BP Alternative Energy International Limited, a company registered in England and Wales with the company number 1553681, VAT num ber GB 243 5105 93 and whose registered office is Chertsey Road, Sunbury on Thames, Middlesex, TW16 7BP. BP Alternative Energy Holdings Limited, a company registered in England and Wales with the company number 2515099, VAT number G B 243 5105 93 and whose registered office is Chertsey Road, Sunbury on Thames, Middlesex, TW16 7BP December 23, 2008

Via Electronic Mail and Overnight Mail

Docket ID No.: EPA-HQ-OW-2998-0390

Cynthia C. Dougherty

Director Office of Ground Water and Drinking Water Environmental Protection Agency , Mailcode: 2822T 1200 Pennsylvania Ave., NW. Washington, DC 20460

Re: BP Alternative Energy North Amer ica Inc.’s Comments on United States Environmental Protection Agency’s Proposed Rule: Federal Requirements under the Underground Injection Contro l (UIC) Program for Carbon Dioxide (CO 2 ) Geologic Sequestration (GS) Wells

Dear Director Dougherty:

BP Alternative Energy North America Inc. (“BP”) is pleased to submit its
comments on the United States Envir onmental Protection Agency’s (“EPA”) Proposed
Rule: Federal Requirements Under the Undergr ound Injection Control (UIC) Program for Carbon Dioxide (CO 2 ) Geologic Sequestration (GS) Wells (“Proposed Rule”)

, published on July 25, 2008 for review and comment by the public (73 Fed. Reg. 43492-541). BP appreciates the opportunity to participate in this rulemaking process and has been actively engaged in the process to date.

As an initial matter, we applaud EPA ’s significant efforts to include and encourage broad stakeholder participation both before and after publication of the Proposed Rule. Furthermore, it is ev ident from the Proposed Rule that EPA considered and incorporated many of the stakeholders’ comm ents from the public workshops. Accordingly, EPA adopted a frame work that is intended to encourage the CO2 Storage Manager, CCS Technology BP Alternative Energy North America Inc. 

## D. Brian Williams

BP Alternative Energy North America, Inc.

501 Westlake Park Blvd.

MC – 9.188A

P O Box 3092

Houston, Texas 77253-3092

Direct: (281) 366-4833

Main: (281) 366-2000

Mobile: (713) 471-6474

Fax: (281) 366-7416
williadb@bp.comBP’s Comments To EPA’s Proposed Rule
Docket ID No.: EPA-HQ-OW-2998-0390 Page 2 of 20

deployment of carbon capture and sequestration or storage (“CCS”) in a manner that is protective of underground sources of dr inking water (“USDWs”). There is growing consensus among scientists, environmental groups and members of government that CCS will play a critical role in addressing greenhouse gas emissions.

The comments herein are founded on k nowledge and experience gained through decades of industry operations, and are intended to provide constructive input on the Proposed Rule. BP’s comments are based upon two important and mutuallyachievable goals: (1) protecting USDWs; and (2) adopting regulations that are reasonable, cost-effective and facilitate geologic sequestration of CO 2 . BP concurs with EPA’s conclusion that CCS presents a “key climate change mitigation technology.” (73 Fed. Reg. at 43495.)

In the context of geologic sequestration of CO 2 , it is imperative to maintain flexibility in the regulatory r equirements due to the site-specific nature of this activity and because the technology is continually advancing. For geologic sequestration of
CO 2 , “one-size-fits-all” is not an approach that is necessarily or reasonably protective of USDWs. Rather, each site has site-s pecific characteristics that merit differing requirements. Indeed, what m ay appear to be a standard protective measure in the context of a particular site could actually have the opposite effect and increase potential risks at another site. (See A Technical Basis for Carbon Dioxide Storage , CO 2 Capture Project, December 2008.)

Consequently, BP strongly encourages EPA to provide performance standards for the various phases of a geologic sequestrati on project (i.e., site characterization, operation and site closure), while providing the Director flexibility to add requirements as necessary to address site-specific char acteristics. This type of approach, consistent with Regulatory Alternative 2, offers the degree of flexibility that the permitting authority will require to tailor fit -for-purpose requirements that address site specific characteristics. Furthermore, it ensures that project costs will be commensurate with the geologic risk, and wi ll further the continued evolution of the best technologies.

Our comments address the following important topics: (A) Enhanced Oil Recovery or Enhanced Gas Recovery (“EOR/EGR”) and CO 2 Storage; (B) Wells, Monitoring & Operations; (C) Site Closure Period; (D) Financial Assurance; and (E)
Issues Related To Oil & Gas Production. BP further joins in the comments submitted by the American Petroleum Institute.BP’s Comments To EPA’s Proposed Rule
Docket ID No.: EPA-HQ-OW-2998-0390 Page 3 of 20

(A) Importance of EPA’s Recogniti on That EOR/EGR and Storage of CO 2 Occur At the Same Time

BP commends EPA for its recognition, as stated in the Preamble of the Proposed Rule, that oil and gas reservoirs will play a valuable role in the geologic storage of CO 2 . Two of the reasons cited by EPA are: (1) oil and gas reservoirs are natural storage containers that have trapped fluid (both liquid and gaseous) hydrocarbons for millions of years; and (2) oil and gas exploration and production
activities have created a wealth of know ledge and geologic data that can support the site characterization process for geologic sequestration. (73 Fed. Reg. at 43502-03.) Indeed, oil and gas reservoirs have proven capable of containing water-buoyant fluids for millions of years. These reservoirs are well studied and they offer the best opportunity to kick-start large-scale geologic sequestration of CO 2 , building on 100 years of oil and gas field operating exper ience. Consequently, many oil and gas

reservoirs are available now to serve CCS projects at a commercial scale, and will add insights for subsequent application to other formations.

EPA should provide further discussion and acknowledgement in its Proposed Rule that, when CO 2 is injected for use in EOR/EGR projects, geologic sequestration (or long term storage) of CO 2 occurs during EOR/EGR operations and continues after EOR/EGR operations cease (“EOR and Storage”). Furthermore, it is critical that EPA support and encourage geologic sequestration of CO 2 in these well-studied and proven oil and gas reservoirs by amending certain elements of the Proposed Rule to clarify and streamline requirements. EPA’s recognition of EOR and Storage will provide a much-needed near-term, economic incentive to CCS projects. Incentivizing the use of anthropogenic CO 2 for EOR/EGR will provide ma ny lasting benefits to the United States, by significantly reducing current CO 2 emissions and increasing energy security.

It has become increasingly clear that early EOR and Storage projects will significantly advance the deployment of CCS technology and geologic sequestration of
CO 2 for many reasons:

• Oil and gas formations offer the be st characterized sites among potential sinks for anthropogenic CO 2 ;

• Much of the required infrastructure a nd operational experience is already in place;

• Class II requirements have proven to be an effective regulatory framework in protecting USDWs in the context of CO 2 EOR operations, evidenced by more than 30 years of experience in the Permian Basin and more than 25BP’s Comments To EPA’s Proposed Rule
Docket ID No.: EPA-HQ-OW-2998-0390 Page 4 of 20

years of miscible gas injection projects on the North Slope of Alaska (where
CO 2 comprises 25% of the miscible gas injected);

• Demand for large volumes of CO 2 for EOR is increasing 1 ; and

• EOR can provide a revenue stream to supplement the economics of earlymover CCS projects.

EOR and Storage have the added benefit of increasing domestic energy supplies in the face of increasing dema nd. Carbon dioxide injection has proven capable of increasing oil or gas recovery in mature fields from 5% to more than 20%. The Department of Energy estimates that EOR has the potential to add 40-80 billion
barrels of oil reserves in the United States , which is 2 to 4 times the current United States’s total proven reserve. The In tergovernmental Panel on Climate Change (“IPCC”) has agreed that EOR technology can provide a significant kick-start on proving geologic sequestration of CO 2 on a commercial scale. Indeed, the early commercial scale CCS projects will probably employ EOR and Storage as their basis of design, which will extensively inform t he technical development and safe deployment of CCS projects in other types of geologic formations. 2

(1) Brief Explanation of EO R/EGR Operations Utilizing CO 2

Currently, EOR/EGR oper ators purchase CO 2 for injection. This can represent a significant portion of the cost of an EOR/EGR project. Consequently, CO 2 is a valuable commodity to EOR/EGR operators and is treat ed accordingly. Because it is a valuable commodity in EOR/EGR operations, CO 2 is not emitted or vented to the atmosphere during operations or after operat ions cease. Any injected CO 2 that returns to the surface during production operations is s eparated from the hydrocarbons and reinjected for additional enhanced recovery use.

Approximately 30% to 50% of the injected CO 2 volume typically remains permanently stored in the oil or gas reserv oir after production operations cease. The injected CO 2 is monitored in the formation and injection operations are designed to
minimize CO 2 procurement and maximize oil (and recycled CO 2 ) production. Despite
best efforts to re-use all the CO 2 , additional trapping of CO 2 occurs with each subsequent injection cycle, necessitating further purchases of CO 2 . When the EOR

1 Currently, over 2 billion cubic feet of natura lly-occurring CO 2 is used daily for EOR operations and the volume is growing.

2 Notably, it is estimated that site characterization of saline reservoirs will likely cost tens of millions of dollars and take years of study to permit one commercial scale saline storage reservoir.BP’s Comments To EPA’s Proposed Rule
Docket ID No.: EPA-HQ-OW-2998-0390 Page 5 of 20

operations cease (and the field is blown down to recover any CO 2 available for use in another operation), wells are closed a nd the remainder of the injected CO 2 remains permanently stored underground. However, an EOR operator could quite easily, at its option, manage operations to store the injected CO 2 for the long term (rather than
recover it).

The foregoing demonstrates that, based on decades of experience gained in existing EOR/EGR operations utilizing CO 2 , EPA should acknowledge in the Final Rule preamble that injected CO 2 can be trapped and stored for long term during EOR operations and continues afterwards. Fur thermore, existing Class II regulations and industry practice employ proven methodologie s to conduct these operations in a safe manner that is protective of USDWs.

(2) Requested Amendments to Proposed Rule

For the reasons stated above, EPA should expand its discussion and acknowledge in the Final Rule te xt and preamble that, when CO 2 is injected for use in EOR/EGR projects, geologic sequestra tion (or long term storage) of CO 2 occurs during EOR/EGR operations and continues afte r operations cease – thus EOR and Storage. BP supports EPA’s statement that EOR/E GR, as long as any production is occurring, will continue to be permitted under the Class II program.

We also understand that it is EPA’s int ent, which we strongly support, that the proven Class II program applies to storage of CO 2 that is occurring during and in connection with EOR/EGR operations. Such an approach is logical, technically sound, and protective of USDWs as demonstrated by decades of safe operations. Accordingly, EPA should amend the Pr oposed Rule language and expand its discussion in the Final Rule preamble to clarify that (a) when CO 2 is injected for EOR

and Storage, the applicable requirem ents are under Class II; and (b) when CO 2 is exclusively injected for storage, the app licable requirements are under Class VI.

(i) Clear Well Classification With Respect to EOR and Storage

BP requests that EPA amend sections 144.3, 144.6, 144.80, 146.5 and 146.81 of the Proposed Rule to clarify that (a) Class II applies to EOR/EGR operations where geologic sequestration of CO 2 is occurring during or in connection with EOR/EGR operations or activities (i.e. EOR and Storage); and (b) Class VI applies when the exclusive purpose is geologic sequestration of CO 2 . In addition to the reasons stated above, this clarity is needed because some amount of CO 2 is sequestered or stored during EOR/EGR operations regardless of the intent of the operat or. As currently drafted, the Proposed Rule m ay be interpreted – contrary to EPA’s intent – to require EOR/EGR operations to proceed under Class V I. API has submitted specific languageBP’s Comments To EPA’s Proposed Rule
Docket ID No.: EPA-HQ-OW-2998-0390 Page 6 of 20

to clarify that the applicable well cl ass is Class II. We support API’s proposed language modifications to sections 144. 3, 144.6, 144.80, 146.5 and 146.81 of the Proposed Rule.

In addition, we have participated in discussions among multi-stakeholders including environmental groups, various asso ciations and different industries (the “Multi-Stakeholder Discussions Group”); we also support the language recommended in the correspondence from the MSDG da ted December 23, 2008 (the “MSDG Proposal”) to sections 144.6, 144.80 and 146. 5(f) establishing a “bright line” for wells injecting CO 2 for EOR and Storage. The MSDG Proposal defines a “bright line” for wells that inject CO 2 for EOR and Storage, and consistent wi th EPA’s intent, remain in Class II and are subject to the existing Cl ass II regulations – wh ich have adequately safeguarded USDWs in the context of EOR/EGR operations for decades.

The MSDG has also agreed to continue discussions regarding specific rules that would be applicable to geologic sequestration of CO 2 in oil and gas formations following the completion of EOR/EGR producti on. We intend to participate in these negotiations. The development of a subclass under Class II or Class II-B regulations would result in a regulatory framework that would effectively protect USDWs and also promote the geologic sequestration of CO 2 in oil and gas formations, especially following the cessation of EOR/EGR production activities.

The advantages of a subclass dedicated to geologic sequestration in oil and gas
formations are that a Class II-B will addre ss risks associated specifically with oil and gas formations, rely upon information and data gathered during the terminated EOR/EGR production activities and maintain permitting authority under a single agency with historical knowledge and expertise about the former operations and the receiving oil and gas formation. This would maximi ze the efficient use of administrative
resources and allow for seamless transiti oning of operations from EOR and geologic sequestration of CO2 to injection of CO2 only for geologic sequestration.

BP requests that EPA consider the for egoing discussion of a subclass or Class II-B wells for oil and gas formations for future rulemaking. However, in the context of the current Proposed Rule, we submit the following recommendations on the question of grandfathering.

(ii) Grandfathering – Transitioning from EOR and Storage to Exclusively CO 2 Storage

After the EOR and Storage projects conclude produc tion of oil or gas, injection
of CO 2 may continue at the option of the oper ator to utilize fully all available pore space. EPA regulations should fac ilitate this transition from EOR and Storage toBP’s Comments To EPA’s Proposed Rule
Docket ID No.: EPA-HQ-OW-2998-0390 Page 7 of 20

exclusively storage operations when EOR/ EGR operations are completed. EPA’s decision to allow grandfathering of constru ction requirements in sections 146.81 and 146.86 of the Proposed Rule is an exce llent example of both protective and reasonable regulation. BP supports EPA ’s proposal and recommends that EPA expand the grandfathering provisions to enc ourage and facilitate c ontinued injection of
CO 2 exclusively for storage when EOR/EGR operations cease.

Specifically, the Proposed Rule should be modified also to allow grandfathering of sections 146.88(e) and (f) (continuous recording devices and down-hole automatic shut-off devices, respectively) regardi ng Operations; and Section 146.89(b) and (c) (continuous monitoring and specific yearly te sts, respectively) regarding Mechanical Integrity. Existing, operati onally-compliant, Class II EOR-wells will continue to protect USDWs, as established by their operational histories, even when injection is for the exclusive purpose of CO 2 sequestration without the foregoing additional Operation or Mechanical Integrity requirem ents. In addition, the follo wing sections of the Proposed Rule simply will not be applicable or pertinent at the time of transition because these provisions presume that no injection has co mmenced. These sections are as follows:

• Permit Application § 146.82(g) and (j);

• Area of Review § 146.84 (b)(2)(iv), (c )(1) and (d);

• Logging Sampling and Testing § 146.87(a), (b) and (f); and

• Testing and Monitoring § 146. 90 (b), (d), (g) and (h).

These provisions should not and cannot apply when a Class II EOR and Storage project transitions to an exclusively stor age project because, as a practical matter, performance of certain “baseline measure ments,” “model predictions,” “witnessing of logging and testing,” and “corrective acti ons” will not be possible prior to injection
of CO 2

.

In sum, EPA should expand the gra ndfathering provisions to encourage continued storage of CO 2 after EOR/EGR operations have ceased. Most of the existing Class II requirements that were appropriate for regulation of EOR and Storage will continue to operate effectively and to safeguard USDWs during exclusively storage operations. Finally, appropria tely expanded grandfathering will facilitate optimal utilization of these proven oil and gas reservoirs for geologic sequestration of
CO 2

.BP’s Comments To EPA’s Proposed Rule
Docket ID No.: EPA-HQ-OW-2998-0390 Page 8 of 20

CCS in connection with EOR provides a forward-looking energy policy for the United States, as it w ill significantly reduce CO 2 emissions with the added benefit of increasing energy security through increased domestic oil production.

(B) WELLS, MONITORING & OPERATIONS

In general, regulations for geologic seques tration should provide for effective storage management by requiring the following activities:

• Site characterization that validates t he geological model of the storage site and confirms potential leakage pa thways have been identified and evaluated;

• Risk assessment that builds upon the predicted behavior and movement of
the CO 2 in the reservoir over time and confirms that the potential for leakage has been evaluated through site characterization; and

• A monitoring plan that measures the performance of the highest leakage risk parameters and validates or upda tes predictive performance models.

The appropriate implementation of these ke y areas will ensure the safe and secure operation of a geologic sequestration project.

(1) Importance of Well Integrity

EPA has appropriately recognized that wells are a fundamental component of a secure system for the long-term geologic sequestration of CO 2 . As such, applying appropriate well design, construction & oper ating requirements is critical to the delivery of secure storage. As previously discussed, oil and gas operators have nearly four decades of experience, via past and existing production operations, in constructing and operating CO 2 EOR/EGR wells in a safe and secure manner. Notably, Class II requirements have pr oven to be effective in ensuring the nonendangerment of USDWs. Therefore, BP be lieves it would be prudent to rely upon this extensive existing regulatory and industry experience and knowledge in setting Class VI requirements for wells that inject CO 2 for long term sequestration.

(2) Flexibility in Design of Moni toring Programs and Selection of Technologies

BP agrees with EPA that monitoring is important. For example, once a site has been selected, appropriate baseline surveys should be conducted and analyzed prior to commencing operations. During operations and at site closure, appropriateBP’s Comments To EPA’s Proposed Rule
Docket ID No.: EPA-HQ-OW-2998-0390 Page 9 of 20

monitoring technologies should be applied to confirm the integrity and effectiveness of the storage site. However, there is a common misperception that, in order to achieve secure storage, a large amount of monitoring is required. The United Nations states that “the proportion of CO 2 retained by appropriately selected and managed sites is likely to exceed 99% over 1,000 year s.” Thus, the key to secure storage is
the appropriate selection and management of the site and these activities should be the focus of any regulatory fr amework for CO2 geo-sequestration. If done properly, a

selected site will be secure with a monito ring program that is designed and focused on the particular storage site.

BP has significant and highly relevant experience around monitoring of the subsurface and the surface. For many de cades, BP has been effectively employing a number of monitoring technologies to ensure the safety and integrit y of its customary oil and gas operations, including CO 2 EOR-related operations since the 1970’s in West Texas and Alaska. Notably, since 2004 BP has been operating the In Salah, Algeria,
CO 2 storage project where BP (and partner s) has been storing ar ound 1 million tones
CO 2 per year in a deep saline formation close to a producing gas field. The In Salah
CO 2 Storage project also incorporates a research project to test CO 2 storage monitoring technologies with a program that is much more extensive than would be appropriate for a commercial project. At In Salah, BP is testing new technologies (such as satellite imagery and micro-seismic) and conventional oilfield technologies
(such as tracers and conventional 3D seismic) to compare and contrast results as the partnership endeavors to design and develop monitoring technologies and methodologies that are reliable and cost-eff ective, given the expectation of future commercial application.

Before initiating injection at In Salah, BP conducted a thorough assessment of potential leakage paths at the site; BP then tailored the m onitoring program to address those site-specific risks. There are two other monitored, industrial-scale CO 2 injection projects in the world (at Sleipner and We yburn) and the site-specific nature of monitoring requirements is demonstra ted by comparing these three CO 2 storage projects – monitoring that wo rks well at one location may not work at all in another
location.

With respect to monitoring require ments in general, EPA should adopt regulations that are performance and risk- based and will result in a site-specific monitoring program that is designed to understand the location, movement and
stabilization of the CO 2 plume in the subsurface as we ll as the early identification of any leakage for appropriate corrective action. BP commends EPA for its efforts in this regard, but believes that further modificat ion is necessary. BP agrees with the proposal to allow a phased approach to conduct corrective action in an Area of Review that has pre-existing well penetrations. Existing wells within the AoR may be idealBP’s Comments To EPA’s Proposed Rule
Docket ID No.: EPA-HQ-OW-2998-0390 Page 10 of 20

candidates for conversion to monitoring or in jection wells during the life of the project and, therefore, should not be plugged and aba ndoned prior to injection. Existing wells within the likely plume area that are not plugged and abandoned should have diagnostic testing to ensure there is minimal risk of vertical leakage prior to conversion to monitoring or injection status.

Furthermore, in various parts of the Proposed Rule, EPA has prescribed particular monitoring technologies. Manda ting any specific technology(ies) would have the adverse effect of (1) promoting pa rticular technologies to the exclusion of other developed – and to be developed – technology(ies), and (2) substantially increasing costs without necessarily contributing to the protection of USDWs. This would hinder the development and deploy ment of CCS at commercial scale. Moreover, it would discourage the developm ent of other technologies. BP therefore strongly discourages EPA from promulgating regulations that mandate the use of any specific monitoring technology.

(3) Specific Comments

In addition to the foregoing, BP respec tfully submits the following areas of specific comment:

(i) Well Design and Construction To Avoid Corrosion

One area of comment requested by EPA relates to requirements for “degradation-resistant well construction materi als, such as acid-resistant cements and corrosion resistant casing.” (73 Fed. Reg. at 43510) Based upon historical industry experience and field studies, this would be an excessive requirement and not reasonably necessary to protect USDWs. Risk Profile of a CO 2 Geological Storage Project: Wells , by Christopher, Crow, Dodds, Wright, Williams, March 2008.

BP strongly discourages EPA from setting a requirement to use degradationresistant materials & cement. Actual field observations based upon sampling of in situ casing and annular cements do not suppo rt this general requirement. The studies referenced by EPA in its Preamble expos ed cement in a laboratory setting to a continuously-refreshed supply of CO 2 -saturated brine, whic h then reportedly caused the cement to degrade. (Duguid et al., 2004 and Kutchko et al., 2007.) These studies represent variations in cement alterati on rates due to curing and exposure conditions, but neither supports the requirement for t he use of degradation-resistant materials and cement because the laboratory proc edures that were used do not necessarily represent the actual barrier exposure c onditions in an appropriately cemented operating well. Indeed, the findings of Kut chko’s laboratory study suggested thereBP’s Comments To EPA’s Proposed Rule
Docket ID No.: EPA-HQ-OW-2998-0390 Page 11 of 20

would be limited degradation even after deca des, which is consistent with the field study results of Carey et al., 2007.

EPA’s rulemaking should give considerable weight to documented field surveys which provide more relevant well inform ation, such as those conducted at the SACROC development in the Permian Basin (ref. Carey et al., 2007) and in Colorado (ref. Crow et al, and CO 2 Capture Project, 2008). Both of these field studies identified that hydraulic isolation was maintained acro ss the caprock, and the majority of cement
reaction was localized to the area near the CO 2 interval. Field results indicate it is the appropriate placement of cement, and not th e type of cement, that is key to delivery of effective isolation and hence prevention of casing corrosion. Furthermore, cement placement to completely fill the annular space between borehole and casing is the primary means of achieving this objective.

Based on the foregoing, degradation -resistant materials should not be mandated for all projects, without regard to site-specific characteristics. Rather, the application of degradation-resistant materi als & cement, if any, should be defined on site-specific characteristics.

BP strongly supports, with one modifi cation discussed below, EPA’s actual language of the Proposed Rule in section 146.86(b)(5), which establishes a reliable performance standard that will achieve protection of USDWs. Section 146.86(b)(5)

states, “ Cement and cement additives must be compatible with the carbon dioxide
stream and formation fluids and of sufficient quality and quantity to maintain integrity over the design life the geologic sequestration project.“ BP recommends that EPA’s

discussion in the Preamble should be cons istent with the actual language of the Proposed Rule to ensure clarity and remove any ambiguity regarding the performancebased approach set forth in the Proposed Rule.

Furthermore, section 146.86(b)(5) shoul d be amended to base the choice of casing and cement materials on the planned operating life of t he well as opposed to the ultimate duration of the geologic seque stration project. EPA may have set the duration as the life of the project in an effo rt to prevent corrosi on of the casing over the long term after injection has ceased. However, this legitimate concern is mitigated by appropriate plugging of the stat ic well at the end of its life. This plugging could employ corrosion-resistant material, if an extra level of mitigation were deemed necessary at that time based upon site charac teristics. API has submitted specific language to address the foregoing. We support API’s proposed language modification
to section 144.86 (b)(5).BP’s Comments To EPA’s Proposed Rule
Docket ID No.: EPA-HQ-OW-2998-0390 Page 12 of 20

(ii) Horizontal Wells Should Be Approved for Geologic Sequestration

BP agrees with EPA’s discussion regarding the usefulness and benefits of constructing horizontal wells in geologic seques tration projects. It is evident that EPA has done a good amount of research in this ar ea and is well informed on this topic. BP has direct experience with horizontal wells used in connection with geologic sequestration. At In Salah, 1mmtpa CO2 is being sequestered in a formation that is 6,000ft deep, 60ft thick and has permeability of only 10mD. These characteristics are very similar to many deep saline formations in the United States. To do this, requires only three wells, but the wells have very long horizontal sections in the storage formation. In fact, each well is about as l ong as it is deep. Horizontal wells provide a means of achieving high performance completi ons that optimize/improve injectivity. Additionally, horizontal wells can reduce t he risk of leakage because their use limits the number of penetrations through the caprock. There are other options to optimize injectivity as well that include, but s hould not be limited to, hydraulic fracture treatments, multiple injection points al ong the wellbore and open hole completions.

(iii) Long String Casing Is Not Needed

Section 146.86(b)(3) states that “at least one long string casing . . . must extend [from the surface] to the injection zo ne and must be cemented . . . .” (73 Fed. Reg. at 43538; § 146.86(b)(3).) This requirem ent is excessive and its implementation would unnecessarily constrain the abilit y to undertake future potential well interventions that support downhole monitori ng and well remediation, if such become

necessary.

To avoid such an unintended result, BP recommends that EPA not mandate the placement of an isolation casing string fro m the surface, but rather allow the casing string to extend from beneath the surf ace or otherwise based upon site
characteristics. Cement should cover t he uppermost caprock (within the Area of Review) by approximately 500 feet; cement coverage should not be required all the way to surface. The ultimate decision for e ach project should rest with the Director since each storage site is unique in the geol ogical intervals of t he caprock(s), injection zone(s) and position relative to USDW(s). Moreover, any expectation to cement in the injection interval should permit the use of external casing packers or other isolation methods in conjunction with cementi ng requirements across the caprock, as
discussed above.BP’s Comments To EPA’s Proposed Rule
Docket ID No.: EPA-HQ-OW-2998-0390 Page 13 of 20

(iv) Definition of Carbon Dioxide Stream

Section 146.81 of the Proposed Rule defines “carbon dioxide stream” as
follows:

Carbon dioxide stream means carbon dioxide that has been captured from an emission source (e.g., a power plant), plus incidental associated substances derived from the source materials and the capture process, and any substances added to the stream to enable or improv e the injection process. This subpart does not apply to any carbon dioxide stre am that meets t he definition of a hazardous waste under 40 CFR part 261.

By limiting the definition to “emission sources,” the Class VI regulations may have the unintended effect of narrowing the types of sources that might inject CO 2 for geologic sequestration. The particular source of the CO 2 is not material in terms of protecting USDWs. Furthermore, the Final Rule should not address the source because it is beyond the scope of this regulation. We recommend deleting the phrase “has been captured from an emission source (e.g., a power plant)” from the definition contained in section 146.81 of the Proposed Rule so that the Final Rule does not inadvertently preclude other non-emission sources of CO 2

.

(v) EPA Should Not Restrict Injection To Below Lower-Most USDW

The Proposed Rule restricts injection of CO 2 to below the lower-most USDW. (See §§ 144.6(f), 146.5(f) and 146.81.) EPA acknowledges that such a restriction would preclude the consideration and use of various potential storage sites, and has requested comment on this approach.

BP disagrees with such a blanket restri ction, one that would pose a barrier to many, viable storage sites. The imposition of an artificial constraint limiting injection only to reservoirs below the USDW is not ju stified by technical knowledge or historical industry experience. For example, Class II requirements have proven successful in protecting USDWs even though injection into certain reservoirs has occurred above
the lower-most USDW. Given the EPA’s effort in adopting a general performancebased approach, injection should be allow ed to proceed into acceptable reservoirs provided the reservoir is demonstrated to provide secure CO 2 storage above and below the injection formation.

A containment system with appropriate site characterization, risk assessment and monitoring is the key to secure stora ge and protection of US DWs. Proximity of the injection zone to USDWs (i.e. whether shallower or deeper) is not the appropriate criteria for protection of USDWs because pr oximity alone does not materially impactBP’s Comments To EPA’s Proposed Rule
Docket ID No.: EPA-HQ-OW-2998-0390 Page 14 of 20

risk of leakage. Similarly, EPA should not establish minimum depths for CO 2 injection. Instead, any constraints placed on injection should be site-specific, consistent with the containment and capacity parameters of the storage site in question.

Related to the depth of injection, BP al so disagrees with the requirement in section 146.86(b)(2) that “(s)urface casi ng must extend through the base of the
lowermost USDW and be cemented to the surf ace.” One reason is that at certain potential storage sites USDWs may be lo cated at depth; consequently, it would be technologically infeasible to construct su rface casing to the requisite depth prescribed by the Proposed Rule.

In summary, EPA should not mandate a re quirement of inject ion only below the lower-most USDW nor a minimum depth for injection of CO 2 . Such a comprehensive prohibition would unjustifiably exclude poten tial storage sites that do not pose an endangerment to USDWs.

(vi) Injection Well Operation & Mech anical Integrity Requirements

Consistent with the earlier discussion a bout blanket construction limitations, BP also disagrees with universal mandates regarding certain CO 2 injection operations. EPA should not include automatic downhole shut-in devices as a standard requirement
for CO 2 injection wells (section 146.88(e)). An across-the-board requirement for
installation of downhole devices is exce ssive – unsupported by technical knowledge and industry experience – and would impos e unnecessary costs. Overpressure protection is best achieved by ensuring co mpatibility of the casing/tubing material design strength with the surface injectio n (compression) system. Downhole shut-in devices may be appropriate, however, for site-specific situations (such as offshore), but they should not be mandated for all stor age sites. Rather, the requirement of
downhole shut-in devices should be left to the discretion of the Director.

With regard to validating mechanical integrity of CO2 injection wells, BP generally agrees with EPA’s suggestion to e valuate the “absence of significant leaks” by monitoring at some regular frequency the injection pressure, flow rate, injected volumes and the annular pressure. (See § 146.89 (b).) An alternative method for determining mechanical integrity, as noted by EPA, is periodic pressure testing; this should remain an option for site-specific case s. Where periodic pressure testing is implemented, the pressure should be cons idered by evaluation of the formation potential instead of casing bur st or tubing collapse limit.

The frequency of the monitoring should be defined not as “continuous” but as “regular” or “periodic” based upon site ch aracteristics because regular monitoring (e.g., every minute or hour) will often be adequa te. For example, fluid volume in theBP’s Comments To EPA’s Proposed Rule
Docket ID No.: EPA-HQ-OW-2998-0390 Page 15 of 20

annulus is static and requires evaluation of a pressure pulse to determine the depth of top of fluid. Therefore, this should be m onitored on a monthly or quarterly basis to support the pressure data.

Section 146.89(c) lists specific methodolog ies to monitor fluid movement. BP strongly disagrees with the requirement of any particular methodology because this would limit technology development and favor certain technologies to the exclusion of others without any rationale basis.

(C) SITE CLOSURE PERIOD

EPA correctly states in its Preamble th at defining the post-injection site care period is “difficult to define because it is based on site-specific considerations.” (73 Fed. Reg. at 43519.) The three studies cited by EPA also concluded that “ the actual time for CO2 plume stabiliziation . . . will be very site-specific , being influenced by geologic factors such as formation perme ability, geochemistry, and the degree of capillary trapping.” (Id .) However, the Proposed Rule establishes a default 50-year period (following the cessation of injecti on) during which the operator must conduct monitoring to demonstrate that “the carbon di oxide plume and pressure front have stabilized and the geologic sequestration pr oject does not pose an endangerment to USDWs.” (See § 146.93(b).) The designation of a 50- year time-period without regard to particular site characteristics is arbi trary and not supported by existing scientific studies or industry experience. Moreove r, the 50-year timeframe does not provide any incremental benefit as compared with a performance standard to protecting USDWs; rather, it will be a significant deterr ent to commercial investment in geologic sequestration projects.

BP urges EPA to adopt the performance standard that EPA considered in its review. EPA considered three options: (1) fi xed period; (2) performance standard; and (3) combination of fixed period and performan ce standard; EPA states it adopted the latter approach. (73 Fed. Reg. at 43519.) While the Proposed Rule allows a Director to reduce the 50-year minimum (§146.93(b)(2)), the practical effect will be the 50-year timeframe applies unless an operator is able to overcome the presumption built into the Proposed Rule that 50 years is adequate. Indeed, this is more prescriptive than the requirement for Class I hazardous wells, which provides that the timeframe for post-injection site care ends when the pl ume has stabilized and cannot endanger USDWs. (Id. ; 40 CFR §146.71.)

EPA should adopt the performance-based standard that it considered previously. Accordingly, the post-injecti on site care period ends when monitoring and other site-specific data demonstrate that the geologic sequestration project does not pose an endangerment to USDWs. (See e.g. , 73 Fed. Reg. 43520.) A performance-BP’s Comments To EPA’s Proposed Rule
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based approach is consistent with technical knowledge and historic industry experience. The site closure period would be appropriately based on particular site characteristics and historic site performan ce. For example, a well-selected and - managed sequestration site (such as an existing oil or gas field) that has met its performance objectives (including plume stabilization) will be much more secure and could be closed reasonably quickly (potentially, in as few as 2-3 years). At other sites that are less well confined (e.g., deep sali ne formation without a conventional 4-way closure), the CO 2 could move around for some time even after injection ceases before stabilizing, and might therefore require a lo nger period to allow for additional residual and solubility trapping.

In summary, BP recommends that EPA a dopt a performance-based approach to
determine the timeframe for site closure. We also suppo rt the site closure standard offered in the MSDG Proposal for section 146. 93(b), which sets forth detailed criteria
that must be satisfied to demonstrate that the site does not pose an endangerment to USDWs. The advantage of the MSDG Propo sal as opposed to a fixed period is it establishes clear criteria that an oper ator must demonstrate before obtaining site closure based upon particular site charact eristics and is, ther efore, reasonable applicable to any storage site as opposed to a standard based upon a fixed-duration. The current proposal of 50-years minimum, ev en subject to potential reduction, would result in significantly discouraging the deploy ment of this technology at commercial scale without providing measurable additional protection of USDWs.

(D) EPA’s Proposed Financial Responsibility Demonstration Requirements

The proposed financial assurance requirements for Class VI UIC wells require the owner or operator to esta blish financial responsibility (or “financial assurance”) to cover the costs of plugging and abandoning injection wells, as well as the costs of corrective action, post-injection site care, site closure and emergency and remedial responses. (73 Fed. Reg. at 43537; §146.85.) The financial responsibility requirements should be consistent with the need to protect USDWs, while being reasonable and cost-effective, yet facilitating geologic sequestration of CO 2. We support EPA’s proposed approach that allows for a wide range of financial assurance mechanisms to be utilized to demonstrate financial responsibility. We also suggest that EPA adopt a flexible, iterative approach to financial assurance in keeping with the phased, adaptive management philosophy of other aspects of the Proposed Rule.

(1) Allow for a Broad Range of Financial Assurance Mechanisms

We support an approach that takes in to account changing market conditions and other factors and allows an operator to utilize a wide range and variety of financial
assurance mechanisms to demonstrate financ ial responsibility. This should be coupledBP’s Comments To EPA’s Proposed Rule
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with the flexibility to combine multiple types of financial assurance mechanisms to demonstrate compliance. The regulations or guidance should be flexible and authorize EPA to accept and recognize other types of instruments, programs or conditions that provide similar reliable assurance.

While the Proposed Rule does not limit the range of financial assurance mechanisms, EPA indicates that the Agency is considering revising various guidance documents related to financial assurance. (7 3 Fed. Reg. at 43520-21.) EPA refers to several reports issued by the United States General Accountability Office (“GAO”), Office of Inspector General (“OIG”), and t he Environmental Financial Advisory Board (“EFAB”). Id. In 2003, the GAO issued a report re viewing, in part, the financial assurance requirements for Class I injection wells. See GAO Report to the Honorable Lynn C. Woolsey, House of Representatives, Deep Injection Wells: EPA Needs to
Involve Communities Earlier and Ensure th at Financial Assurance Requirements are Adequate , GAO-03-761, 17-22 (June 2003). GAO noted that there is uncertainty about the adequacy of financial assurance requirem ents, but did not make any conclusions about specific mechanisms. Similarly, in 2005, OIG issued a report reviewing the
financial assurance mechanisms under t he RCRA program. OIG Evaluation Report, Continued EPA Leadership Will Support State Needs for Information and Guidance on
RCRA Financial Assurance , Report No. 2005-P-00026 (Sept. 26, 2005). OIG concluded that despite ongoing concerns, the lack of uniform national data prohibited ready identification of the problems. Id. at 8.

As EPA develops revisions or potential modifications to financial assurance guidance that would be applied to UIC permits , it should provide further public notice, review and engagement opportunities that allow for feedback to EPA on specific proposals.

(2) EPA’s Suggestion for a Phased Approach to Financial Assurance for PostInjection Site Care Should be Adopted

EPA is relying on an adaptive management approach for regulation of CO 2 injection. (73 Fed. Reg. at 43522.) EPA specifically requested comment on allowing separate financial demonstration to be submitted for well-plugging and for postinjection site care. In the Preamble, EPA states that:

Since post-injection site care has the pot ential to extend many years into the future, subsequent to the time a permit is issued, the Agency believes that it may be advantageous to require the appr oval of the well plugging financial demonstration at permit issuance and the post-injection site care financial demonstration at a later time (e.g., within 180 days of notifying the Director that the well will be plugged and abandoned). Trying to determine the cost for post-BP’s Comments To EPA’s Proposed Rule
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injection site care, possibly 30 to 50 ye ars in the future, could be difficult, as could the approval of a financial demonstration.

(73 Fed. Reg. at 43522.) We agree with EPA’s stated rationale and recommend that EPA specifically incorporate language in the Final Rule that describes the manner in
which determinations and demonstrations of financial assurance for post-injection site care will be postponed until a later time as discussed by EPA.

(3) Clarifying that adaptive management approach allows for phased financial

assurance release

In accordance with the adaptive management approach for CCS, the rulemaking should clarify that the fina ncial assurance can be released (or amounts reduced) as particular activities are complet ed and regulatory criteria are met (e.g., well plugging for corrective action). Also, t he owner or operator should be able to use site-specific data gathered from such activit ies to support revisions to site-specific financial assurance requirements.

(E) ISSUES SPECIFICALLY RELATE D TO OIL & GAS PRODUCTION

EPA has appropriately restricted the applicability of Class VI regulations to projects that are exclusively geologic sequestration projects. Furthermore, BP appreciates EPA’s efforts to limit this ru lemaking to the authority vested in EPA by Congress pursuant to the Safe Drinking Wat er Act (“SDWA”). BP requests that EPA
include some of the discussion in the Prea mble to the Final Rule to ensure that
unrelated activities in the Oil & Gas industry are not impacted by unintended inferences or interpretations of the Proposed Rule.

(1) Property Rights Issues Are Matter of State Law

EPA accurately states that the SDWA does not afford EPA the authority to regulate many issues involved in CO 2 sequestration, including property rights which are regulated under state law. (73 Fed. Reg. at 43495.) In many instances, the owner of the surface property rights may be differ ent than the owner of the subsurface mineral rights. There may be a legal question as to who owns the subsurface storage rights as between, for example, the surface property rights owner and the mineral rights owner. This is a matter of state law as correctly discussed by EPA. BP requests that EPA expand on its assertion in the Preamble that it does not have authority to regulate in this area and that nothing in the Proposed Rule should be interpreted or inferred as a grant of subsurface storage rights.BP’s Comments To EPA’s Proposed Rule
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(2) Organic-Rich Shales Are Primary Remaining Supply of Natural Gas

EPA also states in the Preamble that or ganic-rich shales are potential reservoirs for geologic sequestration of CO 2 . However, these shales are also the single largest source of natural gas remaining in the Un ited States, and will likewise help to ensure that low-carbon energy supplies are available to fuel the United States’s economy.

EPA should include in its Preamble a clear statement that nothing in the Preamble and/or the Proposed Rule should be interpre ted or inferred as a preference for the use of these organic-rich shales for geolog ic sequestration as opposed to natural gas production. Whether organic-rich shales are used for natural gas production or geologic sequestration should be a matter left to negotiations between private parties.

(3) Proposed Rule Should Not A ffect Injection of Oil & Gas Waste

Oil and gas waste (such as produced water and amine waste gases [CO 2 and

H 2 S]) are often injected back into the reservoir after separation during oil and gas production activities. This type of injecti on is and has been historically permissible under Class II regulations. (See 40 CFR § 144.6(b)(1).) EPA was silent on whether the Proposed Rule would in any manner affect the applicability of the Class II well regulations for injection of oil and gas wast e. EPA should indicate in its Preamble to
the Final Rule that the Final Rule does not alter in any manner the applicability of Class II regulations to injecti on of oil and gas waste.

CONCLUSION

BP commends EPA for the tremendous am ount of work that EPA has done in preparing the Preamble and Proposed Rule in an expedited timeframe. After due consideration of studies and analyses performed by international research organizations, non-governmental organiza tions, sister-agencies, and scientists worldwide, EPA’s research has determi ned that CCS could be “a key mitigation technology for achieving domestic emissions reductions,” and CCS has the “potential to play a significant role in climate change mitigation scenarios.” (73 Fed. Reg. at 45496.) BP applauds EPA’s willingness to pl ay a significant role in this Nation’s strategy to address climate change. We are very supportive of EPA’s effort to implement a regulatory scheme that will bot h protect one of our vital resources, USDWs, and facilitate the implementat ion of CCS technology and geologic sequestration of CO 2

.

Significantly, this technology does not start on a blank slate. The Oil & Gas industry has extensive, relevant experience with injection into the subsurface that can inform this rulemaking. Moreover, BP is a leader in studies and demonstration projects conducted around the world r egarding geologic sequestration of CO 2 . TheBP’s Comments To EPA’s Proposed Rule
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comments submitted here are in lar ge measure based upon BP’s significant experience and technical knowledge. We would be pleased to review our comments and/or any questions that EPA may h ave regarding our comments at EPA’s convenience. BP also welcomes the opportuni ty to provide additional information or input to EPA as EPA continues its evalua tion and study of comments, scientific papers/studies or other information subm itted or considered in this rulemaking

process.

Please contact the undersigned with any questions or comments.

BP Alternative Energy North America Inc.



## Brian Williams by Asteghik Khajetoorians

____________________________________ Brian Williams CO2 Storage Manager