This comment letter response contains two parts:

(1) The original submittal from the commenter. (2) A data base printout of EPA’s response to each point raised by the commenter.

Notes about the response letters:

• The response letters were generated by a data base used to track the content of all public

comment submittals and ensure that the Agency responds to each. Each comment letter

was assigned a Letter ID that corresponds to the last four digits of the docket number of the
original comment (as posted on www.regulations.gov).

• Each response letter includes: comment text; an EPA

‐ assigned comment code; and an
individual response. These are described and explained below.

• The data base contains Comment text from the letters submitted by commenters.
Many hard copy letters were scanned into electronic format for inclusion in the data

base. As a result, there may be some typographical errors attributable to optical

character recognition issues. However, all original submittals were reviewed in the

process of drafting responses to ensure that the comment content was understood and
appropriately addressed.

• The content of each comment letter was divided into topic areas and assigned a unique

Comment ID. Additionally, one or more Comment Codes (i.e., unique topic area ID) was assigned to each discrete point raised by a commenter. This information was added to

the data base. To inform final rulemaking decisions, all comments and information

received on a given topic were reviewed by technical experts in each rule area (e.g., on

construction requirements).

• Following decisions on the final rule requirements, Individual responses were drafted
by topic area to ensure completeness and consistency of the responses with the final

rule and other responses to similar comments. Each discrete point made by a

commenter was given a unique response.

• Upon completion of comment responses, all information was entered into the data base.

Each letter response is a compilation of each comment and its individual response, compiled in the order of the original comment letter. As a result of this process, there is
repetition in the response text. The Agency believes this approach ensures completeness

and attention to each comment letter that was submitted.

• All comments in a topic area were reviewed, evaluated, and responded to concurrently.

Responses on each topic area are compiled and are also available in the rulemaking docket.p

. 1

STATE, Or MICHIGAN

DEPARTMENT OF ENVIRONMENTAL QUALITY

LANSING 

# D

WE 

# 13-



# Fm 4z`

JENNIFER M

. GRANHOLM STEVEN E

. CHESTER

GOVERNOR DIRECTOR December 5, 2008

Water Docket
Environmental Protection Agency

Mailcode : 2822T

1200 Pennsylvania Ave

., NW Washington, DC 20460

Dear EPA Administrator :

SUBJECT : Docket ID No

. EPA-HQ-OW-2008-0390 

# DEC 17 2008

In response to the Environmental Protection Agency's (EPA's) request for comments on

its proposed Federal Requirements under the Underground Injection Control (UIC) Program for Carbon Dioxide (C02) Geologic Sequestration (GS) Wells, the Michigan
Department of Environmental Quality (MDEQ), through its Office of Geological Survey (Staff) hereby submits the following comments :

EPA (II

. G

.) proposes that the Director have discretion to carry over or "grandfather" the

construction requirements for existing Class I, 11, and V wells when they are converted

to GS wells

.

" Staff believes that, before allowing the wells to be "grandfathered," the existing

well construction must be evaluated with respect to potential migration of injected

C02 upward via the well bore and remedial action required if the existing

construction does not conform with construction requirements for new GS wells

.

EPA (III .) proposes adopting Regulatory Alternative 3, the Tailored Requirements Approach, for managing C02 injection for GS

.

" Staff believes that Regulatory Alternative 2, the General Requirements Approach, is the proper management approach because it gives the permitting

authorities the necessary flexibility and discretion to properly manage C02 GS

.

EPA (III

. A

. 2 .) proposes periodic re-evaluation of the Area of Review (AoR), with a 10-

year minimum fixed frequency

.

" Staff believes that the frequency of re-evaluation should be based on the results

of the initial modeling and subsequent monitoring and that a fixed 10-year
minimum should not be mandated

.



## DEC p 12008

CONSTITUTION HALL " 525 WEST ALLEGAN STREET " PO, BOX 30473 " LANSING, MICHIGAN 48909-7973

www .michigan .gov " (800) 882-9278

.EPA Administrator

Page 2

December 5, 2008

EPA (I II

. A

. 2 .) proposes phased corrective action for wells in the AoR

.

" Staff believes phased corrective action should not be allowed, since there is

much uncertainty in the modeled results--specifically in the times at which the plume will reach various wells--due to typically sparse or non-existent geologic

data in the AoR

.

EPA (III

. A

. 3 .) proposes a surface casing and long-string casing for a GS well

.

" Staff believes an intermediate casing string should be mandated for those areas where such casing is appropriate ; for example, where high-pressure gas is
known or suspected to exist between the surface casing and the sequestration

interval

. Such casings should be required to be cemented to surface

.

EPA (III

. A

. 4 .) proposes allowing hydraulic fracturing in GS wells

.

" Staff believes hydraulic fracturing should be allowed to improve wellbore injectivity when necessary so long as fracturing of the confining zone(s) is prohibited at all times

.

EPA (III

. A

. 4 .) proposes allowing injection for sequestration above the lowermost
USDW (Underground Source of Drinking Water)

.

" Staff believes injection should be allowed when the EPA Director determines that geologic conditions exist that will prevent fluid movement into adjacent USDWs

.

EPA (III

. A

. 4 .) proposes establishing a minimum injection depth rather than requiring injection below

the lowermost USDW

.

" Staff believes minimum injection depths may be appropriate if sufficient information is available regarding the depths of wells that may have been drilled into an AoR prior to state or federal regulation

.

EPA (III

. A

. 4 .) proposes the use of tracers in the injected C02 to serve as warning of leakage

.

9 Staff is opposed to allowing tracers

.EPA Administrator

Page 3

December 5, 2008

EPA (III

. A

. 4 .) proposes "continuous monitoring" of various injection parameters

.

" Staff believes "continuous monitoring" is appropriate but that the precise definition of "continuous monitoring" may be contentious

.

EPA (III

. A

. 5 .) proposes eliminating periodic internal mechanical integrity tests (MIT) in favor of continuous monitoring and to require external MITs on an annual basis

.

" Staff believes that continuous internal monitoring of injection wells is appropriate

. Staff believes that external MITs should be conducted once every five years

.

EPA (III

. A

. 6 .) seeks comment on the amount and types of monitoring to be conducted at GS sites

.

" Staff is not certain that the monitoring parameters listed will yield any information that relates to endangerment of USDW by leakage from the sequestration zone with the exception of the determination of the position of the C02 plume and area of elevated pressure

. Staff believes, however, that the surface casing and tubing pressures, injection rates, and volumes should be measured daily and reported

on a monthly basis

. It is not clear that surface monitoring will provide unambiguous information regarding the position of the injected C02 plume, particularly in view of the uncertainty associated with the movement of the plume

. It is also not clear that wells in the confining zone will be of any value since there may be no fluid movement into any particular well, and there is much uncertainty

as to appropriate or optimum placement of confining zone monitoring wells

.

EPA (III

. A

. 8 .) proposes a 50-year post-closure monitoring period

.

" Staff believes that the 50-year time period is probably too long as there is no certainty that the entity that originated the sequestration project will be in existence for such a long period

.

EPA (III

. A

. 9 .) proposes corporate self-assurance for well plugging

.

" Staff is opposed to the use of corporate self-assurance

. It has been the Office of Geological Survey's experience that the mere net worth of an owner or operator at any given time is not adequate to insure that funds for plugging are actually available or that the owner or operator will be viable and financially able to plug the wells

. If a governmental entity assumes responsibility for plugging if the

owner is unable to do so, requiring actual surety/conformance bonds or insurance allows the wells to be plugged without spending public monies

.EPA Administrator

Page 4

December 5, 2008

EPA (V .) proposes allowing state regulatory agencies to assume primacy for Class VI

GS wells only

.

" Staff is in favor of this proposal

.

Please contact Mr

. Harold R

. Fitch, Director, Office of Geological Survey, at 517-241-1548, if you have any questions with regard to these comments

.



### Sincerely,

SteGen E : C

Director

517-373-7917

cc : Mr

. Jim Sygo, Deputy Director, MDEQ

Mr

. Harold Fitch, MDEQ

Mr

. Mike Bricker, MDEQ

Mr

. Ray Vugrinovich, MDEQLetter ID: 0264

Commenter: Steven Chester Organization: Michigan Department of Environmental Quality (MDEQ)

Letter ID: 0264 Comment ID: 22833 Letter Lines: 42 to 50

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

Comment: EPA (II. G.) proposes that the Director have discretion to carry over or "grandfather" the constructi on requirements for existing Cl ass I, II, and V wells when they are converted to GS wells.

- Staff believes that, before allowing the wells to be "grandfathered," the existing well construction must be evaluated with respect to potential migration of injected CO2 upward via the well bore and remedi al action required if the existing construction does not conform with cons truction requirements for

new GS wells.

Individual Response: EPA agrees that a cautious approach to grandfathering is appropriate, particularly given that the convert ed well will be used for a substa ntially different process, which involves increased reservoir pre ssures associated with large volumes of stored CO2 and the corrosivity of CO2 in the presence of water. Th e final GS rule provides for the construction of these wells to be grandfathered (per 146.81(c)). EPA has included a requirement in the final Class VI rule that owners or operators seeki ng to convert existing well s for long term storage must demonstrate to the Director that the grandf athered wells were engineered and constructed to meet the requirements at §146.86(a) and ensure prot ection of USDWs, in lie u of requirements at §146.86(b) and §146.87(a). This demonstration must address the potential for upward migration of injected CO2.

EPA adds that, following re-permitting as Class VI wells, these projects must be subject to the MIT requirements in the final GS rule. See the di scussion of EPA's final regulatory approach in the preamble to the GS rule for additional detail on these requirements.

Letter ID: 0264 Comment ID: 22834 Letter Lines: 52 to 57

Comment Code: 2300 1.7 Comments on the Alternatives Considered

Comment: EPA (III .) proposes adopting Regulat ory Alternative 3, the Tailored Requirements Approach, for mana ging CO2 injection for GS.

- Staff believes that Regulatory Alte rnative 2, the General Requirements Approach, is the proper management appr oach because it gives the permitting authorities the necessary flexibility and discretion to properly manage CO2 GS.

Individual Response: Although Alternative 2 (General Re quirements Approach) provides

1standards for siting, construction, operation, and monitoring associated with basic deep well design and operation, EPA does not believe that this alternative is approp riate for GS because it does not contain requirements tailored to meet the unique challenges of long-term CO2 GS, including the potentially large injection volumes, buoyancy, corrosi vity in the pres ence of water, and viscosity and therefore canno t ensure protection of USDWs.

EPA believes that the GS rule offers states th e flexibility and discretion desired by commenters preferring Alternative 2 while ensuring the protec tion of USDWs. The final GS regulation gives

the Director discretion to set permit criteria that are approp riate to site-specific conditions. The regulation provides flexibility to select approp riate sites and target formations (under §146.82), well construction specifics (under §146.86), and testing and monitoring regimes (under §146.90), provided the owner or operator can demonstrate that the injection and storage will not endanger USDWs and that minimum requirements for the site are met. Commenters representing electric utilities, water associations, and states supporte d Alternative 3 and the fl exibility it provides to permitting authorities to make case-by-case permitt ing decisions while ensuring the protection of

USDWs.

Letter ID: 0264 Comment ID: 22835 Letter Lines: 59 to 64

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

Comment: EPA (III. A. 2.) proposes periodic re-evalu ation of the Area of Review (AoR), with a 10year minimum fixed frequency.

- Staff believes that the frequency of re-evaluation should be based on the results of the initial modeling and s ubsequent monitoring and that a fixed 10-year minimum should not be mandated.

Individual Response: EPA believes that periodic AoR reevalua tion at a set frequency of at least every five years is necessary to ensure protec tion of USDWs from endang erment and address the uncertainties inherent in predictive modeling. Periodic AoR reevaluations at §146.84(e) ensure that a deliberate effort is made to verify, base d on monitoring and operational data, that the CO2 plume is moving within the subsurface as predicted. EPA believes that less frequent reevaluations may not be sufficient to appropria tely model plume and pressure front movement,

establish conditions for corrective action, and ensure protec tion of USDWs from endangerment.

EPA clarifies that if site m onitoring data agrees with the existing AoR delin eation, a model recalibration may not be necessary, and the AoR reevaluation may consist of a demonstration

that the current AoR delineation is ad equate based on site monitoring data.

Letter ID: 0264 Comment ID: 22836 Letter Lines: 66 to 71

Comment Code: 3660 2.2.4.2 Comments opposed to allowing phased corrective action

2Comment: EPA (I II . A. 2.) proposes phased correc tive action for wells in the AoR.

- Staff believes phased corrective act ion should not be allowed, since there is much uncertainty in the modele d results--specifically in the times at which the plume will reach various wells --due to typically sparse or nonexistent geologic data in the AoR.

Individual Response: EPA disagrees that phased correctiv e action is inappr opriate for GS projects, and retains this pr ovision in the final GS regula tion. EPA acknowledges the concern regarding the uncertainty in AoR modeling, and notes that addressi ng this is the intent of the AoR reevaluation process. EPA adds that the fina l rule includes a requirement that the AoR be reevaluated every five years or when monitori ng or operational conditions warrant a reevaluation as identified at §146.84(b)(2)(ii).

Allowing phased corrective action is at the discretion of the Direct or. Any state, in developing a primacy package that is concerned that phased corrective action cannot be safely implemented based on the geologic or other c onditions, can prohibit Director's discretion to allow phased

corrective action.

Letter ID: 0264 Comment ID: 22837 Letter Lines: 73 to 79

Comment Code: 3822 2.3.1.1 Depth of surface casing (seeking comment)

Comment Code: 3824 2.3.1.2 Cementing of long-string casing (seeking comment)

Comment: EPA (III. A. 3.) proposes a surface casing and long-string casing for a GS well.

- Staff believes an intermediate cas ing string should be mandated for those areas where such casing is appropria te; for example, where high-pressure gas is known or suspected to exist between the surface casing and the sequestration interval. Such casings s hould be required to be cemented to

surface.

Individual Response: EPA disagrees that specific requireme nts for intermediate casing strings

should be included for all Class VI wells. The rule allows for more than one long-string casing to the injection zone in §146.86(b)(3), in essence permitting intermediate casings.

EPA acknowledges that circumstances such as th e presence of high-pressure gas could dictate the use of more than one long-string casing and in this case, each would be required to be

cemented from the bottom of the hole to the surf ace resulting in multiple barriers of cement and casing between formations above the injection zo ne and the fluids being injected. With their permit applications, owners or operators must submit well construction procedures, as specified in §146.82 (a)(12), that demonstrate that the well, as constructed, will prevent unacceptable fluid movement, as specified in §146.86(a). The Director will evaluate the procedures in the context of

other data about the site and ma y require intermediate casing if it is warran ted to protect USDWs

3from endangerment.

See the discussion of Class VI well construction requirements in the preamble to the final GS rule for additional information. Additionally, EP A is developing guidance on the construction of Class VI wells. This guidance will be available on EPA’s website at http://water.epa.gov/type/groundwater /uic/wells_sequestration.cfm.

Letter ID: 0264 Comment ID: 22838 Letter Lines: 81 to 85

Comment Code: 4120 2.4.1.2 Allowing hydraulic fracturing during GS (seeking comment)

Comment: EPA (III. A. 4.) proposes allowing h ydraulic fracturing in GS wells.

- Staff believes hydraulic fracturing should be allowed to improve well bore injectivity when necessary so long as fracturing of the confining zone(s) is prohibited at all times.

Individual Response: The final rule allows the use of hydrau lic fracturing at Class VI well sites, where approved by the Director. Hydraulic fracturing is one of several stimulation technologies available to improve wellbore and formation injec tivity. EPA clarifies that fracturing is permitted during stimulation, but not during injection. During injection, the injection pressure must not exceed 90 percent of the fracture pressure, as specified in §146.88(a).

EPA clarifies that all stimula tion, including hydraulic fracturing, must be approved by the Director. Owners or operators must submit a propos ed stimulation program as part of the permit application under §146.82(a)(9); the plan must demonstrate that a ny stimulation act ivities will not compromise the integrity of the confining zone. The Director will evaluate the owner or operator's proposed stimulation plan in the cont ext of all information about the site, and the owner or operator must perform stimulation only as approved.

The final rule at §146.91(d)(2) also requires that the owner or operator notify the Director 30 days before performing stimulation during the operational phase of a GS project; this will provide an additional opportunity for the Director to review the owner or operator's plans for stimulation and add other requirements as neede d. EPA clarifies that UIC regulations prohibit fracturing of the confining zone at any time during injection or stimulation.

Letter ID: 0264 Comment ID: 22839 Letter Lines: 87 to 92

Comment Code: 4324 2.4.4.1.2 Comments opposed to requiring injection below the lowermost

USDW

Comment: EPA (III . A. 4.) proposes allowing inj ection for sequestration above the lowermost USDW (Underground Source of Drinking Water).

- Staff believes injection should be allowed when the EPA Director

4determines that geologic conditions exist that will prevent fluid movement into adjacent USDWs.

Individual Response: EPA acknowledges that there are lim ited circumstances where injection above the lowermost USDW can be performe d in a manner that protects USDWs from endangerment, as long as appropriate protections are in place. The final GS rule at §146.95 establishes a process by which owne rs or operators can seek a waiv er of the Class VI injection depth requirements for inject ion into non-USDW formations above and/or between USDWs. Additionally, the final GS rule doe s not categorically preclude or prohibit injection into any type

of formation.

EPA believes that these requirements will ensure USDW protection while providing flexibility to UIC program Directors and owne rs or operators who undertak e CO2 injection for GS. The Agency believes this approach: 1) responds to co ncerns about local and re gional geologic storage capacity limitations imposed by th e proposed injection depth require ments; 2) allows for a more site-specific assessment of injection depth for GS projects; 3) accommodates injection into different formation types; 4) a llows for injection of CO2 for GS into non-USDWs above and/or between USDWs when appropriate and where it can be demonstrated that USDWs will be protected; and 5) responds to concerns about the use of aqui fer exemptions for GS. Finally, EPA’s approach to addressing injection depth va riability through a waiver process responds to concerns about future drinking wa ter resource availability and the need to ensure that high quality water remains available in sufficient qua ntities to supply drinking water needs. For additional information on the waiver approach, pleas e see the final rule and preamble, as well as EPA's responses to comments on the Notice of Data Availability and Request for Comment.

Letter ID: 0264 Comment ID: 22840 Letter Lines: 94 to 99

Comment Code: 4342 2.4.4.2.1 Comments in favor of setti ng a minimum injection depth

Comment: EPA (III . A. 4.) proposes establishing a minimum injection depth rather than requiring injection below the lowermost USDW.

- Staff believes minimum injection depths may be appropriate if sufficient information is available regarding the depths of wells that may have been drilled into an AoR prior to stat e or federal regulation.

Individual Response: EPA disagrees that it is necessary to set a minimum injection depth for GS projects and the Agency believes that a determ ination of site-suitabili ty for GS (i.e., that

subsurface formations will receiv e and confine injected CO2) s hould be made on a site-specific basis. The GS rule, at §146.82, requires the owne r or operator to provide extensive site- and project-specific information to the Director to demonstrate that the site meets the minimum site criteria at §146.83, that the CO2 will be contai ned within the injection formation, and that USDWs will be protected from endangerment.

EPA acknowledges that there are limited circum stances where injectio n above the lowermost USDW can be performed in a manner that protec ts USDWs, as long as appropriate protections

5are in place. The final GS rule at §146.95 establis hes a process by which owners or operators can seek a waiver of the Class VI injection de pth requirements for in jection into non-USDW

formations above and/or between USDWs. The waiver approach requires the submission of extensive, site-specific information (in conjunc tion with the permit appl ication submission) to demonstrate that injection of CO2 into a non-US DW that is above or between USDWs can be done in a manner that is protective of USDWs. Th e requirements are designed to ensure that the owner or operator, the Director, and the Regional Administrator cons ider, on a site specific basis, the implications, benefits, and challenges associat ed with GS and ensuring water availability and USDW protection. For additional information on the waiver approach, please see the final rule and preamble, as well as EPA's responses to comments on the Notice of Data Availability and Request for Comment.

Letter ID: 0264 Comment ID: 22841 Letter Lines: 101 to 104

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

Comment: EPA (III . A. 4.) proposes the use of tracers in the injected CO2 to serve as warning of leakage.

-Staff is opposed to allowing tracers.

Individual Response: EPA agrees that tracer use is not ap propriate in all situations. For this reason, EPA does not require the use of tracers at a ll GS sites; rather, the Director has discretion to require their use if he/she determines that the use of tr acers could improve monitoring of the site and enhance USDW protection from endanger ment. The rule will also allow their use if proposed by the owner or operato r and approved by the Director.

Letter ID: 0264 Comment ID: 22842 Letter Lines: 106 to 110

Comment Code: 1220 1.1.1.1 Terminology and definitions

Comment Code: 4520 2.5.1 Continuous internal mechani cal integrity monitoring (seeking comment)

Comment: EPA (III. A. 4.) proposes "continuous m onitoring" of various injection

parameters.

- Staff believes "continuous monitori ng" is appropriate but that the precise definition of "continuous m onitoring" may be contentious.

Individual Response: EPA agrees with the commenter regarding the importance of demonstrating internal mechanical integrity (MI) and believes that continuous pressure monitoring to demonstrate internal mechanical integrity of Class VI wells is important, given the potential corrosive impact of CO2 and impurities on well materials, the potential geomechanical impacts to well integrity due to CO2 phase chan ges, and the temperature and pressure effects

6associated with injecting supercritical CO 2. See §146.89(b). EPA also believes that the technology for continuous monitoring is practicable, available, and is currently in fairly wide use. EPA anticipates that the owner or operator’ s testing and monitoring pl an will describe the proposed specific equipment and recording frequency.

Letter ID: 0264 Comment ID: 22843 Letter Lines: 112 to 118

Comment Code: 4520 2.5.1 Continuous internal mechani cal integrity monitoring (seeking comment)

Comment Code: 4540 2.5.2 Proposed external MIT requirements

Comment Code: 4546 2.5.2.2 MIT frequency (seeking comment)

Comment: EPA (III . A. 5.) proposes eliminating periodic internal mechanical integrity tests (MIT) in favor of continuous monitori ng and to require exte rnal MITs on an

annual basis.

- Staff believes that continuous internal monitoring of injection wells is appropriate. Staff believes th at external MITs should be conducted once every five years.

Individual Response: EPA agrees with the commenter regarding the importance of demonstrating internal mechanical integrity (MI) , and the final GS rule retains the requirement for continuous pressure monitori ng of Class VI wells to enable the immediate identification of corrosion-related internal mechanical integrity problems that could lead to significant well problems and failure.

EPA disagrees that a five-year ex ternal MIT is appropr iate. The final GS regulation retains the requirement that owners or operato rs of Class VI wells must dem onstrate injection well external mechanical integrity at least once annually unde r §146.89(c). EPA believes this is justifiable for the protection of USDWs from endangerment give n the unique nature of CO2 GS relative to other injection operations, incl uding the potential corrosive impact of CO2 in the presence of water and impurities on well materials, the potentia l geomechanical impacts to well integrity due to CO2 phase changes, the temperature and pr essure effects associated with injecting supercritical CO2, and the buoyant nature of the injected CO2. Because of the unknown longterm effects of CO2 GS, EPA chos e a more conservative initial a pproach in the early stages of deployment for GS.

In addition, a comprehensive review conducte d by EPA of MIT results from 1993 to 1998 found that Class I wells injecting corrosi ve fluids fail MITs at rates two to three times higher than those that inject non-corrosive fluids (USEPA, 1999). Given the potential for CO2 to be corrosive (i.e., in the presence of water or aqueous formation flui ds), there is a potential risk factor for MIT failure and, for this reason, EPA be lieves that the tailored MIT requi rements in the final GS rule are appropriate. For additional information, please see the discussion of MI Ts in the final rule preamble.

EPA adds that it is using an ad aptive approach to regulating GS. The Agency plans to collect and

7review data every six years on GS projects, including MIT da ta, to determine whether the appropriate amount and types of information a nd appropriate documentation are being collected,

and to determine if modifications to the requirements are appropriate or necessary.

Letter ID: 0264 Comment ID: 22844 Letter Lines: 120 to 134

Comment Code: 4660 2.6.6 Geochemical monitoring

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

Comment: EPA (III . A. 6.) seeks comment on the amount and types of monitoring to be

conducted at GS sites.

- Staff is not certain that the monitori ng parameters listed will yield any information that relates to endangerment of USDW by leakage from the sequestration zone with the exception of the determinati on of the position of the CO2 plume and area of elevated pressure. Staff believes, however, that the surface casing and tubing pressures, injection rates, and volumes should be measured daily and reported on a monthly basis. It is no t clear that surface monitoring will provide unambiguous information regardi ng the position of th e injected CO2 plume, particularly in view of the uncertain ty associated with th e movement of the plume. It is also not clear that wells in the confining z one will be of any value since there may be no fluid movement into any particular well, and there is much uncertainty as to appropriate or optimu m placement of confining zone monitoring

wells.

Individual Response: EPA agrees that pressure monitori ng in the confining zone may not provide the data needed to ev aluate plume movement. Instea d, the final GS regulation, at §146.90(g)(1), requires all GS project owners or opera tors to monitor for pr essure changes in the injection zone. EPA believes that pressure monito ring in the injection zone is necessary to track the development and movement of the pressure front and CO2 plume which provides valuable information in determining whether there is a potential for USDW endangerment.

Pressure monitoring within the injection zone is necessary because any such monitoring above the confining zone would not de tect movement of the pressure front unless a breach of the confining zone occurs. EPA believes that monitori ng using wells in the inje ction zone (i.e., that penetrate the confining zone) can be safely performed if the wells are constructed to prevent flow between the injection zone a nd USDWs or other layers above the confining zone. Such construction technologies exist and have been us ed in the oil and gas industry for years.

EPA acknowledges that air and so il gas monitoring are subject to variability and may not be suitable in all settings as a method to ensure USDW protection. However, EPA does not believe that this should entirely preclude their use. For example, if a leak to the surface is suspected, surface monitoring could provide vital informa tion on its location and magnitude to assist owners and operators in identifying what US DWs may have been impacted by a leak. EPA

8clarifies that the various air and soil gas monitoring methods (e.g., chambers, eddy covariance, hyperspectral imaging) all have different capabilities that may prove us eful in specific GS projects (Miles, et al. 2005; Pickles and Cover, 2005; IPCC, 2005; Menzies, et al. 2001). The final rule at §146.90(h) retains the allowance for surface air and soil gas monitoring at the

discretion of the Director as a means of identif ying leaks that may pose a risk to USDWs and informing emergency notification of a Class VI ow ner or operator and UIC Director in the event of a USDW endangerment, pursu ant to requirements at §146.91(c). EPA cl arifies that the decision to use surface monitoring and the selecti on of monitoring methods will be site-specific (e.g., may be influenced by geology, injection depth, and operational conditions) and must be based on potential risks to USDWs within the AoR.

EPA is developing guidance on testing and mon itoring to assist owne rs or operators and Directors in evaluating requi rements under §146.90, including pr oposed monitoring plans. The guidance describes available technologies a nd recommended approaches for implementing a testing and monitoring plan, including pre-ope rational geophysical l ogging and testing of injection wells, MITs, injecti on well testing during operation, groundwater quality monitoring, tracking the CO2 plume and pressure front, a nd soil gas and surface air monitoring which may be required by the UIC Director for specific GS projects. Th e guidance can be found on EPA’s website at http://water.epa.gov/type/gr oundwater/uic/wells_se questration.cfm.

Letter ID: 0264 Comment ID: 22845 Letter Lines: 136 to 140

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

Comment: EPA (III . A. 8.) proposes a 50-year post-closure monitoring period .

- Staff believes that the 50-year tim e period is probably too long as there is no certainty that the entity th at originated the sequestration project will be in existence for such a long period.

Individual Response: EPA disagrees that a post-injection si te care timeframe of 50 years is excessive for most GS sites. However, EPA rec ognizes that there may be sites where the 50 year post injection site care timefram e may be either not appropriate or more burdensome than necessary based on site-specific conditions. For this reason, the GS rule offers owners or operators flexibility regarding th e duration of the PISC timeframe by: (1) allowing the Director discretion to shorten or lengthe n the PISC timeframe during th e post-injection period based on site-specific data, pursuant to requirements at §146.93(b); or (2) a ffording the Director discretion to allow a Class VI well owner or operator to demonstrate, during the permitting process based on substantial data, that an alternative PISC timeframe may be appropr iate if it ensures nonendangerment of USDWs pursuant to requirements at §146.93(c).

EPA believes however, that to ensure USDW protection from enda ngerment, a default timeframe for post-injection site care will be necessary in most cases. The default 50 year post-injection site care timeframe represents a reasonable and prot ective monitoring period based on a review of research studies, industry reports, and existing environmental programs, and evaluation of public

comments.

9EPA believes that a default post-injection site car e timeframe of 50 years, with flexibility to adjust the timeframe for a limited number of GS projects during the permitting process where

substantial data exists to demonstrate that an alternative timeframe would be protective of USDWs, or based on data collected during the PISC period, is appropriate to address the range of sites where GS is anticipated to occur, to ac commodate site-specific circumstances and various geologic conditions, and addre sses commenters’ concerns, wh ile ensuring USDW protection. Both approaches will utilize si te-specific data, and be based on pressure monitoring and USDW impacts.

To the comment that the entity th at originated the project may not be in existence for such a long period, the Agency believes that in order to protect USDWs from endangerment under the SDWA, operators must demonstrate under §146.85 that financial resources are available to plug the injection well and provide post-injection site care at the point in time that the first CO2 is injected. EPA understands that changes in staff or ownership occur associated with all injection operations that operate over timeframes of severa l years or decades, and believes that owners and operators granted UIC permits have a responsibility to maintain c ontinuity in expertise and data associated with the project.

Letter ID: 0264 Comment ID: 22846 Letter Lines: 142 to 151

Comment Code: 5432 2.9.1.1 Need to adjust financial responsibility mechanisms (seeking comment)

Comment: EPA (III . A. 9.) proposes corporate self-assurance for well plugging.

- Staff is opposed to the use of corpor ate self-assurance. It has been the Office of Geological Survey's experience that the mere net worth of an owner or operator at any given time is not adequate to insure that funds for plugging are actually available or that the owner or ope rator will be viable and financially able to plug the wells. If a government al entity assumes responsibility for plugging if the owner is unable to do s o, requiring actual surety/conformance

bonds or insurance allows the wells to be plugged without spending public

monies.

Individual Response: EPA will retain self-insurance as an option for financial responsibility for

Class VI wells. EPA believes that if properly used, the financial te st can be an appropriate option for some owners or operators. EPA recognizes that it is important for sel f-insurers to be creditworthy, otherwise USDWs may not be adequately protected. Owners or operators who choose to

self-insure and use the financial test must be ab le to demonstrate profit ability, with a margin sufficient to cover contingencie s and unknown obligations, and stab ility. If the owner or operator meets corporate financial test criteria, this is an indication that the owner or operator can guarantee its ability to satisfy fi nancial obligations based solely on the strength of the company’s

financial condition. If an operator or operator is not able to meet the corporate financial test criteria, it may arrange a corpor ate guarantee by demonstrating that its corporate parent meets the financial requirements on its behalf.

10Additionally, EPA is developing guid ance to assist Directors in ev aluating the appropriateness of self-insurance in specific circumstances, such as how best to evaluate owners or operators'

demonstrations of financial wort hiness or whether certain owners or operators pose too great a
financial risk to use self-insurance as a financia l responsibility instrument . This guidance will be

available on EPA's website at http://water.epa.gov/type/groundwat er/uic/wells_sequest ration.cfm. States have the discretion under the rule to prohibit the use of financ ial instruments they f eel are inadequate.

Letter ID: 0264 Comment ID: 22847 Letter Lines: 153 to 156

Comment Code: 5610 2.11.1 Allowing partial primacy for Class VI wells (seeking comment)

Comment: EPA (V.) proposes allowing state regulatory agencies to assume primacy for Class VI GS wells only.

- Staff is in favor of this proposal.

Individual Response: EPA agrees with commenters that states should be allowed to obtain primacy for Class VI wells independently of other well classes, and will allow independent primacy for Class VI wells under §145.1(i) of th e final GS rule. Given the potential for CCS (encompassing capture, transportation, and geologic sequestration) to be an important part of a national priority to address clim ate change, EPA believes that provi ding states the flexibility to obtain primacy for Class VI wells independently of other well cla sses can help foster effective management of CCS. EPA believes that allowing independent Class VI primacy may encourage states to take responsibility for implementation of Class VI regulations and provide for a more comprehensive approach to managing CCS projects by promoting the integrat ion of GS activities

under SDWA into a broader framework for mana ging CCS. Furthermore, GS operations involve ancillary activities (e.g., pipeli ne operations, pore space ownership, land use rights, and surface access) for which states can call upon other authorit ies that exist at the state level (but outside UIC authority) to provide a more comp rehensive CCS management approach.

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

EPA also believes that allowing states to apply only for Class VI primacy will shorten the primacy approval process for states. EPA's willingness to accept independent primacy applications for Class VI wells represents a shift in its longstandi ng policy of discouraging "partial primacy." It is very important to note that this shift in policy allowing for Class VI primacy does not apply to any other well Cl ass under Section 1422. EPA will continue to discourage applications for pa rtial primacy for all other well types under Section 1422.

EPA clarifies that states should be able to obtain primacy for Cla ss VI wells independent of other

1112 well classes provided they devel op regulations that are at leas t as stringent as the minimum Federal requirements (e.g., permitting, inspec tion, operation, monitoring, and recordkeeping requirements) provided in the final GS rule. EPA believes that existing programs can adapt their expertise to the new requirements for Class VI wells and will be able to develop a primacy application for Class VI wells under section 1422 of SDWA and en sure that their GS programs integrate into national climate change priori ties and protect USDWs from endangerment.