion believes that a diverse fuel supply is imperative to the economic health of our country. Affordable and reliable electricity, which is created in an environmentally friendly manner, forms the corn erstone for our country’s economy and creates a healthy society. Lignite coal is a vita l part of this dive rse fuel supply.

Coal and the low-cost electricity it provides are vital to the reli ability of the U.S. electric supply system, and to the economic vitality of the U.S. economy. Coal production and related electrical generation account for some hundreds of billions of dollars of U.S. gross domestic output, over a hundred billion dolla rs of annual household income, and millions of jobs.

Lime rock in Florida is used as aggregates in the construction of buildings and roads and as a feedstock for cement producti on. As such, lime rock is a critical compone nt for the growth of the region: It is literally th e foundation for any building project.

Coal-fired power plants and cement kilns all produce carbon dioxide (CO 2 ). If legislation or regulations are promulgated that restrict the emission of carbon dioxide, then many of these facilities will need to capture and sequester CO 2 . Thus, NAC’s customers will be impacted by the proposed regulations. Furthermore, as a na tural resource producer, NAC will be directly impacted by any rule that affects the subsurface of the Earth. Lignite-f ired power plants and

cement kilns are all “mine mouth” facilities. That is to say, the mine is li terally next door to the facility. If the faci lity (and/or others in the area) sequester CO 2 in subsurface formations, then lands and resources controlled by NAC could be adversely affected.

II. Comments Submitted by The Nort h American Coal Corporation :

NAC respectfully submits the following comments regarding the proposed rule to regulate the sequestration of CO 2 to protect underground sources of drinki ng water, officially referenced as: 40 CFR Parts 144 and 146, Federal Requirements Under the Undergroun d Injection Control (UIC) Program for Carbon Dioxide (CO2) Geologi c Sequestration (GS) Wells; Proposed Rule, Friday, July 25, 2008, Federal Register / Vol. 73, No. 144.

A. NAC supports the Administration in its efforts to develop regulations that will protect our valuable groundwater resources. If laws or regulations are promulgated that restrict the

emissions of CO 2 , then sequestration will be the only viable way to dispose of CO 2 until beneficial uses can be developed. Sequestra tion activities will need to be regulated to

insure our environment a nd ALL of our natural re sources are protected.

As a mining company, NAC is very aware that geology varies througho ut the country and within regions and locales. This heteroge neous mix of subsurface conditions makes it challenging to develop a regulat ory program that can adequate ly address all situations

and conditions that will be encountered.

B . Comments on Page 43502 subsections: F. Why is EPA Proposing To Develop a New Class of Injection Well for GS of CO 2 ? G. How Would This Proposal Affect Existing Injection Wells Under the UIC Program?Page 3 of 6

November 20, 2008

14785 Preston Road, Suite 1100 • Dallas, Texas 75254-78911100 • 972-239-2625 • Fax 972-387-1328 • www.nacoal.com The proposed rule states, “the Agency define d five classes of injection wells at 40 CFR 144.6, based on similarities in the fluids inject ed, construction, injection depth, design, and operating techniques”. However, the Ag ency is proposing a new class of well based

more so on use than the afore stated criteria. A Class II well injecting CO 2 into a deep oil reservoir may have the same physical requirem ents as a proposed Class VI well injecting

CO 2 into a similar stratum.

EPA is making the assumption that all Class II wells (EOR) will inject CO 2 at relatively low pressure and all Class VI wells (GS) will inject CO 2 at very high pressure; therefore, the use determines the operating condition and requires the separate well classification. EOR is far from being a mature and widely deployed technology. GS is still very experimental with very limited testing at sc ale. Therefore, it is possible and probably likely that as EOR and GS technologies de velop, the range of ope rating techniques and depths will have si gnificant overlaps.

As such, it would be more a ppropriate to distinguish CO 2 injection wells based on the planned operating techniques and conditions th an on ultimate use. This would improve the protection provided by the intent of the rule.

Wells permitted for EOR and EGR injection of CO 2 do sequester CO 2 . If these wells were permitted for a given range of opera ting conditions and parameters, then there would be no question about a well being used for GS.

Furthermore, classifying wells as EOR/EGR or GS is problematic. EOR/AGR activities do sequester CO 2 while they recover oil and gas. If use is the classification criteria, at what point would a Class II EOR/EGR well need to be reclassified as a Class VI GS well? The recovery of hydrocarbons from an EOR/EGR project will diminish as the reserve is depleted. This means that the volume of CO 2 injected will result in less oil and gas production: Leading to the question of when does a Class II well need to be reclassified as a Class VI? If the requir ement is only that some amount of hydrocarbon be produced, then many GS projects could opt for Class II permits.

If the intent of the rule is to protect USDWs from the effects of CO 2 , then any well injecting CO 2 should be subject to the same permitting requirements for the given operating environment. To do otherwise for the sake of bureaucratic simplicity merely increases the regulatory burden on operators without adding m eaningful protection of the

environment.

C. Comments on Page 43502, subsection: H. What Are the Target Geologic Formations for GS of CO 2 ?

This section is a misrepresent ation, and in some cases a gr oss misrepresentation, of the types of geologic formations that are suitable for geologic sequestration of CO 2 . The geologic studies of various formations that ma y be viable reservoirs for the storage of

CO 2 are relatively new. The scientists are ju st beginning to collect the data and make interpretations of the potential storage capaciti es and related issues. Therefore, it isPage 4 of 6

November 20, 2008

14785 Preston Road, Suite 1100 • Dallas, Texas 75254-78911100 • 972-239-2625 • Fax 972-387-1328 • www.nacoal.com premature for this rule to intimate that one type of geologic formation is better than another. The rule should instead promote thorough site character ization as a way to determine the adequacy of any formati on to act as a seque stration reservoir.

The rule does state that there is a vast am ount of information already available for many depleted oil and gas reservoirs. However, it goes on to discuss the many problems that could preclude such a reservoir from being us ed for sequestration. At the same time, the rule states, “All these characteristics make deep saline formations the leading candidates for GS”. This is a predetermination that deep saline formations are preferred over depleted oil and gas reservoirs. At any gi ven site, local conditions may make one option

better or worse than another.

Research is active and ongoing in this area. Many potential geologic formations have not

even been tested for CO 2 storage capacity, let alone identi fication of problems and issues inherent to the geologic envi ronment. Unmineable coal seams, basalts, and other geologic formations may all have CO 2 storage potential. Ruling out any geologic formations by administrative fiat is premat ure and irresponsible. The results of ongoing research need to be considered prior to such proposed actions and site specific

characterization should be the ultimate de terminant of a formation’s suitability.

One additional criterion should be considered in the process of evaluating a specific geologic formation for suitability of sequestering CO 2 : The potential conflict of other

resources. Other natural re sources above, below, or w ithin geologic sequestration formations should be considered in any evalua tion for long term suitability and security. Drilling and mining operations that may occu r in the future could have a significant impact on a CO 2 reservoir. If oil or gas wells are dr illed through or even near a reservoir, could they affect its integrity? Are there coal reserves, that mining of which (surface or underground) could damage the reservoir’s s eal? If the presen ce of sequestered CO 2 complicates or precludes the re covery of other resources, who is responsible for the lost

resource value or additional costs?

D. Comments on Page 43503 subsections: I. Is Injected CO 2 Considered a Hazardous Waste Under RCRA? J. Is Injected CO 2 Considered a Hazardous Substance Under CERCLA?

Both RCRA and CERCLA are written to deal with hazardous wastes and pollutants at or near the surface where they can interact with our biosphere. Geologic sequestration of

CO 2 is, by definition, not impacting the biosphe re. Therefore, th ese rules should not apply to the injection of CO 2 and associated compounds.

The chemical environment of deep saline aquife rs or deleted oil and gas reservoirs will be very different from that at the surf ace. For example, hydrogen sulfide (H 2 S) is a very

toxic and hazardous substance in the bios phere. However, it commonly occurs in formations at depth as a normal, naturally occurring constituent that causes no harm. Thus, the presence of H 2 S in a CO 2 stream may not only be non-hazardous upon injection but beneficial; it could make the injected gas chemically more compatible with the target

formation’s natural environment. It is more important to consider the impacts ofPage 5 of 6

November 20, 2008

14785 Preston Road, Suite 1100 • Dallas, Texas 75254-78911100 • 972-239-2625 • Fax 972-387-1328 • www.nacoal.com injected CO2 and associated substances on the target formation’s environment. Therefore, injected CO 2 should not be considered a hazardous waste under RCRA or a

hazardous substance under CERCLA.

E. Comments on Page 43505 subsection: 1. Proposed Geologic Siting Requirements

The proposed rule would require maps, cross sections, and geochemical data on all USDWs near an injection well. This requirement could be extremely burdensome to the operator, requiring significant work without a ny additional benefit. In many areas, near surface USDWs are very complex systems wit hout much existing data. Obtaining the required data on these shallow USDWs w ould take significant time, money, and resources, and the interpreted data would have no impact on the injection well’s construction or operation. Defining the lowermost USDW sets a boundary condition for an injection well, everything a bove which would be protected.

Many statements in this section of the proposed rule specify exactly what types of data will be collected and how they will be pres ented in a permit application. Across the United States, there are widely varying geol ogies, available regiona l data sets, and how well various technologies perform. The perm itting authority for a state or region should have the flexibility to determine what types of information an operator should present to adequately characterize a sp ecific injection well site.

For example, the following statement is made : “Today’s proposal would require owners or operators to submit geochemical data on (a) the injection zone, (b) the confining zones, (c) containment zones above the confining z ones in which any potentially migrating CO2 could be trapped, (d) all USDWs, and (e) any other geologic zone or formation that is important to the proposed monitoring program.” This essentially requires an operator to collect geochemical data on the entire geologic column: From the surface down to the target formation. It is impor tant to geochemically define the target formation and its overlying seal. It is also prudent to obtain data from adjacent formations that may be involved if leakage occurs. Ho wever, does this data all the way to the surface in any way add additional USDW protection? The permitting authority should have some discretion to limit the required data, base d on the geology of the area.

One additional criterion should be considered in the process of evaluating a specific geologic formation for suitability of sequestering CO 2 : The potential conflict of other

resources. Other natural re sources above, below, or w ithin geologic sequestration formations should be considered in any evalua tion for long-term suitability and security. Drilling and mining operations that may occu r in the future could have a significant impact on a CO 2 reservoir. If oil or gas wells are dr ill through or even near a reservoir, could they affect its integrity? Are there coal reserves, that mining of which (surface or underground) could damage the reservoir’s s eal? If the presen ce of sequestered CO 2 complicates or precludes the re covery of other resources, who is responsible for the lost

resource value or additional costs? The ex isting language does require seismic data for the area, acknowledging that the geology is not static. Potential human activities could also act to disrupt subsurface conditions.Page 6 of 6

November 20, 2008

NAC appreciates the opportunity to provide comments in this pr oceeding of vital interest to our company, and trusts that these comments will be of assistance to EPA’s subsequent regulatory decisions.

Regards,

T HE N ORTH A MERICAN C OAL C ORPORATION

Dennis R. James Manager of Technology

14785 Preston Road, Suite 1100 • Dallas, Texas 75254-78911100 • 972-239-2625 • Fax 972-387-1328 • www.nacoal.comLetter ID: 0214

Commenter: Dennis R. James Organization: North American Coal Corporation (NAC)

Letter ID: 0214 Comment ID: 22956 Letter Lines: 57 to 86

Comment Code: 1320 1.1.3 General comments about GS

Comment: I. General Statement:

The North American Coal Corporation be lieves that a diverse fuel supply is imperative to the economic health of our country. Affordable and reliable electricity, which is created in an envi ronmentally friendly manner, forms the cornerstone for our country’s economy a nd creates a healthy society. Lignite coal is a vital part of this diverse fuel supply.

Coal and the low-cost electricity it provi des are vital to th e reliability of the U.S. electric supply system, and to the economic vitality of the U.S. economy. Coal production and related electr ical generation account for some

hundreds of billions of dollars of U.S. gross domestic output, over a hundred

billion dollars of annual household income, and millions of jobs.

Lime rock in Florida is used as aggregat es in the constructio n of buildings and

roads and as a feedstock for cement production. As such, lime rock is a critical component for the growth of th e region: It is lite rally the foundation for any building project.

Coal-fired power plants and cement kiln s all produce carbon di oxide (CO2). If legislation or regulations are promulgate d that restrict the emission of carbon dioxide, then many of these facilities w ill need to capture and sequester CO2. Thus, NAC’s customers will be impa cted by the proposed regulations.

Furthermore, as a natural resource producer, NAC will be directly impacted by any rule that affects the subsurface of the Earth. Lignite-fired power plants

and cement kilns are all "mine mouth" faci lities. That is to say, the mine is literally next door to the facility. If the facility (and/or others in the area) sequester CO2 in subsurface formations, then lands and resources controlled by NAC could be adversely affected.

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: 0214 Comment ID: 22957 Letter Lines: 97 to 102

1Comment Code: 1420 1.2.1.1 Support the GS rulemaking

Comment: A. NAC supports the Administration in its efforts to develop regulations that will protect our valuable groundwater reso urces. If laws or regulations are promulgated that restrict the emissions of CO2, then sequestration will be the only viable way to dispose of CO2 until beneficial uses can be developed. Sequestration activities will need to be re gulated to insure our environment and

ALL of our natural reso urces are protected.

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.

Letter ID: 0214 Comment ID: 22958 Letter Lines: 104 to 107

Comment Code: 1200 1.1 General comments about the rulemaking

Comment: As a mining company, NAC is very awar e that geology varies throughout the country and within regions and locales. This heterogeneous mix of subsurface conditions makes it challenging to deve lop a regulatory pr ogram that can adequately address all situations and conditions that will be encountered.

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, including th e discussions of site characterization and target formations fo r GS, as well as the rulemaking docket.

Letter ID: 0214 Comment ID: 22959 Letter Lines: 115 to 154

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: The proposed rule states, "the Agency defi ned five classes of injection wells at 40 CFR 144.6, based on simila rities in the fluids injected, construction, injection depth, design, and operating techniques". However, the Agency is proposing a new class of well based more so on use than the afore stated criteria. A Class II well injecting CO2 into a deep oil reservoir may have the same physical requirements as a proposed Class VI well injecting CO2 into a

similar stratum.

2EPA is making the assumption that all Cla ss II wells (EOR) will inject CO2 at relatively low pressure and all Class VI wells (GS) will inject CO2 at very high pressure; therefore, the use determines the operating condition and requires the separate well classification. EOR is fa r from being a mature and widely deployed technology. GS is still very experi mental with very limited testing at scale. Therefore, it is possible and pr obably likely that as EOR and GS technologies develop, the range of operat ing techniques and de pths will have significant overlaps.

As such, it would be more appropriate to distinguish CO2 injection wells based on the planned operating techniques and conditions than on ultimate use. This would improve the protection provide d by the intent of the rule.

Wells permitted for EOR and EGR injecti on of CO2 do sequester CO2. If these wells were permitted for a given range of operating conditions and parameters, then there would be no question about a well being used for GS.

Furthermore, classifying wells as EOR/ EGR or GS is problematic. EOR/AGR activities do sequester CO2 while they r ecover oil and gas. If use is the classification criteria, at what point would a Class II EOR/EGR well need to be

reclassified as a Class VI GS well? The recovery of hydrocarbons from an EOR/EGR project will diminish as the rese rve is depleted. This means that the volume of CO2 injected will result in less oil and gas production: Leading to the question of when does a Class II well n eed to be reclassified as a Class VI? If the requirement is only that some amount of hydrocarbon be produced, then many GS projects could opt for Class II permits.

If the intent of the rule is to protect USDWs from th e effects of CO2, then any well injecting CO2 should be subject to the same permitting requirements for the given operating environment. To do othe rwise for the sake of bureaucratic simplicity merely increases the regulat ory burden on operators without adding meaningful protection of the environment.

Individual Response: EPA disagrees that the risks posed by long term storage of CO2 for GS can be addressed under existing UIC requirements, such as those for Class II wells. EPA believes that there are significant differe nces between how EOR and GS proj ects are operated, as well as different risks posed by these diffe rent injection activities. The ne w tailored approach of the GS rule was designed to address the general risk s deep injection may pose to USDWs and was tailored specifically to address the risks posed by long term storage of CO2 (i.e., very large volumes, very long time-periods, and reservoir pressure conditions). EPA acknowledges that some CO2 is sequestered during EOR operations; however, the pressure increases associated with injecting high volumes of CO2 changes the risk profiles for these wells increases when transitioning from Class II to Class VI.

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

3Class 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 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: 0214 Comment ID: 22960 Letter Lines: 158 to 199

Comment Code: 2100 1.6 Target Geologic Formations for GS

Comment: H. What Are the Target Geologic Formations for GS of CO2?

This section is a misrepresenta tion, and in some cases a gross misrepresentation, of the types of geol ogic formations that are suitable for geologic sequestration of CO2. The geologic studies of various formations that may be viable reservoirs for the stor age of CO2 are relatively new. The scientists are just beginning to collect the data and make interpretations of the potential storage capacities and relate d issues. Therefore, it is premature for this rule to intimate that one type of geologic formation is better than another. The rule should instead promot e thorough site characterization as a way to determine the adequacy of any formation to act as a sequestration

reservoir.

The rule does state that there is a vast amount of information already available for many depleted oil and ga s reservoirs. However, it goes on to discuss the many problems that could preclude such a reservoir from being used for sequestration. At the same time, the ru le states, "All these characteristics make deep saline formations the leading candidates for GS". This is a predetermination that deep saline formati ons are preferred over depleted oil and gas reservoirs. At any given site, loca l conditions may make one option better

or worse than another.

Research is active and ongoi ng in this area. Many poten tial geologic formations

have not even been tested for CO2 stor age capacity, let alone identification of problems and issues inherent to the ge ologic environment. Unmineable coal seams, basalts, and other geologic form ations may all have CO2 storage potential. Ruling out any geologic form ations by administrative fiat is premature and irresponsible. The results of ongoing research need to be considered prior to such proposed acti ons and site specific characterization should be the ultimate determinant of a formation’s suitability.

One additional criterion should be consider ed in the process of evaluating a specific geologic formation for suitability of sequestering CO 2: The potential

conflict of other resources. Other natura l resources above, below, or within

4geologic sequestration formations should be considered in any evaluation for long term suitability and security. Dr illing and mining operations that may

occur in the future could ha ve a significant impact on a CO2 reservoir. If oil or gas wells are drilled through or even n ear a reservoir, could they affect its integrity? Are there coal reserves, that mining of which (surface or underground) could damage the reservoir’s seal? If the presen ce of sequestered CO2 complicates or precludes the recovery of other resources, who is responsible

for the lost resource value or additional costs?

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.

EPA acknowledges that site-suitabil ity for GS is dependent on a number of factors and that many formation types may be suitable for GS. EPA clarif ies that the owner or op erator of a Class VI

well must demonstrate site-suita bility for GS under §146.83. It is the responsibility of the Director to evaluate the information submitted by the owner or operator with the permit application and to determine whether GS at a specific site is appropriate.

EPA agrees that GS into unmineable coal seam s has the potential to allow sequestration while ensuring USDW protection from endangerment, as described by commenters citing the process of enhanced methane recovery. The final GS ru le does not preclude injection into unmineable coal seams provided owners or operators can demonstrate that GS can be performed in a manner that protects USDWs from endangerment. The Agency clarifies that owners or operators of Class VI wells used for injecting CO2 into unmineab le coal seams are subject to the same site characterization, well constructi on, operation, monitoring, post-inje ction site care and site closure requirements that are required of projects injecting in to other formation types.

Regarding overlap of GS sites, oil and gas site s, or sites containing other resources, EPA notes

5that the final rule requires Class VI permit app licants to submit maps and tabulations of wells, including injection wells (which could be used for ER or natura l gas storage), in the AoR for review by the UIC program Direct or under §146.84. In addition, the ru le requires the Director to notify the state oil and gas agency and state minera l exploration and recovery agency as part of the public notification required for a draft perm it, as required at §124.10(c)(1)(xi). EPA expects that these agencies will inform the Director of any existing natural gas st orage facilities or other drilling or mining operations around the proposed GS site and that the Director will take this

information and the data on wells in the AoR into consideration when deciding whether to grant a permit for GS. EPA clarifies that compensation associated with lost resources or additional costs resulting from interference with oil and gas or other operations is ou tside the scope of this rulemaking.

Letter ID: 0214 Comment ID: 22961 Letter Lines: 203 to 222

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

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

Comment: I. Is Injected CO2 Considered a Hazardous Waste Under RCRA?

J. Is Injected CO2 Considered a Hazardous Substance Under CERCLA?

Both RCRA and CERCLA are written to deal with hazardous wastes and pollutants at or near the surface where they can in teract with our biosphere. Geologic sequestration of CO2 is, by definition, not impacting the biosphere. Therefore, these rules should not apply to the injection of CO2 and associated compounds.

The chemical environment of deep salin e aquifers or deleted oil and gas reservoirs will be very different from that at the surface. For example, hydrogen sulfide (H2S) is a very toxic and hazardous substance in the biosphere. However, it commonly occurs in formati ons at depth as a normal, naturally occurring constituent that causes no harm. Thus, the presence of H2S in a CO2 stream may not only be non-hazardous upon injection but benefi cial; it could make the injected gas chemically more co mpatible with the target formation’s natural environment. It is more important to consider the impacts of injected CO2 and associated substances on the target formation’s environment. Therefore, injected CO2 should not be considered a hazardous waste under RCRA or a

hazardous substance under CERCLA.

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

6is 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 clarifies that CO2 itself is not listed as a hazardous s ubstance under CERCLA; however, the CO2 stream may contain a listed hazardous s ubstance (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 su ch substances may result in CERCLA liability from a sequestration facility depe nds 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.

Letter ID: 0214 Comment ID: 22962 Letter Lines: 226 to 236

Comment Code: 3140 2.1.4 Comments that the proposed ge ologic data requirements are too stringent

Comment: 1. Proposed Geologic S iting Requirements

The proposed rule would require maps, cr oss sections, and geochemical data on all USDWs near an injection well. This requirement could be extremely burdensome to the operator, requiring significant work without any additional benefit. In many areas, near surface US DWs are very complex systems without much existing data. Obtaining the require d data on these shallow USDWs would take significant time, mone y, and resources, and the inte rpreted data would have no impact on the injection well’s cons truction or operation. Defining the lowermost USDW sets a boundary condition fo r an injection well, everything above which would be protected.

Individual Response: EPA believes that identifying and mapping all surrounding USDWs near an injection well, as specified at §146.82(a)(5), is necessary to ensure protection of all USDWs from endangerment. The purpose of the UIC require ments (including those fo r Class VI wells) is to ensure the protection of USDWs from e ndangerment, which are defined based on total dissolved solids (TDS) content, no t their location or depth (§144.3).

EPA adds that knowing the number, location and depth of USDWs near an injection well will generate baseline regional information, suppor t development of an effective testing and monitoring plan, and enhance owne r or operator and Director unde rstanding of the site. This requirement is common to all injection well classes.

7Letter ID: 0214 Comment ID: 22963 Letter Lines: 238 to 257

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

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

Comment: Many statements in this section of the pr oposed rule specify exactly what types

of data will be collected and how th ey will be presented in a permit application. Across the United States, th ere are widely varying geologies, available regional data sets, and how we ll various technologi es perform. The permitting authority for a state or regi on should have the flexibility to determine what types of information an operator should present to adequately characterize a specific injection well site.

For example, the following statement is made: "Today’s proposal would require owners or operators to submit geochemical data on (a) the in jection zone, (b) the confining zones, (c) containment zone s above the confining zones in which any potentially migrating CO2 could be tr apped, (d) all USDWs, and (e) any other geologic zone or formation that is im portant to the proposed monitoring program." This essentially requires an operator to co llect geochemical data on the entire geologic column: From the surf ace down to the target formation. It is important to geochemically define th e target formation and its overlying seal. It is also prudent to obtain data from adjacent formations that may be involved if leakage occurs. However, does this data all the way to the surface in any way add additional USDW protection? The permitting authority should have some discretion to limit the required da ta, based on the geology of the area.

Individual Response: The Agency believes that the re quirement at §146.82(a)(6) to submit baseline geochemical data on subsurface geologic formations, including all USDWs in the AoR is appropriate and protective of USDWs. EPA believes that this data will support monitoring plan development, inform injectate fate a nd transport model development (e.g., by providing appropriate input parameters), a nd provide information needed to respond to any unexpected and unpermitted leaks outside of the injection zone. Th e baseline geochemical information will allow the owner or operator and permitting authority to evaluate monitoring data and identify any changes in subsurface geochemistry that may indicate fluid movement.

The rule requires geochemical analysis of, at a minimum, the injection zone, confining zone, and all USDWs (§146.82(a)(6)). These geochemical tests ar e necessary to ensure the adequacy of the confining system and to serve as a baseline for future monitoring. The Director has the discretion to require geochemical analysis of additional s ubsurface zones if in the Director's opinion they are necessary for the protection of USDWs from endangerment.

EPA agrees that site characterizati on should be site-specific, particul arly in light of the variety of geologic settings in which GS may be employe d. EPA believes that, while there is a large amount of required information, the owner or operat or is given flexibility in determining what methods are used to demonstrate the suitability of a potential site. EPA envisions an ongoing dialogue between the Director and the owner or operator during the permitting process (as well

8as throughout the operation of the site).

EPA is developing guidance on site characterization for GS projects to assist owners or operators and Directors in evaluating permit requirements and applications under §146.82. The guidance provides recommendations regard ing characterizing the region al geology and hydrogeology of a proposed GS site as well as performing th e necessary geochemical, geomechanical, and geophysical analyses of the injection and conf ining zone. The guidance can be found on EPA’s website at http://water.epa.gov/type/gr oundwater/uic/wells_se questration.cfm.

Letter ID: 0214 Comment ID: 22964 Letter Lines: 259 to 271

Comment Code: 2100 1.6 Target Geologic Formations for GS

Comment: One additional criterion should be consider ed in the process of evaluating a specific geologic formation for suitability of sequestering CO 2: The potential

conflict of other resources. Other natura l resources above, below, or within geologic sequestration formations should be considered in any evaluation for long-term suitability and security. Dr illing and mining operations that may

occur in the future could ha ve a significant impact on a CO2 reservoir. If oil or gas wells are drill through or even near a reservoir, could they affect its integrity? Are there coal reserves, that mining of which (surface or underground) could damage the reservoir’s seal? If the presen ce of sequestered CO2 complicates or precludes the recovery of other resources, who is responsible

for the lost resource value or additio nal costs? The existing language does require seismic data for the area, acknow ledging that the geology is not static.

Potential human activities could also act to disrupt subsurface conditions.

Individual Response: Under §146.82(a)(2) owners or operators must identify all injection and production wells, which will most likely include evidence of and information about the location of natural gas storage sites or enhanced recove ry sites. The Director must evaluate this information when determining whether to issu e a permit. The Director may also require

additional site-characterization or data collect ion at his or her discretion. For example, the Director may require additional monitoring under §146.90(i) to ensure that GS does not interfere with existing natural gas storage projects.

EPA adds that the final rule includes a requirement that state and local oil and gas regulatory agencies and state agencies regulating mineral e xploration and recovery mu st be notified when a draft Class VI permit is available for public comment, at §124.10(c)(1)(xi). EPA expects that staff from the different agenci es will provide input on whether a proposed site could interfere

with other resource uses.

Regarding the commenter's concern about future drilling and mining operations, EPA clarifies that if an injection well is drilled in the futu re, the applicable UIC requirements (i.e., based on the well class) for AoR and corrective action w ill apply. The UIC program has no authority to address drilling for other purposes. However, EP A anticipates that any applicable permitting process would consider prior uses of subsurface formations.

910 EPA notes that pore space and mineral rights issu es and associated economic losses are outside the scope of this rulemaking.