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.Dec ember 23 , 2008

Stephen E. Heare Director, Drinking Water Protection Division U.S. Environmental Protection Agency 1200 Pennsylvania Avenue, N.W. Room 2150A EPA East: MC

- (4606) Washington, D

. C

. 20460

Re: Comments on the U.S. Environmental Protecti on Agency’s Proposed Rulemaking under the Safe Drinking Water Act’s Underground Injection Control Program for Carbon Dioxide Geologic Sequestration Wells

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Dear Mr. Heare:

The Edison Electric Institute (EEI) subm its the attached comments, accompanied by executive summary, regarding the U.S. Environmental Protection Agency’s (EPA or Agency) proposed regulations issued July 25, 2008
, for the injection and geologic storage of carbon dioxide (CO 2 ) under the authority of the Safe Drinking Water Act underground injection control program. Our comments provide EEI’s view and additional information on issues raised in EPA’s proposed rule.
EEI appreciates the Agency’s willingness to consider the expertise and experience ou r membership can provide with regard to the regulation of CO 2 injection and geologic storage. Should you have any questions about the attached comments, please contact William Fang, EEI Deputy General Counsel and Climate Issue Director (202

- 508

- 5617 or bfang@eei.org )
, Emily Fisher, Attorney (202

- 508

- 5616 or efisher@eei.org ) or Karen Obenshain, Director, Fuels, Technology & Commercial Policy (202

- 508

- 5223 or kobenshain@eei.org )

. Sincerely,

Quinlan J. Shea, III Executive Director, Environment

QJS:ofMr. Stephen F. Heare

December 23 , 2008 Page 2

Attachment

c c (w/ att ): Robert J. Meyers, Associate Assistant Administrator, Office of Air and Radiation Ann Codrington, Chief, Prevention Branch, Office of Groundwater and drinking Water Bruce Kobelski, Environmental Geologist, Office of Groundwater and Drinking WaterCOMMENTS OF EDISON ELECTRIC INSTITUTE ON THE ENVIRONMENTAL PROTECTION AGENCY’S PROPOSED RULEMAKING UNDER THE SAFE DRINKING WATER ACT’S UNDERGROUND INJECTION CONTROL PROGRAM FOR CARBON DIOXIDE GEOLOGIC SEQUESTRATION WELLS

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December 2 3 , 2008EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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Executive Summary
Addressing climate change concerns requires a full commitment to development and
commercial deployment of carbon capture and storage (CCS) technologies. EEI thus
supports the development of clear, fle xible and appropriately tailored regulatory regimes
that will facilitate development of and investment in CCS technology and projects while
protecting against potential environmental risks. We applaud the Agency for taking this
crucial first step toward e stablishing such a regime for geological sequestration ( GS )

. Recognizing the significance of EPA‘s initiative in proposing regulations for the injection

and storage of carbon dioxide ( CO 2 ) under the Safe Drinking Water Act‘s ( SDWA )
Underground Injection C ontrol ( UIC ) program, EEI appreciates the opportunity to
provide input into the process and to share our suggestions for changes to the proposed
rule. Incorporation of our comments into the final rule will serve to promote the dual
goals of promoting the commercialization of CCS technology and preventing potentially
undesirable impacts to drinking water resources.

The potential environmental benefits of deploying CCS technologies, in terms of avoided
or sequestered CO 2 emissions, should be weighed ag ainst potential requirements that
might delay or compromise the ability to achieve commercial

- scale CCS. Key issues
include balancing state and federal interests, appropriate characterization of CO 2 , appropriate risk management approaches and maintaining needed flexibility. To this end,
EEI has provided comments on nine areas of concern, briefly summarized below.EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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EEI agrees that proper site selection is critical to a successful GS project and notes that it
serves to minimize, if not eliminate, any potent ial threats to drinking water sources that

CO 2 injection and storage may pose. However, several of the proposed requirements are
unnecessary from the perspective of protecting drinking water sources and would only
serve to hamper GS projects from going fo rward, including limitations on receiving
formations, potential alteration to the current definition of an underground source of
drinking water (USDW), and the proposed grant of discretion to the UIC program
director to require permit applicants to identif y secondary containment/confining zones.

EEI is concerned that a broad, unconstrained requirement for periodic reevaluation of the

area of review ( AOR ) that would apply in the same manner to all potential project sites is
unwarranted as a matter of presum ption. The schedule for AOR review should be a
matter addressed through permitting and a plan for development and operation.

EEI is also concerned about proposed requirements related to monitoring for potential

CO 2 movement and the use of tracers. Under the proposed regulations, the UIC program
director would have discretion to require the use of tracers or surface air/soil gas
monitoring ―to detect movement of CO 2 that could endanger a USDW.‖ Tracers and
surface air/soil gas monitoring should not be re quired, and may create an overly negative
and unwarranted public perception regarding the safety of GS projects or tracers.EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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Another general area of concern discussed in our comments involves the proposed rule ‘ s
provisions for closure and post

- injection si te care (PISC). In particular, EEI is concerned
with the proposed imposition of a PISC period spanning, as a matter of default, 50 years
after cessation of injection. Establishing a default time period for PISC, in particular one
as lengthy as 50 years, is unnecessary and undesirable . T he dual goals of protecting
USDW and supporting the commercialization of CCS technology are far better served
through a site

- specific, performance

- based approach.

The proposed financial assurance requirements, which exc eed those currently in place for
injection of hazardous wastes, raise significant concerns from the perspective of
promoting CCS development. EEI strongly urges the Agency to exercise care not to
stigmatize geological CO 2 storage by equating it in any wa y with hazardous waste
disposal, as doing so could affect public perception (thereby potentially hindering the
permitting process) as well as perceptions by financial institutions (thereby potentially
hindering project financing). Further
, it is crucial t hat any financial assurance
requirements be sufficiently flexible to take into account the particular risks associated
with any given project.

EEI is concerned with how existing CO 2 injection wells should be treated in the final
regulations. The rule ‘ s grandfathering provision should be as expansive as possible while
balancing the need for protection of USDW, and thus EEI recommends two principal
modifications to the proposed provision. First, a preferable approach to limiting theEEI Comments on Proposed Regulations for Geologic Storage of CO 2

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scope of grandfatheri ng only to construction requirements is to expand the scope of
available grandfathering for existing wells, given that the wells were constructed for
injection of CO 2 in the first instance. Further, rather than leave grandfathering to the

discretion of th e program director, a preferable approach is to allow grandfathering as a
default rule unless the program director determines that, pursuant to specified criteria, the
specific nature of the project renders it unsuitable for CO 2 storage.

EEI shares the Agency‘s view that accurate public perception and increased

understanding of CCS technology are critical to its success at the commercial level. To
that end, EEI supports the development of regulations and policies that will serve to
educate the public an d provide for appropriate public input on projects. However, EEI is

concerned that i mposition of public participation provisions like those currently
applicable under the R esource C onservation and R ecovery A ct (RCRA) are unnecessary

and undesirable for GS projects. EEI encourages the Agency to craft provisions that
support decision

- making based upon sound science and do not unduly hamper siting

decisions.

Regarding whether states should be permitted to seek primacy for Class VI wells, EEI
agrees that states and tribes should play a key role in managing CCS projects going
forward. Further, many states are moving ahead with developing their own legislation
and regulations related to CCS activities. Allowing those states to take on primacy for

Class VI wells (in particular, allowing them to take on primacy for Class VI withoutEEI Comments on Proposed Regulations for Geologic Storage of CO 2

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assuming the regulatory burden that may be associated with other well classes) will help
ensure that they are given credit and recognition for their groundbreaking work on CCS.

Finally, EEI is concerned about the potential application to CCS activities of
environmental laws that were, without exception, not intended to apply to CCS or even
crafted with CCS in mind and that could impose significant obligations and potential

lia bilities not only on project operators, but also potentially on other entities in the CO 2 chain, such as entities producing the CO 2 that is ultimately injected. These laws include
the Comprehensive Environmental Response, Compensation, and Liability Act

( CERCLA or Superfund) and RCRA. EEI urges EPA to evaluate carefully any proposed
treatment of these two laws (or others) that it may be considering under the Class VI
regulations to ensure that any such treatment is necessary and does not serve as an

unint ended springboard for hampering the successful commercialization of CCS. EEI
submits that any characterization of potentially hazardous constituents in CO 2 injectate
may be addressed as part of the UIC permitting process without addressing any potential

R CRA jurisdictional issues.EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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Comments

The Edison Electric Institute (EEI) 1 submits these comments on the Environmental
Protection Agency (EPA or Agency) ‘s proposed regulations for the injection and
geologic storage (GS) of carbon dioxide (CO 2 ) under the authority of the Safe Drinking

Water Act (SDWA) ‘s underground injection control (UIC) program , issued in July 2008

( D ocket ID N o . EPA

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, 73 Fed. Re g. 43492 (July 25, 2008)

. EEI
submitted pre

- rulemaking comments to the Agency o n May 15, 2 008, and provided oral
and written testimony at EPA‘s September 30, 2008
, public hearing on the proposed
rules. These comments and testimony are incorporated by reference herein.

I. General Principles Applicable To EPA’s GS Regulatory Effort

As we noted in our prior comments, a ddressing climate change concerns requires a full
commitment to development and commercial deployment of carbon capture and storage

(CCS) technologies . To put the need for this commitment in context, consider that

e lectricity gener ation is responsible for 34 percent of greenhouse gas (GHG) emissions
and 40 percent of CO 2 in the U

. S. The Energy Information Administration projects net
electric demand will increase 30 percent by 2030, even after taking into account energy

efficiency i mprovements. New and replacement power plant capacity to meet this
increased demand is projected to total 150,000 mega W atts . Coal is one of the primary
sources of baseload generation in the U

. S

. and will continue to be an important fuel for

1 EEI is the national association of shareholder

- owned electric utilities in the U.S

. Our members represent about 70 percent of the U.S. electric power industry and serve 95 percent of the ultimate customers in the industry‘s investor

- owned segment.EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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generating el ectricity through 2030 because it is comparatively affordable and abundant
in this country. Given this backdrop, the potential environmental benefits of CCS

– in

terms of reduced or avoided CO 2 emissions

– are substantial. Consequently, EEI and our

membe rs see CCS a s a cr itical element in the full portfolio of options needed not only to

reduce CO 2 emissions, but also to ensure continued affordable and reliable electric
service to customers throughout the nation

.

EEI thus supports the development of cle ar , flexible and appropriately tailored regulatory
regimes that will facilitate development of and investment i n CCS technology and
projects while protecting against potential environmental risks

. We applaud the Agency

for taking this crucial first step t oward establishing such a regime for GS . Recognizing
the significance of EPA‘s initiative in proposing regulations for the injection and storage

of CO 2 under SDWA ‘s UIC program, EEI appreciates the opportunity to provide input

into the process and to shar e our suggestions for changes to the proposed rules

.

I ncorporation of our comments into the final rules will serve to promote the dual goals of
promoting the commercialization of CCS technology and preventing potentially
undesirable impacts to drinking wa ter resources.

EEI‘s views are guided by several general principles applicable to any federal legislative
or regulatory effort on CCS , which are described below and discussed more fully in the
context of specific comments :EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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1. Promotion of CCS

. As EPA acknowledges in the p reamble, CCS is a key

climate change mitigation technology, and the proposed rule s are intended to
support its development. 2 Likewise, a ny EPA regulatory regime related to

CCS developed under the authority of SDWA (or any other statu te) should be
designed to facilitate, and not unduly hinder, the successful commercial

- scale
deployment of CCS. The potential environmental benefits of such
deployment in terms of reduced or avoided GHG emissions should be
weighed against potential requir ements that might delay or compromise the
ability to achieve commercial

- scale CCS. Issues the Agency should consider
in connection with this principle include:

a. Reasonable regulatory approaches. Regulations proposed for injection
and storage should be car efully tailored to fit injection and storage
projects and the true nature of the risks that they may pose, but should

not be unduly burdensome for the regulated community. In particular
, the following issues should be considered:

i. Appropriate characterizat ion of CO 2

. It is critical that any
regulation under the UIC program does not unnecessarily

characterize CO 2 as a waste , pollutant or contaminant or
otherwise unduly stigmatize the injection and geologic storage

of CO 2

. While it is appropriate to conside r the actual

characteristics of CO 2 and tailor regulations accordingly,

2 73 Fed. Reg . 43495, col.1.EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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unwarranted characterization of CO 2 as a hazardous waste, for
example, should be avoided.

ii. Appropriate characterization of potential risks. S imilarly
, a ny
regulation should be base d upon an accurate characterization of
the potential risks posed by GS of CO 2 and be tailored
accordingly to address those potential risks, not only to ensure
appropriate protection of underground sources of drinking

water ( USDW ) , but also to avoid unneces sary regulations that
may hamper CCS projects from going forward or call into
question the general safety of CO 2 storage.

iii. Appropriate risk management approaches

. The Agency should

avoid d evelopment of risk management approaches that
discourage CCS deplo yment or create additional uncertainty
, and should seek where possible to bring greater certainty to the
long

- term obligations and risks associated with a GS project.
For example, r equiring financial assurance for potential
liabilities more than 50 years in the future may deter and even

prevent investment in CCS projects. Post

- injection monitoring
and financial assurance requirements are both important, but
should not undermine the goals of the regulations, particularly
when potential risks decrease subst antially after injection is
complete.EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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It is also important to keep in mind the enormous extent to
which proper site characterization will minimize any potential
risks posed by CO 2 storage. P roper site characterization i s
the most effective risk manage ment tool for CCS.
Regulations tailored to ensure proper site selection will in turn
minimize the need for regulations crafted to respond to risks
that, in such a context, would be extremely unlikely to occur.

iv. Maintaining ability to incorporate new infor mation. Any
regulatory regime must be sufficiently flexible to adapt to new
information. Indeed, regulation of on going GS ―pilot‖ projects
under the existing UIC regulations for Class I or V wells has
been positive. EPA must take great care mov ing to a new or
different regulatory framework while projects designed to gain
more technological certainty, as well as the increased certainty
about appropriate risk management solutions for CCS projects
that would likely follow, are ongoing. Given that EPA has

d ecided to move forward with GS

- specific regulations, EEI
urges the Agency to develop a framework that can consider
and, as appropriate, incorporate data developed through CCS
demonstration projects and the activities of the Department of

Energy ‘s R egional Carbon S equestration P artnerships.EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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b. Balancing state and federal interests

. The Agency‘s UIC rulemaking

is occurring in the context of the development of an overall framework
for CCS projects, one that must proper ly balance federal and state

roles. As to the UIC rules, EPA should consider the significant
interests and experience of the states in developing regulations.

2. Avoidance of o ne

- s ize

- f its

- a ll a pproaches

. As currently proposed, EPA‘s

regulations contain a number of default provisions that would a pply
universally to projects, at least as a matter of initial presumption. Rather than
imposing default provisions, those portions of the rulemaking that address
inherently site

- specific issues should allow for site

- specific , performance

based determinati ons as part of the permitting process. The geologic
variability involved in different conceivable GS projects needs to be taken
into account in issues ranging from site characterization to area of review

(A O R) to containment requirements.

3. Importance of limits on discretion. EEI recognizes that in order to allow for

effective site

- specific determinations and to maintain essential regulatory
flexibility, some amount of discretion must be vested in the UIC program

director . At the same time, such discret ion should be bounded by the
inclusion of relevant and appropriate considerations for making necessary
determinations. In general, the rules should establish with sufficient clarity
the factors to be taken into account and leave the precise determinations to the
permit process.EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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4. Limitations on e xisting a uthority

. The Agency should adhere to its limited
authority at this juncture under SDWA and should avoid exceeding that
authority. The value of developing a clear regulatory regime will be

undermined if that regime is potentially unstable or subject to lengthy delays
because of potential susceptibility to attack for failure to adhere to the
Agency‘s authority. Moreover, as EPA notes in the preamble, SDWA does
not provide EPA ―authority to deve lop regulat ions for all areas related to GS.‖

More specifically, EPA further states that it ―is not proposing regulation for

CO 2 under the Clean Air Act [ ] in this proposed rulemaking.‖ 3

5. Anticipation of r elated d evelopments

. On the other hand, the Agency should
strive to anticipate future statutory and regulatory developments in the climate
change arena so that any rulemaking has a reasonable chance of melding with
such developments. For instance, while it is clear that SDWA does not
authorize the Agency to deve lop rules that specify any kind of ―credit‖ system

for capture and storage of CO 2 , the Agency can and should consider how its
UIC rulemaking will fit with foreseeable features of potential future regimes

and how rules can be drafted to complement such feat ures to the extent
possible

.

3 Id . at 43495.EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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With the above general principles in mind, EEI provides below specific comments on
several aspects of the proposed rules, focusing in particular on the following categories of

issues:

S iting, including the definition of USDW, and secondary containment

.

AOR and provisions for periodic reevaluation thereof.

M onitoring and use of tracers

.

C losure and post

- injection site care

.

F inancial assurance

.

G randfathering

.

P ublic participation

.

S tate primacy

.

P otential issues relating to the characterization of CO 2 and arising under other environmental laws.

Further, a lthough EEI appreciates that issues related to property rights and pore space
ownership that may be associated with injection and storage are outside the scope of the

Age ncy‘s rulemaking, comments are provided on these issues as well, at the Agency‘s

request.

II. Specific Comments

A. General Comments on Class VI Approach
EPA‘s proposed rules would create a new class of injection wells

— Class VI

— for CO 2 injection and stor age. EEI is generally supportive of this approach, as it allowsEEI Comments on Proposed Regulations for Geologic Storage of CO 2

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regulations to be tailored to fit the n eeds of such projects and helps to avoid potential

issues of inaccurate public perception that might arise from including it within an existing

well cla ss (in particular Class I). A s is discussed throughout these comments, EEI views
accurate public perception of the nature of CCS as critical to its successful deployment.

B. Siting and Secondary Containment

Our first area of concern relates to proposed provisions for the siting of GS projects,
including requirements related to project site geology and permissible receiving

formations . EEI agrees that proper site selection is critical to a successful GS project and

notes that it serves to minimize, if n ot eliminate, any potential threats to drinking water

sources that CO 2 injection and storage may pose . However, several of the proposed
requirements are unnecessary from the perspective of protecting drinking water sources

and w ould only serve to hamper G S projects from going forward.

The first such requirement relates to the Agency‘s proposed limitations on receiving

formations. The proposed regulations would permit project operators to inject and store

CO 2 only beneath the lowermost formation contain ing USDW

. S uch a categorical

limi tation on receiving formations i s unnecessary , unduly burdensome and undesirable

for several reasons:

Unnecessary for protection of USDW under the UIC program: As a
preliminary matter, categorically eliminating a body of potential receiving
formations is simply unnecessary in light of the overall function of the
UIC rules. As a general proposition, UIC permit applicants mustEEI Comments on Proposed Regulations for Geologic Storage of CO 2

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demonstrate that projects will not endanger USDW; permit applicants for

CO 2 injection and storage projects would be held to the same standard. 4

T he proposed rules would also require permit applicants to demonstrate
that the project will be sited in areas with a ―suitable geologic system‖

— consisting of an injection zone of sufficient areal extent, thi ckness,
porosity and permeability to receive the total anticipated volume of
injectate

— and a confining zone free of transmissive faults or fractures and
sufficient to contain the injected stream as well as any displaced fluids,
considering the proposed max imum pressures and volumes of injection,
without causing fracturing. Thus, the suitability of the receiving formation
and the project‘s general protectiveness of USDW will necessarily be

evaluated as a part of each GS permitting exercise.

All projects (and receiving formations) are not created equal : Each
potential project will possess its own unique characteristics, as will each
potential project site and receiving formation. A blanket requirement
excluding a class of potential receiving formations i mposed outside the
context of actual projects is unnecessary, as for any given receiving

4 EEI notes that EPA has proposed prohibit ing CO 2 storage in unmineable coal seams, basalts, salt domes and shales because ―these formations are limited in geographic and geologic distribution in the U.S., and their technological or economic viability as GS sites has not been demonstrated.‖ 73 Fe d. Reg . 43503, col. 2. EEI urges EPA to continue to permit GS projects in these formations as Class V experimental wells to facilitate continued research into the potential for these formations to safely and economically store CO 2 , particularly because th ere are some areas of the country without easy access to saline formations or depleted oil and gas reservoirs that can be used for GS projects.EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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formation or any given project, there may exist other characteristics that

serve to provide equivalent or greater protection for USDW.

Likely to create public perc eption issues : Currently, a limitation on
injections to only those formations below the lowermost USDW is in
place solely for Class I hazardous waste injection wells. The properties of

C O 2 , while unique in some respects, do not require or warrant such

he ightened treatment. Imposing a requirement currently in place only for

hazardous waste would be likely to create the mis perception that CO 2 injection wells are analogous to hazardous waste injection wells and thus
carry analogous risks. Accurate public p erceptions about the nature of

CO 2 and the true risks associated with properly sited and executed storage
projects are crucial to the success of CCS.

Likely to hamper commercial deployment of CCS, particularly for

enhanced oil recovery ( EOR ) first actors : Much of the experience and
expertise associated with injection and storage of CO 2 that currently exists

is the result of several decades of experience with EOR and enhanced gas

recovery (E G R) operations through Class II UIC permits. As CCS gains

moment um as a GHG mitigation tool, EOR operators may provide not
only this wealth of experience and expertise, but also the first push toward
commercial CCS by seeking to convert existing EOR operations to purely
storage operations to take advantage of whatever credits may eventuallyEEI Comments on Proposed Regulations for Geologic Storage of CO 2

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become available under climate change legislation or regulation

. 5 Some

of those operations inject CO 2 into formations that are above the
lowermost USDW. Under the regulations currently proposed, however,
existing Class II wells

— as well existing CCS pilot projects permitted as

either Class I or V wells

— would be eligible only for the most limited
scope of ―grandfathering‖ : the proposed grandfathering provision,

discussed further below, would cover only construction requirements and

n ot the remaining provisions of the Class VI regulations, including in
particular the proposed limitation on receiving formations . Thus, existing
projects that d o not inject beneath the lowermost USDW c ould be left with
no ability to convert to Class VI GS projects , disincentivizing many
potential first actors. Moreover , creation of such a disincentive is

unnecessary, as the wells at issue would have been designed and
constructed specifically with injection of CO 2 and the protection of

USDW in mind.

Wh ile EPA acknowledges that it has raised for consideration the
possibility of aquifer exemptions or the use of discretion to allow injection
above the lowermost USDW in a given case, such a procedure would only

insert complexity in to the process
, with no co rresponding increase in

5 Of course, nothing in the proposed rule would prevent any owner or operator of a CO 2 storage project, regard less of permit class, from seeking credits related to its participation in any future cap

- and

- trade program.EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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protection afforded to USDW
, as compared to an approach under which

the merits of a proposed receiving formation are considered in the context
of a particular project as a default

.

In light of the UIC permitting process’s focus o n demonstrat ing that a project will
not endanger USDW , EEI proposes that rather than establish a blanket limitation

on available receiving formations, the Agency rely upon the numerous other
provisions that serve to protect USDW and allow those provisions to operate in the
context of actual proposed projects

. In the alternative, limitations on receiving

formations could be left to the UIC program director‘s discretion

— bounded by
appropriate standards for the exercise thereof

— for a particular project ; howev er, given

the case

- by

- case nature of the permitting process and the requirement to demonstrate

non

- endangerment of USDW, providing for the exercise of such discretion is likely

unnecessary

.

Should the Agency choose to impose any sort of limitation on receiving formations,
whether as a default or as a discretionary provision, the ability to obtain an a quifer
exemption should be considered an absolute necessity absent a potential threat to USDW

. In particular, aquifer exemptions would be necessary to fa cilitate complete
grandfathering of existing projects. However, t here would also be broader needs for
aquifer exemptions in order to ensure that otherwise viable projects can go forward.EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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A related issue is how USDW are to be defined under the propos ed rule s . Current
UIC regulations, as well as the p reamble to the proposed rule s , define USDW as :
An aquifer or portion of an aquifer that supplies any public water system or that contains a sufficient quantity of ground water to supply a public water sys tem, and currently supplies drinking water for human consumption, or that contains fewer than 10,000 mg/l total dissolved solids and is not an exempted aquifer.

EEI recommends that the Agency work within the current definition of USDW , in
particular its m aximum total dissolved solids (TDS) provision, for purposes of CO 2 injection and storage. A ny change in the definition of USDW would likely require a
statutory amendment. The legislative history of SDWA identifies the 10,000 TDS

standard as one sufficie nt to ensure that potential drinking water sources that may be
tapped in the future are protected
, 6 and EPA has long recognized this standard in its
regulations without any serious suggestion over the long and successful history of the
UIC program that the standard is inadequate . Thus, any potential alteration to that
standard (which implicates a range of public policy issues) should be left to Congress.

S ome have called for potential revision to this standard, but EEI is unaware of any
analysis supportin g the establishment of an alternative standard. Nor is EEI aware of any
evaluation of the implications of changing this standard for long

- standing UIC activities,
much less on the practicability of CCS as a critical GHG mitigation tool. In short, even if
Congress‘ s original expression of the 10,000 mg/l standard did not constrain EPA‘s

ability to change this standard by regulation, EEI is unaware of any foundation in the

6 See H.R. Rep. 93

- 1185 ( 1974 ), reprinted in 1974 U.S.C.C.A.N. 6454, 6484.EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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administrative record that would allow EPA to provide reasoned support for such a

cha nge.

A third area of concern related to siting involves the Agency’s proposed grant of

discretion to the UIC program d irector to require permit applicants to identify
“additional zones that will impede vertical fluid movement, are free of faults and
fractures that may interfere with containment, allow for pressure dissipation, and
provide additional opportunities for monitoring, mitigation and remediation”

— i.e ., secondary containment/confining zones. A proposal to require secondary containment,

even in discretionary form, is unnecessary and unwarranted for many of the same reasons
that a blanket limitation on receiving formations i s unnecessary and unwarranted.
Specific concerns include the following:

Better alternatives exist to protect USDW : The presumed purpose of
secondary containment is better addressed through proper site selection

and well

- designed plans to detect and contain leakage from the primary
containment system. EEI also note s, as we did in our May 15, 2008
, pre

rulemaking com ments, a discussion led by panelist Susan Hovorka of the
University of Texas at EPA ‘s December 2007 public workshop, as
characterized in the Agency‘s meeting summary (p. 8):

CO 2 is very responsive to pressure as a mitigation technique in the event of move ment to an undesired location. Injecting fluids in an adjacent well at a regulated pressure can guide CO 2 back to the containment area. Another mitigation option is changing injection patterns once a problem is detected. Site

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coul d be built into plans to provide guidance in the event of an

unexpected event.
Given the proposed rules ‘ emergency and remedial response requirements,
a secondary containment requirement is especially unwarranted.

U nprecedented under the UIC program: Se condary
containment/confining systems are currently not required for any other
types of injection wells under the UIC program. The physical and
chemical properties of CO 2 are not sufficiently unique

— nor do they pose
a sufficiently unique potential threat to USDW

— to warrant such
unprecedented treatment under the UIC program.

U nprecedented in U.S. environmental law generally: We are unaware of
any comparable requirement to ascertain secondary containment features
in geologic formations in any other enviro nmental regulatory regime.
Those regimes that impose secondary containment requirements

— for
example, secondary containment requirements for oil spill prevention
control and countermeasure plans under the Oil Pollution Act, and for land
disposal and underg round storage tanks under the Resource Conservation
and Recovery Act (RCRA)

— relate to man

- made containment structures,
as opposed to geologic containment structures.

Unprecedented internationally: To our knowledge, none of the CO 2 storage projects current ly operating outside the U.S. ha s been required to
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system. Further, Norway, Canada , Australia and Algeria, countries where

CCS projects are currently underway, do not require secondar y

containment

.

Concerns for inaccurate public perception: As noted above, no secondary

containment requirement, whether blanket or discretionary, currently

exists even for the injection of hazardous wastes under the Class I
permitting scheme. Impositio n of a substantially more rigorous
requirement on injection and storage of CO 2 strongly implies that such a
project would be more dangerous than underground injection of a host of

other materials , including hazardous wastes . The final rule s should be

craf ted to avoid creating this public stigma for one of the most promising

GHG

- management strategies , and for a technology that can be employed
safely and effectively in the absence of secondary containment
requirements of any sort

.

While EEI is opposed to an y secondary containment requirement, including one that
would be subject to exercise of the UIC program director‘s discretion, EPA‘s proposal to

establish secondary containment as a discretionary requirement presumably would allow

for consideration of the nature of the particular primary confining system at issue and
reduce unnecessary elimination of potential storage sites as compared to a default
requirement to demonstrate secondary containment . At the same time, discretion, even

where warranted, must be bounded by sufficiently clear guidelines for application inEEI Comments on Proposed Regulations for Geologic Storage of CO 2

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determining whether imposition of a discretionary requirement is warranted in a given

case. However, t he proposed rule s contain no discussion of any factors for the UIC
program director to consi der in making this determination. S hould the Agency choose to
impose a discretionary requirement, the current proposal should be modified to include
such clear guidelines in order to provide some amount of certainty for operators and

investors as well as to avoid the metamorphosis of what is a discretionary requirement on
paper into a default requirement in practice.

C. Periodic Re e valuation of AOR and Corrective Action Requirements
The second general area of concern addressed in these comments relate s to EPA‘s
proposed provisions concerning the AOR for CO 2 storage projects. In a departure from

AOR procedures currently in place under the UIC program, t he proposed regulations

would require operators to reevaluate the proper scope of the AOR periodicall y at a
minimum fixed frequency to be set by the program d irector

— currently proposed as no
less than once every 10 years , with discretion to require more frequent reevaluation. T he
apparent assumption underlying this proposed requirement is that the locati on of injected

CO 2
, and thus the location and extent of potential impact
, could change

— or perhaps more
importantly, could change from what is expected at the outset of a project

— over time.

As EEI commented in our May 15, 2008 , pre - rulemaking comments , a broad,
unconstrained requirement for periodic reevaluation of the AOR that would apply
in the same manner to all potential project sites is unwarranted as a matter ofEEI Comments on Proposed Regulations for Geologic Storage of CO 2

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presumption. Although the proposed rule s provide for some discretion in terms of the

re view period, they nonetheless would require periodic reevaluation for every project at
least once every 10 years. Several factor s argue against such an approach:

Consideration of specific circumstances should be required: While EEI is

not necessarily op posed to an appropriately drafted provision requiring
periodic reevaluation of the AOR under certain circumstances
, any
requirement for such review should not be a universally applicable
requirement potentially applied devoid of any context. Rather, AOR

r eevaluation provisions should be triggered by reasonable parameters,
taking into consideration site

- specific issues, as discussed in the general
principles set forth above. AOR issues are inherently site

- specific;
different projects

— and even different geo graphical regions of the

country

— likely warrant different approaches. A default no

- less

- than

once

- every

- 10

- years provision does not allow for adequate consideration
of specific circumstances. Tying reevaluation to the triggering of
appropriate circumstan ces will provide equivalent protection for USDW
while also ensuring that those projects posing greater relative risks receive
greater scrutiny through more stringent reevaluation requirements and

those projects posing fewer relative risks are relieved of u nnecessary
regulatory burdens. At a minimum, any default period for reevaluation

should be determined based on site

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Unknown trade

- offs militate against a universal requirement: It is

impos sible to know what the relevant trade

- offs are as to the initial AOR
versus potential later assessments of the AOR . For example, in certain
instances it is foreseeable that a project owner may seek a relatively more

constrained AOR for an initial portion of the project life, and propose
periodic AOR reevaluations as a function of project experience. In other

instances, a broader initial AOR may be appropriate, with a
correspondingly reduced need for periodic reevaluations. Further,
operators will general ly model the entire life of the project and will likely
include additional acreage in the AOR in any event.

The proposed regulations also include a requirement to conduct corrective action within

the AOR , but would give the UIC program d irector discreti on to allow corrective action
to be conducted in phases over the operational life of the project. A phased corrective

action approach has merit, particularly where periodic reevaluations of the AOR
are to be required

. A phased approach will help ensure t hat all necessary corrective
action is taken, but also that unnecessary corrective action is avoided. It may also serve
to ease the initial financial burden on operators and provide increased certainty from an
investment standpoint. However, t he proposed rule s leave the possibility of a phased
approach to the program director‘s discretion and contain no guidelines for the exercise

of such discretion. Any discretionary requirement should be tempered by suitable criteria

for its exercise. Likewise, any fi nancial assurance requirements related to correctiveEEI Comments on Proposed Regulations for Geologic Storage of CO 2

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action that may be imposed should be tied to the corrective action approach that is to be
taken in any given case. For example, where phased corrective action is permitted,
corresponding provisions for phased financial assurance would provide a greater ability
to price the activities at issue accurately

. A more detailed discussion of financial

assurance issues is below.

A s with a phased approach to corrective action, a phased approach to evaluation a nd

reevaluation of the AOR may prove more practical for operators while affording the
necessary protection for USDW. As noted above, some projects may implicate relatively
constrained areas in terms of the size of the receiving formation, allowing operato rs to
conduct a broader investigation at the outset more efficiently ; for larger projects, it may
make sense to consider allowing a phased plan for AOR evaluation and reevaluation that
would provide for a certain amount of investigation at the outset with more detailed
evaluations to follow over the life of a project.

D. Monitoring Provisions and Use of Tracers
EEI is also concerned about proposed requirements related to monitoring for potential

CO 2 movement and the use of tracers. Under the propo sed regulations, the UIC

program director would have discretion to require the use of tracers or surface
air/soil gas monitoring “to detect movement of CO 2 that could endanger a USDW.”

For the reasons set forth below , EEI is opposed to such a requirement, even where,
as proposed, it is left to the discretion of the program director

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Functionality
, usefulness and cost: Tracers are relatively untested in

terms of workability as a leak

- detecting mechanism. Of greater concern
, however, is the fact that us i ng tracers or surface air or soil gas monitoring
would likely provide too little information, too late, in terms of providing
protection for USDW, in the sense that USDW would likely be affected by
the time the results of such methods revealed any concerns

. Moreover, by
their very nature, tracers can be detected at ultra

- low concentrations. If
the tracer is spilled or a small amount leaked, or if a pipe downstream

from the tracer injection point leaked, the surface air would become

contaminated. Minute a mounts of tracer might be detectable for quite a
distance, making the likelihood of a false positive for the tracer much
greater without any real benefit to the overall protection of USDW. In

sum , if employed for purposes of long

- term monitoring of underg round

waters, tracers would be unlikely to yield significant useful data and
would prove extremely expensive.

Safety: Tracers may present their own safety concerns depending on the
precise nature of the tracer at issue. Further, the use of tracers ma y pose
independent risks for project operators. There may be potential health
effects from some tracers if workers are accidentally exposed.

Concerns regarding inaccurate public perception: As with a secondary
containment requirement, a requirement to us e tracers

— currently
unprecedented in the UIC program

— may create or encourage an overlyEEI Comments on Proposed Regulations for Geologic Storage of CO 2

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negative and unwarranted public perception regarding the safety of CO 2

storage projects.

Potential issues of EPA authority: As noted above, EEI views the
development a nd implementation of legally defensible regulations as a key
to commercial deployment of CCS. To that end, EEI encourages the

Agency to consider carefully the link between each proposed provision
and its authority to regulate under SDWA. Where the link i s more
tenuous, the proposed provision may be subject to greater risk of legal
challenge, posing uncertainty for those who desire to move ahead with
projects. While, as the Agency points out, the use of tracers or surface
air/soil gas monitoring could ind icate that some threat to USDW may be
posed, it seems more likely that by the time the results of such methods
revealed any concerns, such sources would already be affected. Thus, the
nexus between those methods and protection of USDW may be subject to

ch allenge by opponents of the proposed provisions. And the nexus
between surface air/soil gas monitoring and protection of USDW may be
at greater risk of challenge, as the detection of a CO 2 leak to surface air
conceivably provides no useful information tha t would serve to protect
USDW. Indeed, while EPA notes in the preamble that detection of
leakage to the surface ―would indicate potential endangerment‖ to USDW

as a last line of defense, the A gency also acknowledges that regulation ofEEI Comments on Proposed Regulations for Geologic Storage of CO 2

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surface or atmospher ic releases of CO 2 are outside the scope of the

proposed rules and the Agency‘s SDWA authority.

While the proposed rule s would leave these requirements to the discretion of the UIC
program director, again the proposal sets no clear parameters for the e xercise of such
discretion. EEI does not believe that any provisions related to the use of tracers are
required or warranted for the protection of USDW, but should EPA choose to impose a
discretionary requirement, any such requirement should be bounded by appropriate
parameters for its use.

E. Closure and Post

- Injection Site Care
The fourth general area of concern discussed in these comments involves the proposed

rules ‘ provisions for closure and post

- injection site care (PISC). In particular, EE I is
concerned with the proposed imposition of a PISC period spanning, as a matter of
default, 50 years after cessation of injection. The proposed rule s would vest discretion in

the UIC program director to adjust the 50

- year default time period upward or downward,
with monitoring to continue ―until the geologic sequestration project no longer poses an
endangerment to USDWs.‖

E stablishing a default time period for PISC, in particular a defau lt time period as

lengthy as 50 years, is unnecessary and undesi rable, and the dual goals of protecting
USDW and supporting the commercialization of CCS technology are far betterEEI Comments on Proposed Regulations for Geologic Storage of CO 2

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served through a site

- specific, performance

- based approach. To EEI offers the
following supporting points:

A default time period is unnecess ary: As noted above, t he proposed rule s
would, in conjunction with establishing the 50

- year default period for

post

- injection activities , vest discretion in the UIC program director to
shorten or lengthen the PISC period based on the characteristics of a
particular project. As discussed further below, a PISC period based on

site

- and project

- specific characteristics ably serves to meet the dual goals
of EPA‘s rulemaking effort; given the proposed performance

- based,
discretionary aspect of the PISC

- period determination, a default overlay
period is unnecessary . Further, from the perspective of offering protection
to USDW, such a default period offers no additional protection above and
beyond what a performance

- based standard w ill offer.

A default time per iod is unduly burdensome for operators: Establishing a
default time period also risks placing unnecessary regulatory burdens on
owners and operators who can clearly establish from the outset that no
threat to USDW will be posed within a shorter time frame than whatever
default may be established.

A 50

- year default time period is unprecedented under the UIC program

and unwarranted for CO 2 : Even assuming that imposition of a default
period were appropriate, the unique characteristics of CO 2 do not justify

i mposition of such a lengthy default PISC period for GS projects. EEI andEEI Comments on Proposed Regulations for Geologic Storage of CO 2

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its members believe that appropriately sited projects could demonstrate the

absence of endangerment to USDW in substantially less than 50 years;
indeed, data suggest the risk profile of injected CO 2 drops rapidly just 10

years after cessation

. 7 Further, imposing requirements on CO 2 storage
projects that are far beyond those currently in place even for injection of
hazardous wastes is unnecessary and will only engender public

mis perce ptions regarding the safety of such projects.

A default time period may not appropriately incentivize proper site

characterization: Proper siting is the key to ensuring safety and
effectiveness of storage projects, and the rules should work to incenti vize,
rather than discourage, the utmost due diligence in the siting process.
While EPA‘s proposal would provide for the exercise of discretion to

lengthen or shorten the PISC period, placing the burden of proof on
permittees that a departure from the de fault is justified fails to recognize

the enormous efforts associated with proper site characterization.

A 50

- year default period may introduce unnecessary financial uncertainty:
As currently proposed, the rules would require operators to obtain, as a

ba seline and at the time of permitting, financial assurance running through

the default 50

- year PISC period. Thus, operators would be likely required
to assure activities that would not occur for more than 50 years, with

7 S. Benson, Carbon Dioxide Capture and Storage: Research Pathways, Progress and Potential, GCEP Annual Symposium, October 2007: http://pangea.stanford.edu/research/bensonlab/presentations/index.html

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discretion vested in the UIC program director to extend that time period

—

and thus the required period for demonstrating financial assurance. The
end result could be an obligation to provide financial assurance for
activities running through at least 70 years in the future (according to

EPA‘ s assumption of a 20

- year injection period), or more. Further, in
actuality, the PISC period could prove to be considerably shorter,
rendering the initial burden placed upon the operator unnecessary. EEI
urges the Agency to consider carefully , in connect ion with each proposed
requirement that is tied to a financial assurance requirement, the ability for
operators to quantify the activities being assured at the time of
permitting

— the basis of any financial assurance mechanism

— as well as
the potential burde n and expense associated with the proposal. Given the
ongoing credit crisis, an unjustifiably lengthy PISC period may make
obtaining the necessary financial assurance impossible, stunting or
stopping commercial development of CCS.

Instead of a default t ime period

— particularly one as lengthy as 50 years

— EEI urges EPA
to implement a performance

- based approach that considers the circumstances of a
particular project, bounded by appropriate parameters for its application

. As discussed
throughout these comme nts, EEI also encourages the Agency to establish clear
parameters for such a performance

- based approach

— and in particular a clear set ofEEI Comments on Proposed Regulations for Geologic Storage of CO 2

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guidelines for demonstrating that the injectate has ―stabilized‖ and for meeting the non

endangerment standard.

F. Financial Assurance Provisions
The fifth general area of concern addressed in these comments relates to the proposed

rules ‘ provisions for financial assurance. The proposed rule s would require that
permittees demonstrate , at the time of project permitti ng, financial assurance for activities
including injection, corrective action, well plugging and closure, and activities
throughout the PISC period, as well as for emergency and remedial response activities to
address movement of formation or injection flu ids that may endanger USDW . These
proposed financial assurance requirements, which exceed those currently in place even
for injection of hazardous wastes, raise significant concerns from the perspective of
promoting CCS development . They are in many resp ects not balanced by corresponding
increases in the levels of protection provided to USDW. These concerns include the
following :
More stringent treatment for GS projects are unwarranted from a

technical perspective : As noted above, the proposed finan cial assurance
provisions go far beyond the requirements currently in place under the
UIC program, even those for wells injecting hazardous waste. EEI and

our members do not believe that any showing has been made that the
physical and chemical properties of CO 2 are sufficiently unique

— or that
they pose a sufficiently unique potential threat to USDW s

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such unprecedented treatment under the UIC program. Any required

financial assurance should in no event go beyond that currently required

for Class I hazardous waste injection wells ( i.e., beyond requirements to

assure corrective action in the AOR )

. More stringent treatment creates unnecessary public perception issues :
As a preliminary matter, imposing requirements more stringent than (or

even e quivalent to) those currently imposed on hazardous waste may
contribute to an unwarranted negative public perception of CCS. EEI

strongly urges t he Agency to exercise care not to stigmatize geological

CO 2 storage by equating it in any way with hazardous w aste disposal,
as doing so could affect public perception (thereby potentially
hindering the permitting process) as well as perceptions by financial
institutions (thereby potentially hindering project financing).

Consideration of test projects: Small

- scal e test projects currently
underway are providing opportunities to gather necessary information to
explore how financial assurance concerns may best be addressed. EEI
encourages the Agency to consider the experience of these projects in
moving forward with financial assurance provisions.

Consideration of nature of early projects/incentives for early actors:
Early CCS projects are likely to represent the utmost in site selection and
characterization in order to minimize risk. Stringent financial assuranc e
requirements imposed in this context likely would not provide anyEEI Comments on Proposed Regulations for Geologic Storage of CO 2

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additional protection to USDW. Further, financial assurance requirements

beyond those currently in existence under the UIC program would
disincentivize early CCS projects from going forwa rd. The Agency
should consider financial assurance requirements in line with those
currently imposed on other types of wells as a mechanism to incentivize
these early projects.

Consideration of the risk curve: While the Agency properly considers any

un ique threats that may be posed by the long

- term nature of the storage at
issue in a CCS project, the risk curve associated with a properly sited and
managed project begins to fall off rapidly over time, 8 and well before the
Agency‘s proposed financial assu rance provisions would come to an end.
Further, the proposed rule s do not contain clear provisions for reducing
financial assurance obligations over time in accordance with declining

risk. Any financial assurance requirements imposed should be based upon
the actualities of the risk curve for CCS projects, and ideally the risk curve
for a particular CCS project.

Lack of site

- specific flexibility in some respects: While the details of

activities to be assured

— and in some cases the likelihood that such

ac tivities would ever need to be carried out

— could vary widely from
project to project, the financial assurance requirements as proposed do not
include provisions that would allow site

- specific characteristics to be

8 See id

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taken into account. I t is crucial that an y financial assurance

requirements be sufficiently flexible to take into account the
particular risks associated with any given project. All projects are not
created equal, and thus not all risks are the same

Ability to generate reliable cost estimates fo r assured activities : Financial
assurance requirements depend on the ability to obtain reliable cost
estimates for the activity to be assured. If an accurate cost estimate cannot
be developed for the activity at issue, the financial assurance itself cann ot

be assumed to be appropriate

— it may be in adequately protective , or it
may be unduly burdensome. The Agency is proposing imposition of
financial assurance requirements for activities that may occur more than
50 years in the future, with requirements to be satisfied at the time of
permitting. The Agency should carefully examine whether at this time, or
at the time of permitting, the cost of all of the activities required to be

assured can be accurately estimated and assumed to be relatively accurate
goin g forward. If not, financial assurance is no better than a guess

.
The p reamble indicates that EPA may be willing to consider a phased
or staged approach to financial assurance requirements, as well as
separate financial assurance demonstrations for pluggi ng and PISC
activities at later points in time. Such provisions would ease some of the
difficulties with the financial assurance proposal in terms of estimating
costs for future activities assuming that better estimation tools wouldEEI Comments on Proposed Regulations for Geologic Storage of CO 2

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become available, but, again, would not eliminate any difficulties that may

exist in forming cost estimates at the time of permitting.

Market considerations: The above points assume that there currently
exist, or will exist by the time the proposed rules are finalized, ap propriate
financial assurance possibilities for operators. As noted in the
Government Accountability Office (GAO) ‘s September 2008 report on

CCS, 9 stakeholders have already reported difficulties in obtaining
insurance coverage for CCS projects. 10 Even whe re markets do exist,
financial assurance options may prove inordinately expensive to project
operators and investors, who may choose to walk away from projects
rather than face millions of dollars in assurances for activities 50 years

down the road that ma y never occur. EEI strongly encourages the

Agency to evaluate this issue carefully and ensure that it is not
creating obligations with which operators simply cannot comply, or
which are so expensive that commercial development and deployment

of CCS will b e crippled at the outset. One possibility in this regard
would be for the Agency to limit financial assurance requirements to
reasonable caps (whether absolute caps or based on tons injected) in order

9 GAO, Report to the Chai rman of the Select Committee on Energy Independence and Global Warming, House of Representatives, Climate Change: Federal Actions Will Greatly Affect the Viability of Carbon Capture and Storage As a Key Mitigation Option
, GAO

- 08

- 1080 (Sept

. 2008).

10 Id. at 25.EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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to facilitate ability to secure the relevant financial instruments and thus

CCS development

. Lack of appropriate standards for updating: The proposed rule s would
require operators to provide written updates of adjustments to cost
estimates as assured plans are amended. However, t he p reamble suggests

that the UIC program d irector ―would set the frequency for... re

demonstration of financial responsibility and resources. It may be
appropriate to re

- demonstrate financial responsibility on a periodic basis‖

to take into account any changes in submitted plans. While a requirement
to update financial assurance where changes in plans so warrant makes
sense, a default periodic requirement to re

- demonstrate financial assurance
absent some change in circumstances that would require it would impose
an unnecessary burd en on operators.
Lack of contemplation of third

- party assumption of risk or liability: The

p reamble acknowledges that EPA is making no attempt to factor in
circumstances in which a state, for example, or other third party has
assumed long

- term risk or l iability for or ownership of stored CO 2 (as is
contemplated in the Interstate Oil and Gas Compact Commission
(IOGCC) model statute and regulations issued in September 2007 and the

October 2008 Guidelines for Carbon Dioxide Capture, Transport and

Storage
, r eleased by World Resources Institute ). It specifically notes that
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one entity to the other. Trust responsibility for potential impacts to

USDWs remains with the owner or operator ind efinitely under current
SDWA provisions.‖ While EEI acknowledges that EPA‘s authority with

regard to issues of liability transfers for CCS projects generally speaking
is limited, we encourage the Agency to consider that liability transfers
may be effectua ted under other laws and to examine closely how the UIC
rules can take such provisions into account.

For example, the current UIC regulations at least contemplate changes in
ownership of projects ; see, e.g. , 40 C.F.R. § 144.66, which provides that

where a state assumes legal responsibility for compliance with plugging
and abandonment requirements or assures state funding for such
requirements, the operator is deemed to have satisfied applicable financial
assurance requirements where the Administrator det ermines that the
state‘s assumption is at least equivalent to available financial assurance

mechanisms. As another example, o ne option within the Agency‘s SDWA

jurisdiction may be to include a similar provision indicating that where a
third party assumes a permittee‘s regulatory obligations, the permittee is

deemed to have satisfied applicable financial assurance requirements
, which can then be terminated as to the permittee.

Comments on specific financial assurance mechanisms: The p reamble

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be made available for GS projects. While a number of mechanisms

currently exist under the UIC program, such as trust funds, surety
bonds, insurance and satisfaction of a corporate financial test (wi th or

without a third

- party guarantee), the guidance outlining available
mechanisms should provide Agency decision

- makers with flexibility to
take operator and project

- specific considerations into account. In

addition, current ―form‖ corporate financial t est documents may require
that corporations have certain financial information available (such as
bond ratings) that they may lack, but do not clearly allow for substitution
of substantially equivalent financial information for purposes of satisfying

the t est. Any financial assurance regulations should provide the Agency
with considerable flexibility in how to determine a permittee‘s financial

position.

G. Grandfathering Provisions
The sixth general area of concern addressed in these comments invo lves how two
categories of existing injection wells in particular should be treated in the final
regulations

. The first such category includes existing CO 2 injection and storage wells
that have been permitted as ―experimental‖ wells under the Class V UIC regulations or
pilot projects that have been permitted as industrial projects under the Class I UIC
regulations. The second category of existing wells under consideration includes Class II
wells that inject CO 2 for purposes of EOR.EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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EPA has proposed giv ing the UIC program discretion to ―grandfather‖ the construction

requirements for existing Class I, II and Class V wells where the UIC program d irector
can determine that the wells will not endanger USDW . Such grandfathering is soundly
justified , as thes e wells have been constructed specifically for injection and, particularly

in the case of Class I and V wells associated with CCS pilot projects
, for storage of CO 2 and are suitable for the purpose for which they are designed; the promulgation of new
regul ations should not render them unfit for the purpose for which they were intended.

Further, permittees of these wells presumably were required to satisfy the non

endangerment standard as part of the initial permitting process.

However, t he limited scope of the proposed grandfathering

— with the sole exception of
the construction requirements, operators would be required to satisfy all provisions of the
Class VI permitting requirements

— coupled with the fact that its use is left to the UIC

program d irector‘s discretion, casts considerable doubt on its potential efficacy. First,

under these circumstances, potential grandfathering likely would not provide the needed

assurance

— and thus the needed incentives

— to project operators or investors that existing

wells, or , perhaps more importantly, new wells that may be permitted before the proposed

rule s take effect, will remain viable wells from a regulatory perspective going forward

. Under those circumstances, the potential risks of ―first actor‖ status may well out weigh
any potential benefits

. For example, l imiting grandfathering for Class I or V
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operators to undertake such projects, as at some point in the future they will be req uired
to assume a far more stringent slate of obligations (including onerous financial assurance
requirements). Moreover , given many of the other proposed limitations on GS projects,
such as the restrictions on receiving formations, grandfathering may pro ve impossible
even for projects that were specifically designed to inject and store CO 2 .

A s noted above, wells permitted to inject and store CO 2 have already been deemed safe
and suitable for those purposes, and a determination has already been made t hat no
endangerment is posed to USDW. Under these circumstances, leaving a grandfathering

determination to the discretion of the program director

— discretion that may be exercised
where the director determines that there is no endangerment to USDW

— is unnec essarily
duplicative of existing requirements and limiting for project operators. The desired
protection of USDW has already been established for these projects, and absent some
change in circumstances, that protection will remain. Further, leaving gran dfathering to
the discretion of the program director could result in a decision that, as a practical matter,

come s too late for it to be viewed as a legitimate option at the start of a project

.

T he rules’ grandfathering provision should be as expansive as possible while
balancing the need for protection of USDW, and thus EEI recommends two
principal modifications to the proposed provision. First, a preferable approach to
limiting the scope of grandfathering only to construction requirements is to expand
the scope of available grandfathering for existing wells, given that the wells wereEEI Comments on Proposed Regulations for Geologic Storage of CO 2

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constructed for injection of CO 2 in the first instance. Further, rather than leave
grandfathering to the discretion of the program director , a preferable approach is

to a llow grandfathering as a default rule unless the program d irector determines
that, pursuant to specified criteria, the specific nature of the project renders it

un suitable for CO 2 storage.

H. Public Participation Provisions

The p reamble seeks comment on what public participation provisions should be included

for GS wells. EEI shares the Agency‘s view that accurate public perception and

increased understanding of CCS technology are critical to its success at the commercial
level. To that end, EEI supp orts the development of regulations and policies that will
serve to educate the public and provide for appropriate public input on projects.

The p reamble proposes to apply the public participation provisions of 40 C.F.R. Parts 25
and 124 to GS projects and seeks comments on the appropriateness and completeness of

th ose provisions for this task. EEI agrees that public participation provisions currently
existing under the UIC program are appropriately applied to GS projects as well.

However, Part 124 inc ludes provisions for public participation that are unique to other
programs, including RCRA

. 11 Imposition of public participation provisions like those

currently applicable under RCRA is unnecessary and undesirable for GS projects,
as further explained bel ow.

11 See generally 40 C

. F

. R

. Part 124, Subpart B.EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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The general public participation requirements under the UIC program provide for
operators to submit a permit application, complete with all information required by the
regulations, and for a completeness review of the submitted information. The pub lic
comment period is generally commenced once the director has prepared a draft permit for
the project. This is a rationale approach for GS projects. It allows the project operator
and the Agency to make preliminary decisions, such as decisions related to siting, that are
critical to the success of the project generally

— and to the protection of USDW
specifically

— based upon appropriate geologic and technical considerations. It then
allows the public to review the proposed project in light of all of the i nformation that
would be required for permit issuance, including, for example, in the GS context, specific
information related to siting, construction, operation and monitoring.

However, t he RCRA public participation provisions provide for, under certai n
circumstances, public meetings prior to submission of a permit application for a
hazardous waste management unit

. While the siting of RCRA

- regulated facilities is
obviously based on a number of concrete considerations, the siting of GS projects is
depen dent upon site geology to an extent that does not exist in the RCRA context. While
EEI supports creation of provisions that allow for public input into projects, issues related
to project siting are particularly susceptible to public response, which may b e based upon
improper perceptions of risk or desires that projects be sited elsewhere rather than upon
true risks that a project may pose to USDW. EEI encourages the Agency to craft

provisions that support decision

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unduly hamper siting decisions. In addition, as is echoed throughout these comments,
imposing provisions on GS projects similar to those imposed upon hazardous waste in
and of itself may feed into public misperceptions regarding the nature of projects and
their safety as a general matter.

Finally, EEI notes that t he Internet has become an important source of information for the
public, and EEI echoes the Agency‘s desire to utilize its capabilities to provide not only

for public involvement, but als o

– perhaps more importantly as an initial matter

— for
public education on the benefits and true risks of CCS projects.

I. State Primacy Provisions
The proposed rule s seek comment on whether states should be permitted to seek primacy

for Class VI wells, noting the Agency‘s belief that ―the most effective approach for the

comprehensive management of CO 2 GS projects would be achieved at the State and
Tribal level.‖ EEI agrees that states and tribes should play a key role in managing CCS

projects going for ward. Numerous states have decades of experience regulating CO 2 injection through Class II programs, and those states in particular may have much to offer
in the context of Class IV wells. Further, many states are moving ahead with developing

their own l egislation and regulations related to CCS activities

— in many cases laws and

rules that go beyond the scope of EPA‘s jurisdiction, such as incentives provisions and

provisions clarifying the nature of potentially affected property rights. Allowing those

st ates to take on primacy for Class VI wells (in particular, allowing them to take onEEI Comments on Proposed Regulations for Geologic Storage of CO 2

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primacy for Class VI without assuming the regulatory burden that may be associated with
other well classes) will help ensure that they are given credit and recognition for their
groundbreaking work on CCS. EEI supports increased funding for those states that have
primacy for Class VI wells to ensure that sufficient resources exist to review
appropriately the complex permit applications GS projects will entail.

EEI also encourages the Agency to consider potential issues related to projects that may
span multiple states in light of primacy issues. Under such circumstances the rules could
include, for example, provisions for establishing a primary state for permitting pur poses,
with additional affected states provided an opportunity for notice and comment.

J. Issues Related to Potential Application of Other Environmental Laws
EEI and our members are concerned about the potential application to CCS activities of

enviro nmental laws that were, without exception, not intended to apply to CCS or even
crafted with CCS in mind and that could impose significant obligations and potential
liabilities not only on project operators, but also potentially on other entities in the CO 2 chain, such as entities producing the CO 2 that is ultimately injected. These laws include
in particular the Comprehensive Environmental Response, Compensation, and Liability
Act (CERCLA or Superfund) and RCRA. EEI agrees that issues related to potentia l

liabilities under these laws must be resolved. 12 Setting aside for the moment the

12 The recent released GAO report on CCS echoes the importance of addressing these liability issues. GAO recommends that EPA examine its authorities and responsibilitiesEEI Comments on Proposed Regulations for Geologic Storage of CO 2

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important questions of whether either of these laws could apply to CCS activities and, if
so, precisely how and to what extent, EEI does not disagree with the Agency‘s posi tion
that drafting a clear exception from either of these regimes may be difficult in the sole
context of this SDWA UIC rulemaking. Nonetheless, EEI urges EPA to evaluate

carefully any proposed treatment of these two laws (or others) that it may be

consid ering under the Class VI regulations to ensure that any such treatment is
necessary and does not serve as an unintended springboard for hampering the

successful commercialization of CCS.

To turn briefly to the RCRA issue, EPA comments in the preamble that SDWA is
currently used to regulate the injection of both ―pollutants‖ and ―commodities‖; therefore,

the rules do not need to address the status of CO 2 as a pollutant or a commodity. 13

Regardless, the preamble continues to include an analysis of the potent ial application of

RCRA to CO 2 injection and storage activities that appears to be based upon an
assumption that CO 2 is in fact not a commodity, but a waste.

As the Agency is aware, RCRA regulates production, management and disposal of
wastes; RCRA‘s po tential application thus depends upon existence of a waste in the first
instance (more particularly, a solid waste). Once a material is deemed to be ―discarded‖

under RCRA and CERCLA to deter mine ―where additional statutory authority might be needed to address key regulatory and legal issues related‖ to CCS. GAO report, supra n. 9 , at 52

. 13 73 Fed. Reg . 43496, col.3EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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and thus a solid waste, an additional set of parameters applies to determine whether that

subs tance is also a hazardous waste and thus subject to further regulation. It is likely

within EPA’s regulatory ambit (albeit under RCRA) to determine that CCS
activities meeting permit requirements are not equated to discarding the CO 2 , and

EEI recommends t hat EPA examine that approach.

Further, while the preamble notes that it is unnecessary to label CO 2 a waste or a
commodity for purposes of proposing and implementing UIC regulations for its injection
and storage, it jumps to an unnecessary and potentia lly confusing discussion of whether
injected CO 2 may be a hazardous waste, thus perhaps implying the assumption that CO 2 is a solid waste to begin with. The preamble states:
Because the types of impurities and their concentrations in the CO 2 stream are l ikely to vary by facility, coal composition, plant operating conditions, and pollution removal technologies, EPA cannot make a categorical determination as to whether injected CO 2 is hazardous under RCRA. 14

Thus, EPA states, operators ―will need to chara cterize their CO 2 stream as part of their
permit application to determine if the injectate is considered hazardous‖ under RCRA,

and potential application of RCRA is left to a case

- by

- case determination depending upon
the contents of the injectate. EEI sub mits that any characterization of potentially

hazardous constituents in CO 2 injectate may be addressed as part of the UIC
permitting process without addressing any potential RCRA jurisdictional issues.
For instance, EPA could appropriately establish a per mit condition that injectate must

14 Id. a t 43503, col. 3.EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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meet Toxicity Characteristic Leaching Procedure or pH standards, without reference to

the material‘s waste status.

As to CERCLA, the preamble states that the statute ―exempts from liability certain
 ̳federally permitt ed releases‘ including releases in compliance with a UIC permit under

SDWA. Therefore, Class VI requirements and permits will need to be carefully
structured to ensure that they do not  ̳authorize‘ inappropriate hazardous releases. This

would include clar ifying if there are potential releases from the well which are outside the
scope of the Class VI permit.‖ The preamble continues on to request comment on
―particular situations where this might occur‖ as well as more generally on ―other

considerations ass ociated with the presence of impurities in the CO 2 stream related to
CERCLA.‖ This discussion implies that, in the first instance, activities associated with

CCS could be subject to CERCLA.

EEI acknowledges that limits exist on EPA‘s ability to affect issues related to potential
CERCLA liability in the context of this SDWA rulemaking. Nonetheless, EEI submits
that EPA should seek to provide as much clarity and certainty as possible in this context
to allow for the most expansive application of CERCLA‘s federally permitted release
exemption as appropriate to activities permitted under the proposed rules. Insofar as the
contents of a given CO 2 stream will be characterized for permitting purposes and, as the
permit may identify particular impurities in th e stream, the presence of such impurities
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―inappropriate hazardous releases.‖ Further, the application of the federally permitted

release exemption to the expected, intended composition of the injectate does not
inappropriately undermine other limits on the application of the federally permitted
release exemption that may exist, potentially including situations where an impurity not
contemplated by the permit writer i s introduced into the stream or where hazardous
substances in the injectate cause the incurrence of response costs where material permit
compliance has not been maintained.

Furthermore, as noted above, the preamble‘s discussion is based on the assumption that
CERCLA would be triggered in the first instance. As the Agency is aware, CERCLA
liability (at minimum for certain classes of potentially responsible parties) turns to a
significant extent on whether there has been ―disposal‖ of hazardous substances. As with

the RCRA issue, a determination of this issue is unnecessary from the perspective of
regulating injection and storage of CO 2 under the UIC program, and EEI urges the
Agency to avoid creating unnecessary hurdles for the successful commercial

deploy ment of CCS by assuming potential applications of other statutes that may
not come into play. EEI also encourages the Agency, pursuant to its authority
under RCRA and CERCLA, to examine possibilities for exemption or exclusion
from those programs.EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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K. Issues Related to Potentially Implicated Property Rights
Finally, although EEI recognizes the limits on EPA ‘s jurisdiction regard ing CCS projects,

our members appreciate the Agency raising for public comment issues related to property
rights that may be a ssociated with CO 2 injection and storage. While the importance of
EPA‘s rulemaking as an important step in providing clarity , flexibility and certainty for
project operators and investors cannot be overstated, CCS projects may not go forward in

the absenc e of resolution of property rights

- related issues.

Numerous property rights may be implicated by a given CCS project, including
ownership interests in the surface property to be used for injection equipment, the
subsurface property housing the injection well, the ―pore space‖ in which CO 2 will be

stored, and water rights and mineral interests that may exist in the area. Currently, an
entity interested in pursuing a CCS project is left to sort out who owns these various

interests, an exercise that is a c ombination of applicable state law

— to the extent any
applicable state law exists

— and site

- specific due diligence. 15 This exercise is likely
fraught with considerable uncertainty and expense and must be successfully completed in

order for a project to begin

. Commercial deployment of CCS technology may be

advanced considerably through legal mechanisms at the state and federal levels that

15 The proposed regulations would also require the pe rmittee to record a notice on the deed (or other relevant document) to the ―facility property‖ containing certain information. While EEI is not opposed to the concept of a deed notice, more clarity is needed in the regulations regarding how ―facility prop erty‖ is to be defined in order to better understand the scope of the proposed requirement. EEI recommends limiting ―facility property‖ to the area immediately surrounding the injection well.EEI Comments on Proposed Regulations for Geologic Storage of CO 2

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assist potential permittees in working through property rights

- related issues.
Available mechanisms may range from laws t hat clarify presumptions related to
ownership of various implicated interests 16 to provisions allowing for use of eminent
domain authority to obtain such interests. EEI supports further exploration and

discussion of these issues, and EPA‘s efforts to solic it public views will serve to raise
stakeholder and policy

- maker awareness regarding the importance of their resolution to
the successful commercial deployment of CCS.

16 See Wyoming‘s House Bill 89, http://legisweb.state.wy.us/2008/Enroll/HB0089.pdf
, which became law in July 2008.Letter ID: 0177 Commenter: Quinlan J. Shea Organization: Edison Electric Institute

Letter ID: 0177 Comment ID: 23549 Letter Lines: 76 to 91

Comment Code: 1330 1.1.3.1 Support use of GS in general Comment Code: 1420 1.2.1.1 Support the GS rulemaking

Comment: Executive Summary
Addressing climate change concerns require s a full commitment to development and commercial deployment of carbon capture a nd storage (CCS) technologies. EEI thus supports the development of clear, flexible and appropr iately tailored regulatory regimes that will facilitate development of and investment in CCS technology and projects while protecting against potential environmental risks. We applaud the Agency for taking this crucial first step toward establishing such a regime for geological sequestration (GS). Recognizing the significance of EPA‘s initiative in proposi ng regulations for the injection and storage of carbon dioxide (CO2) under the Safe Dri nking Water Act‘s (SDWA) Underground Injection Control (UIC) pr ogram, EEI appreciates the opportunity to provide input into the proce ss and to share our suggestions for changes to the proposed rule. Incorporation of our comments into the final rule will serve to promote the dual goals of promoting the commercialization of CCS technology and preventing potentially undesirable im pacts to drinking water resources.

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

Letter ID: 0177 Comment ID: 23550 Letter Lines: 93 to 99

Comment Code: 1200 1.1 General comments about the rulemaking

Comment: The potential environmental benefits of deploying CCS technologies, in terms of avoided or sequestered CO 2 emissions, should be we ighed against potential requirements that might dela y or compromise the ability to achieve commercialscale CCS. Key issues include balancing state and fede ral interests, appropriate characterization of CO2, appropriate risk ma nagement approaches and maintaining needed flexibility. To this end, EEI has provide d comments on nine

1areas of concern, briefly summarized below.

Individual Response: Please see the remainder of EPA's res ponses to this comment for further details. For additional information on EPA's final regulatory approach, pl ease see the final rule and preamble, including site se lection criteria, emergency and remedial response, and the adaptive rulemaking approach, as well as the rulemaking docket.

EPA clarifies that the intent of the GS rule is not to promote or encourag e the use of GS; rather, its purpose is to ensure consistency in permitting underground injection of CO2 at GS operations across the United States and pr ovide requirements to prevent endangerment of USDWs in anticipation of the eventual use of GS to reduce CO2 emissions.

Letter ID: 0177 Comment ID: 23551 Letter Lines: 100 to 109

Comment Code: 1310 1.1.2.4 Comments on other "out of scope" issues, e.g., pore space ownership Comment Code: 2100 1.6 Target Geologic Formations for GS Comment Code: 3100 2.1 Proposed Geologic Siting Requirements (40 CFR 146.83) Comment Code: 3120 2.1.2 Need to identify additional confining and containment zones (seeking comment)

Comment: EEI agrees that proper site selection is critical to a successf ul GS project and notes that it serves to minimize, if not eliminate, any potential threats to drinking water sources that CO2 injec tion and storage may pose. However, several of the proposed requirements are unnecessary from the perspective of protecting drinking water sources and would only serve to hamper GS projects from going forward, including limitations on receiving formations, potential alteration to the current definition of an underground source of drinking water (USDW), and the proposed grant of discre tion to the UIC program director to require permit applicants to identify s econdary containment/confining zones.

Individual Response: EPA retains the requirement to iden tify additional containment/confining zones, if required by the Di rector, as proposed (§146.83(b)). EPA acknowledges that such additional zones may not be needed in all circumst ances, and clarifies that this requirement is at the Director's discretion, based on his or her understanding of a part icular site. EPA believes that, in some situations, the presence of additional confining and containment zones above the primary (i.e., lowermost) confining zone can improve USDW protecti on. These layers could further impede vertical fluid movement and al low for pressure dissipation, and also provide additional sites for monitoring, mitigation, and re mediation. The Agency's decision is supported by commenters representing states, water associati ons, and an electric utility who assert that these requirements promote a flexible, risk-base d, site-specific approach to characterizing and permitting a site for GS projects, and are intende d to improve understanding of the project as a whole and promote better modeling of the site.
EPA believes that the Class VI requirements, incl uding the level of site characterization required

2under §§146.82 and 146.83, appropriately address the unique challenges posed by large-scale GS including large injection volumes, the relative buo yancy of CO2, its corrosivity in the presence of water, the potential presence of impurities in captured CO2, and its mobility within subsurface geologic formations.
EPA disagrees with the commenter that the GS rule requirements are unn ecessary to protect USDWs. The GS final rule builds upon l ongstanding programmatic requirements for underground injection that have be en in place since the 1980s and that are used to manage over 800,000 injection wells nationwide. These programma tic requirements are designed to prevent fluid movement into USDWs by ad dressing the potential pathways through which injected fluids can migrate into USDWs. EPA coordinated with Federal and non- Federal entities on GS and CCS to determine how best to tailor exis ting injection requireme nts to CO2 for GS.
Additionally, EPA clarifies that th e 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 formati ons 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 requiremen ts 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, ba salts, 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: 0177 Comment ID: 23552 Letter Lines: 111 to 115

Comment Code: 3530 2.2.3.1 AoR reevaluation fre quency (seeking comment)

Comment: EEI is concerned that a broad, uncons trained requirement for periodic reevaluation of the area of review (AOR) that would appl y in the same manner to all potential projec t sites is unwarranted as a matter of presumption. The schedule for AOR review should be a matter addressed through permitting and a plan for development and operation.

Individual Response: EPA is retaining the approach of setting a minimum fixed frequency for reevaluating the AoR but has, based on comment ers' input, changed the frequency from 10 years to at least every 5 years, as specified in §146.84(e). EPA agrees with commenters that sitespecific information is an important factor in determining an appropr iate AoR reevaluation frequency, and adds that the owner or operator' s AoR and corrective action plan must describe the minimum fixed frequency for reevaluating the AoR and the site-specific conditions on which this frequency is based.

Letter ID: 0177 Comment ID: 23553 Letter Lines: 117 to 123

Comment Code: 4490 2.4.5 Use of tracers and potential im pact on human health or ecosystems

3(seeking comment) Comment Code: 4670 2.6.7 Surface air monitoring and/or soil gas monitoring (seeking comment)

Comment: EEI is also concerned about proposed re quirements related to monitoring for potential CO2 movement and the use of tracers. Under the pr oposed regulations, the UIC program director woul d have discretion to requir e the use of tracers or surface air/soil gas monitoring "to detect m ovement of CO2 that could endanger a USDW." Tracers and surface ai r/soil gas monitoring should not be required, and may create an overly negative and unwarrant ed public percepti on regarding the safety of GS proj ects or tracers.
Individual Response: EPA believes that monitoring at a GS site is of critical importance to ensuring protection of USDWs from endangerm ent. Appropriately selected monitoring technologies, including surface air and soil-gas m onitoring will also serve to increase public confidence in the safety of GS and to assure the public that GS projects are being appropriately operated and monitored. The information gained through such monitoring will also enable permitting authorities to take appropriate steps to address any indication that USDWs may be endangered.
If surface monitoring were the only monitoring method employed to ensure USDW protection, direct correlation of CO2 at the surface with CO 2 in the subsurface might be difficult; however, when combined with information gathered thr ough other monitoring tech niques required of GS well owners and operators (e.g., monitoring wells , geophysical techniques ), air and soil gas monitoring may provide valuable data on the magnitude and location of a leak. The CO2 itself may serve as a tracer in the form of stable is otopes of carbon. For exam ple, anthropogenic CO2 is depleted in 13C compared to naturally occurring CO2.

EPA clarifies that surfac e air and soil gas monitoring are not required at all GS sites. However, the GS rule at §146.90(h) gives th e Director discretion to require surface air and/or soil gas monitoring as a means of iden tifying leaks that may pose a risk to USDWs and informing emergency notification of a Class VI owner or operator and UIC Director in the event of a USDW endangerment, pursuant to requirements at §146.91(c).
Regarding the use of tracers, EPA agrees that tracers may not be appropriate for all GS sites, but should be available as an option. For this reason, EPA does not requ ire the use of tracers at all GS sites; however, the Director has discretion to require their use if he/she determines that the use of tracers could improve monitoring of the site and enhance USDW protection from endangerment. The rule will also allow their use if proposed by the owner or operator and approved by the Director.

Letter ID: 0177 Comment ID: 23554 Letter Lines: 125 to 132

Comment Code: 5240 2.8.2.2 Post injection timeframe (seeking comment)

Comment: Another general area of concern discusse d in our comments i nvolves the proposed

4rule‘s provisions for closure and pos t-injection site care (PISC). In particular, EEI is concerned with th e proposed imposition of a PISC period spanning, as a matter of default, 50 years after cessati on of injection. Establishing a default time period for PISC , in particular one as lengthy as 50 years, is unnecessary and undesirable. Th e dual goals of protecting USDW and supporting the commercialization of CCS technology are far better served through a site-specific, perfor mance-based approach.

Individual Response: EPA agrees with commenters that th ere will be circumstances where it can be demonstrated in less than 50 years that the plume and pressure front no longer pose a risk of endangerment to USDWs. For this reason, the final GS regulation offers owners or operators flexibility regarding the duration of the PISC timeframe by: (1) allowing the Director discretion to shorten or lengthen the PISC timeframe during the post-injecti on period based on site-specific data, pursuant to requirements at §146.93(b); or (2) affording the Director discretion to allow a Class VI well owner or operator to demons trate, during the permitting process based on substantial data, that an alternative PISC tim eframe may be appropria te if it ensures nonendangerment of USDWs pursuant to requirements at §146.93(c).
EPA believes however, that to ensure USDW protection from enda ngerment, a default timeframe for post-injection site care will be necessary in most cases. The default 50 year post-injection site care timeframe represents a reasonable and prot ective monitoring period based on a review of research studies, industry reports, and existing environmental programs, and evaluation of public comments. EPA believes that a default post-injection site car e timeframe of 50 years, with flexibility to adjust the timeframe for a limited number of GS projects during the permitting process where substantial data exists to demonstrate that an alternative timeframe would be protective of USDWs, or based on data collected during the PISC period, is appropriate to address the range of sites where GS is anticipated to occur, to ac commodate site-specific circumstances and various geologic conditions, and addre sses commenters’ concerns, wh ile ensuring USDW protection. Both approaches will utilize si te-specific data, and be based on pressure monitoring and USDW impacts. EPA adds that the purpose of the GS rule is not to incentivize the use of GS; rather, the purpose of the GS rule is to ensure that, where GS is deployed, it is conducted in a manner that protects USDWs from endangerment.

Letter ID: 0177 Comment ID: 23555 Letter Lines: 134 to 143

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

Comment: The proposed financial assurance requirem ents, which exceed those currently in place for injection of hazardous wastes, ra ise significant concerns from the perspective of promoting CCS developmen t. EEI strongly urges the Agency to exercise care not to stigmatize geological CO2 storage by equating it in any way with hazardous waste disposal, as doi ng so could affect public perception

5(thereby potentially hindering the permitting process) as well as perceptions by financial institutions (thereby potentially hindering project financing). Further, it is crucial that any financia l assurance requirements be sufficiently flexible to take into account the partic ular risks associated with any given project.

Individual Response: EPA disagrees that the requirements on financial responsibility are overly stringent. The goal of financial resp onsibility is to ensure that fi nancial resources are available to prevent or remediate the endangerment of US DWs from improper plugging, remediation, and management of wells in the event that the owne r or operator experiences financial difficulties. EPA disagrees that the requirements equate GS we lls with Class I hazardous waste wells; rather, the financial responsibility requirements for Clas s VI wells are tailored to account for the unique nature of the long term GS of CO2, while provi ding flexibility for site specific implementation. EPA adds that the purpose of the GS rule is not to incentivize or promote GS; rather it is to ensure that where GS is deployed, it is done in a manner that ensures USDW protection from endangerment.

Letter ID: 0177 Comment ID: 23556 Letter Lines: 145 to 156

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

Comment: EEI is concerned with how existing CO2 in jection wells should be treated in the final regulations. The rule‘s grandfathe ring provision should be as expansive as possible while balancing the need fo r protection of USDW, and thus EEI recommends two principal modifications to the proposed provision. First, a preferable approach to limiting the scope of grandfathering only to construction requirements is to expand the scope of available grandfathering for existing wells, given that the wells were construc ted for injection of CO2 in the first instance. Further, rather than leave gr andfathering to the discretion of the program director, a preferable approach is to allow grandfathe ring as a default rule unless the program director dete rmines that, pursuant to specified criteria, the specific nature of the project renders it uns uitable for CO2 storage.
Individual Response: EPA agrees that many Class I, Cl ass II, and Class V experimental technology wells are designed and constructed to withstand exposure to CO2. The final GS rule provides for the construction of these wells to be grandfathered per §146.81(c), provided the owner or operator can demonstrate to the Director that the wells were en gineered and constructed to meet the requirements at §146.86(a) and ensure protection of USDWs, in lieu of requirements at §146.86(b) and §146.87(a). EPA clarifies that only the construction requirements are grandfathered and that all other Class VI requirements (reporting, monitoring, mechnical integrity testing, etc.) must be met fo llowing a determination under §146.81(c).
EPA disagrees that this grandfat hering should be a "default," or that other requirements should also be grandfathered. Following re-permitting of the well as Class VI, many of the unique factors of GS sites (e.g., increase d reservoir pressures associated with large volumes of stored

6CO2 and the corrosivity of CO2 in the presence of water) will result in an increased risk profile, warranting the specific requirements in the final GS rule. Therefore, following re-permitting as Class VI wells, these projects w ould be subject to the operatio nal, MIT, monitoring, reporting, plugging, and post-injection site care and site closure requirements in the final GS rule. See the discussion of EPA's final regulatory approach in the preamble to th e GS rule for additional detail on these requirements.

Letter ID: 0177 Comment ID: 23557 Letter Lines: 158 to 166

Comment Code: 5500 2.1 Comments on Involving the Public in Permitting Decisions

Comment: EEI shares the Agency‘s view that ac curate public perception and increased understanding of CCS technology are critical to its success at the commercial level. To that end, EEI supports the de velopment of regulations and policies that will serve to educate the public a nd provide for appropriate public input on projects. However, EEI is concerned th at imposition of pub lic participation provisions like those currently applicable under the Resource Conservation and Recovery Act (RCRA) are unnecessary and undesirable for GS projects. EEI encourages the Agency to craft provis ions that support decision-making based upon sound science and do not unduly hamper siting decisions.

Individual Response: The Agency believes that public particip ation is an important part of the UIC permitting process and wants to ensure wi de access to decision-making processes and information on projects that may affect the pub lic. GS permitting authorities must follow the existing public participat ion requirements for UIC permits as specified in 40 CFR Part 124. These regulations lay out the pr ocedures for decision making and include requirements such as requiring the Director to notify th e public regarding the availabili ty of the draft permit and allow him or her to request a public hearing on the draft permit. EPA encourages operators and permitting agencies to begin involving the public by providing information as early in the process as possible. Encouraging public part icipation allows the permitting authority to understand public viewpoints, preferences, and con cerns about the project, which might help avoid public misperceptions about th e nature and safety of GS projects and forestall resistance later in the permitting effort.
EPA clarifies that RCRA public participation pr ovisions do not apply to Class VI permits.

Letter ID: 0177 Comment ID: 23558 Letter Lines: 168 to 175

Comment Code: 5600 2.11 Comments related to UIC Program primacy for Class VI wells Comment Code: 5610 2.11.1 Allowing partial primacy for Class VI wells (seeking comment)

Comment: Regarding whether states should be permitte d to seek primacy for Class VI wells, EEI agrees that states and tribes shou ld play a key role in managing CCS projects going forward. Further, many stat es are moving ahead with developing their own legislation and re gulations related to CCS activities. Allowing those

7states to take on primacy for Class VI wells (in particular, allowing them to take on primacy for Class VI without assu ming the regulatory burden that may be associated with other well classes) will help ensure that they are given credit and recognition for their groundbreaking work on CCS.

Individual Response: EPA agrees that states should be al lowed to obtain primacy for Class VI wells independently of other well classes, and wi ll allow independent primacy for Class VI wells under §145.1(i) of the final GS rule. In the past , EPA has not accepted UIC primacy applications for individual well classes unde r Section 1422 of SDWA. In other words, if a State wanted primacy for Class I wells, the State would also ne ed to accept responsibilit y for Class III, IV, and V wells. This policy has been in place since the initiation of the UIC Program in the early 1980s and was intended to encourage states to take full responsibility fo r UIC programs, avoid duplication of efforts, and provide for administrative efficiencies.
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. 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 leve l (but outside UIC author ity) to provide a more comprehensive CCS management approach.
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 believe s 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.
EPA also believes that allowing states to apply only for Class VI primacy will shorten the primacy approval process for states. EPA's willingness to accept independent primacy applications for Class VI wells represents a shift in its longstandi ng policy of discouraging "partial primacy." It is very important to note that this shift in policy allowing for Class VI primacy does not apply to any other well Cl ass under Section 1422. EPA will continue to discourage applications for pa rtial primacy for all other well types under Section 1422.

EPA clarifies that states should be able to obtain primacy for Cla ss VI wells independent of other well classes provided they devel op regulations that are at leas t as stringent as the minimum Federal requirements (e.g., permitting, inspec tion, operation, monitoring, and recordkeeping requirements) in the final GS rule. EPA believes that existing programs can adapt their expertise to the new requirements for Class VI wells and w ill be able to develop a primacy application for Class VI wells under section 1422 of SDWA to en sure that their GS programs integrate into national climate change priorities an d protect USDWs from endangerment.

8EPA recognizes that some states have already begun legislative e fforts that are wider in scope than the Federal GS rule and believes that allo wing Class VI primacy (i ndependent of other well classes) may encourage states to take responsibility for implemen tation of a more comprehensive approach to managing CCS proj ects (e.g., capture, transportation, and geologic sequestration).

Letter ID: 0177 Comment ID: 23559 Letter Lines: 177 to 190

Comment Code: 1630 1.3.3 RCRA/hazardous waste i ssues (seeking comment) Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

Comment: Finally, EEI is concerned about the potenti al application to CCS activities of environmental laws that were, without excep tion, not intended to apply to CCS or even crafted with CCS in mind and that could impose significant obligations and potential liabilities not only on projec t operators, but also potentially on other entities in the CO2 ch ain, such as entities pr oducing the CO2 that is ultimately injected. These laws include the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund) and RCRA. EEI urges EPA to evaluate carefully any propos ed treatment of these two laws (or others) that it may be considering under th e Class VI regulations to ensure that any such treatment is necessary and does not serve as an unintended springboard for hampering the successful commercializ ation of CCS. EEI submits that any characterization of potentially hazardous constituents in CO2 injectate may be addressed as part of the UIC permitting pr ocess without addressing any potential RCRA jurisdictional issues.

Individual Response: First, EPA notes that the GS rule is not promulgated under either the RCRA or CERCLA statutes, and the applicability of those stat utes will not be determined under the SDWA or the terms of the GS rule, but rather according to those statutes themselves and any implementing regulations that may apply.
EPA received many comments regarding the applicab ility of the RCRA regulations and statute to CO2 streams that are geologically sequestered under the final Cl ass VI UIC well requirements. As a result, EPA has decided to initiate a sepa rate proposed rulemaking specifically to examine the issue of RCRA applicability to CO2 stream s 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 pa rt 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 propose d 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.
With respect to CERCLA, EPA clarifies that CO 2 itself is not listed as a hazardous substance under CERCLA; however, the CO2 stream may cont ain a listed hazardous substance (such as

9mercury) or may mobilize substances in the s ubsurface that could react with ground water to produce listed hazardous substances (such as sulf uric acid). Whether such substances may result in CERCLA liability from a sequestration facili ty depends entirely on the composition of the specific CO2 stream and the environmental medi a 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 ensu re that they prevent potential releases from the well which are outside the scope of the Class VI permit.

Letter ID: 0177 Comment ID: 23560 Letter Lines: 194 to 202 ; 1256 to 1259

Comment Code: 1000 1. General and Administrative Comments

Comment: The Edison Electric Institute (EEI) [F N1] submits these comments on the Environmental Protection Agency (EPA or Agency)‘s proposed regulations for the injection and geologic stor age (GS) of carbon dioxide (CO2) under the authority of the Safe Drinking Water Act (SDWA) 's underground injection control (UIC) program, issued in July 2008 (Docket ID No. EPA-HQ-OW-2008-0390), 73 Fed. Reg. 43492 (July 25, 2008). EEI submitted pre-rulemaking comments to the Agency on May 15, 2008, and provided oral and written testimony at EPA‘s September 30, 2008, public hearing on the proposed rules. These comments and testimony are incorporated by re ference herein.

[FN1] EEI is the national association of shareholder-owned electric utilities in the U.S. Our members represent about 70 percent of the U.S. electric power industry and serve 95 percent of the u ltimate customers in the industry‘s investor-owned segment.

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

Letter ID: 0177 Comment ID: 23561 Letter Lines: 205 to 234

Comment Code: 1330 1.1.3.1 Support use of GS in general Comment Code: 1420 1.2.1.1 Support the GS rulemaking

Comment: I. General Principles Applicable To EPA's GS Regulatory Effort
As we noted in our prior comments, addre ssing climate change concerns requires a full commitment to development and comme rcial deployment of carbon capture and storage (CCS) technologies. To put the n eed for this commitment in context, consider that electricity generation is responsible for 34 percent of greenhouse gas (GHG) emissions and 40 percent of CO2 in the U.S. The Energy Information Administration projects ne t electric demand will incr ease 30 percent by 2030,

10even after taking into account energy -efficiency improvements. New and replacement power plant capacity to meet this increased demand is projected to total 150,000 megaWatts. Coal is one of the primary sources of baseload generation in the U.S. and will continue to be an important fuel for generating electricity through 2030 because it is compar atively affordable and abundant in this country. Given this backdrop, the pot ential environmental benefits of CCS - in terms of reduced or avoided CO2 emi ssions - are substantia l. Consequently, EEI and our members see CCS as a critical element in the full portfolio of options needed not only to reduce CO2 emi ssions, but also to ensure continued affordable and reliable electric servi ce to customers throughout the nation.
EEI thus supports the development of cl ear, flexible and appropriately tailored regulatory regimes that will facilitate development of and investment in CCS technology and projects while protecting against potential environmental risks. We applaud the Agency for taking this crucial first step toward establishing such a regime for GS. Recognizing the significance of EPA' s initiative in proposing regulations for the injection a nd storage of CO2 under SDWA's UIC program, EEI appreciates the opportunity to provide input into the process and to share our suggestions for changes to the proposed rules. Incorporation of our comments into the final rules will serve to promote the dual goals of promoting the commercialization of CCS technology and preventing potentially undesirable impacts to dr inking water resources.

Individual Response: EPA believes that the creation of a new injection well class (VI) under the existing UIC Program is necessary to enable the use of GS as a climate change mitigation technology in a manner that protects USDWs from endangerment. EPA agrees that the UIC Program, under the authority of the SDWA, provides a strong fram ework for regulating injection of CO2 for GS and adds that the GS regulati on tailors the UIC requirements to address the unique issues associated with large-scale GS including large injection volumes, the relative buoyancy of CO2, its corrosivity in the presence of water, the potenti al presence of impurities in captured CO2, and its mobility within subsurface geologic formations.
EPA agrees that the implementation of the GS rule in a manner that ensures protection of USDWs from endangerment is impo rtant to establishing a foundation for further advances in the field of CO2 GS. EPA acknowledges the need for regulatory certaint y: the final GS requirements provide a level of certainty by setting forth unique requirement s for GS. These requirements include: the tailored AoR delin eation process (per §146.84), the types of monitoring appropriate to GS projects (per §146.90), and the post- injection site care pr ocess (per §146.93).
While EPA agrees with commenters that a stab le, predictable, nati onally consistent, and workable regulatory framework is important, EPA st resses that the focus of the GS rule is to ensure that, where GS is deployed, it is conduc ted in a manner that protects USDWs from endangerment.

Letter ID: 0177 Comment ID: 23562 Letter Lines: 236 to 249 ; 1261 to 1261

11Comment Code: 1200 1.1 General comments about the rulemaking Comment Code: 1330 1.1.3.1 Support use of GS in general

Comment: EEI's views are guided by several general principles applicable to any federal legislative or regulatory e ffort on CCS, which are desc ribed below and discussed more fully in the context of specific comments:
1. Promotion of CCS. As EPA acknowledges in the preamble, CCS is a key climate change mitigation technology, and the propos ed rules are intended to support its development.[FN2] Likewise, any EPA regulat ory regime related to CCS developed under the authority of SDWA (or any othe r statute) should be designed to facilitate, and not unduly hinder, the successf ul commercial-scale deployment of CCS. The potential environmental benefits of such deployment in terms of reduced or avoided GHG emissions s hould be weighed against potential requirements that might dela y or compromise the ability to achieve commercialscale CCS. Issues the Agency should consid er in connection with this principle include:
[FN2] 73 Fed. Reg. 43495, col.1.

Individual Response: EPA clarifies that the intent of the GS rule is not to promote or encourage the use of GS; rather, its purpose is to ensure consistency in permitting underground injection of CO2 at GS operations across the United Stat es and provide requirements to prevent endangerment of USDWs in anticipation of the eventual use of GS to reduce CO2 emissions. Please see the remainder of EPA's responses to th is comment for further details. For additional information on EPA's final regulatory approach, pl ease see the final rule and preamble as well as the rulemaking docket.

Letter ID: 0177 Comment ID: 23563 Letter Lines: 251 to 254

Comment Code: 1200 1.1 General comments about the rulemaking

Comment: a. Reasonable regulatory approaches. Re gulations proposed for injection and storage should be carefull y tailored to fit injection and storage projects and the true nature of the risks that th ey may pose, but should not be unduly burdensome for the regulated community. In particular, the following issues

Individual Response: EPA believes 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.

Letter ID: 0177 Comment ID: 23564 Letter Lines: 257 to 262

Comment Code: 1480 1.2.2.2.2 CO2 is not a pollutant

12Comment: i. Appropriate characterization of CO2. It is critical that any regulation under the UIC program does not unnecessar ily characterize CO2 as a waste, pollutant or contaminant or otherwis e unduly stigmatize the injection and geologic storage of CO2. While it is appropriate to consider the actual characteristics of CO2 and tailor regulations accordingly, unwarranted characterization of CO2 as a hazardous wa ste, for example, should be avoided.

Individual Response: EPA clarifies that the GS rule does not address the status of CO2 as either a pollutant or a commodity. In addition, whether or not a fluid could be sold on the market as a commodity does not override EPA's authority under the SDWA to protect USDWs from endangerment.
Under the SDWA, the injection of any "fluid" is subject to the requirements of the UIC program. "Fluid" is defined under 40 CFR 144.3 as any mate rial or substance which flows or moves, whether in a semisolid, liquid, slud ge, gas or other form or state, and it includes liquids, gases, and semisolids (i.e., slurries) in jected into the subsurface.
Under §146.82(a)(7), owners or operators of GS wells must characterize their CO2 stream as part of their permit application. If the injectate is de termined to meet the definition of a hazardous waste under RCRA, and as defined in 40 CFR Part 261, the stringent UIC Class I hazardous waste requirements for injection of hazardous waste apply. Thus, injection of corrosive CO2 into Class VI wells is prohibited. In addition, owners or operators must peri odically monitor their injectate throughout injecti on operations under §146.90(a).

EPA stresses that the focus of the GS rule is to ensure that, where GS is deployed, it is conducted in a manner that protects USDWs.

Letter ID: 0177 Comment ID: 23565 Letter Lines: 264 to 269

Comment Code: 1600 1.3 Risk Associated with CO2 GS

Comment: ii. Appropriate characteri zation of potential risks. Similarly, any regulation should be based upon an accurate character ization of the poten tial risks posed by GS of CO2 and be tailored accordingly to address those potential risks, not only to ensure appropriate protection of underground sources of drinking water (USDW), but also to avoid unnecessary regul ations that may hamper CCS projects from going forward or call into question the general safety of CO2 storage.

Individual Response: EPA agrees that risk is an important aspect of setting requirements for GS, and expects that the tailor ed permitting, siting, construction, operation, monitoring, and postinjection site care requirements in the GS rule wi ll prevent leakage from injection formations and protect USDWs. EPA does not belie ve that the GS regulation stigma tizes CO2 injection or that it mischaracterizes any potential risks. EPA believe s that injecting large volumes of CO2 for GS poses unique challenges that, if not properly managed, could endanger drinking water sources and have other adverse impacts. However, the fina l, tailored, Class VI requirements address the

13large volumes of CO2 injected, its buoyancy, potential corrosivity in the presence of water, and potential impurities in the CO2 stream.
EPA believes that building upon th e existing UIC requirements (e.g., Class I and Class II well requirements) to develop the Class VI GS regulation provides a foundation for protecting USDWs based on successful field experience, and lessons learned about CO2 injection in other applications. Class I well owners or operators ha ve experience with site characterization, well construction, and monitoring procedures and technol ogies that are applicab le to Class VI wells. Class II ER well operators have experience with managing the unique properties of CO2. To successfully flood a hydrocarbon field with CO2 during an ER operation, the behavior of injected CO2 must be well understood. At the Weyburn CO2-ER project in Saskatchewan, the distribution, phase, and interaction of injected fluids with native fluids were modeled and monitored to ensure maximum recovery (of CO2) and target circulation in a thin subsurface formation (Wilson and Monea, 2004).
EPA clarifies that the GS rule does not promote GS . The focus of the GS rule is to ensure that, where GS is deployed, it is conducted in a manner that is protective of USDWs.

Letter ID: 0177 Comment ID: 23566 Letter Lines: 271 to 279

Comment Code: 5240 2.8.2.2 Post injection timeframe (seeking comment) Comment Code: 5430 2.9.1 Comments on proposed financia l responsibility requirements (40 CFR 146.85)

Comment: iii. Appropriate risk management a pproaches. The Agency should avoid development of risk management approach es that discourage CCS deployment or create additional uncertainty, and should seek where possible to bring greater certainty to the long-term obligations a nd risks associated wi th a GS project. For example, requiring financial assuran ce for potential liabilities more than 50 years in the future may deter and even prevent investment in CCS projects. Post-injection monitoring and financia l assurance requirements are both important, but should not undermine the goals of the regulations, particularly when potential risks decrease substan tially after injection is complete.

Individual Response: EPA adds that the purpose of the GS ru le is not to incentivize the use of GS; rather, the purpose of the GS rule is to ensu re that, where GS is deployed, it is conducted in a manner that protects USDWs from endangerment.
EPA disagrees that the requirements for financial responsibility are overly stringent. The goal of financial responsibility is to ensure that fi nancial 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 th roughout the life of the project.
EPA believes that minimum financial responsibi lity requirements are necessary to hold well owners or operators accountable for the safe operation and closure of the well to avoid

14endangerment of USDWs while avoiding expense and risk to the public.
Regarding the need for financial assurance for a 50-year post-injection period, EPA believes that to ensure USDW protection from endangerment, a default timeframe for post-injection site care is necessary. A 50 year post-injection site care timeframe represents a reasonable and protective monitoring period based on a review of resear ch studies, industry reports, and existing environmental programs, and ev aluation of public comments.
EPA agrees with commenters that there will be circumstances where it can be demonstrated in less than 50 years that the plume and pressure front no longe r pose a risk of endangerment to USDWs. For this reason, the final GS regulation o ffers owners or operators flexibility regarding the duration of the PISC timefra me by: (1) allowing the Direct or discretion to shorten or lengthen the PISC timeframe during the post-in jection period based on site-specific data, pursuant to requirements at §146.93(b) ; or (2) affording the Director discretion to allow a Class VI well owner or operator to demonstrate, during the permitting process based on substantial data, that an alternative PISC timeframe may be appropriate if it ensu res non-endangerment of USDWs pursuant to requirements at §146.93(c).
EPA believes that a default post-injection site car e timeframe of 50 years, with flexibility to adjust the timeframe for a limited number of GS projects during the permitting process where substantial data exists to demonstrate that an alternative timeframe would be protective of USDWs, or based on data collected during the PISC period, is appropriate to address the range of sites where GS is anticipated to occur, to ac commodate site-specific circumstances and various geologic conditions, and addre sses commenters’ concerns, wh ile ensuring USDW protection. Both approaches will utilize si te-specific data, and be based on pressure monitoring and USDW impacts.

Letter ID: 0177 Comment ID: 23567 Letter Lines: 281 to 286

Comment Code: 3100 2.1 Proposed Geologic Siting Requirements (40 CFR 146.83)

Comment: It is also important to keep in mind th e enormous extent to which proper site characterization will minimize any potential risks posed by CO2 storage. Proper site characterization is the most eff ective risk management tool for CCS. Regulations tailored to ensure proper s ite selection will in turn minimize the need for regulations crafted to respond to risks that, in such a context, would be extremely unlikely to occur.

Individual Response: The Agency agrees with the commenter about the importance of proper site selection and believes that the site character ization requirements in th e GS rule are essential to ensuring that a GS project will not endange r USDWs. The GS injection requirements, under SDWA authority, ensure protec tion of USDWs from endangerment through assessment of the suitability of an injection zone (146.83), appr opriate site characteriz ation (§146.82), and area of review evaluation (§146.84) among other requirements. The GS requirements are designed to ensure protection of USDWs from endangerment by requiring that inject ion wells are not only

15sited properly, but permitted, constructed, operate d, monitored, and plugged in a manner that does not endanger USDWs.

Letter ID: 0177 Comment ID: 23568 Letter Lines: 288 to 299

Comment Code: 1852 1.4.2.1 DOE Regional Carbon Seque stration Partnerships Comment Code: 2400 1.8 Comments on EPA's adaptive rulemaking process

Comment: iv. Maintaining ability to incorporate new information. Any regulatory regime must be sufficiently flexible to adap t to new information. Indeed, regulation of ongoing GS "pilot" projects under the exis ting UIC regulations for Class I or V wells has been positive. EPA must take great care moving to a new or different regulatory framework while projects designed to gain more technological certainty, as well as the increased certainty about appropriate risk management solutions for CCS proj ects that would likely follow, are ongoing. Given that EPA has decided to move forward with GS-specific regulations, EEI urges the Agency to deve lop a framework that can consider and, as appropriate, incorporate data devel oped through CCS demonstration projects and the activities of the Department of Energy‘s Re gional Carbon Sequestration Partnerships.

Individual Response: EPA agrees that an adaptive approach to the UIC GS rulemaking is appropriate. The Agency plans to use such an appr oach to ensure that USDWs are protected from endangerment and meet the potentially fast p ace of GS deployment. EPA believes that an adaptive approach will allow regulatory developmen t to proceed in time to meet the current and future demand for Class VI permits while recognizi ng the need to: continue to gather data from pilot projects and other research as it becomes available; and to enhanc e understanding of the technical and administrative asp ects of GS deployment, operati on, and technology developments.
EPA plans, every six years, to collect and review data on GS projects, including the DOE Regional Carbon Sequestration Part nership projects, to determ ine whether the appropriate amount and types of information and appropria te documentation are being collected, and to determine if modifications to the requir ements are appropriate or necessary.

Letter ID: 0177 Comment ID: 23569 Letter Lines: 301 to 305

Comment Code: 1530 1.2.3.1 State regulatory effort s on GS (seeking comment)

Comment: b. Balancing state and federal interest s. The Agency‘s UIC rulemaking is occurring in the context of the development of an overall framework for CCS projects, one that must properly balance fe deral and state roles. As to the UIC rules, EPA should consider the significan t interests and experience of the states in developing regulations.

Individual Response: EPA clarifies that the SDWA doe s not provide EPA with specific

16authority to develop UIC regulations for GS that are not directly rela ted to protecting USDWs from endangerment; thus EPA does not have author ity under the SDWA to address issues related to CO2 pipelines, sub-surface property rights, and capture and transport of CO2.
EPA acknowledges the expertise of states and tribes, and also recognizes that some are developing statutory fram eworks, regulations, technical guidan ce, and strategies for addressing broader issues related to CCS a nd GS, and encourages states to seek primacy for Class VI wells to further these efforts. States can use multip le authorities beyond those afforded under the SDWA and UIC regulations, incl uding laws and policies addr essing surface access and land rights, unitization of fields, por e space ownership, mineral rights, worker safety and emergency preparedness, and maximization of state oil and gas resource exploitation. EPA plans to work closely with states and tribes as they develop Class VI primacy pr ograms in this broader context. EPA adds that states may adopt more stringent standards for Class VI wells than the Federal requirements.

Letter ID: 0177 Comment ID: 23570 Letter Lines: 307 to 315

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

Comment: 2. Avoidance of one-size-f its-all approaches. As curre ntly proposed, EPA‘s regulations contain a number of default provisions that would apply universally to projects, at least as a matter of initial presumption. Rather than imposing default provisions, those portions of th e rulemaking that address inherently site-specific issues should allow fo r site-specific, performance-based determinations as part of the permitti ng process. The geologic variability involved in different conceiva ble GS projects needs to be taken into account in issues ranging from site characterization to area of review (AOR) to containment requirements.

Individual Response: EPA 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 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 approp riate technologies for a particul ar project. Please see the final rule and preamble for additional information on EPA's final regulatory approach.

Letter ID: 0177 Comment ID: 23571 Letter Lines: 317 to 323

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

Comment: 3. Importance of limits on discretion. EEI recognizes that in order to allow for effective site-specific determinations and to maintain essential regulatory

17flexibility, some amount of discretion must be vested in the UIC program director. At the same time, such disc retion should be bounded by the inclusion of relevant and appropriate considerati ons for making necessary determinations. In general, the rules should establish w ith sufficient clarity the factors to be taken into account and leave the precise determinations to the permit process.

Individual Response: EPA is developing guidances for Stat es that describe the process of applying for and receiving primary enforcement au thority (primacy) for GS Class VI wells under Section 1422 of SDWA, as well as the technical and administrative issues on developing GS regulations that are the equivalent of minimum federal criteria and re quirements. The guidance will describe areas of Directorial discretion and considerations for how that discretion would be exercised. This guidance will be available on EPA’s website at http://water.epa.gov/type/groundwater /uic/wells_sequestration.cfm.

Letter ID: 0177 Comment ID: 23572 Letter Lines: 325 to 333 ; 1263 to 1263

Comment Code: 1400 1.2 Comments on EPA's Authority to Regulate Injection of CO2

Comment: 4. Limitations on existing authority. The Agency should adhere to its limited authority at this juncture under SDWA a nd should avoid exceeding that authority. The value of developing a clear regulatory regime will be undermined if that regime is potentially unstable or subject to lengthy delays because of potential susceptibility to attack for failure to adhere to the Agency‘s authority. Moreover, as EPA notes in the preamble, SDWA does not provide EPA "authority to develop regulations for all areas relate d to GS." More specifically, EPA further states that it "is not proposing regulation for CO2 under the Clean Air Act [ ] in this proposed rulemaking."[FN3]

[FN3] Id. at 43495.

Individual Response: The EPA acknowledges the comment a nd believes the final rulemaking falls within EPA’s authority under the SDWA. EP A clarifies that the SDWA provides EPA with the authority to develop federal minimum requi rements for underground injection, such as GS, that are directly related to protecting USDWs from endangerm ent. Thus, EPA does not have authority under the SDWA to addr ess other general issues related to CCS, such as capture and transportation. EPA clarifies that the GS rule does not address the status of CO2 as a pollutant or commodity. The UIC requirements regul ate the injection of fluids.

Letter ID: 0177 Comment ID: 23573 Letter Lines: 335 to 342

Comment Code: 1200 1.1 General comments about the rulemaking Comment Code: 1400 1.2 Comments on EPA's Authority to Regulate Injection of CO2

Comment: 5. Anticipation of related developments. On the other hand, the Agency should strive to anticipate future statutory an d regulatory developments in the climate

18change arena so that any rulemaking has a reasonable chance of melding with such developments. For instance, while it is clear that SDWA does not authorize the Agency to develop rules that specify any kind of "credit" syst em for capture and storage of CO2, the Agency can and shoul d consider how its UIC rulemaking will fit with foreseeable features of potentia l future regimes and how rules can be drafted to complement such feat ures to the extent possible.

Individual Response: EPA acknowledges that GS falls within the broader context of CCS and the need for regulatory clarity to ensure that USDWs are protected from endangerment. In developing the final GS rule, the Office of Water coordinated with other Agency program offices and across federal agencies (e.g., with the Depart ment of Energy; United States Geological Survey; Bureau of Ocean Energy Management, Regulation, and Enforcement, formerly the Minerals Management Service; Bureau of Land Ma nagement). The Agency continues to evaluate areas of potential applicability of other Federa l environmental statutes including, but not limited to: the Clean Air Act; the Resource Conserva tion and Recovery Act; the Comprehensive Environmental Response, Compensation, and Liabili ty Act; and the Marine Protection, Research and Sanctuaries Act to various aspects of GS a nd CCS. The Agency will continue to coordinate on GS and CCS related issues to minimize redunda ncy and maximize efficiencies for owners or operators. For additional information, please s ee the discussion entitled "How Does This Rulemaking Relate to Other Federal Authorities and GS and CCS Activities?" in the preamble to the final GS rule.

Letter ID: 0177 Comment ID: 23574 Letter Lines: 344 to 365

Comment Code: 1000 1. General and Administrative Comments

Comment: With the above general prin ciples in mind, EEI provides below specific comments on several aspects of the proposed rule s, focusing in particular on the following categories of issues:
- Siting, including the definition of US DW, and secondary containment.
- AOR and provisions for period ic reevaluation thereof.
- Monitoring and use of tracers.
- Closure and post-injection site care.

- Financial assurance.
- Grandfathering.
- Public participation.
- State primacy.

19- Potential issues relating to the char acterization of CO2 and arising under other environmental laws.

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 site selection criteria, AoR, mon itoring, financial responsibility, and state primacy, please see the final rule and preamble as well as the rulemaking docket. Also, please see the discussion, “How Does This Rulemaking Relate to the Greenhouse Gas (GHG) Reporting Program?” in the preamble.

Letter ID: 0177 Comment ID: 23575 Letter Lines: 367 to 370

Comment Code: 1310 1.1.2.4 Comments on other "out of scope" issues, e.g., pore space ownership

Comment: Further, although EEI appreciates that i ssues related to property rights and pore space ownership that may be associ ated with injection and storage are outside the scope of the Agency‘s rule making, comments are provided on these issues as well, at the Agency‘s request.

Individual Response: EPA clarifies that pore space ownership and surface and subsurface property and mineral rights are outside of the scope of the Class VI GS rulemaking, which focuses on ensuring consistency in permitting underground injection of CO2 at GS operations across the United States and pr ovide requirements to prevent endangerment of USDWs in anticipation of the eventual use of GS to reduce CO2 emissions. EP A clarifies that these issues are under the purview of states a nd any of these issues, as they relate to GS, will need to be addressed though stat e regulations.

Letter ID: 0177 Comment ID: 23576 Letter Lines: 373 to 383

Comment Code: 2020 1.5.1 Support Class VI designation

Comment: II. Specific Comments

A. General Comments on Class VI Approach
EPA‘s proposed rules would create a new class of injection wells--Class VI--for CO2 injection and storage. EEI is genera lly supportive of this approach, as it allows regulations to be tailored to fit the needs of such projects and helps to avoid potential issues of inaccurate pub lic perception that might arise from including it within an existing well cla ss (in particular Class I). As is discussed throughout these comments, EEI vi ews accurate public perception of the nature of CCS as critical to its successful deployment.

Individual Response: EPA agrees that tailored requirements for Class VI wells are necessary to

20address the unique nature of in jecting large volumes of CO2 a nd to ensure that USDWs are protected from endangerment. The GS rule c ontains tailored requirements for the permitting, geologic site characterization, AoR and corre ctive action, well construction, operation, mechanical integrity testing, monitoring, well plu gging, post-injection site care, and site closure of GS wells that directly addre ss issues unique to the nature of large-scale CO2 injection for GS.

Letter ID: 0177 Comment ID: 23577 Letter Lines: 385 to 394

Comment Code: 3100 2.1 Proposed Geologic Siting Requirements (40 CFR 146.83)

Comment: B. Siting and Secondary Containment
Our first area of concern relates to pr oposed provisions for the siting of GS projects, including requirements related to project site geology and permissible receiving formations. EEI agrees that pr oper site selection is critical to a successful GS project and not es that it serves to mini mize, if not eliminate, any potential threats to drinking water s ources that CO2 injection and storage may pose. However, several of the proposed requirements are unnecessary from the perspective of protecting drinking water sources and would only serve to hamper GS projects from going forward.

Individual Response: EPA disagrees that any of these pr otective requirements are unnecessary, and clarifies believes that a de tailed geological site character ization (required under §146.82) is essential to evaluating the presence and adequacy of the various geologic features necessary to receive and confine injected CO2 for GS. The requirements for geol ogic site characterization are based on a long standing UIC regulatory framewor k developed to addre ss specific risks to USDWs posed by injection. The Class VI GS re quirements are tailored so that they are appropriate for the unique nature of injecting la rge volumes of CO2 into a variety of geological formations for long-term storage.
The mission of the UIC program and the goal of the GS regulation is to protect USDWs from endangerment, and every aspect of the GS rule is designed toward th at end. Therefore, EPA disagrees that any of these pr otective requirements are unnecessa ry, and clarifies that waiving any of the requirements would not be acceptable. The GS regulation allows flexibility where appropriate. Certain requirements (e.g., the need to characterize additiona l confining layers) are at the Director's discretion (§146.83(b)), based on his or her understanding of a particular site.

Letter ID: 0177 Comment ID: 23578 Letter Lines: 396 to 457 ; 1265 to 1273 ; 1275 to 1277

Comment Code: 2100 1.6 Target Geologic Formations for GS Comment Code: 4324 2.4.4.1.2 Comments opposed to requiring injection below the lowermost USDW

Comment: The first such requirement relates to the Agency‘s proposed limitations on receiving formations. The proposed regulat ions would permit project operators

21to inject and store CO2 only beneath th e lowermost formation containing USDW. Such a categorical limitation on receiving formations is unnecessary, unduly burdensome and undesirable for several reasons:
- Unnecessary for protection of USDW unde r the UIC program: As a preliminary matter, categorically eliminating a body of potential receiving formations is simply unnecessary in light of the over all function of the UIC rules. As a general proposition, UIC permit applicants must demonstrate that projects will not endanger USDW; permit applicants fo r CO2 injection and storage projects would be held to the same standard.[FN4] The proposed rules w ould also require permit applicants to demonstrate that the project will be sited in areas with a "suitable geologic system"--consisting of an injection zone of sufficient areal extent, thickness, porosity and permeabil ity to receive the total anticipated volume of injectate--and a confining zone free of tr ansmissible faults or fractures and sufficient to contain the injected stream as well as any displaced fluids, considering the proposed maximum pressures and volumes of injection, without causing fracturing. Thus, the suita bility of the receiving formation and the project‘s general protectiveness of USDW will necessarily be evaluated as a part of each GS permitting exercise.
- All projects (and receiving formations) are not created equal: Each potential project will possess its own unique char acteristics, as will each potential project site and receiving formation. A blanket requirement excluding a class of potential receiving forma tions imposed outside the context of actual projects is unnecessary, as for any given receiving formation or any given project, there may exist other characteristics that serv e to provide equivalent or greater protection for USDW.
- Likely to create public percepti on issues: Currently, a limitation on injections to only those formations below the lowermost USDW is in place solely for Class I hazardous waste injection wells. The properties of CO2, while unique in some respects, do not require or warrant such heightened treatment. Imposing a requirement currently in place only for hazardous waste would be likely to create the misperception that CO2 injection wells are analogous to hazardous waste injection wells and thus carry analogous risks. Accurate public perceptions about the nature of CO2 and th e true risks associated with properly sited and executed storage projects ar e crucial to the su ccess of CCS.
- Likely to hamper commerci al deployment of CCS, par ticularly for enhanced oil recovery (EOR) first actors: Much of th e experience and expertise associated with injection and storage of CO2 that currently exists is the result of several decades of experience with EOR and enha nced gas recovery (EGR) operations through Class II UIC permits. As CCS gain s momentum as a GHG mitigation tool, EOR operators may provide not only this we alth of experience a nd expertise, but also the first push toward commercial CCS by seeking to convert existing EOR operations to purely storage operations to take advantage of whatever credits

22may eventually become available under climate change legislation or regulation.[FN5] Some of t hose operations inject CO2 in to formations that are above the lowermost USDW. Under the regu lations currently proposed, however, existing Class II wells--as well existing CCS pilot projects permitted as either Class I or V wells--would be eligible only for the most limited scope of "grandfathering": the proposed grandf athering provision, discussed further below, would cover only construction requirements and not the remaining provisions of the Class VI regulations, including in particular the proposed limitation on receiving formations. Thus, ex isting projects th at do not inject beneath the lowermost USDW could be left with no ability to convert to Class VI GS projects, disincentivizing many potent ial first actors. Mo reover, creation of such a disincentive is unnecessary, as the wells at issue would have been designed and constructed specifically with injection of CO2 and the protection of USDW in mind.
[FN4] EEI notes that EPA has proposed prohibiting CO2 storage in unmineable coal seams, basalts, salt domes and shales because "these formations are limited in geographic and geologic distribution in the U.S., and their technological or economic viability as GS sites has not been demonstrated." 73 Fed. Reg. 43503, col. 2. EEI urges EPA to continue to perm it GS projects in these formations as Class V experimental wells to facilitate continued research into the potential for these formations to safely and econo mically store CO2, particularly because there are some areas of th e country without easy access to saline formations or depleted oil and gas reservoirs that can be used for GS projects.
[FN5] Of course, nothing in the proposed rule would prev ent any owner or operator of a CO2 storage project, regardless of permit class, from seeking credits related to its participation in any future cap-and-trade program.

Individual Response: EPA acknowledges that there are lim ited circumstances where injection above the lowermost USDW can be performe d in a manner that protects USDWs from endangerment, as long as appropriate protections are in place. The final GS rule at §146.95 establishes a process by which owne rs or operators can seek a waiv er of the Class VI injection depth requirements for injecti on into non-USDW formations above and/or between USDWs. The final rule also establishes limited circumstances under which expansions of the areal extent of aquifer exemptions may be granted for owne rs or operators of Class II EOR/EGR wells transitioning to Class VI injec tion for GS. Additionally, the final GS rule does not categorically preclude or prohibit in jection into any type of formation.
EPA believes that these requirements will ensure USDW protection while providing flexibility to UIC program Directors and owne rs or operators who undertak e CO2 injection for GS. The Agency believes this approach: 1) responds to co ncerns about local and re gional geologic storage capacity limitations imposed by th e proposed injection depth require ments; 2) allows for a more site-specific assessment of injection depth for GS projects; 3) accommodates injection into different formation types; 4) a llows for injection of CO2 for GS into non-USDWs above and/or between USDWs when appropriate and where it can be demonstrated that USDWs will be

23protected; and 5) responds to concerns about the use of aqui fer exemptions for GS. Finally, EPA’s approach to addressing injection depth va riability through a waiver process responds to concerns about future drinking wa ter resource availability and the need to ensure that high quality water remains available in sufficient qua ntities to supply drinking water needs. For additional information on the waiver approach, pleas e see the final rule and preamble, as well as EPA's responses to comments on the Notice of Data Availability and Request for Comment.
While the Agency acknowledges the experience gained by the oil and gas industry and other injection activities, EPA identified unique cha llenges posed by 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 that warrant the tailored approach in the GS rule. Furthermore, the Agency believes that wells that inject into non-USDW formations above and be tween USDWs presents additional challenges that warrant a dditional requirements.
Regarding the suggestion to allow experimental GS wells to continue to operate under Class V, EPA anticipates that some owners or operators will apply for Class V experimental technology permits for injection into formations including shallow basalts, coal se ams, salt caverns and shales. These formations may or may not be located above the lowermost USDW or between USDWs. To facilitate experime ntal injection for GS and to increase understanding of injection into these formation types, the Agency is amending the Class V experimental technology guidance. The guidance will be available on EPA's web site, at http://water.epa.gov/type/groundw ater/uic/wells_sequestration.cfm. EPA acknowledges that the Class V experimental technology we ll sub-classification may be a ppropriate for these projects, provided they are experimental in nature. EPA e xpects that, following the final GS rule, a limited number of experimental injection projects tes ting GS technology will continue. EPA anticipates that these projects will be small-scale and i nvolve limited CO2 volumes. However, if these projects become larger scale a nd are no longer experimental, they will need to be permitted as Class VI wells. The construction, operation or ma intenance of any non-experimental Class V GS well is prohibited, at §144.15.

Letter ID: 0177 Comment ID: 23579 Letter Lines: 459 to 464

Comment Code: 4450 2.4.4.4 Use of aquifer exemptions (seeking comment)

Comment: While EPA acknowledges that it has raised for consideration the possibility of aquifer exemptions or the use of disc retion to allow injection above the lowermost USDW in a given case, such a pr ocedure would only insert complexity into the process, with no co rresponding increase in prot ection afforded to USDW, as compared to an approach under which the merits of a proposed receiving formation are considered in the context of a particular project as a default.

Individual Response: EPA believes that there are limited circumstances where aquifer exemptions for GS may be warranted. The final rule allows for the expansion of the areal extent of existing aquifer exemptions for Class II EOR/ EGR wells transitioning to Class VI injection for GS pursuant to requirements at §§146.4 and 144.7(d).

24EPA clarifies that aquifer exemption expans ions are limited to Class II EOR/EGR wells transitioning to Class VI injec tion for GS. The aquifer exemption requirements in the final rule provide flexibility and afford owners or operators an opportunity to assess and select a suitable GS site while also preserving USDWs (i.e., fo rmations/aquifers afforded SDWA protection). Class VI owners or operators granted expansions of existing Class II EOR/EGR aquifer exemptions for GS projects must meet all of the tailored requirements for GS wells in the final GS rule.
The Agency clarifies that the aquifer exempti on requirements and the injection depth waiver requirements serve different purposes. Class VI owners or operators granted expansions of existing Class II EOR/EGR aquifer exemptions fo r GS projects must meet all of the tailored requirements for GS wells in the final GS ru le, including the requirements at §146.83 for site criteria. EPA believes that, in most cases, the inj ection depth waiver is a more appropriate option than aquifer exemptions for Class VI injection, and believes that aquifer exemption expansions for GS should be granted in limited circumstances.
For additional information on aquifer exemptions for Class VI wells, please see the final rule and preamble, as well as EPA's responses to comments on the Notice of Da ta Availability and Request for Comment.

Letter ID: 0177 Comment ID: 23580 Letter Lines: 466 to 475

Comment Code: 2100 1.6 Target Geologic Formations for GS Comment Code: 4324 2.4.4.1.2 Comments opposed to requiring injection below the lowermost USDW

Comment: In light of the UIC permitting process’s focus on demonstrating that a project will not endanger USDW, EEI proposes that rather than establish a blanket limitation on available receiving formations, the Agency rely upon the numerous other provisions that serve to protect USDW and allow t hose provisions to operate in the context of actual propo sed projects. In the alternative, limitations on receiving formations could be left to the UIC program director‘s discretion-bounded by appropriate standard s for the exercise thereof-for a particular project; however, given the case-by-case nature of the permitting process and the requirement to demonstr ate non-endangerment of USDW, providing for the exercise of such disc retion is likely unnecessary.

Individual Response: As described above, 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, a nd the rule requires that owners or operators demonstrate that wells are sited in suitable sy stems with geologic formations to receive and confine injected CO2, required at §146.83 of the GS rule. 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.

25As described above, EPA acknowledges that ther e are limited circumstances where injection above the lowermost USDW can be performe d in a manner that protects USDWs from endangerment, as long as appropriate protections are in place. The final GS rule at §146.95 establishes a process by which owne rs or operators can seek a waiv er of the Class VI injection depth requirements for injecti on into non-USDW formations a bove and/or between USDWs.
For additional information on the waiver approa ch, please see the final rule and preamble, as well as EPA's responses to comments on the No tice of Data Availability and Request for Comment.

Letter ID: 0177 Comment ID: 23581 Letter Lines: 477 to 483

Comment Code: 4450 2.4.4.4 Use of aquifer exemptions (seeking comment)

Comment: Should the Agency choose to impose any sort of limitation on receiving formations, whether as a default or as a discretionary provision, the ability to obtain an aquifer exemption should be consid ered an absolute ne cessity absent a potential threat to USDW. In particular, aquifer exemptions would be necessary to facilitate complete gr andfathering of existing pr ojects. However, there would also be broader needs for aquifer exemptions in order to ensure that otherwise viable proj ects can go forward.

Individual Response: As described above, the final GS rule allows for the expansion of the areal extent of existing aquifer exemptions for Class II EOR/EGR wells transitioning to Class VI injection for GS pursuant to requirements at §§146.4 and 144.7(d). Class VI owners or operators granted expansions of existing Class II EOR/EGR aquifer exemptions for GS projects must meet all of the tailored requirements for GS wells in the final GS rule.
However, the final rule precludes the issuance of new aquifer exemptions for Class VI GS wells; that is, aquifer exemptions will only be granted for projects that are transitioning from Class II EOR/EGR wells to Class VI.
EPA clarifies that all decisions regarding whethe r expansion of existing aquifer exemptions will be at the Director's discretion and based on site -specific information. If an owner or operator applies for a Class VI permit to inject CO2 into a previously exempted aquifer (non-USDW) that is located above and/or between USDWs, the perm it applicant must also apply for a waiver of the injection depth requirements pursuant to §146 .95 to ensure that if a waiver is granted, USDWs above and below the injection z one are protected from endangerment.
This approach is designed to ensure that th e differences between traditional Class II EOR/EGR operations and Class VI operati ons are considered during the aquifer exemption application process and the Class VI permitting process. Thes e differences include the anticipated large CO2 injection volumes associated with GS, the buoyant and mobile nature of the injectate, and its corrosivity in the presence of water. The Agen cy believes that this process will encourage owners or operators and Directors to consider the use of alterna tive formations for GS, including

26non-USDW formations through the waiver process, prior to applying for or approving aquifer exemption expansions for Class II EOR/EGR we lls transitioning to Cl ass VI GS operations.
For additional information on aquifer exemptions for Class VI wells, please see the final rule and preamble, as well as EPA's responses to comments on the Notice of Da ta Availability and Request for Comment.

Letter ID: 0177 Comment ID: 23582 Letter Lines: 485 to 511 ; 1279 to 1279

Comment Code: 1220 1.1.1.1 Terminology and definitions Comment Code: 4400 2.4.4.3 Allowing injection above or between USDWs (seeking comment)

Comment: A related issue is how USDW are to be de fined under the propos ed rules. Current UIC regulations, as well as the preamble to the proposed rules, define USDW as:
An aquifer or portion of an aquife r that supplies any public water system or that contains a sufficien t quantity of ground water to supply a public water system, and currently supplies drinking water for human consumption, or that contains fewer than 10,000 mg/l total dissolved solids and is not an exempted aquifer.
EEI recommends that the Agency work within the current definition of USDW, in particular its maximum total dissolved solids (TDS) provision, for purposes of CO2 injection and storage. Any change in the definition of USDW would likely require a statutory amendment. The legisl ative history of SDWA identifies the 10,000 TDS standard as one sufficient to en sure that potentia l drinking water sources that may be tapped in the future are protected,[FN6] and EPA has long recognized this standard in its regulati ons without any seriou s suggestion over the long and successful history of the UIC program that the standard is inadequate. Thus, any potential alteration to that standa rd (which implicates a range of public policy issues) should be le ft to Congress. Some have called for potential revision to this standard, but EEI is una ware of any analysis supporting the establishment of an altern ative standard. Nor is EEI aware of any evaluation of the implications of ch anging this standard for long-standing UIC activities, much less on the practi cability of CCS as a critical GHG mitigation tool. In short, even if C ongress‘s original expression of the 10,000 mg/l standard did not constrain EPA‘s ab ility to change this standard by regulation, EEI is unaware of any foundati on in the administrative record that would allow EPA to provide reas oned support for such a change.
[FN6] See H.R. Rep. 93-1185 (1974), repr inted in 1974 U.S.C. C.A.N. 6454, 6484.

Individual Response: EPA is not changing the USDW definition; changing the definition of a USDW is outside the scope of the GS rulemaki ng. The GS rule focuses on ensuring protection of USDWs, as required under the SDWA, by establishing regulations to ensure the safe injection of CO2 for long-term storage.

27EPA recognizes that there is increasing demand for water re sources and that technology improvements may make high TDS aquifers viable drinking water sources. EPA believes these potential resources should be c onsidered when injection depth wa ivers are sought. Therefore, the final GS rule at §146.95(b) requires the Director to consider thes e issues in determining whether an injection depth waiver is appropriate. Spec ifically, the Director must consider whether alternative injection si tes are available; community needs, demands, and supply from drinking water resources; planned needs, potential and/or future use of USDWs and non-USDWs in the area; and a plan for securing alternative resour ces or treating USDW formation waters in the event of contamination related to the Class VI injection activity. For additional information on the waiver approach, please see the final rule and preamble, as well as EPA's responses to comments on the Notice of Data Availa bility and Request for Comment.

Letter ID: 0177 Comment ID: 23583 Letter Lines: 513 to 561

Comment Code: 3120 2.1.2 Need to identify additional confining and containment zones (seeking comment)

Comment: A third area of concern related to siti ng involves the Agency’s proposed grant of discretion to the UIC program direct or to require permit applicants to identify "additional zones that will impede vertical fluid movement, are free of faults and fractures that may interfere with containment, allow for pressure dissipation, and provide additional opport unities for monitori ng, mitigation and remediation"-i.e., secondary containment/c onfining zones. A proposal to require secondary containment, even in disc retionary form, is unnecessary and unwarranted for many of the same reasons that a blanket limitation on receiving formations is unnecessary and unwarrant ed. Specific concerns include the following:
- Better alternatives exist to protect US DW: The presumed purpose of secondary containment is better addressed through proper site selecti on and well-designed plans to detect and contain leakage fro m the primary containment system. EEI also notes, as we did in our May 15, 2008, pre-rulemaking comments, a discussion led by panelist Susan Hovorka of the Univ ersity of Texas at EPA‘s December 2007 public workshop, as characterized in th e Agency‘s meeting summary (p. 8):
CO2 is very responsive to pressure as a mitigation technique in the event of movement to an undesired location. Injecting fluids in an adjacent well at a regulated pressure can guide CO2 back to the containment area. Another mitigation option is changing injection patterns once a problem is detected. Site-specific contingencies could be built into plans to provide guida nce in the event of an unexpected event.
Given the proposed rules‘ emergency and remedial response requirements, a secondary containment requirement is especially unwarranted.

28- Unprecedented under the UIC program: Secondary containment/confining systems are currently not required for any other types of injection wells under the UIC program. The physical and chemical prope rties of CO2 are not sufficiently unique--nor do they pose a sufficiently unique potential threat to USDW--to warrant such unprecedented treat ment under the UIC program.
- Unprecedented in U.S. environmental law generally: We are unaware of any comparable requirement to ascertain sec ondary containment feat ures in geologic formations in any other environmental re gulatory regime. T hose regimes that impose secondary containment requirements --for example, secondary containment requirements for oil spill prevention cont rol and countermeasure plans under the Oil Pollution Act, and for land disposal and underground storage tanks under the Resource Conservation and Recovery Act ( RCRA)--relate to man-made containment structures, as opposed to geol ogic containment structures.
- Unprecedented internationally: To our knowledge, none of the CO2 storage projects currently operating outside the U.S. has been required to have or demonstrate existence of a secondary containment zone/confining system. Further, Norway, Canada, Australia and Al geria, countries where CCS projects are currently underway, do not requ ire secondary containment.

Individual Response: EPA retains the requirement to iden tify additional containment/confining zones, if required by the Di rector, as proposed (§146.83(b)). EPA acknowledges that such additional zones may not be needed in all circumst ances, and clarifies that this requirement is at the Director's discretion, based on his or her understanding of a part icular site. EPA believes that, in some situations, the presence of additional confining and containment zones above the primary (i.e., lowermost) confining zone can improve USDW protecti on. These layers could further impede vertical fluid movement and al low for pressure dissipation, and also provide additional sites for monitoring, mitigation, and re mediation. The Agency's decision is supported by commenters representing states, water associati ons, and an electric utility who assert that these requirements promote a flexible, risk-base d, site-specific approach to characterizing and permitting a site for GS projects, and are intende d to improve understanding of the project as a whole and promote better modeling of the site.
EPA believes that the Class VI requirements, incl uding the level of site characterization required under §§146.82 and 146.83, appropriately address the unique challenges posed by large-scale GS including large injection volumes, the relative buo yancy of CO2, its corrosivity in the presence of water, the potential presence of impurities in captured CO2, and its mobility within subsurface geologic formations. The Agency believes that in some geologic settings, the presence and identification of additional confining and contai nment zones above the primary (i.e., lowermost) confining zone can improve USDW protection. These formations co uld further impede vertical fluid movement, allow for pressure dissipati on, and provide additional sites for monitoring, mitigation, and remediation, while also afford ing the greatest prot ection of USDWs from endangerment. While other countries may not re quire such additional protection, EPA believes

29that providing the Director this additional discretion is an importa nt element of assuring that GS activities will not endanger USDWs.

Letter ID: 0177 Comment ID: 23584 Letter Lines: 563 to 572

Comment Code: 3120 2.1.2 Need to identify additional confining and containment zones (seeking comment)

Comment: - Concerns for inaccurate public per ception: As noted above, no secondary containment requirement, whether blanket or discretionary, current ly exists even for the injection of hazardous wastes under the Class I permitting scheme. Imposition of a substantially more rigorous requirement on injection and storage of CO2 strongly implies that such a pr oject would be more dangerous than underground injection of a host of other materials, including hazardous wastes. The final rules should be crafted to avoi d creating this public stigma for one of the most promising GHG-management stra tegies, and for a technology that can be employed safely and effectively in the absence of secondary containment requirements of any sort.

Individual Response: EPA retains the requirement to iden tify additional containment/confining zones, if required by the Di rector, as proposed (§146.83(b)). EPA acknowledges that such additional zones may not be needed in all circumst ances, and clarifies that this requirement is at the Director's discretion, based on his or her understanding of a part icular site. EPA believes that, in some situations, the presence of additional confining and containment zones above the primary (i.e., lowermost) confining zone can improve USDW protecti on. These layers could further impede vertical fluid movement and al low for pressure dissipation, and also provide additional sites for monitoring, mitigation, and re mediation. The Agency's decision is supported by commenters representing states, water associati ons, and an electric utility who assert that these requirements promote a flexible, risk-base d, site-specific approach to characterizing and permitting a site for GS projects, and are intende d to improve understanding of the project as a whole and promote better modeling of the site.
EPA adds that a demonstration to the public th at extensive data have been collected and evaluated would likely improve confidence in the project and help address public questions and

concerns.

Letter ID: 0177 Comment ID: 23585 Letter Lines: 574 to 589

Comment Code: 3120 2.1.2 Need to identify additional confining and containment zones (seeking comment)

Comment: While EEI is opposed to any secondary containment requirement, including one that would be subject to exercise of the UIC program director‘s discretion, EPA‘s proposal to establish secondary cont ainment as a discretionary requirement presumably would allow for consideration of the nature of the particular primary

30confining system at issue and reduce unnecessary elimina tion of potential storage sites as compared to a default requirement to demonstrate secondary containment. At the same time, discre tion, even where warranted, must be bounded by sufficiently clear guidelines for application in determining whether imposition of a discretionary requiremen t is warranted in a given case. However, the proposed rules contain no di scussion of any factors for the UIC program director to consid er in making this determination. Should the Agency choose to impose a discretionary requirem ent, the current proposal should be modified to include such clear guidelines in order to provide some amount of certainty for operators and investors as well as to avoid the metamorphosis of what is a discretionary requirement on paper into a default requirement in practice.

Individual Response: EPA retains the requirement to iden tify additional containment/confining zones, if required by the Di rector, as proposed (e.g., §146.83(b)). The Agency's decision is supported by commenters representing states, wate r associations, and an electric utility who assert that these requirements (at §146.83(b)) pr omote a flexible, risk-based, site-specific approach to characterizing and perm itting a site for GS projects.
The Agency believes that providing the Director di scretion will allow consideration of a range of sites for GS, based on site-specific conditions and ensure USDW protection. EPA believes that requiring appropriate site ch aracterization by the owner or operator (under §146.82) and providing an appropriate de gree of flexibility to the Director to evaluate site-specific geologic data will afford the greatest protec tion of USDWs from endangerment.
EPA is developing guidance on site characterization for GS projects to assist owners or operators and Directors in evaluating permit requirements and applications under §146.82. The guidance provides recommendations regard ing characterizing the region al geology and hydrogeology of a proposed GS site as well as performing th e necessary geochemical, geomechanical, and geophysical analyses of the injection and confin ing zone. EPA expects that this guidance will assist permit writers in making an objective deci sion about requiring additional confining layers. The guidance can be found on EPA’s website at http://water.epa.gov/type/groundwater /uic/wells_sequestration.cfm.

Letter ID: 0177 Comment ID: 23586 Letter Lines: 591 to 638

Comment Code: 3530 2.2.3.1 AoR reevaluation fre quency (seeking comment)

Comment: C. Periodic Reevaluation of AOR and Corrective Action Requirements
The second general area of concern addresse d in these comments relates to EPA‘s proposed provisions concerning the AOR for CO2 storage pr ojects. In a departure from AOR procedures currently in pl ace under the UIC program, the proposed regulations would require operators to r eevaluate the proper scope of the AOR periodically at a minimum fixed frequency to be set by the program directorcurrently proposed as no less than once every 10 years, w ith discretion to

31require more frequent reevaluation. Th e apparent assumption underlying this proposed requirement is that the location of injected CO2, and thus the location and extent of potential impact, could change --or perhaps more importantly, could change from what is expected at the outset of a proj ect--over time.
As EEI commented in our May 15, 2008, pre-rulemaking comments, a broad, unconstrained requirement for periodic reev aluation of the AOR that would apply in the same manner to all potential project sites is unwarranted as a matter of presumption. Although the proposed rules pr ovide for some discretion in terms of the review period, they nonetheless woul d require periodic reevaluation for every project at least once every 10 years. Several factors argue against such an approach:
- Consideration of specific circumstances should be required: While EEI is not necessarily opposed to an appropriately drafted provision requiring periodic reevaluation of the AOR under certain ci rcumstances, any requirement for such review should not be a universally app licable requirement pot entially applied devoid of any context. Rather, AOR reeval uation provisions s hould be triggered by reasonable parameters, taking into cons ideration site-specific issues, as discussed in the general principles set forth above. AOR issues are inherently site-specific; different pr ojects--and even different geographical regions of the country--likely warrant different appr oaches. A default no-less-than-onceevery-10-years provision does not allow fo r adequate consideration of specific circumstances. Tying reevaluation to the triggering of appropriate circumstances will provide equivalent pr otection for USDW wh ile also ensuring that those projects posing greater rela tive risks receive greater scrutiny through more stringent reevaluation requirements and thos e projects posing fewer relative risks are relieved of unnecessary regulatory burdens. At a minimum, any default period for reevaluation should be determined based on site-specific characteristics at the ti me of project permitting.
- Unknown trade-offs militate against a uni versal requirement: It is impossible to know what the relevant trade-offs are as to the initial AOR versus potential later assessments of the AOR. For example, in certain instances it is foreseeable that a project owner may seek a relatively more constrained AOR for an initial portion of the project life, and propose periodic AOR reevaluations as a function of project experience. In other instances, a broader initial AOR may be appropriate, with a correspon dingly reduced need for periodic reevaluations. Further, op erators will generally model the entire life of the project and will likely include additiona l acreage in the AOR in any event.

Individual Response: EPA is retaining the approach of setting a minimum fixed frequency for reevaluating the AoR but has, based on comment ers' input, changed the frequency from 10 years to at least every 5 years, as specified in §146.84(e).
EPA agrees that site-specific factors, including monitoring and operational data, should be

32considered in the reevaluation schedule, and notes that the AoR and corrective action plan must specify the site-specific mon itoring and operational conditions that warrant reevaluation, as specified in §146.84(b)(2)(ii). In addition, the Direct or has discretion to require more frequent AoR reevaluation if he or she has reason to believe, based on site -specific information, that at least every 5 year reevaluation schedule is not sufficiently prot ective of USDWs.

Letter ID: 0177 Comment ID: 23587 Letter Lines: 640 to 657

Comment Code: 3630 2.2.4.1 Comments in favor of allowing phased corrective action

Comment: The proposed regulations also include a re quirement to conduct corrective action within the AOR, but would gi ve the UIC program direct or discretion to allow corrective action to be c onducted in phases over the operational life of the project. A phased corrective action approach has merit, particularly where periodic reevaluations of the AOR are to be required. A phased approach will help ensure that all necessary correc tive action is take n, but also that unnecessary corrective action is avoided. It may also se rve to ease the initial financial burden on operators and provide in creased certainty from an investment standpoint. However, the proposed rules leave the possibili ty of a phased approach to the program director‘s disc retion and contain no guidelines for the exercise of such discretion. Any discreti onary requirement should be tempered by suitable criteria for its exercise. Likewise, any financial assurance requirements related to corrective action th at may be imposed should be tied to the corrective action approach that is to be taken in any given case. For example, where phased corrective action is permitted, corresponding provisions for phased financial assurance would provi de a greater ability to price the activities at issue accurately. A more detailed discussion of financial assurance issues is below.

Individual Response: EPA agrees that phased corrective action should be allowed and has retained this provision in the final rule §146.84(b)(2)(iv). Howe ver, EPA disagrees that decisions of the Director regarding phased corrective act ion would be made arbitrarily. The GS rule provides for Director's discreti on because EPA believes that, given the wide range of conditions at GS sites, the Director is in the best position to make deci sions about the appropriateness of phased corrective action based on his or her knowledge of the local geologic and site conditions.
EPA does not agree that a phased ap proach to corrective action shoul d be available to all owners or operators, because phased corrective may not be appropriate at all GS s ites. EPA believes that, given the wide range of conditions at GS sites, the Director is in the best position to make decisions about the appropriatene ss of phased corrective action base d on his or her knowledge of the local geologic and site condi tions. EPA is developing guidances for states that help to describe the technical and administrative issues a state may need to consider when developing GS regulations that are the e quivalent of minimum federal cr iteria and requirements; this guidance will provided recommended approaches for Directors to exer cise discretion. The guidances will be available on EPA's web site, at http://water.epa.gov/type/groundwat er/uic/wells_se questration.cfm.

33Regarding financial responsibility for corrective action, EPA clarifies that th e owner or operator must demonstrate and maintain financial res ponsibility for all need ed corrective action, regardless of whether it is to be phased. EPA is developing guidance on financial responsibility that will discuss approaches to how to estimate appropriate costs for all required activities. For additional information on EPA's approach to financial responsibilit y for Class VI wells, please see the final rule and preamble.

Letter ID: 0177 Comment ID: 23588 Letter Lines: 659 to 667

Comment Code: 3500 2.2.3 Area of Review Reevaluation (seeking comment)

Comment: As with a phased approach to corrective action, a phased approach to evaluation and reevaluation of the AOR may prove more practical for operators while affording the necessary protection for USDW. As noted above, some projects may implicate relatively constrained areas in terms of the size of the receiving formation, allowing operators to conduct a broader investigati on at the outset more efficiently; for larger projects, it may make sense to consider allowing a phased plan for AOR evaluati on and reevaluation that w ould provide for a certain amount of investigation at th e outset with more detailed evaluations to follow over the life of a project.

Individual Response: EPA agrees that site-specific fact ors should be considered in the reevaluation schedule, and notes that the AoR and corrective acti on plan must specify the sitespecific monitoring and operationa l conditions that warrant r eevaluation, as specified in §146.84(b)(2)(ii). In addition, the Director has discretion to require more frequent AoR reevaluation if he or she has r eason to believe, based on site-speci fic information, that a five-year reevaluation schedule is not su fficiently protective of USDWs. However, EPA believes that setting a minimum reevaluation frequency is appr opriate. In the final rule, the Agency changed the minimum frequency for the AoR reevaluation at §146.84(e) from 10 years to at least every 5 years in the final GS rule. EPA believes that this revised frequency addresses commenters' concerns about the inherent unc ertainties in modeling CO2 move ment, the emerging nature of GS technology, risk-based targeti ng of monitoring activ ities, and the unique nature of CO2 GS. In addition, the Director has disc retion to require more frequent AoR reevaluation if he or she has reason to believe, based on site-specific inform ation, that a five-year reevaluation schedule is not sufficiently prot ective of USDWs.

Letter ID: 0177 Comment ID: 23589 Letter Lines: 669 to 696

Comment Code: 4490 2.4.5 Use of tracers and potential im pact on human health or ecosystems (seeking comment) Comment Code: 4670 2.6.7 Surface air monitoring and/or soil gas monitoring (seeking comment)

Comment: D. Monitoring Provisions and Use of Tracers

34EEI is also concerned about proposed re quirements related to monitoring for potential CO2 movement and the use of tracers. Under the pr oposed regulations, the UIC program director woul d have discretion to requir e the use of tracers or surface air/soil gas monitoring "to detect m ovement of CO2 thatcould endanger a USDW." For the reasons set forth below, EEI is opposed to such a requirement, even where, as proposed, it is left to the discretion of the program director.
- Functionality, usefulness a nd cost: Tracers are relative ly untested in terms of workability as a leak-d etecting mechanism. Of great er concern, however, is the fact that using tracers or surface air or soil gas monitoring would likely provide too little information, too late , in terms of providing protection for USDW, in the sense that USDW would likely be affected by the time the results of such methods revealed any concerns. More over, by their very nature, tracers can be detected at ultra-low c oncentrations. If the tracer is spilled or a small amount leaked, or if a pipe downstream fr om the tracer injection point leaked, the surface air would become contaminate d. Minute amounts of tracer might be detectable for quite a distance, making the likelihood of a false positive for the tracer much greater wit hout any real benefit to th e overall protection of USDW. In sum, if employed for purposes of long-term monitoring of underground waters, tracers would be unlikely to yiel d significant useful data and would prove extremely expensive.
- Safety: Tracers may present their own safety concerns depending on the precise nature of the tracer at issue. Further, the use of tracers may pose independent risks for project operators. There may be potential health effects from some tracers if workers are accidentally exposed.

Individual Response: EPA clarifies that subsurface geochemi cal and pressure monitoring in the subsurface formations are the first line of m onitoring that would allow detection of potential endangerment to USDWs from GS ac tivities (this is required at al l GS sites, as described at §146.90(d)). The Agency also believes that surf ace air and soil gas monitoring, when coupled with subsurface monitoring, may be appropriate at some GS projects to ensure USDW protection. EPA acknowledges that surface air and soil gas monitori ng may not be suitable in all settings as a method to ensure USDW protec tion. However, EPA does not believe that this should entirely preclude their use. The decision to use surface monitoring and the selection of monitoring methods will be site-specific (e.g., may be influenced by geology, injection depth, and operational conditions) and must be based on potential risks to USDWs within the AoR.
The final rule at §146.90(h) retains the allowance for surface air and soil gas monitoring at the discretion of the Director as a means of identif ying leaks that may pose a risk to USDWs and informing emergency notification of a Class VI ow ner or operator and UIC Director in the event of a USDW endangerment, pursuant to requirements at §146.91(c).
As described above, EPA agrees that tracer us e is not appropriate in all situations. EPA acknowledges that some tracers may have the potential to cause ha rm to people or the

35environment. For this reason, EPA does not re quire the use of tracers at all GS sites. Nevertheless, there are many differ ent types of tracers and not al l are problematic; research is being done to overcome problems with existing tracer s. EPA believes that tracers have been used safely and successfully in other applications. Th erefore the Director ha s discretion to require their use if he/she determines that the use of tracers could improve monitoring of the site and enhance USDW protection from endangerment. The rule will also allow their use if proposed by the owner or operator and approved by the Director.
EPA has been following new and ongoing research on the safety and efficacy of tracers, and believes that, in some circumstances, tracers can be an effective part of monitoring GS projects. EPA will continue to track research related to tra cer use and plans to, every six years, collect and review data on GS projects to determine wh ether 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: 0177 Comment ID: 23590 Letter Lines: 698 to 701

Comment Code: 4490 2.4.5 Use of tracers and potential im pact on human health or ecosystems (seeking comment)

Comment: - Concerns regarding inaccurate public perception: As with a secondary containment requirement, a requirement to use tracers--curren tly unprecedented in the UIC program--may create or encour age an overly negative and unwarranted public perception regarding the safe ty of CO2 storage projects.

Individual Response: EPA believes that tracers can be useful tools for monitoring, plume tracking, and verification at GS sites and may help improve public confidence in certain projects. Comments related to whether the use of tracers, if needed, would signal to the public that GS is unsafe are outside the scope of this rulemaking. However, EPA believes that providing the public with important information about the project, incl uding how tracers would be an integral part of the site monitoring plan, will be a key part of improving public acceptance of specific projects and GS technology in general.
As described above, the GS rule does not require th e use of tracers at all GS sites; however, the Director has discretion to require their use if he/she determ ines that the use of tracers could improve monitoring of the site and enhance USDW protection. The rule will also allow their use if proposed by the owner or operato r and approved by the Director.

Letter ID: 0177 Comment ID: 23591 Letter Lines: 703 to 728

Comment Code: 1400 1.2 Comments on EPA's Authority to Regulate Injection of CO2 Comment Code: 4670 2.6.7 Surface air monitoring and/or soil gas monitoring (seeking comment)

Comment: - Potential issues of EPA authority: As noted above, EEI views the development

36and implementation of legally defensible regulations as a key to commercial deployment of CCS. To that end, EEI encour ages the Agency to consider carefully the link between each proposed provision and its authority to regulate under SDWA. Where the link is more tenuous, the proposed provision ma y be subject to greater risk of legal challe nge, posing uncertainty for those who desire to move ahead with projects. While, as the Agen cy points out, the us e of tracers or surface air/soil gas monitoring could indicate that some threat to USDW may be posed, it seems more likely that by the time the results of such methods revealed any concerns, such sources woul d already be affected. Thus, the nexus between those methods and protection of USDW may be subject to challenge by opponents of the proposed provisions. A nd the nexus between surface air/soil gas monitoring and protection of USDW may be at greater risk of challenge, as the detection of a CO2 leak to surfac e air conceivably provides no useful information that would serve to protect USDW. Indeed, while EPA notes in the preamble that detection of leakage to the surface "would i ndicate potential endangerment" to USDW as a last line of defense, the Agency also acknowledges that regulation of surface or atmospheric releases of CO2 are outside the scope of the proposed rules and the Agency‘s SDWA authority.
While the proposed rules would leave these requirements to the discretion of the UIC program director, again the proposal sets no clear pa rameters for the exercise of such discretion. EEI does not believe that any pr ovisions related to the use of tracers are required or wa rranted for the protection of USDW, but should EPA choose to impose a discretionary requirement, any such requirement should be bounded by appropriate parameters for its use.

Individual Response: As described above, subsurface geochemical and pressure monitoring in the subsurface formations are the first line of mo nitoring that would allo w detection of potential endangerment to USDWs from GS ac tivities (this is required at al l GS sites, as described at §146.90(d)).
EPA agrees that the implementation of the GS rule in a manner that ensures protection of USDWs from endangerment is impo rtant to establishing a foundation for further advances in the field of CO2 GS. EPA acknowledges the need for regulatory certaint y: the final GS requirements provide a level of certainty by setting forth unique requirement s for GS. These requirements include: the tailored AoR delin eation process under §146.84, the t ypes of monitoring appropriate to GS projects under §146.90, and the post-in jection site care process under §146.93.
While EPA agrees with commenters that a stab le, predictable, nati onally consistent, and workable regulatory framework is important, EPA st resses that the focus of the GS rule is to ensure that, where GS is deployed, it is conduc ted in a manner that protects USDWs from endangerment.
EPA disagrees with the comment with respect to its authority under the SDWA and believes it within the Agency’s authority to provide the Di rector with discretion to require surface air monitoring and/or soil gas monitoring in the AoR at §146.90(h). This discretion is limited to

37potential risks to USDWs within the AoR. EPA be lieves that monitoring for the injected fluid at the surface for the purposes of protecting USDWs is within the jurisdiction of the SDWA. If the injected CO2 were to migrate through fractur es, abandoned well bore holes or other means, it would be released in a gaseous form at the surf ace, and therefore must be monitored as such. EPA believes that having this information can be critical to allow the Director to determine whether injected CO2 has migrated from the injection zone and endangered a USDW(s).
EPA is developing guidance for permitting author ities that will include recommendations for how Directors may exercise discretion in im plementing the requirements of the GS rule, including the testing and monito ring requirements. This guidan ce will be available on EPA’s website at http://water.epa.gov/type/gr oundwater/uic/wells_sequestration.cfm.
The final rule at §146.90(h) retains the allowance for surface air and soil gas monitoring at the discretion of the Director as a means of identif ying leaks that may pose a risk to USDWs and informing emergency notification of a Class VI ow ner or operator and UIC Director in the event of a USDW endangerment, pursuant to requirements at §146.91(c).

Letter ID: 0177 Comment ID: 23592 Letter Lines: 730 to 811 ; 1281 to 1283

Comment Code: 5240 2.8.2.2 Post injection timeframe (seeking comment)

Comment: E. Closure and Post-In jection Site Care
The fourth general area of concern disc ussed in these comments involves the proposed rules‘ provisions for closure a nd post-injection site care (PISC). In particular, EEI is concerned with th e proposed imposition of a PISC period spanning, as a matter of default, 50 y ears after cessation of injection. The proposed rules would vest di scretion in the UIC program director to adjust the 50-year default time period upward or dow nward, with monitoring to continue "until the geologic sequestration project no longer poses an endangerment to USDWs."
Establishing a default time period for PISC , in particular a default time period as lengthy as 50 years, is unnecessary and undesirable, and the dual goals of protecting USDW and supporting the commerc ialization of CCS technology are far better served through a site -specific, performance-ba sed approach. To EEI offers the following supporting points:
- A default time period is unnecessary: As noted above, the proposed rules would, in conjunction with establishing the 50-year default period for postinjection activities, vest di scretion in the UIC program director to shorten or lengthen the PISC period based on the char acteristics of a pa rticular project. As discussed further below, a PISC peri od based on site- and project-specific characteristics ably serves to meet th e dual goals of EPA‘s rulemaking effort; given the proposed performance-based, disc retionary aspect of the PISC-period determination, a default overlay period is unnecessary. Further, from the

38perspective of offering protection to US DW, such a default period offers no additional protection above and beyond what a performance-based standard will offer.
- A default time period is unduly burde nsome for operators: Establishing a default time period also risks placing unnecessary regulatory burdens on owners and operators who can clearly establish from the outset that no threat to USDW will be posed within a shorter time frame than whatever default may be established.
- A 50-year default time period is un precedented under the UIC program and unwarranted for CO2: Even assuming that imposition of a default period were appropriate, the unique characteristics of CO2 do not justify imposition of such a lengthy default PISC period for GS projec ts. EEI and its members believe that appropriately sited projects could demons trate the absence of endangerment to USDW in substantially less than 50 years; indeed, data suggest the risk profile of injected CO2 drops rapi dly just 10 years after cessation.[FN7] Further, imposing requirements on CO2 storage projects that are far beyond those currently in place even for injection of hazardous wastes is unnecessary and will only engender public misperceptions rega rding the safety of such projects.
- A default time period may not appr opriately incentivize proper site characterization: Proper siti ng is the key to ensuring sa fety and effectiveness of storage projects, and the rules should work to incentivize, rather than discourage, the utmost due diligence in the siting process. While EPA‘s proposal would provide for the exercise of discretion to lengthen or shorten the PISC period, placing the burden of proof on permittees that a departure from the default is justified fails to recognize the enormous efforts associated with proper site characterization.
- A 50-year default period may introduce unnecessary financial uncertainty: As currently proposed, the rules would require operators to obtai n, as a baseline and at the time of permitting, financia l assurance running through the default 50-year PISC period. Thus, operators woul d be likely required to assure activities that would not o ccur for more than 50 years, with discretion vested n the UIC program director to extend th at time period--and thus the required period for demonstrating financial assu rance. The end result could be an obligation to provide financial assura nce for activities running through at least 70 years in the future (according to EPA‘s assumption of a 20-year injection period), or more. Further, in actuality, the PISC period could prove to be considerably shorter, renderin g the initial burden placed upon the operator unnecessary. EEI urges the Agency to consider carefully, in connection with each proposed requirement that is tied to a financial assurance requirement, the ability for operators to quantify the activit ies being assured at the time of permitting--the basis of any financial assurance mechanism--as well as the potential burden and expense associated with the proposal. Given

39the ongoing credit crisis, an unjustifiab ly lengthy PISC period may make obtaining the necessary financial assura nce impossible, stunting or stopping commercial development of CCS.
Instead of a default time period--particu larly one as lengthy as 50 years--EEI urges EPA to implement a performance- based approach that considers the circumstances of a particular project, bounded by appropriate parameters for its application. As discussed throughout these comments, EEI also encourages the Agency to establish clear parameters for such a performance-based approach--and in particular a clear set of guidelines fo r demonstrating that the injectate has "stabilized" and for meeting th e non-endangerment standard.
[FN7] S. Benson, Carbon Dioxide Capture and Storage: Research Pathways, Progress and Potential, GCEP A nnual Symposium, October 2007: http://pangea.stanford.edu/research/b ensonlab/presentations/index.html.

Individual Response: EPA agrees that there will be circumst ances where it can be demonstrated in less than 50 years that the plume and pressure front no longer pose a risk of endangerment to USDWs. For this reason, the final GS regulation o ffers owners or operators flexibility regarding the duration of the PISC timefra me by: (1) allowing the Direct or discretion to shorten or lengthen the PISC timeframe during the post-in jection period based on site-specific data, pursuant to requirements at §146.93(b) ; or (2) affording the Director discretion to allow a Class VI well owner or operator to demonstrate, during the permitting process based on substantial data, that an alternative PISC timeframe may be appropriate if it ensu res non-endangerment of USDWs pursuant to requirements at §146.93(c).
EPA believes however, that to ensure USDW protection from enda ngerment, a default timeframe for post-injection site care will be necessary in most cases. The default 50 year post-injection site care timeframe represents a reasonable and prot ective monitoring period based on a review of research studies, industry reports, and existing environmental programs, and evaluation of public comments. EPA believes that a default post-injection site car e timeframe of 50 years, with flexibility to adjust the timeframe for a limited number of GS projects during the permitting process where substantial data exists to demonstrate that an alternative timeframe would be protective of USDWs, or based on data collected during the PISC period, is appropriate to address the range of sites where GS is anticipated to occur, to ac commodate site-specific circumstances and various geologic conditions, and addre sses commenters’ concerns, wh ile ensuring USDW protection. Both approaches will utilize si te-specific data, and be based on pressure monitoring and USDW impacts. EPA adds that the purpose of the GS rule is not to incentivize the use of GS; rather, the purpose of the GS rule is to ensure that, where GS is deployed, it is conducted in a manner that protects USDWs from endangerment.
EPA does not believe that performing the demons tration before 50 years places an additional burden on these owners or operators . EPA clarifies that all operators will need to make this demonstration prior to the Director authorizing site closure; the di fference is that some operators

40will be performing the demonstration earlier th an others. As indicated by the commenters, ideally this demonstration will be part of an ongoing communication between the owner or operator and the UIC Director. If an owner or ope rator believes that an earlier demonstration will be burdensome, they are not required to make the demonstration.
EPA recognizes that there are chal lenges associated with assuring funding for activities that will occur far in the future. However, the Agency be lieves that in order to protect USDWs from endangerment under the SDWA operators must demonstrate under §146.85 that financial resources are available to plug the injection well and provide post-injection site care at the point in time that the first CO2 is injected.
EPA also recognizes the concerns associated with assuring fina ncial responsibil ity for the long time frames over which post-injection site care will be conducted. EPA is developing guidance on financial responsibility to a ssist owners or operators in evaluating the requirements of §146.85 and to assist Directors in evaluating fi nancial responsibility demonstrations. The guidance describes the types of financial mechanisms that operators may choose to use when evaluating the financial responsibility requirements for GS wells and it will also include a section on how to estimate costs to s upport accurate financial respon sibility demonstrations. The guidance will be available at h ttp://water.epa.gov/type /groundwater/uic/wells_sequestration.cfm.

Letter ID: 0177 Comment ID: 23593 Letter Lines: 813 to 837

Comment Code: 5430 2.9.1 Comments on proposed financia l responsibility requirements (40 CFR 146.85)

Comment: F. Financial Assurance Provisions
The fifth general area of concern addresse d in these comments relates to the proposed rules‘ provisions for financia l assurance. The proposed rules would require that permittees demonstrate, at the time of project permitting, financial assurance for activities incl uding injection, corrective action, well plugging and closure, and ac tivities throughout the PISC period, as well as for emergency and remedial response activities to address movement of formation or injection fluids that may endanger USDW . These proposed financial assurance requirements, which exceed those current ly in place even for injection of hazardous wastes, raise significant concerns from the perspective of promoting CCS development. They are in many resp ects not balanced by corresponding increases in the levels of protection pr ovided to USDW. These concerns include the following:
- More stringent treatment for GS proj ects are unwarranted from a technical perspective: As noted above, the proposed financial assurance provisions go far beyond the requirements currently in place under the UIC program, even those for wells injecting hazardous waste. EEI and our members do not believe that any showing has been made that the physical and chemical properties of CO2 are

41sufficiently unique--or that they pose a su fficiently unique potential threat to USDWs--to warrant such unprecedented tr eatment under the UIC program. Any required financial assurance should in no event go beyond that currently required for Class I hazardous waste inje ction wells (i.e., be yond requirements to assure corrective action in the AOR).

Individual Response: EPA disagrees that the requirements on financial responsibility are overly stringent. The goal of financial resp onsibility is to ensure that fi nancial resources are available to prevent or remediate the endangerment of US DWs from improper plugging, remediation, and management of wells in the event that the owne r or operator experiences financial difficulties. EPA disagrees that the requirements equate GS we lls with Class I hazardous waste wells; rather, the financial responsibility requirements for Clas s VI wells are tailored to account for the unique nature of the long term GS of CO2, while provi ding flexibility for site specific implementation. EPA adds that the purpose of the GS rule is not to incentivize or promote GS; rather it is to ensure that where GS is deployed, it is done in a manner that ensures USDW protection from endangerment.

Letter ID: 0177 Comment ID: 23594 Letter Lines: 839 to 846

Comment Code: 5430 2.9.1 Comments on proposed financia l responsibility requirements (40 CFR 146.85)

Comment: - More stringent treatment creates unnece ssary public percep tion issues: As a preliminary matter, imposing requiremen ts more stringent than (or even equivalent to) those currently imposed on hazardous waste may contribute to an unwarranted negative pu blic perception of CCS. EEI st rongly urges the Agency to exercise care not to stigmatize geological CO2 storage by equating it in any way with hazardous waste disposal, as doi ng so could affect public perception (thereby potentially hindering the permitting process) as well as perceptions by financial institutions (thereby potentially hindering project financing).

Individual Response: As described above, EPA believes that the tailored financ ial responsibility requirements are appropriate to the unique na ture of GS. Comments related to financial responsibility requirements resultin g in negative percepti ons of GS are outside the scope of this rulemaking. However, EPA does not agree that th e financial assurance re quirements will result in negative public perceptions of GS. EPA believes that the pub lic will be reassured that any necessary activities will be covered despite the owner’s or operator’s financial difficulties.
EPA adds that the purpose of the GS rule is not to encourage the use of GS; rather, the purpose of the GS rule is to ensure that, where GS is deployed, it is conducted in a manner that protects USDWs from endangerment.

Letter ID: 0177 Comment ID: 23595 Letter Lines: 848 to 881 ; 1285 to 1285

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

42CFR 146.85)

Comment: - Consideration of test projects: Small- scale test projects currently underway are providing opportunities to gather necessary information to explore how financial assurance concerns may best be addressed. EEI encourages the Agency to consider the experience of these pr ojects in moving forward with financial assurance provisions.
- Consideration of nature of early proj ects/incentives for early actors: Early CCS projects are likely to represent the utmost in site selection and characterization in order to minimize risk. Stringent fina ncial assurance requirements imposed in this context lik ely would not provide any additional protection to USDW. Furthe r, financial assurance requirements beyond those currently in existence under the UIC pr ogram would disincentivize early CCS projects from going forward. The Agency should consider financial assurance requirements in line with those currently imposed on other types of wells as a mechanism to incentivize these early projects.

- Consideration of the risk curve: Wh ile the Agency prope rly considers any unique threats that may be posed by the long -term nature of the storage at issue in a CCS project, the risk curve associat ed with a properly sited and managed project begins to fall off rapidly over tim e, [FN8] and well before the Agency‘s proposed financial assurance provisions would come to an end. Further, the proposed rules do not contain clear provisi ons for reducing financial assurance obligations over time in accordance w ith declining risk. Any financial assurance requirements imposed should be based upon the actualities of the risk curve for CCS projects, and ideally the risk curve for a particular CCS project.
- Lack of site-specific flexibility in some respects: While the details of activities to be assured--and in some cas es the likelihood that such activities would ever need to be carried out--could vary widely from project to project, the financial assurance requirements as proposed do not include provisions that would allow site-specific characteristics to be taken into account. It is crucial that any financial assurance requi rements be sufficiently flexible to take into account the particular risks a ssociated with any given project. All projects are not created equal, and thus not all risks are the same

[FN8] See id.

Individual Response: EPA agrees that it is appropriate to al low a flexible approach for financial responsibility. Under the final GS rule, 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 allo w 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-injec tion site care period rather than with the permit application). A

43demonstration of financial responsibility for all ph ases of the GS project will be required prior to the issuance of a Class VI permit (§146.85(a)(5)(i)).
Regarding the comment that some sites may not pos e the same risk as others, EPA notes that the cost of meeting the financial re sponsibility requirements is exp ected to be proportionate to the expected costs of each GS activity. Thus, owners or operators of smaller sites (e.g., that comprise smaller AoRs) may not need to provide financia l responsibility instrume nts that are as highly valued as a larger site. Regardless, all owner or operators must demonstrat e to the Director that their financial instrument is adequate to protect USDWs from endangerment.
EPA is developing guidance to help owners or op erators, permitting authorities, and third parties choose and evaluate appropriate financial methods and states may set mo re specific financial responsibility requirements if they so choose. Th e guidance will be available on EPA's website at http://water.epa.gov/type/groundwater /uic/wells_sequestration.cfm.
As described above, the purpose of the GS rule is not to encourage the use of GS; rather, the purpose of the GS rule is to ensure that, where GS is deployed, it is conducted in a manner that protects USDWs from endangerment.

Letter ID: 0177 Comment ID: 23596 Letter Lines: 883 to 901

Comment Code: 5430 2.9.1 Comments on proposed financia l responsibility requirements (40 CFR 146.85) Comment Code: 5436 2.9.1.3 Allowing separate financial demonstrations for plugging and abandonment and post-injection si te care (seeking comment)

Comment: - Ability to generate reliable cost esti mates for assured activities: Financial assurance requirements depend on the ability to obtain reliable cost estimates for the activity to be assured. If an accurate cost estimate cannot be developed for the activity at issue, th e financial assurance itself cannot be assumed to be appropriate--it may be in adequately protective, or it may be unduly burdensome. The Agency is proposing imposition of financial assurance requirements for activities that may occur more than 50 years in the future, with requirements to be satisfied at the time of permitting. The Agency should carefully examine whether at this time, or at the time of permitting, the cost of all of the activities re quired to be assured can be accurately estimated and assumed to be relatively accurate going fo rward. If not, financial assurance is no better than a guess. The preamble indi cates that EPA may be willing to consider a phased or staged approach to financial assurance requirements, as well as separate financial assurance demonstrations for plugging and PISC activities at later points in time. Su ch provisions would ease some of the difficulties with the financia l assurance proposal in te rms of estimating costs for future activities assuming that be tter estimation tools would become available, but, again, would not eliminat e any difficulties that may exist in forming cost estimates at the time of permitting.

44Individual Response: In the final rule, owners or operators are required to demonstrate, with their permit application, adequate financial resp onsibility for specific GS activities, including plugging and post-injection site ca re, per §146.85(a). EPA clarifies at §146.85(a)(6) that, prior to obtaining a Class VI permit, an owner or opera tor may demonstrate financial responsibility by using one or multiple qualifying financial instruments for specific GS activities, thereby realizing greater flexibility and cost savings from this re gulation. In the event that the owner or operator combines more than one instrument for a specific GS activity (e.g., well plugging), such combination must be limited to instruments th at are not based on fi nancial strength or performance (i.e., self insurance or performa nce bond), for example trust funds, surety bonds guaranteeing payment into a trust fund, letters of credit, escrow account, and insurance. In this case, it is the combination of instruments, rath er than the single instru ment, which must provide financial responsibility for an amount at l east equal to the current cost estimate.

EPA believes that the demonstrati on at the time of permit applicati on is important to ensure that resources are available to prevent the endangerm ent of USDWs in the event that the owner or operator experiences financial difficulties at a ny time during the life of the GS project. In addition, financial responsibility will need to be reevaluated prior to well plugging or site closure, or at any other time deemed appropriate by the Direct or, for example, following AoR reevaluations.

Letter ID: 0177 Comment ID: 23597 Letter Lines: 903 to 918 ; 1287 to 1290 ; 1292 to 1292

Comment Code: 5430 2.9.1 Comments on proposed financia l responsibility requirements (40 CFR 146.85)

Comment: - Market considerations: The above points as sume that there currently exist, or will exist by the time the proposed rules are finalized, appropriate financial assurance possibilities for operators . As noted in the Government Accountability Office (GAO)‘s September 2008 report on CCS,[FN9] stakeholders have already reported difficulties in obtaining insurance coverage for CCS projects.[FN10] Even where markets do ex ist, financial assu rance options may prove inordinately expensive to project operators and investor s, who may choose to walk away from projects rather than face millions of dollars in assurances for activities 50 years down the road th at may never occur. EEI strongly encourages the Agency to evaluate this i ssue carefully and ensure that it is not creating obligations with which operators simply cannot comply, or which are so expensive that commercial development and deployment of CCS will be crippled at the outset. One possibility in this regard would be for the Agency to limit financial assurance requirements to reasona ble caps (whether absolute caps or based on tons injected) in order to facil itate ability to secure the relevant financial instruments and thus CCS development.
[FN9] GAO, Report to the Ch airman of the Select Committee on Energy Independence and Global Warming, House of Representativ es, Climate Change: Federal Actions Will Greatly Affect the Viability of Carbon Capture and Storage As a Key Mitigation Option, GAO-08-1080 (Sept. 2008).

45[FN10] Id. at 25.

Individual Response: EPA anticipates that the availabil ity of third-party GS financial instruments will grow in response to demand for such instruments by GS well owners or operators as deployment of GS technology increase s in the future. In addition, EPA clarifies at §146.85(a)(6) that, prior to obtaining a Class VI permit, an owner or operator may demonstrate financial responsibility by using one or multiple qualifying financial instruments for specific GS activities, thereby realizing greater flexibility and cost savings fr om this regulation. In the event that the owner or operator combin es more than one instrument for a specific GS activity (e.g., well plugging), such combination must be limited to instruments that are not based on financial strength or performance (i.e., self insurance or performance bond), for example trust funds, surety bonds guaranteeing payment into a trus t fund, letters of credit, escrow account, and insurance. In this case, it is the combination of instruments, rather than the single instrument, which must provide financial res ponsibility for an amount at least equal to the current cost estimate.

Letter ID: 0177 Comment ID: 23598 Letter Lines: 920 to 929

Comment Code: 5430 2.9.1 Comments on proposed financia l responsibility requirements (40 CFR 146.85)

Comment: - Lack of appropriate standards for upda ting: The proposed rules would require operators to provide written updates of adju stments to cost estimates as assured plans are amended. However, the preamble suggests that the UIC program director "would set the frequency for... re-demonstr ation of financial responsibility and resources. It may be appropriate to re-demonstrate financial responsibility on a periodic basis" to take into account any changes in submitted plans. While a requirement to update financial assuran ce where changes in plans so warrant makes sense, a default periodic requ irement to re-demonstrate financial assurance absent some change in circumst ances that would require it would impose an unnecessary burden on operators.

Individual Response: EPA clarifies that the GS rule, at §146.85 requires the Director to evaluate the financial responsibility demonstra tion annually to confirm that the instrument(s) used remain adequate. EPA believes this is necess ary to assure that resources are available to prevent the endangerment of USDWs in the ev ent that the owner or operator experiences financial difficulties at any time dur ing the life of the GS project.
At §146.85(e), the rule states that if the Director determines duri ng the annual eval uation that the original demonstration is no longe r adequate to cover the cost of activities for which it is required, that the owner or operato r must provide an adjustment to the cost estimate within 60 days.

46Letter ID: 0177 Comment ID: 23599 Letter Lines: 931 to 957

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

Comment: - Lack of contemplation of third-party assumption of risk or liability: The preamble acknowledges that EPA is making no attempt to factor in circumstances in which a state, for example, or other third party has assumed long-term risk or liability for or ownership of stor ed CO2 (as is contemplated in the Interstate Oil and Gas Compact Commission (IOGCC) model statut e and regulations issued in September 2007 and the Octobe r 2008 Guidelines for Carbon Dioxide Capture, Transport and Storage, releas ed by World Resources Institute). It specifically notes that "SDWA does not provide EPA with the authority to transfer liability from one entity to the other. Trust responsibility for potential impacts to USDWs remains with the owner or operator indefinitely under current SDWA provisions." While EEI ac knowledges that EPA‘s authority with regard to issues of liability transfer s for CCS projects generally speaking is limited, we encourage the Agency to consid er that liability transfers may be effectuated under other laws and to examin e closely how the UIC rules can take such provisions into account.
For example, the current UIC regulations at least contemplate changes in ownership of projects; see, e.g., 40 C.F. R. § 144.66, which provides that where a state assumes legal responsibility for compliance with plugging and abandonment requirements or assures stat e funding for such requirements, the operator is deemed to have satisfied app licable financial assu rance requirements where the Administrator determines that the state‘s assumption is at least equivalent to available financial assuran ce mechanisms. As another example, one option within the Agency‘s SDWA jurisd iction may be to include a similar provision indicating that where a third party assumes a permittee‘s regulatory obligations, the permittee is deemed to have satisfied applicable financial assurance requirements, which can then be terminated as to the permittee.

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

47measures 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.
The Agency clarifies that Class VI well permits may be transferred to another owner or operator pursuant to §144.38 whereby generally all other regulatory re sponsibilities are transferred to that new owner and operator, which includes all poten tial liabilities associat ed with meeting the requirements of that permit. Please see further clar ification on the issue of long term liability in the preamble of the final rule.
Furthermore, after site closure an owner or ope rator may remain liable under tort and other remedies, or under other federal statutes includi ng, but not limited to, Clean Air Act, 42 U.S.C. §§ 7401-7671; CERCLA, 42 U.S.C. § 9601-9675; and RCRA, 42 U.S.C. § 6901-6992. EPA does not have authority to transfer 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.

Letter ID: 0177 Comment ID: 23600 Letter Lines: 959 to 971

Comment Code: 5432 2.9.1.1 Need to adjust financial responsibility mechanisms (seeking comment) Comment Code: 5434 2.9.1.2 Need for additional instruments (seeking comment)

Comment: - Comments on specific financial assurance mechanisms: The preamble seeks comment on what types of financial assuranc e mechanisms should be made available for GS projects. While a number of m echanisms currently exist under the UIC program, such as trust funds, surety bonds, insurance and satisfaction of a corporate financial test (with or without a third-party guara ntee), the guidance outlining available mechanisms should provide Agency decision-makers with flexibility to take operator and project-sp ecific considerations into account. In addition, current "form" corporate fina ncial test documents may require that corporations have certain financial information availa ble (such as bond ratings) that they may lack, but do not clearly allow for substitution of substantially equivalent financial information for pu rposes of satisfying the test. Any financial assurance regulations should pr ovide the Agency with considerable flexibility in how to determine a permittee‘s financial position.

Individual Response: EPA will retain self insurance as an option for financial responsibility for Class VI wells. EPA believes that if properly used, the financial te st can be an appropriate option for some owners or operators. EPA recognizes that it is important for sel f-insurers to be creditworthy, otherwise USDWs may not be adequately protected. Owner or operators who choose to self-insure and use the financial test must be ab le to demonstrate profit ability, with a margin

48sufficient to cover contingencie s and unknown obligations, and stab ility. 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 fi nancial obligations based solely on the strength of the company’s financial condition.
Furthermore, EPA is developing guidance (available on EPA's website at http://water.epa.gov/type/groundwat er/uic/wells_sequest ration.cfm) to assist Directors in evaluating the appropriateness of the financial test in specific circumstances. EPA will provide examples of "substantiall y equivalent" financial information to that can be used to fulfill a financial test.
Owners or operators may choose from a variety of financial instruments listed in §146.85(a) to meet their financial responsibility obligations , provided the Director determines that the operator's proposed financial responsibility dem onstration is adequate to protect USDWs from endangerment by demonstrating the ability 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, a nd emergency and remedial response.

Letter ID: 0177 Comment ID: 23601 Letter Lines: 973 to 1037

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

Comment: G. Grandfathering Provisions
The sixth general area of concern addresse d in these comments involves how two categories of existing injection wells in particular should be treated in the final regulations. The first such catego ry includes existing CO2 injection and storage wells that have been permitted as "experimental" wells under the Class V UIC regulations or pilot projects that have been permitted as industrial projects under the Class I UIC regulations. The second category of existing wells under consideration includes Class II wells that inject CO2 for purposes of EOR.
EPA has proposed giving the UIC program discretion to "grandfather" the construction requirements for existing Cla ss I, II and Class V wells where the UIC program director can de termine that the wells will not endanger USDW. Such grandfathering is soundly justified, as these wells have been constructed specifically for injection and, particularly in the case of Class I and V wells associated with CCS pilot projects, for storage of CO2 and are suitable for the purpose for which they are designed; the promulgation of new regulations should not render them unfit for the purpose for which they were intended. Further, permittees of these wells presumably were required to satisfy the nonendangerment standard as part of the initial permitting process.
However, the limited scope of the pro posed grandfathering--with the sole exception of the construction requirement s, operators would be required to

49satisfy all provisions of the Class VI permitting requirements--coupled with the fact that its use is left to the UI C program director‘s discretion, casts considerable doubt on its potential efficac y. First, under these circumstances, potential grandfathering likel y would not provide the need ed assurance--and thus the needed incentives--to project operator s or investors that existing wells, or, perhaps more importantly, new wells that may be permitted before the proposed rules take effect, will remain viable wells from a regulatory perspective going forward. Under those ci rcumstances, the pote ntial risks of "first actor" status may well outweigh any potential benefits. For example, limiting grandfathering for Class I or V experimental wells to construction requirements risks greatly reducing incentiv es for operators to undertake such projects, as at some point in the future they will be required to assume a far more stringent slate of obligations (i ncluding onerous financial assurance requirements). Moreover, given many of the other proposed limitations on GS projects, such as the restrictions on receiving formations, grandfathering may prove impossible even for projects that we re specifically desi gned to inject and store CO2.
As noted above, wells permitted to inject and store CO2 have already been deemed safe and suitable for those purposes, and a determination has already been made that no endangerment is posed to USDW. Under these circumstances, leaving a grandfathering determination to the discretion of the program director--discretion that may be exercise d where the director determines that there is no endangerment to USDW--is unnecessarily duplicative of existing requirements and limiting for project operators. The desired protection of USDW has already been estab lished for these projects, and absent some change in circumstances, that protection will remai n. Further, leaving grandfathering to the discretion of the program director c ould result in a decision that, as a practical matter, comes too late for it to be viewed as a legitimate option at the start of a project.
The rules’ grandfathering provision should be as expa nsive as possible while balancing the need for prot ection of USDW, and thus EEI recommends two principal modifications to the proposed provision. First, a preferable approach to limiting the scope of grandfathering only to construction requirements is to expand the scope of available grandfatheri ng for existing wells, given that the wells were constructed for injection of CO2 in the fi rst instance. Further, rather than leave grandfathering to the discretion of the pr ogram director, a preferable approach is to allow grandf athering as a default rule unless the program director determines that, pursuant to specified criteria, the specific nature of the project renders it unsuitable for CO2 storage.

Individual Response: As described above, EPA agrees that many Class I, Class II, and Class V experimental technology wells are designed and constructed to withstand exposure to CO2, and the final GS rule provides for the construction of these wells to be gr andfathered per §146.81(c), provided the owner or operator can demonstrate to the Director that the wells were engineered

50and constructed to meet the requirements at §146. 86(a) and ensure protec tion of USDWs, in lieu of requirements at §146.86(b) and §146.87(a). Howeve r, EPA disagrees that other requirements (e.g., MITs, siting, monitoring, operational, and AoR requirements) should also be grandfathered because the Class I, II, and V requirements are not tailored to address inje ction of large volumes of CO2 for long term storage.

Letter ID: 0177 Comment ID: 23602 Letter Lines: 1039 to 1083 ; 1294 to 1294

Comment Code: 5520 2.10.1 Appropriateness of existing p ublic participation requirements (Part 25 and Part 124) for GS (seeking comment)

Comment: H. Public Participation Provisions
The preamble seeks comment on what public participation provisions should be included for GS wells. EEI shares the Ag ency‘s view that accurate public perception and increased understanding of CCS technology are cr itical to its success at the commercial level. To that end, EEI supports the development of regulations and policies that will serve to educate th e public and provide for appropriate public input on projects. The preamble proposes to apply the public participation provisions of 40 C.F.R. Parts 25 and 124 to GS projects and seeks comments on the appropriateness and comple teness of those provisions for this task. EEI agrees that public participation provisions currently existing under the UIC program are appropriately applied to GS projects as well. However, Part 124 includes provisions for public partic ipation that are unique to other programs, including RCRA.[FN11] Imposition of public participation provisions like those currently applicable under RCRA is unnecessary and undesirable for GS projects, as further explained below.
The general public pa rticipation requirements under the UIC program provide for operators to submit a permit application, co mplete with all information required by the regulations, and for a completeness review of the submitted information. The public comment period is generally comm enced once the director has prepared a draft permit for the project. This is a rationale approach for GS projects. It allows the project operator and the Ag ency to make preliminary decisions, such as decisions related to siting, that are critical to th e success of the project generally--and to the protecti on of USDW specifically--based upon appropriate geologic and tec hnical considerations. It th en allows the public to review the proposed project in light of all of the information that would be required for permit issuance, including, fo r example, in the GS context, specific information related to siting, construction, operation and monitoring.
However, the RCRA public participation provisions provide fo r, under certain circumstances, public meetings prior to submission of a permit application for a hazardous waste management unit. While th e siting of RCRA-regulated facilities is obviously based on a number of concre te considerations, the siting of GS projects is dependent upon site geology to an extent that does not exist in the

51RCRA context. While EEI supports creation of provisions that allow for public input into projects, issu es related to project si ting are particularly susceptible to public response, which ma y be based upon improper perceptions of risk or desires that projects be sited elsewhere rather than upon true risks that a project may pose to USDW. EEI enc ourages the Agency to craft provisions that support decision-making based upon sound science and do not unduly hamper siting decisions. In addition, as is echoe d throughout these comments, imposing provisions on GS projects similar to t hose imposed upon hazardous waste in and of itself may feed into public mispercep tions regarding the na ture of projects and their safety as a general matter.
[FN11] See generally 40 C. F.R. Part 124, Subpart B.

Individual Response: EPA agrees that the existing UIC pub lic participation requirements as specified in 40 CFR 25 and 40 CFR 124 are appropria te for GS projects. In addition, because of the unique nature of GS projects, and the anticipa ted level of public intere st in GS projects, EPA encourages early public involvement in GS proj ects. Providing the public with accurate, project specific information in the early stages of each GS project can help clar ify project details and avoid public misperceptions about the nature and sa fety of GS projects, a nd will allow a potential GS owner or operator and the permitting agency to address the public's concerns before the permitting process is complete.
In response to comments regarding the requirements in 40 CFR Parts 25 and 124 applicable under RCRA, EPA clarifies that only the public pa rticipation requirements pertaining to the UIC program apply to Class VI wells.

Letter ID: 0177 Comment ID: 23603 Letter Lines: 1085 to 1089

Comment Code: 5560 2.10.3 Enhancing the public particip ation process (seeking comment)

Comment: Finally, EEI notes that the Internet has become an important source of information for the public, and EEI echoes the Agency‘s desire to utilize its capabilities to provide not only for public involvement, but also--perhaps more importantly as an initial matter--for public education on the benefits and true risks of CCS projects.

Individual Response: EPA agrees with commenters that th e use of new forms of information technology can improve public participation and unde rstanding of GS project s and the associated injection technologies involve d. EPA is not requiring the use of any new information technologies to inform the public, but encourages GS project operators and permitting authorities to use the Internet as well as both new and es tablished tools to explain and post information on the latest developments. This information may include schedules for hearings, briefings, and other opportunities for involvement. EPA plans to conduct outreach on the GS rule, and provides GS related information on its website at http://water.epa.gov/type/groundwat er/uic/wells_sequest ration.cfm. EPA currently uses social networking applications for important in formation (e.g., Facebook and Twitter), and will

52encourage GS operators and permitting authorities to use similar technologies to keep the public informed of GS projects.

Letter ID: 0177 Comment ID: 23604 Letter Lines: 1091 to 1116

Comment Code: 5600 2.11 Comments related to UIC Program primacy for Class VI wells Comment Code: 5610 2.11.1 Allowing partial primacy for Class VI wells (seeking comment)

Comment: I. State Primacy Provisions
The proposed rules seek comment on whethe r states should be permitted to seek primacy for Class VI wells, noting the Agen cy‘s belief that "the most effective approach for the comprehensive management of CO2 GS projects w ould be achieved at the State and Tribal level." EEI agrees that states and tribes should play a key role in managing CCS projects going fo rward. Numerous states have decades of experience regulating CO2 injecti on through Class II programs, and those states in particular may have much to offer in the context of Class IV wells. Further, many states are moving ahead with developing their own legislation and regulations related to CCS activities--in many cases laws and rules that go beyond the scope of EPA‘s jurisdiction, such as incentives provisions and provisions clarifying the nature of pote ntially affected property rights. Allowing those states to ta ke on primacy for Class VI wells (in particular, allowing them to take on primacy for Cl ass VI without assuming the regulatory burden that may be associated with other well classes) will help ensure that they are given credit and recognition for their groundbr eaking work on CCS. EEI supports increased funding for those states that have primacy for Class VI wells to ensure that sufficient resources exis t to review appropriately the complex permit applications GS pr ojects will entail.
EEI also encourages the Agency to consider potential issues related to projects that may span multiple states in lig ht of primacy issues. Under such circumstances the rules could include, fo r example, provisions for establishing a primary state for permitting purposes, with additional affected states provided an opportunity fo r notice and comment.

Individual Response: As described above, EPA will allow states to apply for primacy for Class VI wells independently of primacy for other well classes, and will allow independent primacy for Class VI wells under §145.1(i) of the final GS rule.
In response to the question about which state or region would oversee th e permit for projects where the AoR spans State, Tribal or Territo rial boundaries, EPA clarif ies that issuance and oversight of a GS permit, including any associ ated AoR boundary relate d coordination, is the responsibility of the primacy (State, Tribal, or Territorial) or regional DI program in the state where the injection well is located.
Because some GS projects will require coordi nation across State, Tribal, and Territorial

53jurisdictions, the Agency will work with the appropriate entities to facilitate communication among States, Tribes, and Territori es interested in obtaining pr imacy during the implementation phase of the GS regulation. Such communication may involve other organizations such as the Sierra Club, NDWAC, associations, and other experts. However, the responsibility for addressing such subjects ultimately rests with the States, Tribes, and Territories with primacy. EPA is developing primacy implementation materi als for states that de scribe trans-boundary issues that should be addressed in permitting Class VI wells under the GS regulation. The materials will be available at http://water.epa.gov/t ype/groundwater/uic/wells_sequestration.cfm.
EPA understands that the CO2 plumes for large GS projects may cross State, Tribal, Territorial or EPA Regional boundaries. The final GS rule, at §146.82(a)(2), requires the owner or operator to identify all State, Tribal, and Territorial boundaries within the AoR. Based on this information, the Director must provide written notif ication to all States, Tribes, and Territories to inform them of the permit app lication, as specified in §146.82(b) , and ensure that they are involved in any necessary processes (e.g., develo pment of the emergency and remedial response plan, as specified in §146.94). The Agency enc ourages transparency in the permitting process and expects that State-State/State-Tribal communication on GS permitting will facilitate information sharing and encourag e safe, protective projects.

Letter ID: 0177 Comment ID: 23605 Letter Lines: 1118 to 1136 ; 1296 to 1300

Comment Code: 1630 1.3.3 RCRA/hazardous waste i ssues (seeking comment) Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

Comment: J. Issues Related to Potential Applic ation of Other Environmental Laws

EEI and our members are concerned about the potential application to CCS activities of environmental laws that we re, without exception, not intended to apply to CCS or even crafted with CCS in mind and that could impose significant obligations and potential liabilities no t only on project operators, but also potentially on other entities in the CO 2 chain, such as entities producing the CO2 that is ultimately injected. Thes e laws include in particular the Comprehensive Environmental Response, Comp ensation, and Liability Act (CERCLA or Superfund) and RCRA. EEI agrees that issu es related to potential liabilities under these laws must be resolved.[FN12] Setting aside for the moment important questions of whether either of these laws could apply to CCS activities and, if so, precisely how and to what extent, EEI does not disagree with the Agency‘s position that drafting a clear exception fr om either of these regimes may be difficult in the sole context of this SDWA UIC rulemaking. Nonetheless, EEI urges EPA to evaluate carefully any propos ed treatment of these two laws (or others) that it may be considering under th e Class VI regulations to ensure that any such treatment is necessary and does not serve as an unintended springboard for hampering the successful commercialization of CCS.
[FN12] The recent released GAO report on CCS echoes the importance of addressing these liability issues. GAO recommends th at EPA examine its authorities and

54responsibilities the under RCRA and CERCLA to determine "where additional statutory authority might be needed to address key regulatory and legal issues related" to CCS. GAO repor t, supra n. 9, at 52.

Individual Response: As described above, EPA has decide d 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.

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 “f ederally permitted releases” 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: 0177 Comment ID: 23606 Letter Lines: 1138 to 1178 ; 1302 to 1302 ; 1304 to 1304

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

Comment: To turn briefly to the RCRA issue, EPA comments in the preamble that SDWA is currently used to regulate the injection of both "pollutants" and "commodities"; therefore, the rules do not n eed to address the status of CO2 as a pollutant or a commodity.[FN13] Regardless, the preamble continues to include an analysis of the potential application of RCRA to CO2 injection and storage activities that appears to be based upon an assumption that CO2 is in fact not a commodity, but a waste.
As the Agency is aware, RCRA regulates production, management and disposal of wastes; RCRA‘s potential application thus depends upon existence of a waste in the first instance (more particularly, a solid waste). Once a material is deemed to be "discarded" and thus a solid waste, an additional set of parameters applies to determine whether that substa nce is also a hazardous waste and thus subject to further regulation. It is li kely within EPA’s regulatory ambit (albeit under RCRA) to determine that CCS activities meeting permit requirements are not equated to discarding the CO2, and EEI recommends that EPA examine that approach.
Further, while the preamble notes that it is unnecessary to label CO2 a waste or a commodity for purposes of proposing and implementing UIC regulations for its injection and storage, it jumps to an unnecessary and potentially confusing discussion of whether injected CO2 may be a hazardous waste, thus perhaps

55implying the assumption that CO2 is a solid waste to begin with. The preamble states:
Because the types of impurities and their concentrations in the CO2 stream are likely to vary by facilit y, coal composition, plant operating conditions, and pollution removal te chnologies, EPA cannot make a categorical determination as to whet her injected CO2 is hazardous under RCRA.[FN14]
Thus, EPA states, operators "will need to characterize their CO2 stream as part of their permit application to determin e if the injectate is considered hazardous" under RCRA, and potential applica tion of RCRA is left to a case-bycase determination depending upon the conten ts of the injectate. EEI submits that any characterization of potentially hazardous constitu ents in CO2 injectate may be addressed as part of the UIC permitting process without addressing any potential RCRA jurisdictional issues. Fo r instance, EPA could appropriately establish a permit condition that injectat e must meet Toxic ity Characteristic Leaching Procedure or pH standards, wit hout reference to the material‘s waste status.
[FN13] 73 Fed. Reg. 43496, col.3

[FN14] Id. at 43503, col. 3.

Individual Response: First, EPA notes that the final GS rule, which adds new regulations for Class VI wells under the Safe Drinking Water Ac t (SDWA), is not making any changes to the RCRA regulations, which continue to apply on their own terms.

At the same time, under the final GS rule, owners or operators will need to determine whether the CO2 stream is hazardous under EPA’s RCRA re gulations, and if so, any injection of the hazardous CO2 stream may only occur in a Class I hazardous waste injection well under 40 CFR Part 146 Subpart G. Conversely, Class VI wells cannot be used for the co-injection of RCRA hazardous wastes (i.e., hazardous wastes that are injected along with the CO2 stream).

As described above, 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 r ead 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 comme nt period for that rule.

Letter ID: 0177 Comment ID: 23607 Letter Lines: 1180 to 1220

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

56Comment: As to CERCLA, the preamble states that the statute "exempts from liability certain 'federally permitted releases' in cluding releases in compliance with a UIC permit under SDWA. Therefore, Class VI requirements and permits will need to be carefully structured to ensure th at they do not 'authorize' inappropriate hazardous releases. This would include clarifying if there are potential releases from the well which are outside the scope of the Cla ss VI permit." The preamble continues on to request comment on "particular situations where this might occur" as well as more generally on "other considerations associated with the presence of impurities in the CO2 stream related to CERCLA." This discussion implies that, in the first inst ance, activities associated with CCS could be subject to CERCLA.
EEI acknowledges that limits exist on EPA‘s ability to affect issues related to potential CERCLA liability in the context of this SDWA rulema king. Nonetheless, EEI submits that EPA should seek to provi de as much clarity and certainty as possible in this context to allow for the most expansive application of CERCLA‘s federally permitted release exemption as appropriate to activities permitted under the proposed rules. Insofar as the c ontents of a given CO2 stream will be characterized for permitting purposes and, as the permit may identify particular impurities in the stream, the presence of such impurities would fall squarely within the federally permitted rel ease exemption should not result in "inappropriate hazardous rele ases." Further, the applic ation of the federally permitted release exemption to the e xpected, intended composition of the injectate does not inappropria tely undermine other limits on the application of the federally permitted release exemption that may exist, potentially including situations where an impurity not contem plated by the permit writer is introduced into the stream or where hazardous subs tances in the injectate cause the incurrence of response costs where mate rial permit compliance has not been maintained.
Furthermore, as noted above, the prea mble‘s discussion is based on the assumption that CERCLA would be triggered in the first instance. As the Agency is aware, CERCLA liability (at minimum for certain classes of potentially responsible parties) turns to a significant extent on whether there has been "disposal" of hazardous substances. As with the RCRA issue, a determination of this issue is unnecessary from the pers pective of regulati ng injection and storage of CO2 under the UIC program, and EEI urges the Agency to avoid creating unnecessary hurdles for the su ccessful commercial deployment of CCS by assuming potential applications of other statutes that may not come into play. EEI also encourages the Agency, pursuant to it s authority under RCRA and CERCLA, to examine possibilities for exemption or exclusion from those programs.

Individual Response: The Agency thanks the commenter for their detailed comments regarding the scope and possible impacts of CERCLA liability on CCS activities, and in particular comments related to the CERCLA exemption for federally-permitted releases. EPA notes that

57the GS rule is not promulgated under CERCLA, therefore the applicability of th at statute will not be determined under the SDWA or the terms of the GS rule, but rather according to the CERCLA statute itself and any implementing regul ations that may apply. To the extent the commenter is seeking interpre tations of CERCLA a nd its related provisions, such as the definition of a federally permitted release, such interpretations are beyond the scope of this rulemaking.
With respect to the commenter’s reference to RCRA, EPA received many comments regarding the applicability of the RCRA re gulations and statute to CO2 st reams that are geologically sequestered under the final Class VI UIC well requirements. As a result, EPA has decided to initiate a separate proposed rulemaking specificall y to examine the issue of RCRA applicability to CO2 streams being geologically sequestere d, 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 propos al. 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 Ag ency notes that commenters who wish to submit comments on the RCRA proposal will need to do so during the comment pe riod for that rule.

Letter ID: 0177 Comment ID: 23608 Letter Lines: 1222 to 1249 ; 1306 to 1312 ; 1314 to 1316

Comment Code: 1310 1.1.2.4 Comments on other "out of scope" issues, e.g., pore space ownership

Comment: K. Issues Related to Potentially Implicated Property Rights
Finally, although EEI recognizes the limits on EPA‘s jurisdicti on regarding CCS projects, our members appreci ate the Agency raising for public comment issues related to property rights that may be associated with CO2 injection and storage. While the importance of EPA‘s rulemaking as an important step in providing clarity, flexibility and certainty for project operators and investors cannot be overstated, CCS projects ma y not go forward in the absence of resolution of property rights-related issues.
Numerous property rights may be implic ated by a given CCS project, including ownership interests in the surface property to be used for injection equipment, the subsurface property housing the injec tion well, the "pore space" in which CO2 will be stored, and water rights and mi neral interests that may exist in the area. Currently, an entity interested in pursuing a CCS project is left to sort out who owns these various interests, an exercise that is a combination of applicable state law--to the extent any applicable state law exists--and sitespecific due diligence.[FN15] This exercise is likely fraught with considerable uncertainty and expense and must be su ccessfully completed in order for a project to begin. Commercial deployment of CCS technology may be advanced considerably through legal mechanisms at the state and federal levels that assist potential permittees in working through property rights-related issues. Available mechanisms may range from laws that clarify presump tions related to

58ownership of various implicated interests [FN16] to provisions allowing for use of eminent domain authority to obtain such interests. EEI supports further exploration and discussion of these issues , and EPA‘s efforts to solicit public views will serve to raise stakeholder a nd policy-maker awareness regarding the importance of their resolution to the succe ssful commercial de ployment of CCS.
[FN15] The proposed regulations would al so require the permittee to record a notice on the deed (or othe r relevant document) to the "facility property" containing certain informa tion. While EEI is not opposed to the concept of a deed notice, more clarity is needed in the regulations regarding how "facility property" is to be defined in order to better understand th e scope of the proposed requirement. EEI recommends limitin g "facility property" to the area immediately surrounding the injection well.
[FN16] See Wyoming‘s House Bill 89, http://legisweb.state.wy.us/2008/Enroll/HB 0089.pdf, which became law in July 2008.

Individual Response: As described above, EPA clarifies th at pore space owne rship and surface and subsurface property and mineral rights are outside of the scope of the Class VI GS rulemaking, which focuses on ensuring consistency in permitting underground injection of CO2 at GS operations across the United States and prov ide requirements to prevent endangerment of USDWs in anticipation of the eventual use of GS to reduce CO2 emissions.
EPA recognizes the importance of providing cl ear, flexible, scalable, and appropriate regulations. EPA believes that the Class VI GS regulation will provi de certainty to industry and the public by providing consistency in requirements across the U.S. and tr ansparency about what requirements apply to ow ners or operators.

Letter ID: 0177 Comment ID: 25116 Letter Lines: 1306 to 1312

Comment Code: 4730 2.7.3 Reporting associated with closur e and post-injection site care

Comment: [FN15] The proposed regulations would al so require the permittee to record a notice on the deed (or othe r relevant document) to the "facility property" containing certain informa tion. While EEI is not opposed to the concept of a deed notice, more clarity is needed in the regulations regarding how "facility property" is to be defined in order to better understand th e scope of the proposed requirement. EEI recommends limitin g "facility property" to the area immediately surrounding the injection well.

Individual Response: EPA believes the requirements for submitting of survey plats, as specified at §146.93(f), and recording a notation on the deed to the facility property th at the land has been used to sequester CO2, as specified at §146.93(g) are sufficiently clear. Additionally, they are important to ensure that future land owners do not inadvertently drill wells or perform other activities that may compromise the injection zone and/or confining zone and cause CO2 or other

5960 fluids to migrate into USDWs or other formati ons or to the surface. While EPA recognizes that this may entail a large area at large GS sites, the Agency believes that this requirement is necessary to maximize protection of USDWs from endangerment a nd human health. Please note that “facility” is defined at §144.3. See the final rule and preamble for further discussion on EPA's final approach to site closure.