(XI-1) 04/2013 CHAPTER 43-05-01

GEOLOGIC STORAGE OF CARBON DIOXIDE

43-05-01-01. DEFINITIONS. The terms used throughout th is chapter have the same meaning as in chapter 43-02-03 and North Dakota Century Code chapter 38-08 except:

1. "Abandoned well" means a well whose use has been permanently discontinued or which is in a state of disrepair such that it cannot be used for its intended purpose or for observation purposes.

2. “Activity” means any activ ity related to the geologic storage of carbon dioxide subject to regulation under this chapter and North Dakota Century Code chapter

38-22.

3. "Aquifer" means a geological formation, gr oup of formations, or part of a formation that is capable of yielding a significant am ount of water to a we ll, spring, or other point of discharge.

4. “Area of review” means the region surr ounding the geologic sequestration project where underground sources of drinking wate r may be endangered by the injection activity.

5. “Bond rating” means a rating assigned to a ny long-term senior secured indebtedness issued by or on behalf of the storage ope rator, including any i ndebtedness issued by any governmental authority with respect to which the storage operator is obligor.

6. “Carbon dioxide plume” means the extent underground, in three dimensions, of an injected carbon dioxide stream.

7. “Carbon dioxide stream” means carbon dioxid e that has been captured from an emission source (e.g., a coal-burning power plant), plus incidental associated

substances derived from the source mate rials and the capture process, and any

substances added to the stream to enable or improve the injection process. This does not apply to any carbon dioxide stream that meets the definition of a hazardous

waste.

8. "Casing" means a pipe or tubing of varyi ng diameter and weight, which is installed into a well to maintain the structural integrity of that well.

9. “Cementing” means the operation whereby a cement slurry is pumped into a drilled hole and forced behind the casing.

10. "Closure period" means that period fr om permanent cessation of carbon dioxide injection until the commission issues a certificate of project completion.(XI-2) 04/2013 11. “Confining zone” means a geologic forma tion, group of formations, or part of a formation stratigraphically overlying the inje ction zone that acts as a barrier to fluid movement. For injection wells operating unde r an injection depth waiver, confining zone means a geologic formation, group of formations, or part of a formation stratigraphically overlying and underlying the injection zone.

12. "Contaminant" means any physical, chemi cal, biological, or ra diological substance

or matter in water.

13. “Corrective action” means the use of co mmission-approved methods to ensure that

wells within the area of revi ew do not serve as conduits for the movement of fluids into underground sources of drinking water.

14. “Draft permit” means a document prepar ed under section 43 -05-01-07.2 indicating

the commission’s tentative decision to is sue a storage facility permit or modify, revoke and reissue, or terminate an existing storage facility permit.

15. “Exempted aquifer” means an “aquifer” or its portion that meet s the criteria in the definition of “underground sources of dri nking water” but which has been exempted according to the procedures in section 43-05-01-02.4.

16. “Facility area” means the areal ex tent of the storage reservoir.

17. “Fault” means a surface or zone of rock fracture along which there has been displacement.

18. “Flow lines” means pipelines transportin g carbon dioxide from the carbon dioxide injection facilities to the wellhead.

19. "Fluid" means any material or substanc e which flows or moves, whether in a semisolid, liquid, sludge, gas, or any other form or state.

20. “Formation” means a body of rock char acterized by a degree of lithologic homogeneity which is prevailingly, but not necessarily, tabular and is mappable on

the earth’s surface or traceab le in the subsurface.

21. "Formation fluid" means fluid present in a formation under natural conditions as opposed to introduced fluids.

22. “Formation fracture pressure” means the pressure, measured in pounds per square inch, which, if applied to a subsurface formation, will cause that formation to

fracture.

23. “Geologic sequestration” means the geol ogic storage of a gaseous, liquid, or supercritical carbon dioxide stream in a stor age reservoir. This term does not apply to carbon dioxide capture or transport.(XI-3) 04/2013 24. “Geologic sequestration project” means an injection well or wells used to emplace a

carbon dioxide stream beneath the lowe rmost formation containing underground sources of drinking water; or, wells used for geologic sequestration that have been granted a waiver of the injection depth requirements; or, wells used for geologic sequestration that have received an expa nsion to the areal extent of an existing enhanced oil or gas recovery aquifer exemption. It includes the subsurface

three-dimensional extent of the carbon di oxide plume, as well as the associated pressure front.

25. "Ground water" means water occurring bene ath the surface of the ground that fills available openings in rock or soil mate rials such that they may be considered

saturated.

26. “Injection well” means a nonexperimental well used to inject car bon dioxide into or

withdraw carbon dioxide from a reservoir.

27. “Injection zone” means a geologic forma tion, group of formations, or part of a

formation that is of sufficient areal exte nt, thickness, porosit y, and permeability to receive carbon dioxide through a well or wells associated with a geologic sequestration project.

28. “Mechanical integrity” means the absence of significant leakage within an injection well’s tubing, casing, or packer (internal mechanical inte grity), or outside of the casing (external mechanical integrity).

29. "Minerals" means coal, oil, and natural gas.

30. “Model” means a representation or simula tion of a phenomenon or process that is difficult to observe directly or that occu rs over long timeframes. Models that support geologic sequestration can predict the flow of carbon dioxide within the subsurface, accounting for the properties and fluid content of the subsurface

formations and the effects of injection parameters.

31. "Operational period" means the peri od during which injection occurs.

32. "Packer" means a device lowered into a well, which can be expanded or compressed to produce a fluid-tight seal.

33. “Person” means an individual, association, pa rtnership, corporation, municipality, state, federal, or tribal agency, or an agency or employee thereof.

34. "Plug or plugging" means the act or process of sealing the flow of fluid into or out of a formation through a borehole or "w ell" penetrating that formation.(XI-4) 04/2013 35. “Postclosure period” means that period afte r the commission has issued a certificate of project completion.

36. “Postinjection site care” means appropriate monitoring and other actions, including corrective action, needed following cessation of injection to ensure that underground sources of drinking water ar e not endangered. Po stinjection site care may occur in the closure or postclosure periods.

37. "Pressure" means the total load or force per unit area acting on a surface.

38. “Pressure front” means the zone of elevated pressure and displaced fluids created by the injection of carbon dioxide into the subsurface. The pressure front of a carbon dioxide plume refers to a zone where there is a pressure differential sufficient to cause the movement of injected fluids or formation fluids into underground sources of drinking water.

39. “Project completion” means the point in time, as determined by the commission at which the certificate of project completion is issued and the storage operator is released from all regulatory requirement s associated with th e storage facility.

40. "Stratum" (strata plural) means a single sedimentary bed or layer, regardless of thickness, that consists of generally the same kind of rock material.

41. "Subsurface observation well" means a we ll used to observe subsurface phenomena, including the presence of carbon dioxide, pr essure fluctuations, fluid levels and flow, temperature, and in situ water chemistry.

42. “Surface casing” means the first string of well casing to be in stalled in the well.

43. “Transmissive fault or fracture” means a fault or fracture that has sufficient permeability and vertical extent to allow fluids to move between formations.

44. “Trapping” means the physical and geochemi cal processes by which injected carbon dioxide is sequestered in the subsurface. Physical trapping occurs when buoyant

carbon dioxide rises in the formation until it re aches impermeable strata that inhibits further upward and lateral migration or is immobilized in pore spaces due to capillary forces. Geochemical trapping occu rs when chemical reactions between the injected carbon dioxide and natural occurri ng minerals in the fo rmation lead to the precipitation of solid carbonate minerals or dissolution in formation fluids.

45. "Underground source of drinking water" m eans an aquifer or any portion of an aquifer that supplies drinking water for hu man consumption, or in which the ground water contains fewer than ten thousand millig rams per liter total dissolved solids and is not an exempted aquifer as de termined by the co mmission under section

43-02-05-03.(XI-5) 04/2013 46. “Well” means a bored, drilled or driven shaft, or a dug hole, whose depth is greater than the largest surface dimension; or an improved sinkhole; or a subsurface fluid distribution system.

History: Effective April 1, 2010; amended effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-02. SCOPE OF CHAPTER. This chapter governs th e geologic storage of carbon dioxide. This chapter does not apply to applic ations filed with th e commission proposing to use carbon dioxide for an enhanced oil or gas r ecovery project, rather such applications will be processed under chapter 43-02-05.

History: Effective April 1, 2010; amended effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-02.1. APPLICATION OF RU LES FOR GEOLOGIC STORAGE OF

CARBON DIOXIDE. In addition to the provisions in this chapter, injection wells utilized for geologic storage are subject to the provisi ons of chapters 43-02-03 and 43-02-05 when applicable.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-02.2. INJECTION INTO UNDERGROUND SOURCE OF DRINKING

WATER PROHIBITED. Underground injection of carbon dioxi de for geologic storage that

causes or allows movement of fluid into an underground source of drinki ng water is prohibited, unless the underground source of drinking wate r is an exempted aquifer under section

43-02-05-03.

No storage operator shall construct, operate, mainta in, convert, plug, abandon, or conduct any injection activity in a manner that allows th e movement of fluid containing any contaminant into underground sources of drinking water, if the presence of that contaminant may endanger underground sources of drinking water or may a dversely affect the hea lth of persons. The applicant must show that the objectives of this section are fulfilled.

Notwithstanding any other provision of this section, the commission may take emergency action upon receipt of information that a contamin ant which is present in or likely to enter a(XI-6) 04/2013 public water system or underground source of drinking water may present an imminent and substantial endangerment to the health of persons.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-02.3. TRANSITIONING FROM ENHANCED OIL OR GAS RECOVERY TO GEOLOGIC SEQUESTRATION. A storage operato r injecting carbon dioxide for the primary purpose of geologic sequestration into an oil and gas reservoir shall apply for and obtain storage facility and injection we ll permits when there is an increased risk to underground sources of drinking water compared to enhanced oil or gas recovery operations. In determining if there is an increased risk to underground sources of drinking water, the

commission shall consider the following factors:

1. Increase in reservoir pressure within the injection zone;

2. Increase in carbon diox ide injection rates;

3. Decrease in reservoir production rates;

4. Distance between the injection zone and underground sources of drinking water;

5 Suitability of the enhanced oil or ga s recovery area of review delineation;

6. Quality of abandoned well plugs within the area of review;

7. The storage operator’s plan for recove ry of carbon dioxide at the cessation of injection;

8. The source and properties of injected carbon dioxide; and

9. Any additional site-specific factor s as determined by the commission.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22(XI-7) 04/2013 43-05-01-02.4. EXEMPTED AQUIFE RS AND EXPANSIONS OF AREAL EXTENT OF EXISTING AQUIFER EXEMPTIONS.

1. The commission may identify by narrative de scription, illustrations, maps, or other means and shall implement these rules to protect as underground s ources of drinking water, all aquifers and parts of aquifers that meet the definition of ‘‘underground source of drinking water’’. Even if an aqui fer has not been specifically identified by the commission, it is an underground source of drinking water if it meets the definition of “underground source of drinki ng water”. Other than United States environmental protection agency-approve d aquifer exemption expansions, new aquifer exemptions shall not be issued for injection wells.

2. The commission shall identify, by narrative de scription, illustrati ons, maps, or other means, and describe in geographic and geomet ric terms, such as vertical and lateral limits and gradient, which are clear and definite , all aquifers or part s of aquifers that the commission proposes to designate as ex empted aquifers usi ng the criteria in section 43-02-05-03. No designation of an ex empted aquifer submitted as part of the underground injection control program is final until approved by the United States environmental protection agency administra tor as part of th e underground injection control program.

3. A storage operator of enhanced oil or gas recovery wells may apply to the commission for approval to expand the areal extent of an aquifer exemption already in place for an enhanced oil or gas recovery well for th e exclusive purpose of carbon dioxide injection for geologic sequestration. Such appl ications are considered a revision to the applicable federal underg round injection cont rol program or a substantial program revision to an a pproved state underground injection control program and are not final until approved by the United States environmental protection agency.

a. A storage operator’s application mu st define by narrative description, illustrations, maps, or other means and describe in geographic or geometric terms, such as vertical and lateral limits and gradient that are clear and definite, all aquifers or parts thereo f that are requested to be designated as exempted

under section 43-02-05-03.

b. In evaluating an application, the co mmission shall determine that it meets the criteria for exemptions in section 43 -02-05-03. In making the determination,

the commission shall consider:

(1) Current and potential future use of the underground sources of drinking water to be exempted as drinking water resources;

(2) The predicted extent of the in jected carbon dioxide plume, and any mobilized fluids that may result in degradation of water quality, over the lifetime of the geologic sequestr ation project, as informed by(XI-8) 04/2013 computational modeling performed purs uant to subdivision a of subsection 2 of section 43-05-01-05.1, in order to ensure that the pr oposed injection operation will not at any time endanger underground sources of drinking water, including nonexempted portions of the injection formation;

(3) Whether the areal extent of the e xpanded aquifer exemption is sufficient to account for any possible revisions to the computational model during

reevaluation of the area of review; and

(4) Information submitted to support a waiver request made by the applicant under section 43-05-01-11.6, if appropriate.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-02.5. PROHIBITION OF UNAUTHORIZED INJECTION. Any underground injection of carbon dioxide for the pur pose of geologic storage, except into a well authorized by permit issued under this chapter, is prohibited. The construction of any well required to have a permit is prohibited until the permit authorizing construction of the well has

been issued.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-02.6. EXISTING WELL CONVERSION. Storage operators seeking to convert an existing well to an injection well for the purpose of geologic storage of carbon

dioxide must demonstrate to the commission that th e well is constructed in a manner that will ensure the protection of underground sources of drinking water.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-03. BOOKS AND RECORDS TO BE KEPT TO SUBSTANTIATE

REPORTS. All owners, operators, drilling contractors, drillers, service companies, or other persons engaged in drilling, completing, operating, or servicing storage facilities shall make and keep appropriate books and record s until project completion, cove ring their opera tions in North(XI-9) 04/2013 Dakota from which they may be able to make and substantiate the re ports required by this chapter.

History: Effective April 1, 2010; amended effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-04. ACCESS TO RECORDS. The industrial commission and the commission's authorized agents shall have access to all storage facility records wherever located. All owners, operators, drilling cont ractors, drillers, service compan ies, or other persons engaged in drilling, completing, operating, or servicing storage faciliti es shall permit the industrial commission, or its authorized agents, to come upon any lease, property, well, or drilling rig operated or controlled by them, complying with st ate safety rules and to inspect the records and operation of wells and to conduct sampling and testing. Any information so obtained shall be public information. If requested, copies of storage facility r ecords must be filed with the

commission.

History: Effective April 1, 2010.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-05. STORAGE FACILITY PERMIT.

1. An application for a permit must include the following:

a. A site map showing the boundaries of the storage reservoir and the location of all proposed wells, proposed cathodic protection boreholes, and surface

facilities within the carbon di oxide storage facility area;

b. A technical evaluation of the proposed storage facility, incl uding the following:

(1) The name, description, and aver age depth of the storage reservoirs;

(2) A geologic and hydrogeologi c evaluation of the fac ility area, including an evaluation of all existing informati on on all geologic strata overlying the storage reservoir, including the immediate caprock containment characteristics and all subsurface zones to be used for monitoring. The evaluation must include any available geophysical data and assessments of any regional tectonic activity, local seismicity and regional or local fault zones, and a comprehensive description of local and regiona l structural or stratigraphic features. The evalua tion must describe the storage reservoir’s mechanisms of geologic confinement, including rock(XI-10) 04/2013 properties, regional pressure gradients, structural features, and adsorption characteristics with regard to the ab ility of that confinement to prevent migration of carbon dioxide beyond th e proposed storage reservoir. The evaluation must also identify any pr oductive existing or potential mineral zones occurring within the facility area and an y underground sources of drinking water in the facility area and within one mile [1.61 kilometers] of its outside boundary. The evaluation mu st include exhibits and plan view maps showing the following:

(a) All wells, including water, oil, and natural gas exploration and development wells, and other manmade subsurface structures and activities, including coal mines, w ithin the facility area and within one mile [1.61 kilometers] of its outside boundary;

(b) All manmade surface structures that are intended for temporary or permanent human occupancy within the facility area and within one mile [1.61 kilometers] of its outside boundary;

(c) Any regional or local faulting;

(d) An isopach map of the storage reservoirs;

(e) An isopach map of the prim ary and any secondary containment barrier for the storage reservoir;

(f) A structure map of the top a nd base of the storage reservoirs;

(g) Identification of all struct ural spill points or stratigraphic discontinuities controlling the isol ation of stored carbon dioxide and

associated fluids within the storage reservoir;

(h) Evaluation of the pressure front and the potential impact on underground sources of dri nking water, if any;

(i) Structural and stratigraphic cross s ections that describe the geologic conditions at the storage reservoir;

(j) The location, orientation, and properties of known or suspected faults and fractures that may transect th e confining zone in the area of review, and a determination that they would not interfere with containment;

(k) Data on the depth, areal exte nt, thickness, mineralogy, porosity, permeability, and capillary pressure of the injection and confining zone, including facies changes base d on field data, which may include(XI-11) 04/2013 geologic cores, outcrop data, seismi c surveys, well logs, and names and lithologic descriptions;

(l) Geomechanical information on fractures, stress, ductility, rock strength, and in situ fluid pressure s within the confining zone. The confining zone must be free of transm issive faults or fractures and of sufficient areal extent and integrit y to contain the injected carbon dioxide stream;

(m) Information on the seismic history, including the presence and depth

of seismic sources and a determina tion that the seismicity would not interfere with containment;

(n) Geologic and topographic maps and cross sections illustrating regional geology, hydrogeology, and th e geologic structure of the facility area; and

(o) Identify and characterize additi onal strata overl ying the storage reservoir that will prevent vertical fluid movement, are free of transmissive faults or fractures, allow for pressure dissipation, and provide additional opportunities for monitoring, mitigation, and

remediation.

(3) A review of the data of public record, conducted by a geologist or engineer, for all wells within the facility area, which penetrate the storage reservoir or primary or secondary s eals overlying the reservoir, and all

wells within the f acility area and within one m ile [1.61 kilometers], or any other distance as deemed necessary by the commission, of the facility area boundary. The review must include the following:

(a) A determination that all abandone d wells have been plugged and all operating wells have been constructed in a manner that prevents the

carbon dioxide or associated fluids from escaping from the storage reservoir;

(b) A description of each well’s type , construction, date drilled, location, depth, record of plugging, and completion;

(c) Maps and stratigraphic cross sect ions indicating the general vertical and lateral limits of all underground sources of drinking water, water wells, and springs within the area of review; their positions relative to the injection zone; and the dire ction of water movement, where known;

(d) Maps and cross sections of the area of review;(XI-12) 04/2013 (e) A map of the area of review showing the number or name and location of all injection wells, producing wells, abandoned wells, plugged wells or dry holes, d eep stratigraphic boreholes, state-approved or United St ates environmental protection agency-approved subsurface cleanup sites, surface bodies of water, springs, mines (surface and subsurf ace), quarries, water wells, other pertinent surface features, including structures intended for human occupancy, state, county, or Indian country boundary lines, and roads;

(f) A list of contacts, submitted to the commission, when the area of

review extends across stat e jurisdiction boundary lines;

(g) Baseline geochemical data on subs urface formations, including all underground sources of drinking wate r in the area of review; and

(h) Any additional information the commission may require.

(4) The proposed calculated average a nd maximum daily inje ction rates, daily volume, and the total anticipated vol ume of the carbon dioxide stream using a method acceptable to and filed with the commission;

(5) The proposed average and maximum bottom hole injection pressure to be

utilized at the reservoir. The ma ximum allowed injection pressure, measured in pounds per square inch gauge, sh all be approved by the commission and specified in the permit. In approving a maximum injection pressure limit, the commission shall consider the results of well

tests and other studies that assess th e risks of tensile failure and shear failure. The commission shall approve limits that, with a reasonable degree of certainty, will avoid initiating a new fracture or propagating an existing fracture in the confining zone or cause the movement of injection

or formation fluids into an unde rground source of drinking water;

(6) The proposed preoperational forma tion testing program to obtain an analysis of the chemical and physical characteristics of the injection zone and confining zone pursuan t to section 43-05-01-11.2;

(7) The proposed stimulation program, a de scription of stimulation fluids to be used, and a determination that stimulation will not interfere with containment; and

(8) The proposed procedure to outline steps necessary to conduct injection operations.

c. The extent of the pore space that will be occ upied by carbon dioxide as determined by utilizing all appropriat e geologic and reservoir engineering information and reservoir analysis, whic h must include various computational(XI-13) 04/2013 models for reservoir characterization, and the projected response of the carbon dioxide plume and storage capacity of the storage reservoir. The computational model must be based on detailed geologic da ta collected to characterize the injection zones, confin ing zones, and any additional zones;

d. An emergency and remedial response plan pursuant to s ection 43-05-01-13;

e. A detailed worker safe ty plan that addresses car bon dioxide safety training and safe working procedures at the storage f acility pursuant to section 43-05-01-13;

f. A corrosion monitoring and prevention pl an for all wells and surface facilities pursuant to section 43-05-01-15;

g. A leak detection and monitoring pl an for all wells and surface facilities pursuant to section 43-05-01-14. The plan must:

(1) Identify the potential for release to the atmosphere;

(2) Identify potential degradation of ground water resources with particular emphasis on underground sources of drinking water; and

(3) Identify potential migration of car bon dioxide into any mineral zone in the facility area.

h. A leak detection and monitoring plan to monitor any movement of the carbon

dioxide outside of the stor age reservoir. This may include the collection of

baseline information of carbon dioxid e background concentrations in ground water, surface soils, and chemical com position of in situ waters within the facility area and the storage reservoir a nd within one mile [1.61 kilometers] of the facility area’s outside boundary. Provi sions in the plan will be dictated by

the site characteristics as documented by materials submitted in support of the permit application but must:

(1) Identify the potential for release to the atmosphere;

(2) Identify potential degradation of ground water resources with particular emphasis on underground sources of drinking water; and

(3) Identify potential migration of car bon dioxide into any mineral zone in the facility area.

i. The proposed well casing and cementing program detailing compliance with section 43-05-01-09;(XI-14) 04/2013 j. An area of review and corrective action plan that meets the requirements pursuant to section 43-05-01-05.1;

k. The storage operator shall comply with the financial responsibility requirements pursuant to section 43-05-01-09.1;

l. A testing and monitoring pl an pursuant to s ection 43-05-01-11.4;

m. A plugging plan that meets requir ements pursuant to section 43-05-01-11.5;

n. A postinjection site care and facil ity closure plan pursuant to section 43-05-01-19; and

o. Any other information that the commission requires.

2. Any person filing a permit application or an application to amend an existing permit shall pay a processing fee. The fee will be based on actual processing costs, including computer data processi ng costs, incurred by the commission.

a. A record of all application processing costs incurred must be maintained by the

commission.

b. Promptly after receiving an appl ication, the commissi on shall prepare and submit to the applicant an estimate of the processing fee and a payment billing

schedule.

c. After the commission’s work on the application has concluded, a final statement will be sent to the applicant. The full processing fee must be paid

before the commission issues its final decision on an application.

d. The applicant must pay the processi ng fee regardless of whether a permit is issued or denied, or th e application withdrawn.

3. The commission has one year from the date an application is deemed complete to issue a final decision rega rding the application.

History: Effective April 1, 2010; amended effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-05.1. AREA OF REVI EW AND CORRECTIVE ACTION.

1. The storage operator sh all prepare, maintain, and comply with a plan to delineate the area of review for a proposed geologic seque stration project, period ically reevaluate(XI-15) 04/2013 the delineation, and perform corrective acti on that meets the requirements of this section and is acceptable to the commissi on. The requirement to maintain and implement a commission-approved plan is directly enforceable regardless of whether the requirement is a condition of the permit. As a part of the storage facility permit application, the storage operator shal l submit an area of re view and corrective action plan that includes the following:

a. The method for delineating the area of review, including the model to be used, assumptions that will be made, and the site characterization data on which the model will be based;

b. A description of:

(1) The reevaluation date, not to exceed five years, at which time the storage operator shall reevaluate the area of review;

(2) The monitoring and operational conditions that would warrant a

reevaluation of the area of review prior to the next scheduled reevaluation date;

(3) How monitoring and operational data (e.g., injection rate and pressure) will be used to inform an area of review reevaluation; and

(4) How corrective action will be conducted to meet the requirements of this section, including what corrective ac tion will be performed prior to injection and what, if any, portions of the area of review will have

corrective action addresse d on a phased basis and how the phasing will be determined; how corrective action will be adjusted if there are changes in the area of review; and how site access will be guaranteed for future

corrective action.

2. The storage operator shall perform the fo llowing actions to delineate the area of review and identify all wells th at require corrective action:

a. Predict, using existing site characte rization, monitoring and operational data, and computational modeling, the projected lateral and vertical migration of the carbon dioxide plume and its associated pr essure front in the subsurface from the commencement of injection activities until the plume movement ceases, or until the end of a fixed time period as determined by the commission. The

model must:

(1) Be based on detailed geologic data co llected to characte rize the injection zone, confining zone, and any additi onal zones; and anticipated operating data, including injection pressures, rates, and total volumes over the proposed life of the geologic sequestration project;(XI-16) 04/2013 (2) Take into account any geologic heter ogeneities, other di scontinuities, data quality, and their possible imp act on model predictions; and

(3) Consider potential migration th rough faults, fractures, and artificial penetrations.

b. Using methods approved by the co mmission, identify all penetrations, including active and aba ndoned wells and underground mines, in the area of review that may penetrate the confini ng zone. Provide a description of each well’s type, construction, date drilled, location, depth, record of plugging and completion, and any additional informa tion the commission may require; and

c. Determine which abandoned wells have been plugged or operating wells have been constructed in the area of review in a manner that prevents the movement of the injected carbon di oxide or other fluids th at may endanger underground sources of drinking water, including use of materials compatible with the

carbon dioxide stream.

3. The storage operator shall perform correc tive action on all wells in the area of

review that are determined to need corrective action, using methods designed to prevent the movement of fluid into or between underground sources of drinking water, including use of materials compatib le with the carbon dioxide stream, where appropriate.

4. At the reevaluation date, not to exceed five years, as specified in the area of review and corrective action plan, or when mon itoring and operational conditions warrant, the storage operator shall:

a. Reevaluate the area of review in the same manner specified in subdivision a of subsection 2;

b. Identify all wells in the reevaluated area of review that requi re corrective action in the same manner specified in subsection 2;

c. Perform corrective action on wells requiring corrective action in the

reevaluated area of review in the same manner specified in subsection 3; and

d. Submit an amended area of review and co rrective action plan or demonstrate to the commission through monitoring da ta and modeling results that no amendment to the plan is needed. Any amendments to the plan are subject to the commission’s approval, must be incorporated into the permit, and are subject to the permit modification requirements.

5. The emergency and remedial response pl an and the demonstration of financial responsibility must account for the area of review, regardless of whether or not

corrective action in the ar ea of review is phased.(XI-17) 04/2013 6. All modeling inputs and data used to support area of review delineations and reevaluations must be retained until pr oject completion. Upon project completion, the storage operator shall deliver the records to the commission.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-06. STORAGE FACILITY PERMIT TRANSFER.

1. Notification. The storage operator and proposed transferee shall notify the commission in writing of any proposed permit transfer. The notice must contain the following:

a. The name and address of the person to whom the permit is to be transferred.

b. The name of the permit subject to tran sfer and location of the storage facility and a description of the land within the facility area.

c. The date that the storage operator de sires the proposed tr ansfer to occur.

d. A demonstration of financial assu rance as required by section 43-05-01-09.1.

2. Transfers by modification. A storage facility permit may be transferred by the

storage operator to a new storage operator only if the storage facility permit is modified, or revoked and reissued, or a mi nor modification made, to identify the new storage operator and incorporate such othe r requirements as may be necessary under

state and federal law.

3. Commission review. The commission shall review the proposed transfer to ensure that the purposes of North Dakota Century Code chapter 38-22 are not compromised but are promoted. For good cause, the co mmission may deny a transfer request, delay acting on it, and place conditions on its approval.

4. Commission approval required. A pe rmit transfer can occur only upon the

commission’s written order. The transferor of a permit shall receive notice from the commission that the approved new storag e operator has demonstrated financial responsibility for the storage facility.

History: Effective April 1, 2010; amended effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22(XI-18) 04/2013 43-05-01-07. AMENDING STO RAGE FACILITY PERMIT. Repealed effective April 1, 2013.

43-05-01-07.1. PERMITTING.

1. Application for a perm it under this chapter:

a. Any person who is required to have a permit shall complete, sign, and submit a permit application to the commission.

b. When the owner and storage operator are different, it is the storage operator’s duty to obtain a permit.

c. The commission shall not begin pro cessing a permit until the applicant has fully complied with the application requirements for that permit.

d. The application must be complete before the permit is issued. An application for a permit is complete when the commi ssion receives an app lication form and any supplemental information which are completed to the commission’s

satisfaction.

2. All permit applications, reports, or information submitted to the commission must comply with the following signatu re and certification requirements:

a. All permit applications mu st be signed as follows:

(1) For a corporation by a principal execu tive officer of at least the level of vice president;

(2) For a partnership or sole proprie torship by a general partner or the proprietor, respectively; or

(3) For a municipality, state, fe deral, or othe r public agency by either a principal executive officer or ranking elected official.

b. All reports required by permits and other information requested by the commission must be signed by a person described in subdivision a, or by a duly authorized representative of that person. A person is a duly authorized representative only if:

(1) The authorization is made in writing by a person described in subdivision a;

(2) The authorization specifies either an individual or a position having responsibility for the overal l operation of the regulated facility or activity,(XI-19) 04/2013 such as the position of plant manager, operator of a well or well field, superintendent, or position of equivale nt responsibility. A duly authorized representative may thus be either a named individual or any individual occupying a named position; and

(3) The written authorization is submitted to the commission.

c. If an authorization under subdivisi on b is no longer accurate because a different individual or position has res ponsibility for the ov erall operation of the storage facility, a new authoriza tion pursuant to subdivision b must be submitted to the commission prior to or t ogether with any reports, information, or applications to be signed by an authorized representative.

d. Any person signing a document under subdivision a or b shall make certification under penalty of law that th at person has personally examined and

is familiar with the information submitte d in the document and all attachments and that, based on inquiry of those i ndividuals immediately responsible for obtaining the information, the person beli eves that the info rmation is true, accurate, and complete. Further, the pe rson shall certify awar eness that there are significant penaltie s for submitting false information, including the possibility of a fine and imprisonment.

3

. Applicants shall provide the following information to the commission:

a. The activities conducted by the appli cant which require it to obtain a storage facility permit or other federal, state, or local permits;

b. Name, mailing address, and location of the storage facility for which the application is submitted;

c. Up to four standard industrial cl assification codes which best reflect the principal products or services provided by the facility;

d. The storage operator's name, address, telephone number, ownership status, and status as federal, state, private, public, or other entity;

e. Whether the storage facility is located on Indian lands, historic or archaeological sites; and

f. A listing of all environmental perm its, construction approvals, or any other relevant permit received or applied fo r from the commission or any other federal, state, or local regulatory agency.

4. Applicants shall retain records of all data used to complete permit applications and supplemental information until project completion. Upon project completion, the storage operator shall deliver any records re quired in this sect ion to the commission.(XI-20) 04/2013 5. Storage operators applying to drill a new injection well shall submit an application

within a reasonable time before c onstruction is expected to begin.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-07.2. DRAFT PERMITS AND FACT SHEETS.

1. Draft permits.

a. When a storage facility permit appli cation is complete, the commission shall either prepare a draft perm it or deny the application.

b. Before preparing the draft permit, the commission shall consult the state department of health.

c. The draft permit must contain the permit conditions required under sections

43-05-01-07.3 and 43-05-01-07.4.

2. Fact sheets.

a. A fact sheet must be prep ared for each draft permit.

b. The fact sheet and draft permit must be sent to the appli cant and, upon request, to any other person.

c. The fact sheet must include:

(1) A brief description of th e type of facility or activity which is the subject of the draft permit;

(2) The quantity and quality of the carbon dioxide which is proposed to be injected and stored;

(3) A brief summary of the basis fo r the draft permit conditions, including references to applicable stat utory or regulat ory provisions;

(4) The reasons why any requested vari ances or alternatives to required

standards do or do not appear justified;

(5) A description of the procedures for reaching a final decision on the draft permit, including:(XI-21) 04/2013 (a) The beginning and ending dates of the comment period;

(b) The address where comments will be received;

(c) The date, time, and location of th e storage facility permit hearing; and

(d) Any other procedures by which th e public may participate in the final

decision.

(6) The name and telephone number of a person to contact for additional

information.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-07.3. PERMIT CONDITIONS. The following conditions apply to all storage facility permits:

1. The storage operator shall comply with all conditions of the permit. Any noncompliance with the permit constitu tes a violation and is grounds for enforcement action, including permit term ination, revocation, or modification pursuant to section 43-05-01-12.

2. In an administrative action, it shall not be a defense that it would have been necessary for the storage operator to halt or reduce the permitted activity in order to maintain compliance with the conditions of the permit.

3. The storage operator shall take all reas onable steps to minimi ze or correct any adverse impact on the environment resul ting from noncomplianc e with the storage facility permit.

4. The storage operator shall develop and implement an emergency and remedial response plan pursuant to section 43-05-01-13.

5. The storage operator shall at all times properly operate and maintain all storage facilities which are installed or used by the storage operator to achieve compliance with the conditions of the storage facility permit. Proper operation and maintenance includes effective performance, adequate funding, adequate operator staffing and training, and adequate laborat ory and process controls, in cluding appropriate quality assurance procedures. This provision re quires the operation of backup or auxiliary facilities or similar systems only when necessary to achieve compliance with the conditions of the storage facility permit.(XI-22) 04/2013 6. The permit may be modified, revoked and rei ssued, or terminated pursuant to section 43-05-01-12. The filing of a request by the storage operator for a permit modification, revocation and re issuance, or termination, or a notification of planned changes or anticipated noncompliance, does not stay any permit condition.

7. The injection well permit or the permit to operate an injection well does not convey any property rights of any sort or any exclusive privilege.

8. The storage operator shall furnish to the commission, within a time specified by the commission, any information which th e commission may request to determine whether cause exists for modifying, revoki ng and reissuing, or terminating the permit, or to determine compliance with th e permit. The storage operator shall also furnish to the commission, upon request, copies of records required to be kept by the storage facility permit.

9. The storage operator shall allow the commission, or an authorized representative, upon the presentation of creden tials and other documents as may be required by law,

to:

a. Enter upon the storage facility premises where records must be kept under the conditions of the permit;

b. At reasonable times, have access to and copy any records that must be kept under the conditions of the permit;

c. At reasonable times, inspect any f acilities, equipment, including monitoring and control equipment, practices, or ope rations regulated or required under the permit; and

d. At reasonable times, sample or monitor for the purposes of assuring permit compliance, any substances or parameters at any location.

10. The storage operator shall prepare, ma intain, and comply with a testing and monitoring plan pursuant to section 43-05-01-11.4.

11. The storage operator shall comply with the reporting requirements provided in

section 43-05-01-18.

12. The storage operator must obtain an in jection well permit unde r section 43-05-01-10 and injection wells must meet the constr uction and completion requirements in

section 43-05-01-11.

13. The storage operator shall prepare, ma intain, and comply with a plugging plan pursuant to section 43-05-01-11.5.(XI-23) 04/2013 14. The storage operator shall establish mechanic al integrity prior to commencing injection and maintain mechanical in tegrity pursuant to section 43-05-01-11.1.

15. The storage operator shall implement the worker safety plan pursuant to section

43-05-01-13.

16. The storage operator shall comply with leak detection and reporting requirements pursuant to section 43-05-01-14.

17. The storage operator shall conduct a co rrosion monitoring and prevention program pursuant to section 43-05-01-15.

18. The storage operator shall prep are, maintain, and comply w ith the area of review and corrective action plan pursua nt to section 43-05-01-05.1.

19. The storage operator shall maintain fina ncial responsibility pursuant to section

43-05-01-09.1.

20. The storage operator shall ma intain and comply with the postinjection site care and facility closure plan purs uant to section 43-05-01-19.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-07.4. ESTABLISHING PERMIT CONDITIONS.

1. In addition to conditions required in section 43-05-01-07.3, the commission shall establish conditions, as required on a case-by-case basis. Storage facility permits shall include conditions meeting the requireme nts of this chapter and such additional conditions as are necessary to prevent th e endangerment of underground sources of drinking water.

2. The commission shall establish conditi ons in any permit as required on a case-by-case basis, to provide for and a ssure compliance with all statutory or regulatory requirements which take effect prio r to final administrative disposition of the permit.

3. New or reissued permits, and to the extent allowed under section 43-05-01-12 modified or revoked and reissued permits, sh all incorporate each of the applicable requirements referenced in this section.(XI-24) 04/2013 4. All permit conditions shall be incorporated either expressly or by reference. If incorporated by reference, a specific citation to the applicable regulations or requirements must be given in the permit.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-08. STORAGE FACILITY PERMIT HEARING.

1. The commission shall hold a public hearing before issuing a storag e facility permit. At least forty-five days prior to the hear ing, the applicant shall give notice of the hearing to the following:

a. Each operator of mineral extraction activ ities within the facility area and within one-half mile [.80 kilometer] of its outside boundary;

b. Each mineral lessee of record within the facility area and within one-half mile [.80 kilometer] of its outside boundary;

c. Each owner of record of the surface within the facility area and one-half mile [.80 kilometer] of its outside boundary;

d. Each owner of record of minerals w ithin the facility area and within one-half mile [.80 kilometer] of its outside boundary;

e. Each owner and each lessee of reco rd of the pore space within the storage reservoir and within one-half mile [.80 kilometer] of the reservoir’s boundary;

and

f. Any other persons as required by the commission.

2. The notice given by the applicant must contain:

a. A legal description of th e land within the facility area.

b. The date, time, and place that the commission will hold a hearing on the permit application.

c. A statement that a copy of the permit application and draft permit may be

obtained from the commission.(XI-25) 04/2013 d. A statement that all comments regard ing the storage facility permit application must be in writing and submitted to th e commission prior to the hearing or presented at the hearing.

e. A statement that amalgamation of the storage reservoirs pore space is required to operate the storage facility, that the commission may require that the pore space owned by nonconsenting owners be in cluded in the storage facility and subject to geologic storage, and th e amalgamation of pore space will be considered at the hearing.

3. The commission shall give at least a thir ty-day public notice and comment period for a draft storage facility permit, except in an emergency, including notice of the time and place of hearing there on by one publication of such notice in a newspaper of general circulation in Bism arck, North Dakota, and in a newspaper of general circulation in the county where the land aff ected or some part thereof is situated, unless in some particular proceeding a longe r period of time or a different method of publication is required by law, in which ev ent such period of time and method of publication shall prevail. The notice shall issue in the name of the commission and shall conform to the other requirements provided by law. The public notice must state that an application has been filed w ith the commission for permission to store

carbon dioxide and describe the location of the proposed facility area and the date, time, and place of the hearing before the co mmission at which time the merits of the application and draft permit will be considered.

4. The public notice given by the comm ission must contain the following:

a. Name and address of the commission;

b. Name and address of the applicant;

c. A brief description of the nature and purpose of the hearing, including the applicable rules and procedures;

d. A brief description of the activity de scribed in the storage facility permit application or the draft storage facility permit;

e. Name, address, and telephone numbe r of a person from whom interested persons may obtain further information, in cluding copies of the draft storage facility permit, fact sheet, and the storage facility permit application;

f. A brief description of the comment procedures and other procedures by which the public may participate in the final permit decision;

g. The date of any previous public noti ces relating to the storage facility; and

h. Any additional information that the commission requires.(XI-26) 04/2013 5. Public notice shall be given by the following methods:

a. By mailing or e-mailing a copy of the notice, the fact sheet, the storage facility permit application, and draf t permit to the following:

(1) The applicant;

(2) The state department of health;

(3) The state geological survey;

(4) The state water commission;

(5) The United States environmental protection agency; and

(6) Federal and state agencies with jurisdiction over fish and wildlife resources, the advisory council on hist oric preservation, and state historic preservation officers, including any a ffected Indian tribes and the bureau

of Indian affairs.

b. By mailing or e-mailing a copy of the public notice to the following:

(1) To any unit of local government having jurisdiction over the area where the storage facility is proposed to be located and to each state agency having any authority under state law with respect to the construction or operation of such facility.

(2) Any other person or group either upon request or on a departmental mailing list to receive geologic storag e of carbon dioxide public notices:

(a) Including those who reques t in writing to be on the list;

(b) Persons on ‘‘area lists’’ from past permit proceedings in that area;

and

(c) Notifying the public of the opportunity to be put on the mailing list through periodic publication in th e public press and in such publications as state-funded newslett ers, environmental bulletins, or state law journals. The commission may update the mailing list from time to time by requesting written indication of continued interest from those listed. The commission may delete from the list the name of any person who fails to respond to such a request.

6. During the public comment period any interested person may submit written comments on the draft storage facility permit or the storage facility permit(XI-27) 04/2013 application. All comments shall be consid ered in making the final decision and shall be answered when a final storage facil ity permit is issued. The response to

comments must include:

a. Provisions, if any, of the draft perm it that have been changed in the final permit decision, and the reasons for the change; and

b. A brief description and response to a ll significant comments on the draft permit or the permit application.

7. The response to all applicable comme nts shall be availa ble to the public.

History: Effective April 1, 2010; amended effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-09. WELL PERMIT APPLICATION REQUIREMENTS.

1. Following receipt of a storage facility permit, the storage operator shall obtain a permit to drill, deepen, convert, operat e, or, upon demonstration of mechanical integrity, reenter a previously plugged and abandoned well for storage purposes.

2. Application for permits to drill, deepen, convert, operate, or reenter a well must be submitted on form 25 provided by the commission and must include at a minimum:

a. An accurate plat cer tified by a registered surveyor showing the location of the proposed injection or subsurface observati on well. The plat must be drawn to the scale of one inch [25.4 millimete rs] equals one thousand feet [304.8 meters], unless otherwise directed by the commission, and must show distances from the proposed well to the nearest facility area boundary. The plat must show the latitude and longitude of th e proposed well location to the nearest tenth of a second. The plat must also s how the location and status of all other

wells that have been drill ed within one-four th mile [402.34 meters], or any other distance deemed necessary by th e commission, of the proposed injection or subsurface observation well;

b. The drilling, completion, or conversi on procedures for the proposed injection or subsurface observation well;

c. A well bore schematic showing the name, description, and depth of the storage reservoirs and the depth of the deepes t underground source of drinking water; a description of the casing in the injection or subsurface observation well, or the proposed casing program, including a fu ll description of cement already in(XI-28) 04/2013 place or as proposed; and the proposed method of testing casing before use of the injection well;

d. A geophysical log, if ava ilable, through the storage re servoir to be penetrated by the proposed injection well or if an injection or s ubsurface observation well is to be drilled, a complete log thr ough the reservoir from a nearby well is permissible. Such log must be annotat ed to identify the estimated location of the base of the deepest underground s ource of drinking water, showing the stratigraphic position and thickness of all confining strata above the reservoirs and the stratigraphic position and thickness of the reservoir; and

e. The proposed pad layout, including cut and fill diagrams.

3. Within thirty days after the conclusion of well drilling and completion activities, a permit application shall be submitted to opera te an injection well and must include at

a minimum:

a. A schematic diagram of the surface injection system and its appurtenances;

b. A final well bore diagram showing the name, description, and depths of the storage reservoir and the base of the deepest unde rground source of drinking water and a diagram of the well depi cting the casing, cementing, perforation, tubing, and plug and packer records asso ciated with the construction of the well;

c. The well’s complete dual induction or equivalent log through the storage reservoir. Such a log shall be run pr ior to setting casing through the storage reservoir. Logs must be annotated to id entify the estimated location of the base of the deepest underground source of dri nking water, showing the stratigraphic position and thickness of all confining strata above the storage reservoir and the reservoir’s stratigraphic position and thickness unless that information has been previously submitted. When appr oved in advance by the commission,

this information can be demonstrated w ith a dual induction or equivalent log run in a nearby well or by such othe r method acceptable to the commission;

d. An affidavit specifying the chemical constituents, their re lative proportions and the physical properties of the carbon dioxi de stream, and the source of the carbon dioxide stream;

e. Proof that the long string of casing of the well is cemented adequately so that

the carbon dioxide is confined to the stor age reservoirs. Such proof must be provided in the form of a cement bond log or the results of a fluid movement study or such other method sp ecified by the commission;

f. The results of a mechanical-integrity test, if applicable to well type, of the casing in accordance with the pressure test requirements of this section if a test(XI-29) 04/2013 was run within one calendar year precedi ng the request for a conversion permit for a previously drilled well;

g. The final area of review based on mo deling, using data obtained during logging and testing of the well and the formati on, including any relevant updates on the geologic structure and hydrogeologic pr operties of the proposed storage reservoir and overlying formations;

h. Information on the compatibility of the carbon dioxide stream with fluids in the injection zone and minerals in both the injection and the confining zone, based on the results of the formation testing pr ogram, and with the materials used to construct the well;

i. The results of the formation testing program;

j. The status of corrective action on wells in the area of review;

k. All available logging and testi ng program data on the well;

l. Any updates to the proposed area of re view and corrective action plan, testing and monitoring plan, injection well pl ugging plan, postinjection site care and facility closure plan, and the emergenc y and remedial response plan, which are necessary to address new information co llected during logging and testing of the well; and

m. Any other information th at the commission requires.

History: Effective April 1, 2010; amended effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-09.1. FINANCIAL RESPONSIBILITY.

1. The storage operator shall demonstrate and maintain financial responsibility as determined by the commission that meets the following conditions:

a. The qualifying financial responsibility instrument used must be from the following list of qualifying instruments:

(1) Trust funds;

(2) Surety or cash bonds;

(3) Letter of credit;(XI-30) 04/2013 (4) Insurance;

(5) Self-insurance (i.e., financia l test and corporate guarantee);

(6) Escrow account; or

(7) Any other instrument the co mmission finds satisfactory.

b. The qualifying financial responsibility in strument must be sufficient to cover

the cost of:

(1) Corrective action that meets the re quirements of section 43-05-01-05.1;

(2) Injection well plugging that m eets the requirements of section 43-05-01-11.5;

(3) Postinjection site care and facility closure that meets the requirements of section 43-05-01-19; and

(4) Emergency and remedial response that meets the requirements of section

43-05-01-13.

c. The qualifying financial re sponsibility instrument must be sufficient to address endangerment of underground sources of drinking water.

d. The qualifying financial responsibility instrument must comprise protective conditions of coverage.

(1) Protective conditions of coverage must include at a minimum cancellation, renewal, and continuation provisions; specifications on when the provider becomes liable following a notice of can cellation if there is a failure to renew with a new qualifying financial responsibility instrument; and requirements for the provider to meet a minimum rating, minimum capitalization, and ability to pa ss the bond rating when applicable.

(2) Cancellation. The storage operato r shall provide that its financial mechanism may not cancel, terminate, or fail to renew except for failure to pay such financial instrument. If th ere is a failure to pay the financial instrument, the financial institution may elect to cancel, terminate, or fail to renew the instrument by sending no tice by certified mail to the storage operator and the commission. The cancellation must not be final for one hundred twenty days after receipt of cancellation notice. The storage operator shall provide an alternate qualifying financial responsibility demonstration within sixty days of no tice of cancellation, and if it is not acceptable or possible, any funds from the instrument being canceled must(XI-31) 04/2013 be released to the commission within sixty days of notification by the

commission.

(3) Renewal. The storage operator shall renew all qualifying financial responsibility instruments, if an instru ment expires, for the entire term of the geologic sequestration project. The instrument must be automatically renewed as long as the storage operato r has the option of renewal at the face amount of the expiring instrument. The automatic renewal must, at a minimum, provide the storage operator with the option of renewal at the face amount of the expiring financial instrument.

(4) Cancellation, termination, or failure to renew may not occur and the

financial instrument will remain in full force and effect in the event that on or before the date of expiration:

(a) The commission deems the facility abandoned;

(b) The permit is terminated or revoked or a new permit is denied;

(c) Closure is ordered by the comm ission or a United States district

court or other court of competent jurisdiction;

(d) The storage operator is named as debtor in a voluntary or involuntary proceeding under title 11 (bankrupt cy), United States Code; or

(e) The amount due is paid.

e. The qualifying financial responsibil ity instrument is subject to the commission’s approval.

(1) The commission shall consider a nd approve the qualifying financial responsibility demonstration for all the phases of the geologic sequestration project prior to is suing a storage facility permit.

(2) The storage operator shall provide any updated information related to its qualifying financial responsibility instrument on an annual basis and, if there are any changes, the commission must evaluate, within a reasonable time, the qualifying financial responsibi lity demonstration to confirm that the instrument used remains adequate. The storage operator shall maintain financial responsibility requirements regardless of the status of the

commission’s review of the financ ial responsibility demonstration.

(3) The commission may disapprove the us e of a financial instrument if it determines that it is not sufficient to meet the requirements of this section.(XI-32) 04/2013 f. Upon the commission’s approval, the storage operator may demonstrate financial responsibility by using one or multiple qualifying financial responsibility instruments for specific phases of th e geologic sequestration project.

If the storage operator combines more than one instrument for a specific geologic sequestration phase (e.g., well pl ugging), such combination must be

limited to instruments that are not base d on financial strength or performance (i.e., self-insurance or performance bond), for example trust funds, surety bonds guaranteeing payment into a trust f und, letters of credit, escrow account, and insurance. In this case, it is the combination of mechanisms, rather than the single mechanism, which must provi de financial res ponsibility for an amount at least equal to the current cost estimate.

g. When using a third-party instrument to demonstrate financial responsibility, the storage operator shall provide proof that the third-party providers either have passed financial strength requirements ba sed on credit ratings; or have met a minimum rating, minimum capitalization, a nd ability to pass the bond rating when applicable.

h. The storage operator using certain t ypes of third party instruments shall establish a standby trust to enable the co mmission to be party to the financial responsibility agreement without the co mmission being the be neficiary of any funds. The standby trust fund must be used along with other qualifying financial responsibility instruments (e .g., surety bonds, letters of credit, or escrow accounts) to provide a locat ion to place funds if needed.

i. If the storage operator uses a surety bond or cash bond to satisfy its financial responsibility requirements, the storage operator shall be the principal on the bond and each surety bond must be executed by a responsible surety company

authorized to transact bu siness in North Dakota.

j. If the storage opera tor uses an escrow account to satisfy its financial responsibility requirements, the account must segregate funds sufficient to cover estimated costs for geologic sequest ration financial responsibility from

other accounts and uses.

k. If the storage operator or its guarantor uses self-insurance to satisfy its financial responsibility requirements, the storage operator shall:

(1) Meet a tangible net worth of an amount approved by the commission;

(2) Have a net working capital and ta ngible net worth each at least six times

the sum of the current we ll plugging, postinjection si te care, and facility closure cost;(XI-33) 04/2013 (3) Have assets located in the United States amounting to at least ninety percent of total assets or at least six times the sum of the current well plugging, postinjection site care, and facility closure cost; and

(4) Must submit a report of its bond rating and financial information annually.

l. In addition to the requirements in subdivision k, the st orage operator shall

either:

(1) Have a bond rating test of AAA, AA , A, or BBB as issued by Standard & Poor’s, or Aaa, Aa, A, or Baa as issued by Moody’s; or

(2) Meet all of the following fi ve financial ratio thresholds:

(a) A ratio of total liabilities to net worth less than 2.0;

(b) A ratio of current assets to current liabilities greater than 1.5;

(c) A ratio of the sum of net in come plus depreciation, depletion, and

amortization to total liab ilities greater than 0.1;

(d) A ratio of current assets minus current liabilities to total assets greater than -0.1; and

(e) A net profit (revenues minus expenses) greater than zero.

m. The storage operator who is not able to meet corporate financial test criteria in the preceding provision, may arrange a corporate guarantee by demonstrating that its corporate parent meets the financ ial test requirements on its behalf. The parent’s demonstration that it meets the financial test requirement is insufficient if it has not also guaranteed to fulfill th e obligations for the storage operator.

n. If the storage operator uses an insurance policy to satisfy its financial responsibility requirements, the insura nce policy must be obtained from a third-party provider.

2. The requirement to maintain comm ission-approved qualifying financial responsibility and resources is directly enforceable regardless of whether the requirement is a condition of the permit.

a. The storage operator shall maintain qualifying financial responsibility and resources until the commission approves project completion.

b. The storage operator may be released from a financial instrument in the following circumstances:(XI-34) 04/2013 (1) The storage operator has completed the phase of the geologic sequestration project for which the fi nancial instrument was required and has fulfilled all its financial obligations as determined by the commission, including obtaining financial responsi bility for the next phase of the geologic sequestration pr oject, if required;

(2) The storage operator has submitted a replacement financial instrument and received written approval from the commission accepting the new financial instrument and releasing the storage operator from the previous financial instrument; or

(3) The commission approves project completion.

3. The storage operator shall have a detailed written estimate, in current dollars, of the cost of performing corrective action on we lls in the area of review, plugging the injection well, postinjection site care a nd facility closure, and emergency and remedial response.

a. The cost estimate must be performe d for each phase separately and must be

based on the costs to the commission of hiring a third party to perform the required activities. A third party is a party who is not within the corporate structure of the storage operator;

b. During the active life of the geologic sequestration proj ect, the storage operator shall adjust the cost estimate for inflation within sixty days prior to the anniversary date of the establishment of the financial instrument used to comply with this section and provide th is adjustment to the commission. The storage operator shall also provide to the co mmission written updates of adjustments to the cost estimate within sixty days of any amendments to the

area of review and correc tive action plan, the injec tion well plugging plan, the postinjection site care and facility closure plan, and the emergency and remedial response plan;

c. Any decrease or increase to the initial cost estimate is subject to the commission’s approval. During the ac tive life of the geologic sequestration project, the storage operator shall revise the cost estimate no later than sixty days after the commission has approved the request to modify the area of review and corrective action plan, th e injection well plugging plan, the postinjection site care and facility closure plan, and the emergency and remedial response plan, if the change in the plan increases the cost. If the change to the plans decreases the cost, any withdrawal of funds is subject to the commission’s approval. Any decrea se to the value of the financial responsibility instrument must first be approved by the commission. The

revised cost estimate must be adjusted for inflation; and(XI-35) 04/2013 d. Whenever the current cost estimate increa ses to an amount great er than the face amount of a financial instrument currently in use, the storag e operator, within sixty days after the increase, shall either cause the face amount to be increased to an amount at least equal to the curre nt cost estimate and submit evidence of such increase to the commission, or obtain other qualifying financial responsibility instruments to cover the increase. Whenever the current cost estimate decreases, the face amount of the financial assurance instrument may

be reduced to the amount of the curre nt cost estimate only after the storage operator has received written a pproval from the commission.

4. The storage operator sha ll notify the commission by certified mail of adverse financial conditions that may affect the opera tor’s ability to carry out its obligations

under state and federal laws.

a. If the storage operator or the third- party provider of a qualifying financial responsibility instrument is named as th e debtor in a bankruptcy proceeding, the notice to the commission must be made within ten days after commencement of the proceeding;

b. A guarantor of a corporate guarantee sh all make the notification required in subdivision a if the guarantor is named as debtor, as required under the terms of the corporate guarantee; and

c. The storage operator who fulfills its financial responsibility requirements by obtaining a trust fund, surety bond, letter of credit, escrow account, or insurance policy will be deemed to be without the required financial assurance in the event of bankruptcy of the trust ee or issuing institution, or a suspension or revocation of the authority of the trustee institution to act as trustee of the institution issuing the trust fund, surety bond, letter of credit, escrow account, or insurance policy. The storage opera tor shall establish other financial assurance within sixty days after such an event.

5. The storage operator shall provide an adjustment of the cost estimate to the commission within sixty days of notification by the co mmission, if the commission determines during the annual evaluation of the qualifyi ng financial responsibility

instrument that the most recent demonstr ation is no longer ad equate to cover the operator’s obligations unde r state and federal laws.

6. The use and length of pay-in periods for trust funds or escrow accounts are subject to the commission’s approval. The storage opera tor may make periodic deposits into a

trust fund or escrow account throughout the operational period in order to ensure sufficient funds are available to carry out the required act ivities on the date on which they may occur. The commission shall take into account project-specific risk assessments, projected timing of activities (e .g., postinjection site ca re), and interest(XI-36) 04/2013 accumulation in determining whether sufficien t funds are available to carry out the required activities.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-10. INJECTION WELL PERMIT.

1. Upon review and approval of the applicati on to drill, deepen, convert, reenter, or operate an injection well, submitted in accordance with section 43-05-01-09, the commission shall issue permits to drill and operate.

2. A permit shall expire twelve months from the date of issue if the permitted well has not been drilled, deepened, reen tered, operated, or converted.

3. Injection well permits must be issued for th e operating life of the storage facility and the closure period.

4. The commission shall review each issued injection well permit at least once every five years to determine whether it shou ld be modified, revoked, or a minor

modification made.

5. On a case-by-case basis when required by the commission, the storage operator shall submit a schedule of compliance leading to full compliance with all provisions of this chapter and North Dakota Century Code chapter 38-22.

a. Any schedules of compliance shall requi re compliance as soon as possible, and

in no case later than thre e years after the effective date of the permit.

b. If the schedule of compliance is for a duration of more than one year from the date of permit issuance, then interim re quirements and completion dates (not to exceed one year) must be incorporated into the compliance schedule and permit.

c. No later than thirty days following each interim and final date, the storage operator shall submit progress reports to the commission.

6. For the purposes of enforcement, compliance with an injection well permit during its term means compliance with this chapte r and North Dakota Century Code chapter 38-22. However, a permit may be modifie d, revoked, or terminated during its term pursuant to section 43-05-01-12.(XI-37) 04/2013 7. The issuance of an injection well perm it does not convey any property rights of any sort or any exclusive privilege.

8. The issuance of an injection well permit does not authorize any in jury to persons or property or invasion of other private rights or an y infringement of state or local law or regulations.

9. Injection is prohibited until construction is complete, and

a. The storage operator has submitted noti ce of completion of construction to the commission;

b. The commission has issued an approved permit to operate an injection well;

and

c. The commission has inspected or othe rwise reviewed the injection well and finds it is in compliance with the conditions of the permit; or

d. The storage operator has not received no tice from the commission of its intent to inspect the injection well within fourteen days of the date of the notice in subdivision a, in which case prior insp ection or review is waived and the storage operator may commence permitted injection. The commission shall include in the notice a reasonable time pe riod in which it shall inspect the well.

10. The permit shall establish any maximum in jection volumes and pressures necessary

to assure that fractures are not initiated in the confining zone, that injected fluids do not migrate into any underground source of dr inking water, that formation fluids are not displaced into any underground source of drinking water, and to assure compliance with section 43-05-01-11.3.

History: Effective April 1, 2010; amended effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-11. INJECTION WELL CONSTRUCTION AND COMPLETION

STANDARDS.

1. The storage operator shall ensure that all injection wells are constructed and completed to prevent movement of the carbon dioxide stream or fluids into underground sources of drinking water or outsi de the authorized storage reservoir. The injection wells must be constructed and completed in a way that allows the use of appropriate testing devices and workover tools. The casing and cement or other

materials used in the construction of each new injection well must be designed for(XI-38) 04/2013 the well’s life expectancy. In dete rmining and specifying casing and cementing requirements, all of the following factors must be considered:

a. Depth to the injection zone;

b. Injection pressure, extern al pressure, internal pres sure, and axial loading;

c. Hole size;

d. Size and grade of all casing strings (wa ll thickness, external diameter, nominal weight, length, joint specificat ion, and construction material);

e. Corrosiveness of the carbon dioxide stream and formation fluids;

f. Down-hole temperatures;

g. Lithology of injection and confining zone;

h. Type or grade of cement and cement additives; and

i. Quantity, chemical com position, and temperature of the carbon dioxide stream.

2. Surface casing in all newly drilled carbon dioxide injection and subsurface observation wells drilled below the undergr ound source of drinking water must be set fifty feet [15.24 meters] below the base of the lowermost underground source of drinking water and cemented pursuant to section 43-02-03-21.

3. The long string casing in all injection and subsurface observation wells must be cemented pursuant to section 43-02-03-21. Sufficient cement must be used on the long string casing to fill th e annular space behind the ca sing to the surface of the ground and a sufficient number of centralizer s shall be used to assure a good cement job. The long string casing must extend to the injection zone.

4. Any liner set in the well bore must be cemented with a sufficient volume of cement to fill the annular space.

5 All cements used in the cementing of cas ings in injection and subsurface observation wells must be of sufficient quality to maintain well integrity in the carbon dioxide injection environment. Circulation of cement may be accomplished by staging. The commission may approve an alternative method of cementing in cases where the

cement cannot be recirculated to the su rface, provided the storage operator can demonstrate by using logs that the cement does not allow fluid movement behind the

well bore.

6. All casings must meet the standards sp ecified in any of the following documents, which are hereby adopted by reference:(XI-39) 04/2013 a. The most recent American petroleum institute bulletin on performance properties of casing, tubing, and drill pipe;

b. Specification for casing and tubing (United States customary units), American petroleum institute specification 5CT, as published by the American petroleum institute;

c. North Dakota Administrative Code Section 43-02-03-21; or

d. Other equivalent casing as approved by the commission.

7. All casings used in new wells must be new casing or reconditioned casing of a quality equivalent to new casing and that has been pressure-tested in accordance with the requirements of subsection 6. Fo r new casings, the pressure test conducted at the manufacturing mill or fabrication plant may be used to fulfill the requirements

of subsection 6.

8. The location and amount of cement behind ca sings must be verifi ed by an evaluation method approved by the commission. The ev aluation method must be capable of evaluating cement quality radially and identi fying the location of channels to ensure that underground sources of dri nking water are not endangered.

9. All injection wells must be completed with and injection must be through tubing and packer. In order for the commission to determine and specify requirements for tubing and packer, the storage operator shall submit the following information:

a. Depth of setting;

b. Characteristics of the carbon dioxide st ream (chemical content, corrosiveness, temperature, and density) and formation fluids;

c. Maximum proposed injection pressure;

d. Maximum proposed annular pressure;

e. Proposed injection rate (intermittent or continuous) and volume and mass of the carbon dioxide stream;

f. Size of tubing and casing; and

g. Tubing tensile, burst, and collapse strengths.

10. All tubing strings must meet the standa rds contained in subsection 6. All tubing must be new tubing or reconditioned tubing of a quality equivale nt to new tubing(XI-40) 04/2013 and that has been pressure-tested. For new tubing, the pressure te st conducted at the manufacturing mill or fabrication plant may be used to fulfill this requirement.

11. All wellhead components, including th e casinghead and tubing head, valves, and fittings, must be made of steel having operating pressure ratings sufficient to exceed the maximum injection pressures computed at the wellhead and to withstand the

corrosive nature of carbon dioxide. Each flow line connected to the wellhead must be equipped with a manually operated posit ive shutoff valve located on or near the

wellhead.

12. All packers, packer elements, or similar equipment critical to the containment of carbon dioxide must be of a quality to withstand exposure to carbon dioxide.

13. All injection wells must ha ve at all times an accurate , operating pressure gauge or pressure recording device. Gauges must be calibrated as required by the commission

and evidence of such calibration must be available to the commission upon request.

14. All newly drilled wells must establish inte rnal and external mechanical integrity as specified by the commission and demonstrate continued mechanical integrity through periodic testing as determined by th e commission. All other wells to be used as injection wells must demonstrate mechanical integrity as specified by the commission prior to use for injection and be tested on an ongoing basis as determined by the commission using these methods:

a. Pressure tests. Injection wells, eq uipped with tubing and packer as required, must be pressure-tested as required by the commission. A testing plan must be submitted to the commission for prior appr oval. At a minimum, the pressure must be applied to the tubing casing annul us at the surface for a period of thirty minutes and must have no decrease in pre ssure greater than ten percent of the required minimum test pressure. The pack er must be set at a depth at which the packer will be opposite a cemented interval of the long string casing and must be set no more than fifty f eet [15.24 meters] above the uppermost perforation or open hole for the storage reservoirs; and

b. The commission may require additional testing, such as a bottom hole temperature and pressure measurements , tracer survey, temperature survey, gamma ray log, neutron log, noise log, cas ing inspection log, or a combination

of two or more of these surveys and logs, to demonstrate mechanical integrity.

15. The commission has the author ity to witness all mechanical integrity tests conducted by the storage operator.

16. If an injection well fails to demonstrate mechanical inte grity by an approved method, the storage operator shall immediately shut in the well, report the failure to the commission, and commence isolation and repa ir of the leak. The operator shall,(XI-41) 04/2013 within ninety days or as otherwise dire cted by the commission, perform one of the following:

a. Repair and retest the well to demonstrate mechanical integrity; or

b. Properly plug the well.

17. All injection wells must be equipped w ith shutoff systems designed to alert the operator and shut in wells when necessary.

18. Additional requirements may be required by the commission to address specific circumstances and types of projects.

History: Effective April 1, 2010; amended effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-11.1. MECHANICAL INTEGRITY - INJECTION WELLS.

1. An injection well has mechanical integrity if:

a. There is no significant leak in the casing, tubing, or packer; and

b. There is no significant fluid movement into an underground source of drinking water through channels adjacent to the well bore.

2. To evaluate the absence of significant leak s, the storage operator shall, following an initial annulus pressure test , continuously monitor inject ion pressure, rate, injected volumes, pressure on the annulus betw een tubing and long string casing, and

annulus fluid volume.

3. On a schedule determined by the commi ssion, but at least annually, the storage operator shall use one of the following methods to determine the absence of significant fluid movement:

a. An approved tracer survey; or

b. A temperature or noise log.

4. If required by the commission, at a frequenc y specified in the te sting and monitoring plan, the storage operator shall run a casin g inspection log to determine the presence or absence of corrosion in the long string casing.(XI-42) 04/2013 5. The commission may require alternative and additional methods to evaluate mechanical integrity. Also, the commission may allow the use of an alternative method to demonstrate mechanical integrity other than those listed above with the written approval of the United States envir onmental protection agency administrator. To obtain approval for a new mechanical inte grity test, the commission shall submit a written request to the United States envi ronmental protection agency administrator.

6. To conduct and evaluate mechanical inte grity, the storage operator shall apply methods and standards generally accepted in the industry. When the storage operator reports the results of mechanical integrity tests to the commission, the storage operator sha ll include a descript ion of the test and the method used.

7. The commission may require additional or alternative tests if the results presented by the storage operator are not satisfactory to the co mmission to demonstrate mechanical integrity.

8. If the commission determines that an injection well lacks mechanical integrity pursuant to this section, the commissi on shall give written notice of its determination to the storage operator. Unless the commission requires immediate cessation of injection, the storage operator shall cease injection into the well within forty-eight hours of receipt of the commi ssion’s determination. The commission may allow plugging of the well pursuan t to the requirements of section 43-05-01-11.5 or require the storage ope rator to perform such additional construction, operation, monitoring, reporting, and corrective action as is necessary to prevent the movement of fluid into or between underground sources of drinking water caused by the lack of mechanical in tegrity. The storage operator may resume injection upon written notification from the commission that the storage operator has demonstrated mechanical integrit y pursuant to this section.

9. The commission may allow the storage ope rator of an injection well that lacks mechanical integrity pursuant to this section to continue or resume injection, if the storage operator has made a satisfactory de monstration that there is no movement of fluid into or between undergr ound sources of drinking water.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-11.2. LOGGING, SAMPLING, AND TESTING PRIOR TO INJECTION

WELL OPERATION.

1. During the drilling and construction of an injection well, the storage operator shall run appropriate logs, surveys, and tests to determine or verify the depth, thickness, porosity, permeability, lithology, and salinity of any formation fluids in all relevant(XI-43) 04/2013 geologic formations to ensure conforma nce with the injection well construction requirements under section 43-05-01-11, and to establish accurate baseline data against which future measurements may be compared. The storage operator shall submit to the commission a descriptive report prepared by a log analyst that includes an interpretation of the results of such logs and tests. At a mi nimum, such logs and

tests must include:

a. Deviation checks during drilling on all holes constructed by drilling a pilot hole which is enlarged by reaming or another method. Such checks must be at sufficiently frequent intervals to determ ine the location of the borehole and to

ensure that vertical avenue s for fluid movement in the form of diverging holes are not created during drilling.

b. Before and upon installing the surface casing:

(1) Resistivity, spontaneous potential , and caliper logs before the casing is installed; and

(2) A cement bond and variable dens ity log to evaluate cement quality radially and a temperature log afte r the casing is set and cemented.

c. Before and upon installa tion of the long string casing:

(1) Resistivity, spontaneous potenti al, porosity, caliper, gamma ray, fracture finder logs, and any othe r logs the commission re quires for the given geology before the casing is installed; and

(2) A cement bond and variable dens ity log, and a temperature log after the casing is set and cemented.

d. A series of tests designed to demons trate the internal and external mechanical integrity of injection wells, which may include:

(1) A pressure test with liquid or gas;

(2) A tracer survey;

(3) A temperature or noise log;

(4) A casing inspection log; and

e. Any alternative methods that provide equivalent or better information and that the commission requires or approves.

2. The storage operator shall take whole core s or sidewall cores of the injection zone and confining zone and formation fluid sa mples from the injection zone, and shall(XI-44) 04/2013 submit to the commission a detailed report prepared by a log analyst that includes well log analyses (including well logs), co re analyses, and formation fluid sample information. The commission may accept info rmation on cores from nearby wells if the storage operator can demonstrate that core retrieval is not possible and that such cores are representative of conditions at the well. The commission may require the storage operator to core othe r formations in the borehole.

3. The storage operator shall record the fluid temperatur e, pH, conductivity, reservoir pressure, and static fluid le vel of the injection zone.

4. At a minimum, the storage operator sh all determine or calculate the following information concerning the injection and confining zone:

a. Fracture pressure;

b. Other physical and chemical characteri stics of the injecti on and confining zone;

and

c. Physical and chemical characteristic s of the formation fluids in the injection

zone.

5. Upon completion, but prior to operati on, the storage operator shall conduct the following tests to verify hydrogeologic characteristics of the injection zone:

a. Pressure fall-off test; and

b. Pump test; or

c. Injectivity test.

6. The storage operator shall provide the commission with the opportunity to witness all logging and testing carried out under th is section. The storage operator shall submit a schedule of such activities to the commission thirty days prior to

conducting the first test and submit any change s to the schedule thirty days prior to

the next scheduled test.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22(XI-45) 04/2013 43-05-01-11.3. INJECTION WELL OPERATING REQUIREMENTS.

1. Except during stimulation, the storage opera tor shall ensure that injection pressure does not exceed ninety percent of the fracture pressure of th e injection zone so as to ensure that the injection does not initiate new fractures or propagate existing fractures in the injection zone . Injection pressure must never initiate fractures in the confining zone or cause the movement of in jection or formation fluids that endanger an underground source of drinking water. All stimulation programs are subject to the commission’s approval as part of the storage facility permit application and incorporated into the permit.

2. Injection between the outermost casing protecting underground sources of drinking

water and the well bor e is prohibited.

3. The storage operator shall fill the annul us between the tubing and the long string casing with a noncorrosive fluid approved by the commission. The storage operator shall maintain on the annulus a pressure that exceeds the operating injection pressure, unless the commission determines that such requirement might harm the integrity of the well or endanger und erground sources of drinking water.

4. Other than during periods approved by the commission in which the sealed tubing-casing annulus is disa ssembled for maintenance or corrective procedures, the storage operator shall maintain mechanical in tegrity of the injection well at all times.

5. The storage operator sh all install and use:

a. Continuous recording devices to m onitor the injection pressure; the rate, volume or mass, and temperature of the carbon dioxide stream; and the pressure on the annulus between the tubing and th e long string casing and annulus fluid volume; and

b. Alarms and automatic surface shuto ff systems or, at the discretion of the commission, down-hole shutoff systems (e .g., automatic shutoff, check valves) or, other mechanical devices that pr ovide equivalent pr otection that are designed to alert the operat or and shut-in the well wh en operating parameters diverge beyond permitted ranges or gradients specified in the permit.

6. If a shutdown (down-hole or at the surf ace) is triggered or a loss of mechanical integrity is discovered, the storage operator shall immediately investigate and identify the cause as expeditiously as po ssible. If, upon such investigation, the well appears to be lacking mech anical integrity, or if monitoring required under

subsection 5 indicates that the well may lack mechanical integrity, the storage operator shall:

a. Immediately cease injection;(XI-46) 04/2013 b. Take all steps reasonably necessary to determine whether there may have been a release of the injected carbon dioxide stream or formation fluids into any unauthorized zone;

c. Notify the commission within twenty-four hours;

d. Restore and demonstrate mechanical integrity to the satisfaction of the commission prior to resuming injection; and

e. Notify the commission when inje ction can be expected to resume.

7. If any monitoring indicates the movement of injection or fo rmation fluids into underground sources of drinking water, the commission shall prescribe such additional requirements for construction, co rrective action, operat ion, monitoring, or reporting as are necessary to preven t such movement. These additional requirements must be imposed by modifying or terminating the permit in accordance

with section 43-05-01-12 if the commission determines that cause exists, or appropriate enforcement action may be ta ken if the permit has been violated.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-11.4. TESTING AND MO NITORING REQUIREMENTS. The storage operator shall prepare, maintain, and comply with a testing and monitoring plan to verify that the geologic sequestration project is operating as permitted and is not endangering underground sources of drinking water. The requirement to maintain and implement a commission-approved plan is directly enforceable re gardless of whether the requirement is a condition of the permit. The plan must be submitted with the storage f acility permit application for commission approval and must include a description of how the storage operator will meet the requirements of this section, including accessing sites fo r all necessary monitoring and testing during the life of the project.

1. The testing and monitoring plan must include:

a. Analysis of the carbon dioxide stream in compliance with a pplicable analytical methods and standards generally accepte d by industry and with sufficient frequency to yield data representati ve of its chemical and physical characteristics;

b. Installation and use, except during well workovers, of continuous recording devices to monitor injection pressure, rate, and volume; the pressure on the annulus between the tubing and the long string casing; and the annulus fluid volume added;(XI-47) 04/2013 c. Corrosion monitoring of the well materials for loss of mass, thickness, cracking, pitting, and other signs of co rrosion, which must be performed on a quarterly basis to ensure that the well components meet the minimum standards for material strength and performance by:

(1) Analyzing coupons of the well c onstruction materials placed in contact with the carbon dioxide stream;

(2) Routing the carbon dioxide stre am through a loop c onstructed with the material used in the well and inspecting the materials in the loop; or

(3) Using an alternative method approved by the commission;

d. Periodic monitoring of the ground water quality and geochemical changes above the confining zone that may be a result of carbon dioxide movement through the confining zone or additional identifie d zones, including:

(1) The location and number of monitoring wells based on specific information about the geologic sequest ration project, including injection rate and volume, geology, the presence of artificial penetrations, and other factors; and

(2) The monitoring frequency and sp atial distribution of monitoring wells based on baseline geochemical data and on any modeling results in the

area of review evaluation.

e. A demonstration of external mechanical integrity at least once per year until the injection well is plugged; and, if required by the commission, a casing inspection log at a frequency establishe d in the testing and monitoring plan;

f. A pressure fall-off test at least once every five years unless more frequent testing is required by the commission based on site-specific information;

g. Testing and monitoring to track the extent of the carbon dioxide plume and the presence or absence of elevated pres sure (e.g., the pressu re front) by using:

(1) Direct methods in the injection zone; and

(2) Indirect methods (e.g., seismi c, electrical, gravity, interferometric synthetic aperture radar or electro magnetic surveys and down-hole carbon dioxide detection tools), unless the commission determines, based on sitespecific geology, that such me thods are not appropriate;(XI-48) 04/2013 h. The commission may require surface ai r monitoring and soil gas monitoring to

detect movement of carbon dioxide th at could endanger an underground source of drinking water. Rega rding these requirements:

(1) Design of surface air and soil gas monitoring must be based on potential risks to underground sources of drinki ng water within the area of review;

(2) The monitoring frequency and spatial distribution of surface air monitoring and soil gas monitoring must be based on using baseline data, and the monitoring plan must descri be how the proposed monitoring will yield useful information on the area of review; and

(3) Surface air monitoring and soil ga s monitoring methods are subject to the commission’s approval;

i. Any additional monitoring, as required by the commission, necessary to support, upgrade, and improve computa tional modeling of the area of review evaluation;

j. Periodic reviews of the testing and monitoring plan by the storage operator to incorporate monitoring data collected, operational data collected, and the most recent area of review reevaluation performed. The storage operator shall review the testing and monitoring plan at least once every five years. Based on this review, the storage operator sh all submit an amended testing and monitoring plan or demonstrate to th e commission that no amendment to the testing and monitoring plan is needed. Any amendments to the testing and monitoring plan are subject to the commi ssion’s approval, must be incorporated into the permit, and are subject to the permit modification requirements. Amended plans or demonstrations must be submitted to the commission as

follows:

(1) Within one year of an area of review reevaluation;

(2) Following any significant change s to the facility, su ch as addition of monitoring wells or newly permitted injection wells within the area of review, on a schedule determined by the commission; or

(3) When required by the commission; and

k. A quality assurance and surveillan ce plan for all tes ting and monitoring requirements.

2. Samples and measurements taken for the purpose of monitoring shall be representative of the monitored activity.

3. Records of monitoring information shall include:(XI-49) 04/2013 a. The date, exact place, and time of sampling or measurements;

b. The individual who performed the sampling or measurements;

c. The date analyses were performed;

d. The individual who performed the analyses;

e. The analytical techniques or methods used; and

f. The results of such analyses.

4. All permits shall specify:

a. Requirements concerning the proper use, maintenance, and installation, when appropriate, of monitoring equipmen t or methods, including biological monitoring methods when appropriate;

b. Required monitoring, including type, intervals, and frequency sufficient to yield data, which are representative of the monitored activ ity, including when appropriate, continuous monitoring; and

c. Applicable reporting requirements based upon the impact of the regulated activity and as specified th roughout this chapter. Reporting shall be no less frequent than specified in section 43-05-01-18.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-11.5. INJECTION WELL PLUGGING.

1. Prior to the well plugging, the storage operator shall flus h each injection well with a buffer fluid, determine bottom hole reservoi r pressure, and perform a final external mechanical integrity test.

2. The storage operator shall pr epare, maintain, and comply with a plugging plan that is acceptable to the commission. The require ment to maintain and implement a commission-approved plan is directly enforceable regardless of whether the requirement is a condition of the permit. The plan must be submitted as part of the storage facility permit application and must include the following:

a. Appropriate tests or measures for determining bottom hole reservoir pressure;(XI-50) 04/2013 b. Appropriate testing methods to en sure external mechanical integrity;

c. The type and number of plugs to be used;

d. The placement of each plug, including the elevation of the top and bottom of each plug;

e. The type, grade, and quantity of mate rial to be used in plugging. The material must be compatible with the carbon dioxide stream; and

f. The method of placement of the plugs.

3. The storage operator shall notify the co mmission in writing, at least sixty days before plugging a well, although the commission may allow a shorter period. At this time, if any changes have been made to th e original well plu gging plan, the storage operator shall also pr ovide the revised well plugging plan. Any amendments to the plan are subject to the commission’s approv al and must be inco rporated into the storage facility permit and are subject to the permit modification requirements.

4. Within sixty days after plugging, the st orage operator shall submit a plugging report to the commission. The report must be cer tified as accurate by the storage operator and by the person who performed the plugging operation if other than the storage operator. The storage operator shall re tain the well plugging report until project completion. Upon project completion the st orage operator shall deliver the records

to the commission.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-11.6. INJECTION DEPT H WAIVER REQUIREMENTS.

1. In seeking a waiver of the requirement to inject below the lowermost underground sources of drinking water, the storage operator shall submit a supplemental report concurrent with the storag e facility permit application. The supplemental report

must:

a. Demonstrate that the injection z one is laterally continuous, is not an underground source of drinking water, a nd is not hydraulically connected to underground sources of drinking wate r; does not outcrop; has adequate injectivity, volume, and suffi cient porosity to safely contain the injected carbon dioxide and formation fluids; a nd has appropriate geochemistry;(XI-51) 04/2013 b. Demonstrate that the injection zone is bounded by laterally continuous, impermeable confining units above and be low the injection zone adequate to prevent fluid movement and pressure bu ildup outside of the injection zone; and that the confining unit is free of transmi ssive faults and fractures. The report shall further characterize the regional fracture properties and demonstrate that

such fractures will not interfere with injection, serve as co nduits, or endanger underground sources of drinking water;

c. Demonstrate, using computati onal modeling, that underground sources of drinking water above and below the injec tion zone will not be endangered as a

result of fluid movement. This mode ling must be conducted in conjunction

with the area of review determinati on, and is subject to requirements and periodic reevaluation;

d. Demonstrate that well design and cons truction, in conjunction with the waiver, will ensure isolation of the injectate in lieu of requirements and will meet well construction requirements;

e. Describe how the monitoring and testing and any additional plans will be tailored to the geologic sequestrati on project to ensure protection of underground sources of drinking water above and below the inje ction zone, if a waiver is granted;

f. Provide information on the location of all the public water supplies affected, reasonably likely to be a ffected, or served by underg round sources of drinking water in the area of review; and

g. Provide any other information re quested by the commission that the United States environmental protection agency regional administrator might find useful in making the decision whether to issue a waiver.

2. To assist the United States environmental protection agency regional administrator in making the decision whether to gran t a waiver of the injection depth requirements, the commission shall s ubmit to the regional administrator documentation of the following:

a. An evaluation of the following inform ation as it relates to siting, construction, and operation of a geologic sequest ration project with a waiver:

(1) The integrity of the upper and lower confining units;

(2) The suitability of the injecti on zone (e.g., lateral continuity; lack of

transmissive faults and fractures ; knowledge of current or planned artificial penetrations into the inje ction zone or formations below the injection zone);(XI-52) 04/2013 (3) The potential capacity of the geologic formation to sequester carbon dioxide, accounting for the availability of alternative injection sites;

(4) All other site characterization data, the proposed emergency and remedial response plan, and a demonstrati on of financial responsibility;

(5) Community needs, demands, and supply from drinking water resources;

(6) Planned needs, potential and future use of underground sources of drinking water and nonunderground sources of drinking water in the area;

(7) Planned or permitted water, hyd rocarbon, or mineral resource exploitation potential of the proposed injection formation and other formations both above and below the injection zone to determine if there are any plans to drill through the formation to access resources in or beneath the proposed injection zone;

(8) The proposed plan for securing alternative resources or treating underground sources of drinking wate r in the event of contamination

related to the carbon dioxide injection well activity; and

(9) Any other applicable consider ations or information requested by the

commission.

b. A review of the commission’s consultati on with the state department of health and federally recognized Indian tribes having jurisdiction over lands within the area of review for the injection well for which a waiver is sought.

c. Any written waiver-related information submitted by the state department of

health to the commission.

3. The commission shall give public noti ce that a waiver application has been submitted. The notice must include a map of the area of review and state:

a. The depth of the proposed injection zone;

b. The location of the injection well;

c. The name and depth of all undergr ound sources of drinking water within the area of review;

d. The names of any public water supplies affected, reasonably likely to be affected, or served by unde rground sources of drinki ng water in the area of review; and

e. The results of the consultation with the state department of health.(XI-53) 04/2013 4. Following public notice, the commission shall provide all information received through the waiver application process to th e United States environmental protection agency regional administrator.

a. If the regional administrator determines that additional information is required to support a decision, the commission shall request that the applicant for the waiver provide the information.

b. The commission may not issue a waiver without written c oncurrence from the regional administrator.

5. Upon receipt of a waiver, the st orage operator shall comply with:

a. All requirements in sectio ns 43-05-01-5.1, 43-05-01-9.1, 43-05-01-11.1, 43-05-01-11.2, 43-05-01-11.3, 43-05-01- 11.5, 43-05-01-13, and 43-05-01-18.

b. All requirements in section 43-05 -01-11 with the following modifications:

(1) Injection wells must be constr ucted and completed to prevent movement of fluids into any unauthorized zone s, including underg round sources of drinking water.

(2) The casing and cementing progra m must be designed to prevent the movement of fluids into any unaut horized zones, including underground sources of drinking water in lieu of requirements in section 43-05-01-11.

(3) The surface casing must exte nd through the base of the nearest underground source of drinking water di rectly above the injection zone and be cemented to the surface; or, at the commission’s discretion, another formation above the injection zone and below the nearest underground source of drinking water a bove the injection zone.

c. All requirements in section 43-05 -01-11.4 with the followi ng modifications:

(1) Ground water quality, geochemical changes, and pressure in the first underground source of drinking water immediately above and below the injection zone, and in any other formations at the discretion of the commission, must be monitored.

(2) Test and monitor to track the ex tent of the carbon dioxide plume and the presence or absence of elevated pres sure (e.g., the pressure front) by using direct methods to monitor for pressure changes in the injection zone, and indirect methods (e.g., seismic, elect rical, gravity, or electromagnetic surveys or down-hole carbon dioxide detection tools), unless the(XI-54) 04/2013 commission determines based on site -specific geology that such methods are not appropriate.

d. All requirements in section 43-05- 01-19 with the following modifications for postinjection site care m onitoring requirements:

(1) Ground water quality, geochemical changes and pressure in the first underground source of drinking water immediately above and below the injection zone, and in any other formations at the discretion of the commission, must be monitored.

(2) Test and monitor to track the ex tent of the carbon dioxide plume and the presence or absence of elevated pres sure (e.g., the pressure front) by using direct methods in the injection zone , and indirect methods (e.g., seismic, electrical, gravity, or electroma gnetic surveys or down-hole carbon dioxide detection tools), unless the commission de termines based on sitespecific geology that such me thods are not appropriate.

e. Any additional requirements requested by the commission to ensure protection of underground sources of drinking water above and below the injection zone.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-12 MODIFICATION, REVO CATION, AND REISSUANCE OR

TERMINATION OF PERMITS.

1. Permits are subject to re view by the commission. Any interested person (i.e., the storage operator, local govern ments having jurisdiction over land within the area of review, and any person who has suffered or will suffer actual injury or economic damage) may request that the commission re view permits issued under this chapter

for one of the reasons set forth below. All requests must be in writing and must contain facts or reasons supporting the reque st. If the commission determines that the request may have merit or at the commission’s initiati ve for one or more of the reasons set forth below, the commission ma y review the permit. After review, the commission may modify or revoke a permit. Permits may be modified or revoked and reissued when the commission determines one of the following events has

occurred:

a. Changes to the facility area;

b. Injecting into a reservoir not specified in the permit;(XI-55) 04/2013 c. Any increase greater than the permitted carbon dioxide storage volume;

d. Changes in the chemical composition of the carbon dioxide stream;

e. Area of review reevaluations under s ubdivision a of subsection 4 of section 43-05-01-05.1;

f. Amendment to the testing and m onitoring plan under subdivision j of subsection 1 of section 43-05-01-11.4;

g. Amendment to the injec tion well plugging plan under subsection 3 of section 43-05-01-11.5;

h. Amendment to the postinjection site care and facility closure plan under subsection 3 of section 43-05-01-19;

i. Amendment to the emergency and re medial response plan under subsection 4 of section 43-05-01-13;

j. Review of monitoring and testing results conducted in accordance with injection well permit requirements;

k. The commission receives information that was not available at the time of permit issuance. Permits may be modifi ed during their terms for this cause only if the information was not available at the time of permit issuance (other than revised regulations, guidance, or test methods) and would have justified the application of different permit conditions at the time of issuance;

l. The standards or regulations on whic h the storage facility permit was based have been changed by promulgation of new or amended standards or regulations or by judicial decisi on after the permit was issued;

m. The commission determines good cau se exists for modification of a compliance schedule, such as an act of God, strike, fl ood, or materials shortage or other events over which the storage ope rator has little or no control and for which there is no reasonably available remedy; or

n. There are material and substantial alterations or additions to the permitted facility or activity which occurred af ter permit issuance which justify the application of permit conditions that are different or absent in the existing permit.

2. If the commission tentatively decides to modify or revoke and reissue a permit, the commission shall prepare a draft permit in corporating the propos ed changes. The commission may request additional inform ation and, in the case of a modified permit, may require the submission of an updated application. In the case of a(XI-56) 04/2013 revoked and reissued permit, the commission shall require the submission of a new permit application.

3. In a permit modification under this section, only those conditions to be modified shall be reopened when a new draft permit is prepared. All other aspects of the existing permit shall remain in effect fo r the duration of th e unmodified permit. When a permit is revoked and reissued, the entire permit is reopened just as if the permit had expired and was being reissue d. During any revocation and reissuance proceeding, the storage operator shall comply with all conditions of the existing permit until a new final permit is reissued.

4. Suitability of the storage facility location will not be considered at the time of permit

modification or revocation unless new informa tion or standards indi cate that a threat

to human health or the environment exis ts which was unknown at the time of permit

issuance.

5. The commission has received notification of a proposed transfer of the storage facility permit.

6. The following are causes for terminating an injection well permit during its term:

a. Noncompliance by the storage ope rator with any permit condition;

b. Failure by the storage operator to fu lly disclose all relevant facts or misrepresentation of relevant facts to the commission; or

c. A determination that the permitted activity endangers human health or the

environment.

7. If the commission tentatively decides to terminate a permit, the commission shall

issue notice of intent to terminate. A notice of intent to terminate is a type of draft permit which follows the same procedures as any draft permit prep ared under section

43-05-01-07.2.

History: Effective April 1, 2010; amended effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-12.1. MINOR MODI FICATIONS OF PERMITS. Upon agreement between the storage operator and the commission, the co mmission may modify a permit to make the

corrections or allowances without the storage operator filing an application to amend a permit. Any permit modification not processed as a minor modification under this section must be filed as an application to amend an existing permit under section 43-05-01-12. Minor modifications may include:(XI-57) 04/2013 1. Correct typographical errors;

2. Require more frequent monitoring or reporting by the storage operator;

3. Change an interim compliance date in a schedule of compliance, provided the new date is not more than one hundred twenty days after the date specified in the existing permit and does not interfere with attainment of the final compliance date requirement;

4. Allow for a change in ownership or ope rational control of a facility where the commission determines that no other change in the storage facility permit is necessary, provided that a writt en agreement containing a specific date for transfer of permit responsibility, coverage, and liabil ity between the current and new storage operator has been submitted to the commission pursuant to section 43-05-01-06;

5. Change quantities or types of fluids inje cted which are within the capacity of the facility as permitted and, in the judgment of the commission, would not interfere with the operation of the facility or its ability to meet conditions described in the permit and would not change its classification;

6. Change construction requirements approve d by the commission, provided that any such alteration shall comply with the re quirements of this chapter and no such changes are physically incorporated into c onstruction of the well prior to approval of the modification by th e commission; or

7. Amend the testing and monitoring plan, plugging plan, postinjection site care and facility closure plan, emergency and remedi al response plan, worker safety plan, or corrosion monitoring and prevention progr am where the modifications merely clarify or correct the plan, as determined by the commission.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-13. EMERGENCY AND RE MEDIAL RESPONSE PLAN. The storage operator shall implement the commission-approved emergency and remedial response plan and the worker safety plan proposed in section 43 -05-01-05. This plan must include emergency response and security procedures. The plan, in cluding revision of the lis t of contractors and equipment vendors, must be updated as necessary or as the commission requi res. Copies of the plans must be available at the storage facility and at the storage operator’s nearest operational

office.(XI-58) 04/2013 1. The emergency and remedial response plan requires a description of the actions the storage operator shall take to address moveme nt of the injection or formation fluids that may endanger an underground source of drinking water during construction, operation, and postinjection site care periods . The requirement to maintain and implement a commission-approved plan is directly enforceable regardless of whether the requirement is a condition of the permit. The plan must also detail:

a. The safety procedures concerning the facility and residential, commercial, and public land use within one mile [1.61 kilometers], or any other distance set by the commission, of the outside bounda ry of the facility area; and

b. Contingency plans for addressing car bon dioxide leaks from any well, flow lines, or other facility, and loss of containment from the storage reservoir, and identify specific contractors and e quipment vendors capable of providing necessary services and equipment to respond to such leaks or loss of

containment.

2. If the storage operator obtains evidence that the injected car bon dioxide stream and associated pressure front may endanger an underground source of drinking water, the storage operator shall:

a. Immediately cease injection;

b. Take all steps reasonably necessary to identify and characterize any release;

c. Notify the commission w ithin twenty-four hours; and

d. Implement the emergency and remedial response plan approved by the

commission.

3. The commission may allow the operator to resume injection prior to remediation if the storage operator demonstrates that the injection operation will not endanger underground sources of drinking water.

4. The storage operator sha ll review annually the emerge ncy and remedial response plan developed under subsection 1. Based on this review, the storage operator shall submit to the commission an amended plan or demonstrate to the commission that no amendment to the plan is needed. Any am endments to the plan are subject to the commission’s approval, must be incorporated into the storage facility permit, and are subject to the permit modifi cation requirements. Amended plans or demonstrations

that amendments are not needed shall be submitted to the commission as follows:

a. Within one year of an area of review reevaluation;

b. Following any significant changes to th e facility, such as a ddition of injection or monitoring wells, on a schedule de termined by the commission; or(XI-59) 04/2013 c. When required by the commission.

History: Effective April 1, 2010; amended effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-14. LEAK DETE CTION AND REPORTING.

1. Leak detectors or other approved leak de tection methodologies must be placed at the wellhead of all injection and subsurface obser vation wells. Leak detectors must be integrated, where applicable, with automate d warning systems and must be inspected and tested on a semiannual basis and, if defec tive, shall be repaired or replaced within ten days. Each repaired or replaced dete ctor must be retested if required by the commission. An extension of time for repa ir or replacement of a leak detector may be granted upon a showing of good cause by th e storage operator. A record of each inspection must include the inspection result s, must be maintained by the operator for at least ten years, and must be made available to the commission upon request.

2. The storage operator shall immediately report to the commission any leak detected at any well or surface facility.

3. The storage operator shall immediatel y report to the commission any pressure changes or other monitoring data from subs urface observation wells that indicate the presence of leaks in the storage reservoir.

4. The storage operator shall immediat ely report to the co mmission any other indication that the storage facility is not containing carbon dioxide, whether the lack of containment concerns the storage rese rvoir, surface equipment, or any other aspect of the storage facility.

History: Effective April 1, 2010; amended effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22(XI-60) 04/2013 43-05-01-15. STORAGE FACILITY CORROSION MONITORING AND PREVENTION REQUIREMENTS. The storage operator shall conduct a corrosion monitoring and prevention program approved by the commission.

History: Effective April 1, 2010; amended effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-16. STORAGE FACILITY IDENTIFICATION REQUIREMENTS. Identification signs must be placed at each storag e facility in a centrali zed location and at each well site. The signs must show the name of th e operator, the facility name, and the emergency response number to c ontact the operator.

History: Effective April 1, 2010.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-17. STORAGE FACILITY FEES.

1. The storage operator shall pay the comm ission a fee of one cent on each ton of carbon dioxide injected for storage. The f ee must be deposited in the carbon dioxide storage facility administrative fund.

2. The storage operator shall pay the commi ssion a fee of seven cents on each ton of carbon dioxide injected for storage. The f ee must be deposited in the carbon dioxide storage facility trust fund.

3. Moneys from the carbon dioxide storage facility trust fund, including accumulated interest, may be relied upon to satisfy the financial assurance re quirements pursuant to section 43-05-01-09.1 for the postclosur e period. If suffici ent moneys are not available in the carbon dioxide storage facili ty trust fund at the end of the closure period, the storage operator shall make addi tional payments into the trust fund to

ensure that sufficient funds are available to carry out the required activities on the date at which they may occur. The commission shall take into account project-specific risk asse ssments, projected timing of activities (e.g., postinjection site care), and interest accumulation in determining whether sufficient funds are available to carry out the required activities.

History: Effective April 1, 2010; amended effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22(XI-61) 04/2013 43-05-01-18. REPORTING REQUIREMENTS

.

1. The storage operator shall file with the commission all reports, submittals, notifications, and any other informa tion that the commission requires.

2. The storage operator shall give notice to the commission as soon as possible of any planned physical alterations or additions to the permitted storage facility or any other planned changes in the permitted storage f acility or activity which may result in noncompliance with permit requirements.

3. Reports of compliance or noncompliance with, or any progress reports on, interim and final requirements containe d in any compliance schedule of this permit shall be submitted no later than thirty days following each schedule date.

4. The storage operator shall file with the commission quarterly, or more frequently if the commission requires, a report on the vol ume of carbon dioxide injected into or withdrawn since the last report, the aver age injection rate, average composition of the carbon dioxide stream, wellhead and down- hole temperature and pressure data or calculations, or other pertinent opera tional parameters as required by the

commission.

5. The storage operator shall submit all re quired reports, submittals, and notifications under chapter 43-05-01 to the United States environmental protection agency in an electronic format approved by that agency.

6. The quarterly report is due thirty days af ter the end of the quarter. The report must:

a. Describe any changes to the phys ical, chemical, and other relevant

characteristics of the carbon dioxide st ream from the proposed operating data;

b. State the monthly average, maximum, and minimum values for injection pressure, flow rate and volu me, and annular pressure;

c. Describe any event that exceeds operat ing parameters for annulus pressure or injection pressure specified in the permit;

d. Describe any event which triggers a shutoff device required pursuant to

subsection 5 of section 43-05- 01-11.3 and the response taken;

e. State the monthly volume and mass of the carbon dioxide stream injected over the reporting period and the volume injected cumulatively over the life of the project to date;

f. State the monthly annulu s fluid volume added; and

g. State the results of monitoring prescribed under section 43-05-01-11.4.(XI-62) 04/2013 7. The storage operator shall file with the commission an annual report that summarizes the quarterly reports and that provides updated projections of the response and storage capacity of the storage reservoir. The projections must be based on actual reservoir operational experience, including all new geologic data and information. All anomalies in predicted behavior as indicated in permit conditions or in the assumptions upon which the permit was issued must be explained and, if necessary, the permit conditions amended in accordance with section 43-05-01-12. The annual report is due forty-five days after the end of the year.

8. The storage operator sha ll report, within thirty days, the results of:

a. Periodic tests of mechanical integrity;

b. Any well workover; and

c. Any other test of the injection well conducted by the storage operator if required by the commission.

9. The storage operator sh all report the following, w ithin twenty-four hours:

a. Any evidence that the injected carbon dioxide stream or associated pressure front may cause an endangerment to an underground source of drinking water;

b. Any noncompliance which may endanger hea lth and safety of persons or cause pollution of the environment, including:

(1) Any monitoring or other informati on which indicates that any contaminant may cause an endangerment to undergr ound sources of drinking water; or

(2) Any noncompliance with a perm it condition or malfunction of the injection system which may cause fluid migration in to or between underground sources of drinking water shall be provided verbally within twenty-four hours from the time the st orage operator becomes aware of the circumstances. A written submission shall also be provided within five days of the time the stor age operator becomes aware of the circumstances. The written submission shall contain a description of the noncompliance and its cause; the pe riod of noncompliance, including exact dates and times; and if the noncompliance has not been corrected, the anticipated time it is expected to continue; and steps taken or planned to reduce, eliminate, and prevent reoccurrence of th e noncompliance.

c. Any triggering of a shutoff system (e.g., down-hole or at the surface);

d. Any failure to maintain mechanical integrity; or(XI-63) 04/2013 e. Any release of carbon di oxide to the atmosphere or biosphere in compliance with the requirement under subdivisi on h of subsection 1 of section 43-05-01-11.4 for surface air and soil ga s monitoring, or other monitoring technologies required by the commission.

10. The storage operator shall notify the comm ission in writing thirty days in advance

of:

a. Any planned well workover;

b. Any planned stimulation act ivities, other than stimul ation for formation testing conducted;

c. Any other planned test of the inject ion well conducted by th e storage operator;

and

d. The conversion or abandonment of any we ll used or proposed to be used in a geologic storage operation.

11. The storage operator shall retain the following record s until project completion:

a. All data collected for the applications of the storage faci lity permit, injection well permit, and operation of injection well permit;

b. Data on the nature and composition of a ll injected fluids co llected pursuant to

subdivision a of subsection 1 of section 43-05-01-11.4; and

c. All records from the closure period, including we ll plugging reports, postinjection site care data, and the final assessment.

d. Upon project completion, the storag e operator shall deliver any records required in this section to the commission.

12. The storage operator shall retain the following records fo r a period of at least ten years from the date of the sa mple, measurement, or report:

a. Monitoring data collected pursuant to subdivisions b through i of subsection 1 of section 43-05-01-11.4; and

b. Calibration and maintenance records and all original strip chart recordings for continuous monitoring instrumentation, and copies of all repor ts required by the storage facility permit.

c. This period may be extended by requ est of the commission at any time.(XI-64) 04/2013 13. The storage operator shall report all instances of noncompliance not otherwise reported under this section, at the time monitoring reports are submitted. The reports

shall contain the informati on listed in subsection 9.

14. Where the storage operator becomes aware th at it failed to subm it any relevant facts in a permit application, or submitted incorrect information in a permit application or in any report to the commission, such f acts or information shall be promptly submitted to the commission. Failure to do so may result in revocation of the permit, depending on the nature of the information withheld.

History: Effective April 1, 2010; amended effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-18.1. ABANDONMENT OF WELLS.

1. The removal of injection equipment or the failure to operate an injection well for one year constitutes abandonment of the well. An abandoned well must be plugged in accordance with the plugging plan a nd its site must be reclaimed.

2. The commission may waive for one year the requirement to plug and reclaim an abandoned well by giving the well temporarily abandoned status. This status may only be given to wells that ar e to be used for purposes re lated to the geologic storage of carbon dioxide. If a well is given te mporarily abandoned status, the well's perforations must be isolated, the integr ity of its casing must be proven, and its casing must be sealed at the surface, all in a manner approved by the commission. The commission may extend a well's temporar ily abandoned status beyond one year.

A fee of one hundred dollars shall be s ubmitted for each application to extend the temporary abandonment status of any well.

3. In addition to the waiver in subsection 2, the commission may also waive the duty to plug and reclaim an abandoned well fo r any other good cause found by the

commission. If the commission exercises th is discretion, the commission shall set a date or circumstance upon wh ich the waiver expires.

History: Effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-19. POSTINJECTION SI TE CARE AND FACILITY CLOSURE

. The storage operator shall submit and maintain the postin jection site care and fa cility closure plan as a part of the storage facility permit appli cation to be approved by the commission. The(XI-65) 04/2013 requirement to maintain and implement a commi ssion-approved plan is directly enforceable regardless of whether the requirement is a condition of the permit.

1. The postinjection site care and facility closure plan must include the following

information:

a. The pressure differential between preinjection and predicted postinjection pressures in the injection zone;

b. The predicted position of the carbon dioxi de plume and associated pressure front at cessation of injection as demons trated in the area of review evaluation;

c. A description of postinjection monitoring location, methods, and proposed frequency;

d. A schedule for submitting postinjection site care monitoring results to the commission; and

e. The duration of the postinjection site care monitoring timeframe that ensures nonendangerment of underground s ources of drinking water.

2. The storage operator shall specify in the postinjection site care and facility closure plan which wells will be plugged and which will remain unplugge d to be used as

subsurface observation wells. Subsurf ace observation and ground water monitoring wells as approved in the plan must remain in place for continued monitoring during the closure and postclosure periods.

3. Upon cessation of injection, the storage operat or shall either submit an amended postinjection site care and facility closur e plan or demonstrate to the commission through monitoring data and modeling results that no amendment to the plan is needed. Any amendments to the postinjecti on site care and facility closure plan are subject to the commission’s approval and must be incorporated into the storage facility permit.

4. At any time during the life of the geologic sequestration project, the storage operator may modify and resubmit the pos tinjection site care and facility closure plan for the commission’s approval within th irty days of such change.

5. Upon cessation of injection, all wells no t associated with monitoring must be properly plugged and abandoned in a manne r which will not allow movement of injection or formation fluids that enda nger underground sources of drinking water in

accordance with section 43-05-01-11.5. All storage facility equipment, appurtenances, and structures not associated with monitoring must be removed. Following well plugging and removal of all surface equipment, the surface must be reclaimed to the commission’s specifications th at will, in general, return the land as closely as practicable to original condition.(XI-66) 04/2013 6. The well casing must be cut off at a de pth of five feet [1.52 meters] below the surface and a steel plate welded on top iden tifying the well name and that it was used for carbon dioxide storage.

7. The commission shall develop in conjuncti on with the storage operator a continuing monitoring plan for the postclosure period, including a review and final approval of wells to be plugged.

8. The storage operator shall continue to conduct monitori ng during the closure period as specified in the commission-approved pos tinjection site care and facility closure plan. The storage operator may apply fo r project completion with an alternative postinjection site care mon itoring timeframe pursuant to North Dakota Century Code

section 38-22-17. Once it is demonstrated that underground s ources of drinking water are no longer endangered, the final as sessment under subsection 9 is complete, and upon full compliance with North Dakot a Century Code se ction 38-22-17, the storage operator may apply to the commission for a certificat e of project completion. If the storage operator is unable to meet the requirements of North Dakota Century

Code section 38-22-17 and is unable to de monstrate that underground sources of drinking water are no longer being endangered, the storag e operator shall continue monitoring the storage facility for fifty year s or until full compliance is met and such

demonstration can be made.

9. Before project completion, the storage ope rator shall provide a final assessment of the stored carbon dioxide’s location, charac teristics, and its fu ture movement and location within the storage reservoir. The storage operator shall submit the final assessment to the commission within ninety days of completing all postinjection site care and facility closure requirements.

a. The final assessment must include:

(1) The results of computational mode ling performed pursuant to delineation

of the area of review under section 43-05-01-05.1;

(2) The predicted timeframe for pressure decline within the injection zone, and any other zones, such that forma tion fluids may not be forced into any underground sources of drinking water or the timeframe for pressure decline to preinjection pressures;

(3) The predicted rate of carbon dioxide plume migration within the injection zone and the predicted timeframe for the cessation of migration;

(4) A description of the site-specifi c processes that will result in carbon dioxide trapping, including immob ilization by capillary trapping, dissolution, and minerali zation at the site;(XI-67) 04/2013 (5) The predicted rate of carbon dioxid e trapping in the immobile capillary phase, dissolved phase, or mineral phase;

(6) The results of laboratory analys es, research studies, or field or site-specific studies to verify the information required in paragraphs 4 and 5;

(7) A characterization of the confining zone, including a demonstration that it is free of transmissive faults, fr actures, and microf ractures, and an evaluation of thickness, permeability, and integrity to impede fluid (e.g., carbon dioxide, formation fluids) movement;

(8) Any other projects in proximity to the predictive modeling of the final extent of the carbon dioxide plume and area of elevated pressures. The presence of potential conduits for fluid movement, including planned injection wells and project monitoring wells associated with the proposed geologic sequestration project;

(9) A description of the well constructio n and an assessment of the quality of plugs of all abandoned wells w ithin the area of review;

(10) The distance between the injec tion zone and the nearest underground source of drinking water above and below the injection zone;

(11) An assessment of the operations conducted during the operational period, including the volumes injected, volumes extracted, all chemical analyses conducted, and a summary of all monitori ng efforts. The report must also

document the stored carbon dioxide’ s location and characteristics and predict how it might move dur ing the postclosure period;

(12) An assessment of the funds in th e carbon dioxide storag e facility trust

fund to ensure that sufficient funds ar e available to carry out the required activities on the date on which they may occur, taking into account project-specific risk assessments, projected ti ming of activities (e.g., postinjection site care), and interest accumulation in the trust fund; and

(13) Any additional site-specific factors required by the commission.

b. Information submitted to support the demonstration in subdivision a must meet the following criteria:

(1) All analyses and tests for the final assessment must be accurate, reproducible, and performed in accordance with the established quality assurance standards. An approved qua lity assurance and quality control plan must address all aspect s of the final assessment;(XI-68) 04/2013 (2) Estimation techniques must be appropriate and test protocols certified by the United States environmental prot ection agency must be used where available;

(3) Predictive models must be appropriate and tailored to th e site conditions, composition of the carbon dioxide st ream, and injection and site

conditions over the life of the geologic sequestration project;

(4) Predictive models must be calibrated using existing information when sufficient data are available;

(5) Reasonably conservative values and modeling assumptions must be used

and disclosed to the commission whenever values are estimated on the basis of known, historical inform ation instead of site-specific

measurements;

(6) An analysis must be performed to identify and assess aspects of the postinjection monitoring timeframe demonstration th at contribute significantly to uncertainty. Th e storage operato r shall conduct sensitivity analyses to determine the effect that significant uncertainty may contribute to the modeling demonstration; and

(7) Any additional criteria required by the commission.

10. The storage operator shall pr ovide a copy of an a ccurate plat certifi ed by a registered surveyor which has been submitted to the c ounty recorder’s office designated by the commission. The plat must indicate the location of the injection well relative to permanently surveyed benchmarks. The stor age operator must also submit a copy of the plat to the United States environmenta l protection agency regional administrator

office.

11. The storage operator shall record a notation on the deed to the property on which the injection well was located, or any other document that is normally examined during title search, that will in perpetuity provide any potential purchaser of the property the following information:

a. The fact that land has been used to sequester carbon dioxide;

b. The name of the state agency, local authority, or tribe with which the survey plat was filed, as well as the address of the United States environmental protection agency regional office to which it was submitted; and(XI-69) 04/2013 c. The volume of fluid injected, the in jection zone or zones into which it was injected, and the period over which injection occurred.

History: Effective April 1, 2010; amended effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22

43-05-01-20. DETERMIN ING STORAGE AMOUNTS.

1. Upon application by an enhanced oil or gas recovery unit ope rator or a storage operator, the commission, after notice and h earing, shall issue an order determining the amount of injected carbon dioxide stored in a reservoir that has been or is being used for an enhanced oil or gas recovery project or in a storage reservoir that has been or is being used for storage under a permit issued pursua nt to North Dakota Century Code chapter 38-22.

2. The applicant shall pay a processing fee for a storage amount determination.

The applicant shall pay a processing fee based on the commission’s actual processing costs, including computer data processing costs, as determined by the commission. The following procedures and criteria will be utilized in establishing

the fee:

a. A record of all application processing costs incurred must be maintained by the

commission.

b. Promptly after receiving an applic ation, the commission shall prepare and submit to the applicant an estimate of the processing fee.

c. After the commission’s work on th e application has concluded, a final statement will be sent to the applicant. The full processing fee must be paid

before the commission issues it s decision on the application.

d. The applicant must pay the processing fee even if the applica tion is denied or

withdrawn.

History: Effective April 1, 2010; amended effective April 1, 2013.

General Authority Law Implemented

NDCC 28-32-02 NDCC 38-22