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 comments 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) greatly appreciates EPA's work toward developing a 

regulatory framework for underground injection of CO2. EPA's decision to develop 

regulations under the UIC program 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. 

It appears that GS of CO2 from fossil-fueled power plants will be a necessary part 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 could 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 Electric 

Cooperative Association (“NRECA”) and the Utility Solid 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 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 craft a Final Rule for commercial CO2 injection appropriate for activities 

that will largely 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 liabilities. As long as risks and liabilities are largely 

unknown and open-ended, private companies will not step forward to offer insurance and 

other risk management products, 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, reasonable and protective liability regime for an activity where 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 difficulty and uncertainty of regulating 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. 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.

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 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 two 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 that Congressional action may be needed.

Comments Regarding Liability and Risk Management

GRE supports the comments of the Carbon Capture and Sequestration Alliance (CCS, 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 

removing impediments to investment in and development of carbon capture and storage 
(“CCS”), as well as mitigating the potential risks associated with the deployment of this 

technology.(1) Its purpose is to promote development of policy by the states and the 

federal government to appropriately address risks and potential liabilities, thereby 

enabling the further development and increased deployment of CCS. The CCS Alliance 

believes these technologies can be developed while protecting underground water 

resources, 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 by the private sector, 

states, the federal government, non-governmental organizations and others, to help ensure 

that these technologies can be developed and widely, efficiently and cost-effectively 

deployed. 

We support the comments of the Alliance and 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 following general 

comments for managing risk and liability associated with GS:

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

the framework of the Price-Anderson Act for nuclear faculties could be a rational 

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

in the comments NRECA is submitting on this rulemaking. 

2. EPA should consider a broad array of financial mechanisms owners or operators 

can use to meet financial responsibility requirements specified in the regulations.

3. While Self Insurance mechanisms belong 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 options

for meeting potential financial responsibility requirements.

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

Please direct any questions to Erik Silvola (763)445-5203.

Sincerely,

Great River Energy

Erik Silvola

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) greatly appreciates EPA's work toward developing a 

regulatory framework for underground injection of CO2. EPA's decision to develop 

regulations under the UIC program 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. 

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 endangerment. The Class VI requirements are 

appropriate because of the unique nature and risks of CO2 injection for long-term storage (e.g., 

large injection volumes, long project duration, and reservoir pressure conditions). The GS rule 

contains tailored requirements for the permitting, geologic site characterization, AoR and 

corrective action, well construction, operation, mechanical integrity testing, monitoring, well 

plugging, post-injection site care, and 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 issues 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 liability mechanisms available under §§ 1423 and 

1431 for those activities that endanger USDWs. EPA recognizes that liability is an important 

issue to owners or operators but the Agency does not have authority 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 

1
part 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 could 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 Electric Cooperative 

Association ("NRECA") and the Utility Solid 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. 

Individual Response: EPA acknowledges the comment. Please see the remainder of EPA's 

responses to this comment for further details. For additional information on EPA's final 

regulatory approach, including financial responsibility, please see the 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 reduce CO2 emissions; however, these technologies 

are outside the scope of the UIC GS rulemaking. The Class VI GS requirements are designed to 

ensure consistency in permitting underground injection of CO2 at GS operations across the 

United States and provide requirements to prevent 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 craft a Final Rule for commercial CO2 

injection appropriate for activities that will largely 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 liabilities. As long as risks and liabilities are largely 

unknown and open-ended, private companies will not step forward to offer 

insurance and other risk management products, 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, reasonable and protective liability regime 

for an activity where the nature of the risks are different from many other 

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

2
operations are presently unknown. 

Individual Response: EPA agrees that flexibility is important for GS projects. The GS rule 

requires owners or operators to submit, and Directors to consider, extensive site-specific data, 

specified at §146.82, to demonstrate that a site is suitable for GS. Additionally, many of the 

permit requirements for GS wells are established 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 final GS rule includes a balance 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 this comment for further details. For additional 

information on EPA's final regulatory approach, 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 (performance-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 "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. 

Individual Response: The Agency believes that the Class VI requirements balance site-specific 

flexibility with USDW protection. Rather than setting performance- or technology-based 

standards for GS projects, EPA is adopting a flexible approach, where operators of GS projects 

would develop and implement site-specific plans for delineating the AoR, testing and monitoring 

the site, performing corrective action, and post-injection site care. EPA believes that the plans—

which would be reviewed and approved by the Director and periodically updated throughout the 

life of the project—promote an ongoing dialogue between the operator and the Director that will 

encourage use of the most appropriate technologies 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 adaptive approach to regulating GS under the UIC 

Program. Even after finalization of the GS regulation, 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 documentation are being collected, and to determine if 

modifications to the requirements are appropriate or necessary. 

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

Comment Code: 1250 1.1.1.4 Flexibility is needed (performance-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 believes that the Class VI requirements 

balance site-specific flexibility with USDW protection. EPA adds that it is using an adaptive 

approach to regulating GS under the UIC Program. Even after finalization of the GS regulation, 

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 

documentation are being collected, and to determine 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 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). 

Individual Response: EPA clarifies that the GS rule does not categorically preclude 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 Class VI siting, well construction and operation, 

monitoring and testing, and post-injection site care and site closure 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 and 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 

4
states should be allowed to assume primacy 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 settings in which GS will be applied. EPA recognizes 

that State, Tribal, Territorial, and DI UIC Program Directors are in the best position to evaluate 

the unique issues related to well depth, geology, and hydrogeology that are posed by a Class VI 

well. Some degree of flexibility is needed for Class VI wells because each decision made will be 

site-specific and conditions will differ from state to state. The GS rule balances the need for 

these site-specific decisions with the need for minimum standards to ensure national consistency. 

The Agency believes that it is important for states to use their unique efficiencies to promote 

adoption of this burgeoning and important technology, while assuring that USDWs are protected 

from endangerment through the UIC regulatory framework. EPA encourages states to accept 

primacy for Class VI, and believes that, due to 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 (encompassing capture, transportation, and geologic 

sequestration) to be an important part of a national 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 responsibility for implementation of 

Class VI regulations and provide for a more comprehensive approach to managing CCS projects 

by promoting the integration of GS activities under SDWA into a broader framework for 

managing CCS. The Agency will allow independent primacy for Class VI wells under §145.1(i) 

of the final GS rule. Furthermore, GS operations 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 level (but outside UIC authority) 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 risk, 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 characterizing stored CO2 

as a waste. 

Individual Response: EPA does not believe that the tailored requirements will create a negative 

public perception of GS. The Agency believes that a demonstration to the public that GS projects 

are meeting the GS rule's tailored requirements would likely improve confidence in the project 

and help address public questions and concerns. 

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

5
risks associated with the injection of CO2, and do not address the 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 issues (seeking comment) 

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment) 

Comment: 6. EPA must settle the way GS activities 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 two 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 that Congressional action may be needed. 

Individual Response: EPA received many comments regarding the applicability of the RCRA 

regulations and statute to CO2 streams that are geologically sequestered under the final Class VI 

UIC well requirements. As a result, EPA has decided to initiate a separate proposed rulemaking 

specifically to examine the issue of RCRA applicability 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 particular 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 commenters who wish to submit comments on the RCRA 

proposal will need to do so during the comment period for that rule. Finally, EPA also notes that 

the final GS rule, which adds new 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 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 

sulfuric acid). Whether such substances may result in CERCLA liability from a sequestration 

facility depends entirely on the composition of the specific CO2 stream and the environmental 

media in which it is stored (e.g., soil or ground water). CERCLA exempts from 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: 0171 Comment ID: 23446 Letter Lines: 112 to 134 ; 161 to 163 

Comment Code: 1000 1. General and Administrative Comments 

6
Comment Code: 5400 2.9 Proposed Financial Responsibility and Long-Term Care 

Requirements 

Comment: Comments Regarding Liability and Risk Management 

GRE supports the comments of the Carbon Capture and Sequestration Alliance (CCS, 

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 removing impediments to investment in and development of 

carbon capture and storage ("CCS"), as well as mitigating the potential risks 

associated with the deployment of this technology.(Footnote 1) Its purpose is to 

promote development of policy by the states and the federal government to 

appropriately address risks and potential liabilities, thereby enabling the 

further development and increased deployment of CCS. The CCS Alliance believes 

these technologies can be developed while protecting underground water 

resources, 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 by the private sector, states, the federal government, nongovernmental organizations and others, to help ensure that these technologies 

can be developed and widely, efficiently and cost-effectively deployed. 

We support the comments of the Alliance and 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 Cooperative 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 USDWs 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 Alliance'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 liability for long-term care 

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

7
in the framework of the Price-Anderson Act for nuclear faculties could be a 

rational way of structuring liability management for 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 owner or operator has met all regulatory 

requirements under Part 146 for Class VI wells and the Director has approved site closure 

pursuant to requirements at §146.93, the owner or operator will generally no longer be subject to 

enforcement for regulatory noncompliance. Furthermore, 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 certain circumstances. For example, an owner or operator may be 

held liable for regulatory noncompliance even after site closure was approved if the Director 

relied on erroneous information (e.g., erroneous modeling data) provided by the owner or 

operator when approving site closure. 

Separate from EPA’s authority to enforce regulatory compliance, an owner or operator may be 

subject to a §1431 response order even after proper site closure is approved under §146.93. 

Under §1431 the Administrator may require an owner 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 present an imminent and substantial endangerment 

to the health of persons, and the appropriate State and local authorities have not acted to protect 

the health of such persons. The action may include issuing administrative orders or commencing 

a civil action for appropriate relief against the owner 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 operator may remain liable under tort and other 

remedies, or under other federal statutes including, 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 third-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 discussion 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 broad array of financial mechanisms owners or operators 

can use to meet financial responsibility requirements specified in the 

regulations. 

3. While Self Insurance mechanisms belong 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 

8
9

options for meeting potential financial 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 the Director determines 

that the operator's proposed financial responsibility demonstration is adequate to protect USDWs 

from endangerment, which means the ability of the owner or operator to pay for each activity for 

which financial responsibility must be demonstrated, including corrective action on wells in the 

AoR, injection well plugging, PISC and site closure, 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 instruments. See the final rule and preamble 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 for self-insurers to be credit-worthy, otherwise 

USDWs may not be adequately protected. Owners or operators who choose to self-insure and 

use the financial test must be able to demonstrate profitability, with a margin sufficient to cover 

contingencies and unknown obligations, and stability. 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 corporate 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 responsibility guidance will include considerations 

for Directors regarding how to evaluate the appropriateness of a specific financial responsibility 

instrument for a given project, such as potential concerns regarding companies with relatively 

small capitalization or the experiences of states in approving self-insurance instruments.