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.
Am A subsidiary of Pinnacle West Capital Corporation 

Scott Davis, Director Tel. 602-250-3225 Mail Station 8376 

Environmental, Health & Fax 602-250-3872 PO Box 53999 

Safety e-mail Scott.Davis@aps.com Phoenix, Arizona 85072-3999 

December 23,2008 

Water Docket 

Environmental Protection Agency 

Mailcode: 2822T 

1200 Pennsylvania Ave., NW. 

Washington D.C. 20460 

Attention: Docket ID No. EPA-HQ-OW-2008-0390 

Dear SirIMadam: 

Arizona Public Service Company ("APS") appreciates the opportunity to offer comments in 

reference to the Environmental Protection Agency's ("EPA") proposal to establish a 

regulatory program addressing sequestration of carbon dioxide ("CO2") under the 

Underground Injection Control ("UIC") program pursuant to the Safe Drinking Water Act. 

APS is the largest electric utility in Arizona serving over a million customers. APS owns or 

operates a number of fossil fuel-fired power plants, including two large coal-fired power 

plants, and the nation's largest nuclear generating station. Accordingly, the proposed UIC 

program would have considerable impacts on APS and its customers. 

APS is an active member of the Utility Solid Waste Activity Group ("USWAG"), which 

submitted a detailed set of comments on this regulatory proposal. USWAG is an informal 

consortium of approximately 80 energy industry operating companies and associations, 

which together represent more than 85% of the total electric generating capacity of the 

United States, and service more than 95% of the nation's consumers of electricity and more 

than 93% of the nation's consumers of natural gas. 

APS would like to go on record voicing its support of the USWAG comments and urge EPA 

to carefully consider USWAG's comments as it develops this program. In particular, APS 

would like to emphasize the following points, which are discussed in detail in the USWAG 

comments together with comments on several other key issues associated with the proposal. 

- The final rule must resolve several key policy and legal questions regarding 

underground injection of COz, including but not limited to implications under the 

Resource Conservation and Recovery Act ("RCRA") and the Comprehensive 

Environmental Response, Compensation and Liability Act ("CERCLA"), and limiting 

post injection liability. 
- The final rule must be flexible and structured such that it has the ability to respond 

appropriately to the development of future carbon sequestration technologies. In this 

regard, performance-based standards allowing for a site tailored approach are critical. 

- The final rule must ensure protection of underground sources of drinking water, but 

not be overly burdensome or subject COz sequestration operations to unnecessarily 

more stringent regulation than is warranted based upon the risks. 

- The final rule must limit open-ended financial liability by developing the appropriate 

financial responsibility mechanisms. As pointed out in USWAG's comments, EPA 

should retain the option of self-insurance instruments, which have worked 

successfully under the RCRA program. Failure to adequately address the issue of 

open ended liability in this rule making would be a mistake. 

EPA's proposal represents an important first step in developing a sequestration regulatory 

program, and APS commends EPA for its effort. Again, APS appreciates the opportunity to 

comment on this important rulemaking initiative. 

~irKtor Environmental Health and Safety, APS 

Chairman, USWAG 
Letter ID: 0187 

Commenter: Scott Davis 

Organization: Arizona Public Service Company 

Letter ID: 0187 Comment ID: 25219 Letter Lines: 61 to 65 

Comment Code: 1000 1. General and Administrative Comments 

Comment: APS would like to go on record voicing its support of the USWAG comments and 

urge EPA to carefully consider USWAG's comments as it develops this program. In 

particular, APS would like to emphasize the following points, which are 

discussed in detail in the USWAG comments together with comments on several 

other key issues associated with the proposal. 

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

responses to this comment and USWAG’s comment for further details. For additional 

information on EPA's final regulatory approach, please see the final rule and preamble as well as 

the rulemaking docket. 

Letter ID: 0187 Comment ID: 25220 Letter Lines: 67 to 71 

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

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment) 

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

Comment: - The final rule must resolve several key policy and legal questions regarding 

underground injection of CO2, including but not limited to implications under 

the Resource Conservation and Recovery Act ("RCRA") and the Comprehensive 

Environmental Response, Compensation and Liability Act ("CERCLA"), and limiting 

post injection liability. 

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 

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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. EPA 

does not have authority to transfer SDWA or other legal liability for Class VI wells to the State 

or federal government or a third-party fund. See the final rule preamble for further discussion of 

EPA's final approach. 

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. 

EPA also clarifies that 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: 0187 Comment ID: 25221 Letter Lines: 73 to 76 

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

Comment: - The final rule must be flexible and structured such that it has the ability to 

respond appropriately to the development of future carbon sequestration 

technologies. In this regard, performance-based standards allowing for a site 

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tailored approach are critical. 

Individual Response: EPA 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: 0187 Comment ID: 25222 Letter Lines: 78 to 80 

Comment Code: 1600 1.3 Risk Associated with CO2 GS 

Comment: - The final rule must ensure protection of underground sources of drinking 

water, but not be overly burdensome or subject CO2 sequestration operations to 

unnecessarily more stringent regulation than is warranted based upon the risks. 

Individual Response: The GS rule balances the need for site-specific decisions with the need for 

minimum standards to ensure national consistency and USDW protection from endangerment, 

while also ensuring that states have the data they need to make permitting decisions. 

Letter ID: 0187 Comment ID: 25223 Letter Lines: 82 to 86 

Comment Code: 5430 2.9.1 Comments on proposed financial responsibility requirements (40 

CFR 146.85) 

Comment: - The final rule must limit open-ended financial liability by developing the 

appropriate financial responsibility mechanisms. As pointed out in USWAG's 

comments, EPA should retain the option of self-insurance instruments, which have 

worked successfully under the RCRA program. Failure to adequately address the 

issue of open ended liability in this rule making would be a mistake. 

Individual Response: EPA will retain the use of self-insurance as an instrument for financial 

responsibility for Class VI wells. Owners or operators may provide self insurance through a 

financial test provided certain conditions are met under the final rule. For example, these 

conditions include the demonstration of profitability and stability. EPA is developing guidance 

that describes the types of financial instruments, including self insurance, which owners or 

operators can use to meet financial responsibility requirements for GS wells. The financial 

responsibility guidance will include considerations for Directors regarding how to evaluate the 

appropriateness of a specific financial responsibility instrument for a specific project. This 

guidance is available on EPA's website at 

http://water.epa.gov/type/groundwater/uic/wells_sequestration.cfm. 

Owners or operators have the flexibility to choose from a variety of financial instruments to meet 

their financial responsibility obligations. Owners or operators may use one or multiple financial 

responsibility instruments for well plugging and PISC (§146.85(a)(6)). However EPA will not 

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allow for a separate financial responsibility demonstration for well plugging and PISC (i.e., a 

demonstration submitted prior to well plugging and the beginning of the post-injection site care 

period rather than with the permit application). A demonstration of financial responsibility for all 

phases of the GS project will be required prior to the issuance of a Class VI permit 

(§146.85(a)(5)(i)). See the final rule and preamble for further discussion of EPA's final approach 

to financial responsibility. 

EPA disagrees that caps should be placed on financial responsibility requirements in the rule. 

The goal of financial responsibility is to assure that resources are available to prevent the 

endangerment of USDWs from improper plugging, remediation, and management of wells in the 

event that the owner or operator experiences financial difficulties. EPA believes that the 

instruments chosen for financial responsibility must cover the complete costs of these activities. 

The cost of meeting the financial responsibility requirements is expected to be proportionate to 

the expected costs of each GS activity. EPA anticipates that the availability of third-party GS 

financial instruments will grow in response to demand for such instruments by Class VI well 

owners or operators. 

Letter ID: 0187 Comment ID: 25224 Letter Lines: 88 to 90 

Comment Code: 1410 1.2.1 Comments in support of EPA/rulemaking 

Comment: EPA's proposal represents an important first step in developing a sequestration 

regulatory program, and APS commends EPA for its effort. Again, APS appreciates 

the opportunity to comment on this important rulemaking initiative. 

Individual Response: EPA acknowledges the comment and believes that the creation of a new 

injection well class (VI) under the existing UIC Program is necessary to enable the deployment 

of GS as a climate change mitigation technology in a manner that protects USDWs from 

endangerment. EPA believes that the UIC Program, under the authority of the SDWA, provides a 

strong framework for regulating injection of CO2 for GS and adds that the GS regulation 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 

potential presence of impurities in captured CO2, and its mobility within subsurface geologic 

formations. 

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