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.Federal Requirements Under the Underground Injection Control Program for Carbon Dioxide Geologic Sequestration Wells

Docket No. EPA

- HQ

- OW

- 2008

- 0390 73 Fed. Reg. 43492 (July 25, 2008)

Comments of Great River Energy

Great River Energy submits these comment s on the Proposal of the Environmental Protection Agency ("EPA" or "the Agency") to establish the regulatory framework for geologic sequestration (“GS”) of carbon dioxide (“CO2”) under the Underground Injection Control (“UIC”) Program pursuant to the Safe Drinking Water Act ("SDWA"). 73 Fed. Reg. 43492 (July 25, 2008).

Great River Energy (GRE) greatl y appreciates EPA's work toward developing a regulatory framework for underground injection of CO2. EPA's decision to develop regulations under the UIC progr am and to develop a new Class VI for CO2 GS well is appropriate. GRE also appreciates EPA's recognition that while the new regulations at hand must be within the scope of the SDWA, there are a number of very important issues (such as long term liability) that are outside the scope of the act but are highly pertinent to developing a viable GS program and we are glad that EPA is willing to discuss these issues as part of this regulatory proposal.

I t appears that GS of CO2 from fossil

- fueled power plants w ill be a necessary part of an y national strateg y to control green house gas emissions. GRE operates coal

- fired power plants and these plants are likely to be directl y affected b y new GS regulations. The regulations could have significant financial and op erational impacts on GRE and we ask

EPA to carefull y consider our comments because of the significant stake we have in the outcome of this important rulemaking. GRE is a member of the National Rural Electric Cooperative Association ( “ NRECA ” ) and the Utilit y S olid Waste Activity Group (USWAG). Both groups will also be submitting comments on the proposed UIC rules.

GRE supports the comments of both NRECA and USWAG , and incorporates them here by reference.

SUMMARY

GRE applauds the efforts EPA has taken th us far to instill "certaint y" and "transparency"

into the future Class VI CO2 regulatory regime

, 73 Fed. Reg. at 43496. The challenge

EPA faces is to craft a Final Rule for commercial CO2 injection appropriate for activities

that will largel y b e conducted in the future

. EPA has had to confront many technical uncertainties regarding the establishment and operation of GS wells. Because many of the technical aspects are unknown, it is also very difficult to develop a clear understanding of project risks and liabilities . As long as risks and liabilities are largel y unknown and open

- ended, private companies will not step forward to offer insurance and other risk management products, and it will not be possibl e to obtain the level of

financ ing needed to underta ke a costly GS operation. We hope the pilot carbon captureand sequestration ( C C S ) projects conducted b y D OE an d other entities will help resolve

some of these uncertainties.

EPA needs to establish clear, reasonable regulations that are environmentally protective

and cover a range of operations for which the technology will not be commerciall y deploy ed for a number of years . To the extent practicable , EPA needs to establish a single, clear, reasonable and protective liability regime for an activity wher e the nature of the risks are different from many other industrial activities and the full extent of possible

risks from full scale CSS operations are presently unknown.

Comments Regarding UIC Regulations

1. Due to the difficult y and uncertaint y of regula ting future activities, we urge EPA

to continue to use a "performance based" approach in developing the requirements

for Class VI UIC wells. This way , rules can be readily adjusted and fine

- tuned as industry and regulators alike gain experience with large

- scale CO2 sequestration. It is also important to maintain the flexibility for a site

- based approach when addressing the requirements for Area of Review evaluations, operational monitoring and post injection care and closure periods.

2. I nformation and techn ology related to carbon sequestration will evolve as industry and regulators gain experience with CCS

. GRE feels EPA should resist placing blanket prohibitions or detailed operational specifications in the Final Rule.

3. EPA should not automatically exclude placement of wells in particular geologic

structures. The Final Rule should leave the door open for a range of injection sites and methods provided the owner or operator can show that the injection and storage will be protective of Underground Sources of Drinking Water (USDWs).

4. GRE believes that the states will have the best knowledge of regional geology

, existing projects, areas in need of special protection, etc. and that states should be allowed to assume primacy for administration of the UIC Class VI well program

. 5. EPA should be careful not to stigmatize GS operations and to take positive measures to build public acceptance. EPA should avoid characterizing stored

CO2 as a waste.

6. EPA must settle the way GS activities will relate to RCRA and CERCL A. RCR A is simply the wrong tool to use to regulate GS of CO2 and EPA needs to find a

way to insure that the onerous requirements of CERCL A, (never intended for GS of CO2) , are not applied to this highly specialized gas storage operation

. 7. Dealing with these last two hazardous waste issues appears to GRE to be o ne of

the most difficult hurdles standing in the way of commercial deploy ment of full scale GS projects and we recognize that Congressional action may be needed.

Comments Regarding Liability and Risk Manag ement

GRE supports the comments of the Carbon Capture and Sequestration Alliance ( C C S , or the Alliance ) on the proposed UIC regulations. The CCS Alliance is a coalition of

entities , spanning a number of economic sectors, that share a common interest in

r emoving impediments to investment in and development of carbon capture and storage( “ CCS ” )

, as well as mitigating the potential risks associated with the deplo yment of this

technology

. ( 1 ) It s purpose is to promote development of policy by the s tates and t he federal government to appropriatel y address risks and potential liabilities, thereb y enabling the further dev elopment and increased deploy ment of CCS. The CCS Alliance believes these technologies can be developed while protecting underground water

reso urces, significantly reducing global and U.S. greenhouse gas (“GHG”) emissions, and enhancing U.S. energy security . The Alliance’s purpose is to consider ways of promoting the development and use of CCS technologies and to support efforts b y t he private s ector, states, the federal government, non

- governmental organizations and others, to help ensure that these technologies can be developed and widely , efficiently and cost

- effectivel y deploy ed.

We support the comments of the Alliance and incorporate t hem here b y reference. GRE is rely ing on NRECA and the Alliance to provide EPA with specific comments on the Financial Assurance and Long Term Liability issues discussed in the proposal. We are not experts on these issues , however we ask EPA to consider the following general

comments f

or managing risk and liability associated with GS :

1. It appears to GRE that a t iered a pproach with a government back

- stop as used in

the framework of the Price

- Anderson Act for nuclear faculties could be a rational

way of st ructuring liability management for GS of CO2. This is discussed further

in the comments NRECA i s submitting on this rulemaking

. 2. EPA should consider a broad array of financial mechanisms owners or operators can use to meet financial responsibility require ments specified in the regulations.

3. While Self I nsurance mechanisms belong on EPA ’ s menu o f Financial Assurance options, GRE is a relatively small business and we may not have adequate capitalization for Corporate Guarantees or Self Insurance to be availab le option s for meeting potential financial responsibility requirements.

GRE would like to thank EPA for the opportunity to comment on this proposed rule.

Please direct an y questions to Erik Silvola (763)445

- 5203.

Sincerel y, Great River Energy

Erik Sil vola Environmental Compliance Administrator

1 MidAmerican Energy Holdings Company, National Mining Association, National Rural Electric Cooperative Association, NRG Energy, Inc., PacifiCorp and Zurich North America

.Letter ID: 0171

Commenter: Erik Silvola Organization: Great River Energy

Letter ID: 0171 Comment ID: 23437 Letter Lines: 28 to 36

Comment Code: 1420 1.2.1.1 Support the GS rulemaking

Comment Code: 2020 1.5.1 Support Class VI designation

Comment: Great River Energy (GRE) gr eatly appreciates EPA's wo rk toward developing a regulatory framework for underground injec tion of CO2. EPA's d ecision to develop regulations under the UIC program and to de velop a new Class VI for CO2 GS well is appropriate. GRE also appreciates EPA's recognition that while the new regulations at hand must be within the sc ope of the SDWA, ther e are a number of very important issues (such as long term liability) that are outside the scope of the act but are highly pert inent to developing a viable GS program and we are glad that EPA is willing to discuss thes e issues as part of this regulatory proposal.

Individual Response: EPA acknowledges the comment and agrees that tailored requirements for Class VI wells are necessary to address the unique nature of injecting large volumes of CO2 and to ensure that USDWs are protected from e ndangerment. The Class VI requirements are appropriate because of the unique nature and ri sks of CO2 injection for long-term storage (e.g., large injection volumes, long proj ect duration, and reservoir pressure conditions). The GS rule contains tailored requirements for the perm itting, geologic site ch aracterization, AoR and corrective action, well construc tion, operation, mechanical integr ity testing, monitoring, well plugging, post-injection site care, an d site closure of GS wells that directly address issues unique to the nature of large-scale CO2 injection for GS.

EPA understands that there are a number of issu es that are outside of the scope of this rulemaking and SDWA authority that are important to commenters, such as long-term liability. EPA clarifies that long-term liability is a broad concept that includes many mechanisms, however, for purposes of the SDWA there are lia bility mechanisms available under §§ 1423 and

1431 for those activities that enda nger USDWs. EPA recognizes that liability is an important issue to owners or operators but the Agency does not have author ity under the SDWA to transfer long-term liability from owners or operators to the state or federal government. Therefore, liability remains with the owner or operator. Please see the preamble discussion on financial responsibility and liability.

Letter ID: 0171 Comment ID: 23438 Letter Lines: 38 to 47

Comment Code: 1000 1. General and Administrative Comments

Comment: It appears that GS of CO2 from fossil-fueled power plants will be a necessary

1part of any national strategy to control green house gas emissions. GRE operates coal-fired power plants and these plants are likely to be directly affected by new GS regulations. The regulations c ould have significant financial and operational impacts on GRE and we ask EPA to carefully consider our comments because of the significant stake we have in the outcome of this important rulemaking. GRE is a member of the National Rural Elect ric Cooperative Association ("NRECA") and the Utility Soli d Waste Activity Group (USWAG). Both groups will also be submitting comments on the proposed UIC rules. GRE supports

the comments of both NRECA a nd USWAG, and incorporates them here by reference.

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

EPA agrees that GS is one technology in a portfolio of options, including solar, wind, biomass, and geothermal, that could be deployed to re duce CO2 emissions; howev er, these technologies are outside the scope of the UIC GS rulemaking. The Class VI GS requirements are designed to ensure consistency in permitting underground inje ction of CO2 at GS operations across the United States and provide requirements to prev ent endangerment of USDWs in anticipation of

the eventual use of GS to reduce CO2 emissions.

Letter ID: 0171 Comment ID: 23439 Letter Lines: 51 to 71

Comment Code: 1200 1.1 General comments about the rulemaking

Comment: GRE applauds the efforts EPA has taken thus far to instill "certainty" and "transparency" into the future Class VI CO2 regulatory regime, 73 Fed. Reg. at 43496. The challenge EPA faces is to craf t a Final Rule for commercial CO2 injection appropriate for activities that will larg ely be conducted in the future. EPA has had to confront many technical uncertainties regarding the establishment and operation of GS wells. Because many of the technical aspects are unknown, it is also very difficult to develop a clear understanding of project risks and liabilitie s. As long as risks and liabilities ar e largely unknown and open-ended, private companies will not step forward to offer insurance and other risk management pr oducts, and it will not be possible to obtain the level of financing needed to undertake a costly GS operation. We hope the pilot carbon capture and sequestration (CCS) projects conducted by DOE and other entities will help resolve some of these uncertainties.

EPA needs to establish clear, reasonable regulations that are environmentally protective and cover a range of operations for which the technology will not be commercially deployed for a number of years. To the extent practicable, EPA needs to establish a single, clear, reas onable and protective liability regime for an activity where the nature of th e risks are different from many other

industrial activities and the full extent of possible risks from full scale CSS

2operations are presently unknown.

Individual Response: EPA agrees that flexibility is impor tant for GS projects. The GS rule requires owners or operators to submit, and Dir ectors to consider, extensive site-specific data, specified at §146.82, to demonstrat e that a site is suitable for GS. Additionally, many of the permit requirements for GS wells are establishe d through individualized site-specific plans for AoR and corrective action, testing and monitoring, and injection well plugging and post-injection

site care and site closure. EPA adds that the fina l GS rule includes a bala nce of specific criteria to be met by the owner or operator and areas of Director discretion. The Agency believes this balance allows for GS projects to be designed and permitted to address the unique, site-specific aspects of each project, while providing consistency in permitting across the U.S.

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

Letter ID: 0171 Comment ID: 23440 Letter Lines: 73 to 81

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

Comment: Comments Regarding UIC Regulations

1. Due to the difficulty and uncertainty of regulating future activities, we urge EPA to continue to use a "performan ce based" approach in developing the requirements for Class VI UIC wells. This way, rules can be readily adjusted and fine-tuned as industry and re gulators alike gain experien ce with large-scale CO2 sequestration. It is also im portant to maintain the flexibility for a site-based approach when addressing the requiremen ts for Area of Review evaluations, operational monitoring and post injec tion care and closure periods.

Individual Response: The Agency believes that the Class VI requirements balance site-specific flexibility with USDW protection. Rather th an setting performance- or technology-based standards for GS projects, EPA is adopting a flex ible approach, where operators of GS projects would develop and implement site-specific plans for delineating the AoR, testing and monitoring the site, performing corrective actio n, and post-injection site care . EPA believes that the plans— which would be reviewed and approved by the Director and periodical ly updated throughout the life of the project—promote an ongoing dialogue between the operato r and the Director that will encourage use of the most appropriate t echnologies for a particular project.

To address the comment that the rule should accommodate future technological developments related to GS, EPA adds that it is using an ad aptive approach to regulating GS under the UIC Program. Even after finalization of the GS regulat ion, EPA plans, every six years, to collect and review project data on GS research projects to determine whether the appropriate amount and types of information and appropriate documenta tion are being collected, and to determine if modifications to the requirements are appropriate or necessary.

3Letter ID: 0171 Comment ID: 23441 Letter Lines: 83 to 86

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

Comment: 2. Information and technology related to carbon sequestration will evolve as industry and regulators gain experience with CCS. GRE feels EPA should resist placing blanket prohibitions or detailed operational specifications in the Final

Rule.

Individual Response: As described above, the Agency believ es that the Class VI requirements balance site-specific flexibilitywith USDW protection. EPA adds that it is using an adaptive approach to regulating GS under the UIC Program. Even after fina lization of the GS regulation, EPA plans, every six years, to collect and revi ew project data on GS research projects to determine whether the appropriate amount a nd types of information and appropriate documentation are being collected, and to determ ine if modifications to the requirements are appropriate or necessary.

Letter ID: 0171 Comment ID: 23442 Letter Lines: 88 to 92

Comment Code: 2100 1.6 Target Geologic Formations for GS

Comment: 3. EPA should not automatically exclude placement of wells in particular geologic structures. The Fi nal Rule should leave the door open for a range of injection sites and methods provided the owner or operator ca n show that the injection and storage will be protective of Underground Sources of Drinking Water (USDWs).

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.

Letter ID: 0171 Comment ID: 23443 Letter Lines: 94 to 97

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

Comment: 4. GRE believes that the states will have the best knowledge of regional geology, existing projects, areas in need of special protection, etc. and that

4states should be allowed to assume prim acy for administration of the UIC Class VI well program.

Individual Response: EPA agrees with commenters on the importance of states having primacy for GS wells given the variety of geologic settin gs in which GS will be applied. EPA recognizes that State, Tribal, Territorial, a nd DI UIC Program Direct ors are in the best position to evaluate the unique issues related to well depth, geol ogy, and hydrogeology that are posed by a Class VI well. Some degree of flexibility is needed for Cl ass VI wells because each decision made will be site-specific and conditions will di ffer from state to state. The GS rule balances the need for these site-specific decisions with the need for mi nimum standards to ensure national consistency.

The Agency believes that it is important for stat es to use their unique e fficiencies to promote adoption of this burgeoning and important tec hnology, while assuring that USDWs are protected from endangerment through the UIC regulatory framework. EPA encourages states to accept primacy for Class VI, and believes that, due to the importance of implementing an effective, comprehensive, and seamless CCS program, States should be provided the flexibility to obtain primacy for Class VI only.

However, given the potential for CCS (encom passing capture, transportation, and geologic sequestration) to be an important part of a na tional priority to address climate change, EPA believes that providing states the flexibility to obtain primacy for Class VI wells independently of other well classes can help foster effective management of CCS. EPA believes that allowing independent Class VI primacy may encourage states to take res ponsibility for implementation of Class VI regulations and provide for a more co mprehensive approach to managing CCS projects by promoting the integration of GS activities under SDWA in to a broader framework for managing CCS. The Agency will allow independe nt primacy for Class VI wells under §145.1(i) of the final GS rule. Furthermore, GS opera tions involve ancillary activities (e.g., pipeline operations, pore space ownership, land use rights, and surface access) for which states can call upon other authorities that exist at the state leve l (but outside UIC author ity) to provide a more comprehensive CCS management approach.

Letter ID: 0171 Comment ID: 23444 Letter Lines: 99 to 101

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

Comment: 5. EPA should be careful not to stigmatize GS operations and to take positive measures to build public acceptance. EPA should avoid characte rizing stored CO2

as a waste.

Individual Response: EPA does not believe that the tailor ed requirements will create a negative public perception of GS. The Agency believes that a demonstration to the pub lic that GS projects are meeting the GS rule's tailored requirement s would likely improve confidence in the project and help address public questions and concerns.

EPA adds that the requirements of the GS rule ar e tailored to the nature of the CO2 itself and

5risks associated with the injec tion of CO2, and do not address th e status of CO2 as either a pollutant, commodity, or waste.

Letter ID: 0171 Comment ID: 23445 Letter Lines: 103 to 110

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

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

Comment: 6. EPA must settle the way GS activitie s will relate to RCRA and CERCLA. RCRA

is simply the wrong tool to use to regulate GS of CO2 and EPA needs to find a way to insure that the onerous requirements of CERCLA, (never intended for GS of CO2), are not applied to this highly specialized gas storage operation.

7. Dealing with these last tw o hazardous waste issues appears to GRE to be one of the most difficult hurdles standing in the way of commercial deployment of full scale GS projects and we recognize th at Congressional acti on may be needed.

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

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

Letter ID: 0171 Comment ID: 23446 Letter Lines: 112 to 134 ; 161 to 163

Comment Code: 1000 1. General and Administrative Comments

6Comment Code: 5400 2.9 Proposed Financial Respons ibility and Long-Term Care Requirements

Comment: Comments Regarding Liability and Risk Management

GRE supports the comments of the Carbon Ca pture and Sequestrati on Alliance (CCS, or the Alliance) on the proposed UIC regulations. The CCS Alliance is a coalition of entities, sp anning a number of economic sectors, that share a common interest in removing impediments to investment in and development of carbon capture and storage ("CCS"), as we ll as mitigating the potential risks associated with the deployment of this t echnology.(Footnote 1) Its purpose is to promote development of policy by the stat es and the federal government to appropriately address risks and potentia l liabilities, ther eby enabling the further development and increased deployment of CCS. The CCS Alliance believes these technologies can be develope d while protecting underground water resources, significantly reducing glob al and U.S. greenhouse gas ("GHG") emissions, and enhancing U.S. energy security. The Alliance’s purpose is to consider ways of promoting the developm ent and use of CCS technologies and to support efforts by the private sector, st ates, the federal government, nongovernmental organizations and others, to help ensure that these technologies can be developed and widely, effici ently and cost-effectively deployed.

We support the comments of the Alliance a nd incorporate them here by reference. GRE is relying on NRECA and the Alliance to provide EPA with specific comments on the Financial Assurance and Long Term Liability issues discussed in the proposal. We are not experts on these issues, however we ask EPA to consider the

Footnote 1: MidAmerican Energy Holdings Company, National Mining Association, National Rural Electric Coope rative Association, NRG Energy, Inc., PacifiCorp

and Zurich North America.

Individual Response: The goal of financial responsibility is to ensure that financial resources are available to prevent or remediate the endangerment of USDWs from improper plugging, remediation, and management of wells in the event that the owner or operator experiences financial difficulties. EPA agrees that assuring financial responsibility for corrective action on wells in the AoR, injection well plugging, PISC and site closure, and emergency and remedial response at GS sites is an important component of ensuring that USDW s are protected. See the final rule and preamble for further discussion of EPA's final approach to financial responsibility.

Please see EPA's responses to the CCS Allia nce's comment for additional information.

Letter ID: 0171 Comment ID: 23447 Letter Lines: 137 to 140

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

Comment: 1. It appears to GRE that a tiered approach with a government back-stop as used

7in the framework of the Price-Anderson Act for nuclear faculties could be a rational way of structuri ng liability management fo r GS of CO2. This is discussed further in the comments NRECA is submitting on this rulemaking.

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

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

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

which such violation occurs or failure to comply continues.

Furthermore, after site closure an owner or ope rator may remain liable under tort and other remedies, or under other federal statutes includi ng, but not limited to, Clean Air Act, 42 U.S.C. §§ 7401-7671; CERCLA, 42 U.S.C. § 9601-9675; and RCRA, 42 U.S.C. § 6901-6992. Please note that EPA does not have authority under the SDWA to transfer SDWA or other legal liability

for Class VI wells to the State or federal government or a thir d-party fund. Furthermore, EPA does not have the authority under the SDWA to create a trust fund upon which to manage longterm liability of GS sites. See the final rule preamble for further di scussion of EPA's final approach.

Letter ID: 0171 Comment ID: 23448 Letter Lines: 142 to 149

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

Comment: 2. EPA should consider a broa d array of financial mechanis ms owners or operators can use to meet financial responsibi lity requirements specified in the regulations.

3. While Self Insurance mechanisms bel ong on EPA’s menu of Financial Assurance options, GRE is a relatively small business and we may not have adequate capitalization for Corporate Guarantees or Self Insurance to be available

89 options for meeting potential financ ial responsibility requirements.

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

EPA will retain self insurance as an option for financial responsibility for Class VI wells. EPA believes that, if properly used, the financial test can be an appropriate option for some owners or operators. EPA recognizes that it is important fo r self-insurers to be credit-worthy, otherwise USDWs may not be adequately protected. Owners or operators who choos e to self-insure and

use the financial test must be able to demonstrat e profitability, with a margin sufficient to cover contingencies and unknown obligations, and stabilit y. If the owner or operator meets corporate financial test criteria, this is an indication that the owner or operator can guarantee its ability to satisfy financial obligations based solely on the strength of the company’ s financial condition. If an operator or operator is not able to meet the corporate financial test criteria, they may arrange a corporate guarantee by demonstrating that its cor porate parent meets the financial requirements

on its behalf.

EPA recognizes that there are some concerns about the use of self insurance, including those mentioned by the commenters. The financial resp onsibility guidance will include considerations for Directors regarding how to ev aluate the appropriate ness of a specific fina ncial responsibility instrument for a given project, such as potential concerns regarding companies with relatively small capitalization or the experi ences of states in approving se lf-insurance instruments.