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

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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

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• 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.
Utilty Solid Waste Activities Group U

c/o Edison Electric Institute

701 Pennsylvania Avenue, NW

Washington, DC 20004-2696

202-508-5645

www.uswag.org

December 23, 2008

VIA MESSENGER AND ELECTRONIC SUBMISSION

U.S. Environmental Protection Agency

Water Docket

EPA Docket Center (EPA/DC)

EPA West

Room 3334

1301 Constitution Avenue NW

Washington, D.C.

Re: Proposal for Federal Requirements Under the Underground

Injection Control Program for Geologic Sequestration of

Carbon Dioxide (Docket No.: EPA-HQ-OW-2008-0390)

Dear Sir or Madam:

Enclosed please find the comments of the Utility Solid Waste Activities

Group ("USWAG") on the Environmental Protection Agency's Proposal for

Geologic Sequestration ("GS") of Carbon Dioxide ("C02") under the Underground

Injection Control ("UIC") Program.

As the leading utility organization responsible for interacting with EPA and

other federal and state agencies regarding the management of materials from the

combustion of coal and other fossil fuels, USWAG has a valuable knowledge

base and perspective from which to provide meaningful input on the development

. of EPA's UIC regulations for CO2 sequestration. We appreciate the opportunity

to comment on this important rulemaking initiative and look forward to working

with EPA on this effort.

Sincerely,

James Rower

Executive Director, USWAG

Enclosures
Federal Requirements Under the Underground Injection Control Program for

Carbon Dioxide Geologic Sequestration Wells

Docket No. EPA-HQ-OW-2008-0390

73 Fed. Reg. 43492 (July 25, 2008)

Comments of the Utility Solid Waste Activities Group

INTRODUCTION

The Utility Solid Waste Activities Group ("USWAG") 1 submits these comments on

the Proposal of the Environmental Protection Agency ("EPA" or "the Agency") to

establish the regulatory framework for geologic sequestration ("GS") of carbon dioxide

("C02") under the Underground Injection Control ("UIC") Program pursuant to the Safe

Drinking Water Act ("SDWA"). 73 Fed. Reg. 43492 (July 25, 2008). For the past thirty

years, USWAG has been the leading utility organization responsible for interacting with

EPA and other federal and state agencies concerning the management of materials

from the combustion of coal and other fossil fuels (e.g., fly ash and bottom ash) under

federal and state environmental programs.

The development of a viable CO2 capture and sequestration regulatory program

has been cited by many as a prerequisite to the implementation of energy reform

initiatives involving carbon reduction measures on both the federal and state leveL.

Because the electric utility industry, including USWAG members, has been identified as

the primary industrial sector targeted for regulation under future carbon capture and

1 USWAG was formed in 1978, and is an informal consortium of approximately 80 energy industry

operating companies and associations, including the Edison Electric Institute ("EEl"), the National Rural

Electric Cooperative Association ("NRECA"), and the American Gas Association ("AGA"). EEl is the

principal national association of investor-owned electric power and light companies. NRECA is the

national association of rural electric cooperatives. AGA is the national association of natural gas utiliies.

Together, USWAG members represent more than 85% of the total electric generating capacity of the

United States, and service more than 95% of the nation's consumers of electricity and more than 93% of

the nation's consumers of natural gas.
sequestration ("CCS") regulations, USWAG has a direct and substantial interest in

EPA's development of a realistic and cost-effective UIC program for Class Vi CO2 GS

wells. EPA projects that the electric power sector "will most likely be the largest

potential market for (CCS) technologies," and predicts that CCS technology could lead

to CO2 reductions of approximately 80-90% at an individual plant. 73 Fed. Reg. 44354,

44492 (July 30, 2008). USWAG's decades-long involvement with the management of

fossil fuel combustion materials has given us a valuable knowledge base and

perspective from which to provide meaningful input on the development of EPA's UIC

regulations for CO2 sequestration.

USWAG outlines below its major views on the Proposal and then provides a

more detailed discussion regarding these and other issues.

· EPA must resolve key policy and legal uncertainties to alleviate financial

concerns of potential Class Vi well Owners or Operators and to encourage

investment in the development and operation of Class Vi CO2 injection wells.

Issues that must be addressed include the interaction of the Resource

Conservation and Recovery Act (''RCRA'') and the Comprehensive

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

Class Vi injection activities as well as long-term post-injection liability.

· In many instances the proposed requirements for Class Vi CO2 GS wells are

unnecessarily more stringent than existing requirements for other well classes

under the UIC Program. While it is essential that the Final Rule be protective of

underground sources of drinking water ("USDWs"), many of the more rigorous

requirements proposed for Class Vi wells are not warranted by findings of unique

risks posed by CO2 GS wells. The Final Rule should craft requirements that

protect USDWs while avoiding the imposition of unnecessary costs or the

creation of an unfounded negative public perception of C02 GS projects.

· Because the technology described in the Proposal will not be commercially

deployed for a number of years, the Final Rule must be flexible enough to

accommodate developments in information and technology related to carbon

sequestration. Similarly, because there is likely to be a significant amount of CO2

available for sequestration under the Program, the Final Rule should avoid

arbitrary absolutes or blanket prohibitions regarding site selection or well

construction or injection procedures. The Final Rule should keep available as

DC2DOCS i -#985086v7 2
many options as possible for site selection and method of injection, subject

always to the standard that any CO2 GS be protective of USDWs.

· Because carbon sequestration technology is still developing and the

characteristics and limitations of CO2 GS projects will vary greatly from one site

to another, it is essential to incorporate performance-based standards into the

Final Rule, leading to a site-tailored approach to requirements for Area of Review

("AoR") reevaluation and post-injection site care and closure periods.

· In discussing the potential applicability of RCRA's hazardous waste rules to

Class Vi CO2 injection activities, EPA prematurely assumes that the CO2 is being

"discarded" and is a solid waste under RCRA. To the extent there is any

possibility that CO2 injection operations could be subject to RCRA controls, EPA

should exempt such activities from RCRA regulation under the well-established

"contingent management" concept, particularly given that the UIC permit will

ensure that the injected material is not mismanaged.

· In developing guidanæ identifying financial responsibility mechanisms available

for post-injection care, EPA should retain the option of self-insurance instruments

including the corporate financial test. Self-insurance has worked successfully for

over two decades under the RCRA program and there is no reason why this

option should not also be available for Class Vi UIC wells. EPA must also take

steps to mitigate the specter of open-ended financial liability for CO2 injection

operations after the cessation of the post-injection site care period. Such openend liability is one of the major impediments to the successful development of a

commercial CO2 GS program.

· The Final Rule must not make the application process overly burdensome or

unrealistic by requiring detailed information that may not be available at the time

of the initial application; instead, the Final Rule should allow for submission of

updated information regarding a CO2 GS well and its AoR as that information

becomes available.

· Given the similarities between Class Vi wells (as envisioned by the Proposal)

and the existing requirements for those Class I and V wells permitted exclusively

for CO2 injection, the Final Rule should allow grandfathering of construction and

operating requirements for these existing wells seeking to become Class Vi wells

provided that it can be demonstrated that such carrying-over of requirements will

be protective of USDWs.

· While directorial discretion is a useful mechanism to ensure flexibility in the Final

Rule, such discretion must be clearly defined and limited.

· Because state regulators have worked extensively with Owners or Operators of

UIC Class V experimental CO2 wells and have familiarity with environmental,

geologic, and financial concerns specific to a given region, state adoption and

DC2DOCS i -#985086v7 3
tailored implementation of the CO2 GS rules will be crucial to the success of the

Program.

DISCUSSION

1. Legal and Regulatory Challenges to Commercial-Scale CO2 GS

It is important to recognize that the development of a viable, large-scale

commercial CCS program requires resolution of technical, policy, and legal issues that

are beyond the scope of this rulemaking. The General Accounting Office ("GAO")

recently issued a report entitled "Climate Change - Federal Actions Will Greatly Affect

the Viability of Carbon Capture and Storage As a Key Mitigation Option" which

emphasizes that significant technological barriers involving CO2 capture technologies

must be resolved before a successful CO2 CCS program of the scale envisioned by

policymakers can be achieved. GAO-08-1080 at 3-5 (September 2008) ("GAO

Report"). The GAO Report also references a number of regulatory and legal

uncertainties involving CO2 storage, leakage, and ownership issues, the resolution of

which is critical to a successful CCS program. 'd. Federal agencies must also work

together to "examine how CO2 pipeline infrastructure might be regulated to

accommodate commercial-scale CCS," as well as how "C02 emissions reductions from

CCS will be treated in a future emissions trading scheme." 'd. at 4.

In addition, the GAO report discusses the complex and still unresolved property

rights issues involving CO2 injection on both federal and nonfederal lands. 'd. at 42-23.

Finally, GAO cites a National Academy of Sciences ("NAS") report emphasizing that a

large-scale CO2 UIC program cannot be successful "if a significant fraction of the public

DC2DOCS 1-#985086v7 4
views it as dangerous or unacceptable," concluding that CO2 storage technologies must

not only be safe and effective, they must be presented "to the public and the regulatory

community in such a way as to instill confidence that they are in fact safe and effective."

'd. at 49 (quoting National Research Council, NAS, Prospective Eva'uation of App'ied

Energy Research and Deve'opment at DOE (Phase Two) (2007)).

With that being said, this rulemaking can resolve some important policy and legal

issues and, in doing so, help foster the development of a practical, commercially

deployable CCS regulatory program. For example, the Final Rule can provide much

needed clarity regarding (1) the potential for liability under RCRA and CERCLA resulting

from CO2 injection and GS activities, and (2) the options for addressing long-term postinjection liability for Class Vi wells. GAO Report at 39-42. As discussed below, there

are practical regulatory and legislative options available to resolve these uncertainties

that will help assure the public and the regulated community that CO2 UIC activities can

be conducted in a manner that is both safe and effective.

2. Necessity of a Flexible Regulatory Scheme

USWAG applauds the efforts EPA has taken thus far to instill certainty and

transparency in the future Class Vi CO2 regulatory regime. 73 Fed. Reg. at 43496. At

the same time, it is imperative that the Final Rule reflect the challenges inherent in

crafting regulations for commercial CO2 injection activities when large-scale commercial

operations are only at the nascent stage. The challenge confronting EPA in this

rulemaking is to establish a cost-effective and environmentally protective regulatory

DC2DOCS i -#985086v7 5
program to cover a range of operations for which the technology wil not be

commercially deployed for a number of years.

To meet this challenge, it is critical that the Final Rule emphasize performancebased rules that can be readily adjusted and fine-tuned as industry and regulators alike

gain experience with large-scale CO2 sequestration. USWAG acknowledges EPA's

efforts to build flexibility mechanisms into the Proposal, including provisions for

directorial discretion and the suggestion that forthcoming guidance may be used to

clarify other requirements. In general, we agree that these methods will help create a

regulatory framework that can evolve as information and technological advancements

are gained in the field of carbon capture and sequestration. It is important, however,

that any directorial discretion be clearly defined and limited; this can be achieved while

still maintaining a rule that is flexible and avoids unnecessary prohibitions. In addition,

guidance on any aspect of the Final Rule (for example, clarification of requirements for

financial assurance mechanisms) must be developed in accordance with OMB's Good

Guidance Practices Bulletin, which directs that notice and comment be provided on

"economically significant" guidance documents.2 See 72 Fed. Reg. 3432, 3438 (Jan.

25,2007).

Because information and technology related to carbon sequestration will develop

as industry and regulators gain experience with CCS, USWAG urges EPA to avoid

blanket prohibitions or arbitrary absolutes in the Final Rule. We agree that the

appropriate standard underlying the technical requirements for CO2 GS wells is the

protection of USDWs. However, because it is difficult to know at this point what

2 The Bulletin defines "economically significant guidance document" as "a significant guidance document

that 'may reasonably be anticipated to lead to' an annual effect on the economy of $100 million or more or

adversely affect in a material way the economy or a sector of the economy." See 72 Fed. Reg. at 3435.

DC2DOCS i -#985086v7 6
methods or technology will be developed for injection and long-term storage of CO2 in a

manner that is protective of USDWs - and because there is sure to be demand for

significant capacity for CO2 GS - EPA should not prematurely preclude the use of

specific types of sites or methods for Class Vi CO2 injection. The Final Rule should

leave the door open for a range of injection sites and methods (some of which are

unknown or not yet fully understood), provided that the Owner or Operator can show

that the injection and storage will be protective of USDWs.

3. Classification and Regulation of CO2 GS Wells

USWAG believes the creation of a new category of wells under the UIC Program

for long-term storage of CO2 is appropriate. 73 Fed. Reg. at 43502. USWAG agrees

with the Proposal's structure that would only apply the requirements for Class Vi wells

to those wells specifically permitted for purposes of geologic sequestration, while

maintaining a distinct permittng classification (Class II) for the injection of CO2 for the

purposes of enhanced oil and gas recovery. 'd.

With respect to the integration of state programs, USWAG agrees that the Final

Rule should create a delegable program and encourage the adoption and

implementation of that program by states. 'd. at 43497. Our members' experiences

with Class V experimental CO2 wells underscore the benefits of regulation on a state

leveL. State regulators have familiarity with local environmental, geologic, and financial

concerns, and in many cases have pre-existing relationships with the regulated

community that will facilitate implementation of a new and complex regulatory program.

For these reasons, it is appropriate to allow states to obtain primacy for only Class Vi

DC2DOCS i -#985086v7 7
wells if a particular state so chooses. 'd. at 43523. Such class-specific primacy is

consistent with the statutory authorization behind the UIC Program and EPA is correct

in predicting that states obtaining primacy for Class Vi wells - regardless of whether

they have sought primacy for other well classes under the UIC program - may be more

likely to develop a comprehensive regulatory program for all aspects of carbon capture

and storage. 'd.; see a'so 42 U.S.C. § 300h-1 (SDWA § 1422).

USWAG also urges EPA to issue more definitive direction in the Final Rule

regarding the regulation of CO2 injection activities that cross state boundaries. This

issue is mentioned in the Preamble to the Proposal but receives little attention. See 73

Fed. Reg. at 43497. Rather, EPA simply observes that "some injection activities may

raise cross-state boundary issues that are beyond the scope of this rulemaking." 'd.

EPA should provide more direction regarding how such cross-state activities would be

regulated, and specifically should make clear in the Final Rule that Owners or Operators

of Class Vi CO2 GS projects will seek a Class Vi permit for that operation from the state

in which the wellhead is located. In other words, a given state is the permitting body for

any Class Vi CO2 GS project with a wellhead in that state. EPA should direct states to

consult and coordinate with other affected states (i.e., other states to which the

underground portion of the well may extend and/or those to which there could be a

subsurface release or migration of injected material) in determining how to avoid

duplicative or dueling regulatory systems. USWAG urges EPA to playa leadership role

and proactively address these issues by suggesting procedural guidelines for interstate

regulation and cooperation.

DC2DOCS i -#985086v7 8
4. Grandfathering Requirements for Class I and V UIC Wells

Grandfathering is an extremely important issue to USWAG as a number of our

members have invested substantial resources in developing and permitting nonhazardous Class I and V experimental CO2 injection wells to help demonstrate the

viability of large-scale commercial deployment of C02 sequestration. Federal and state

governments are encouraging these efforts as their success is critical to the large-scale

commercial deployment of C02 sequestration. Therefore, Owners or Operators should

be given the opportunity to operate these wells on a regular basis as Class Vi wells

once the wells have been shown to be safe and effective on an experimental basis.

This will help encourage the substantial upfront investment necessary to get these wells

permitted. USWAG therefore supports the Proposal's provision allowing for the

grandfathering of construction requirements for existing Class I and V wells developed

for the injection of CO2 if and when Owners or Operators of those wells seek a Class Vi

permit for GS of CO2. 'd. at 43502.

However, the Proposal's grandfathering provision does not go far enough. It is

both necessary and appropriate to allow for grandfathering of requirements beyond

those related to construction where this carrying-over of requirements can be done in a

manner that is protective of USDWs. This is particularly true for the Class I and V wells

developed solely for the injection of CO2. It has already been determined through the

permittng process that the operation of these Class I and V wells is protective of

USDWs. See 40 C.FR. § 144 et seq. Having made this determination, there should

be a regulatory presumption that conversion of these wells for the exact same activity -

albeit at a larger scale and for an extended period of time - under the Class Vi program

DC2DOCS i -#985086v7 9
is also protective of USDWs, with the understanding that grandfathering will not be

allowed if the Director demonstrates that conversion of these wells to Class Vi would

endanger USDWs. In other words, EPA should bear the burden of showing why

continued operation of the CO2 injection activities under the Class Vi program should

not be allowed.

To the extent that EPA can demonstrate that elements of the Class Vi program

not already incorporated into the pre-existing Class I or V permit are necessary to

protect USDWs, Owners or Operators can be required to incorporate such elements

into the Class Vi permit. This approach would be preferable to a default wholesale

application of the Class Vi program requirements to Class I or V wells currently used for

the same activity and already proven to be protective of USDWs. USWAG

recommends that the Final Rule include a presumption that Class I and V CO2 injection

wells be allowed to transition into Class Vi wells based on existing conditions, while

allowing the Director to incorporate additional elements into the Class Vi permit if the

Director can show that continued operation of the pre-existing well under the Class VI

program would not be protective of USDWs.

5. Siting of CO2 GS Wells

As a general matter, USWAG believes that EPA must consider the potential

impact of CO2 GS projects on other pre-existing subsurface activities (e.g., natural gas

storage operations). In particular, the Final Rule should ensure that final Class Vi

permits not inappropriately interfere with these other pre-existing subsurface interests

and operations.

DC2DOCS i -#985086v7 10
With respect to the types of formations into which CO2 may be injected for GS

under the UIC Program, it is counterproductive at this stage in the development of the

CO2 GS regulatory regime to categorically preclude any potentially feasible injection

formations as possible long-term storage sites. EPA recognizes that the commercial

deployment of CO2 GS activities will result in the new production of large volumes of

CO2 for which Owners or Operators will have to locate new and environmentally

protective injection zones. In fact, the GAO Report anticipates a need to permit

thousands, if not tens of thousands, of additional UIC wells to accommodate the

increased volumes of CO2 expected to be captured in a large-scale CCS program.

GAO Report at 40. Therefore, it makes sound policy sense for EPA to encourage the

identification and utilization of as many injection zones as possible, with the prerequisite

that injection at any site be protective of USDWs.

To achieve this result, the Final Rule should avoid absolute prohibitions on any

category of injection site and instead keep all options open; injection should be allowed

as long as it can be demonstrated that injection will be protective of USDWs and meet

other applicable conditions for Class Vi CO2 GS wells. As a result, USWAG believes

that the Final Rule should not contain a blanket prohibition on injection of CO2 into coal

seams (whether above or below the lowermost USDW) or into other formations such as

basalts, salt domes, or shales. 73 Fed. Reg. at 43503. If it can be demonstrated that

the injection of CO2 into such sites is protective of USDWs, then such activities should

remain available options under the Class Vi UIC program.

On a related subject, EPA requests comment on whether the Final Rule should

require, or allow the Director to require at his discretion, the identification and

DC2DOCS i -#985086v7 11
characterization of additional confining and containment zones above the primary (i.e.,

lowermost) confining zone that could further impede vertical fluid movement and allow

for pressure dissipation - in effect, a "secondary containment" requirement. 'd. at

43505-06. As a general matter, USWAG opposes the inclusion of a secondary

containment requirement, even at the Director's discretion, and believes that it will only

be in the most unusual situations where circumstances warrant the requirement of this

additional layer of protection.

In developing this regulatory program, EPA must ensure that CO2 GS is

protective of USDWs while simultaneously taking care not to unduly burden the

permitting process or discourage the development of environmentally protective Class

Vi wells. While it is of course true that additional containment zones above the

confining zone could impede vertical fluid movement, there is no basis for requiring

these additional zones if it has a'ready been demonstrated that the original confining

zone is protective of USDWs. A redundant requirement that is frequently unnecessary

will eliminate otherwise valid injection zones from the universe of potential Class Vi

injection sites.

6. Interaction with RCRA

The Agency seeks comment on the proposal to preclude the injection of

hazardous waste into Class Vi injection wells. 'd. at 43503. USWAG takes issue with

the underlying premise behind EPA's discussion regarding the potential applicability of

the RCRA hazardous waste regulations to CO2 GS. 'd. The fundamental error in EPA's

request for comment on this point is its premature assumption that CO2 is being

DC2DOCS i -#985086v7 12
discarded and therefore is a solid waste. A material cannot be a RCRA hazardous

waste if it is not first a "solid waste." See 40 C.F.R. § 261.2. Under the statutory

definition of "solid waste," a material cannot be a "solid waste" unless it has first been

"discarded." 42 U.S.C. § 6903 (RCRA § 3001).

While there have been numerous judicial decisions addressing what constitutes

"discard," the fundamental holding from these cases is simple and straightforward:

Congress intended to extend EPA's authority to regulate "solid waste" under RCRA

"on'y to materials that are truly discarded, disposed of, thrown away, or abandoned"

American Mining Congress v. EPA, 824 F.2d 1177, 1190 (D.C. Cir. 1987) (emphasis

added). The D.C. Circuit has emphasized that the "plain meaning" of the term "solid

waste" extends only to materials that are "discarded" and that the term "discard" should

be interpreted with reference to its ordinary meaning. Ass'n of Battery Recyc'ers, 'nco v.

EPA, 208 F.3d 1047, 1051-52 (D.C. Cir. 2000).

CO2 is a valuable commodity used in a variety of manufacturing operations,

including in the enhanced oil recovery ("EOR") and enhanced gas recovery ("EGR")

production process. When used in these commercial applications, CO2 is not

"discarded" and therefore is not a solid waste. While large volumes of CO2 will be

produced under the CCS programs contemplated by the UIC Class Vi Proposal, it is

premature for EPA to presume that these additional volumes of CO2 will not retain

commercial value and that their sequestration in Class Vi wells automatically means

that they have been "discarded" as that term has been defined under RCRA. As we

have already cautioned, the Agency should refrain from making categorical

DC2DOCS i -#985086v7 13
assumptions associated with this still-emerging technology, including with respect to the

status of captured C02 destined for GS.

Assuming, for purposes of argument, that CO2 is "discarded" and exhibits a

hazardous waste characteristic when injected for long-term sequestration, there are

compelling policy reasons to exclude such activities from RCRA regulation. Facilities

that have obtained a RCRA "permit by rule" for the operation of a Class i UIC hazardous

waste injection well are potentially subject to the full scope of RCRA's corrective action

program for all solid waste management units ("SWMUs") located at the facility,

including units that are in no way related to the CO2 injection operations. See 40 C.F.R.

§§ 270.1 (c)(1 )(i) and 270.64; see a'so EPA RCRA/Superfund Hotline Monthly

Summary, "Corrective Action for UIC Wells," 9502.1986(07) (April 1986). The potential

for RCRA applicability on such a broad scale is a significant economic and practical

obstacle for any facility considering whether to seek a permit for a new Class Vi well, as

facility-wide RCRA corrective action is an administratively complex and exceedingly

expensive undertaking.

The imposition of this obstacle is unwarranted because any well receiving a

permit under the UIC Program for CO2 GS will be, by definition, protective of USDWs.

EPA's RCRA program has established a legally sound process, referred to as

"contingent management," for the exclusion of materials from hazardous waste

regulation when such materials are already subject to an alternate regulatory regime

that ensures the wastes are managed in an environmentally protective manner. As

discussed below, where the potential for mismanagement of a waste is already

adequately addressed by another regulatory regime - as would be the case with the

DC2DOCS 1-#985086v7 14
injection of CO2 under the Class Vi UIC program - regulation of such materials under

the RCRA's hazardous waste program is duplicative and unwarranted. EPA has

successfully employed the contingent management concept in various contexts where

the Agency determined that other regulatory regimes adequately addressed any

potential mismanagement scenarios related to certain materials; examples include

regulation of used oil, mixed radioactive/hazardous waste, and military munitions.

The Court of Appeals for the District of Columbia Circuit has reviewed EPA's

legal theory underlying the contingent management concept and found it to be a

"permissible construction of the statute," based on the idea that the statutory definition

of "hazardous waste" is predicated upon the risks posed by a solid waste when

"improper'y" managed. Miltary Toxics Project v. EPA, 146 F.3d 948, 958 (D.C. Cir

1998) (emphasis added). Therefore, "where a waste might pose a hazard only under

limited management scenarios, and other regulatory programs already address such

scenarios, EPA is not required to classify a waste as hazardous waste subject to

regulation under (RCRA) Subtitle C." 'd.

Even if such operations were deemed subject to RCRA regulation, including a

RCRA permit by rule, EPA could - and should - establish a conditional exclusion from

RCRA regulation for CO2 GS operations. Such an exclusion would be legally justified,

consistent with the Agency's past promulgation of conditional exclusion rules, and would

make sound policy sense by removing a potentially significant regulatory barrier to the

commercial development of C02 GS operations.

DC2DOCS i -#985086v7 15
7. Interaction with CERCLA

An important issue on which EPA seeks comment is the interaction of CERCLA

with the CO2 GS regulatory program. While EPA acknowledges that "C02 itself is not

listed as a hazardous substance under CERCLA," the Agency raises the possibility of

potential liability under CERCLA, including liability for natural resource damages, if the

CO2 stream contains other CERCLA hazardous constituents (e.g., mercury), or if other

hazardous constituents are formed when the injected CO2 stream reacts with

groundwater.3 73 Fed. Reg. at 43504. The potential for open-ended CERCLA liability

for any contamination resulting from CO2 GS activities will act as a serious deterrent to

would-be Owners or Operators of Class Vi wells and could jeopardize the contemplated

wide-spread commercial deployment of CO2 GS operations.

EPA correctly acknowledges that CERCLA's "federally permitted release"

exemption will provide CERCLA protection from those releases that fall within the scope

of a Class Vi permit (e.g., contained within the AoR), but the Agency also recognizes

the limitations of this exemption, as it does not offer protection for any release of a

hazardous substance that is beyond the scope of the Class Vi permit (e.g., outside the

AoR). Indeed, EPA states that any permits will have to "be carefully structured to

ensure that they do not 'authorize' inappropriate hazardous releases," including

"potential releases from the well which are outside the scope of the Class Vi permit." 'd.

USWAG appreciates that the contamination issue is extremely important. At the

same time, the potential for open-ended CERCLA liability will impede the ability of

Owners or Operators to calculate and demonstrate financial responsibility, obtain

3 In the Preamble to the Proposal, EPA suggests that sulfuric acid is one such hazardous substance that

could be formed when the injected CO2 stream reacts with groundwater; it is extremely unlikely that

sulfuric acid would be produced as a result of the injectate reacting with groundwater.

DC2DOCS i -#985086v7 16
financial assurance, and acquire the initial capital necessary to invest in this important

technology. The specter of CERCLA liability will serve as a significant barrier to the

commercial development of CO2 GS -unnecessarily so, given EPA's ample civil and

criminal enforcement authority under the SDWA for violations of UIC permits (see

SDWA § 1423(b), 42 U.S.C. § 300h-2(b) (authorizing the imposition of $32,500 per day

civil penalties and/or criminal penalties and imprisonment)). EPA must mitigate the

threat of potential CERCLA liability to the extent possible in this rulemaking.

One step that the Agency can take is to ensure that final Class Vi permits for

individual CO2 GS projects have the broadest possible reach whi'e remaining protective

of USDWs in order to maximize the protection offered by the federally permitted release

exemption. This would mean including in the scope of the permit for CO2 injection all

other CERCLA hazardous constituents likely to be contained in the CO2 stream,

including those generated during capture and transport as well as any that could be

formed in the injection zone as a result of the injection of CO2. Similarly, the scope of

the authorized "permit zone" should be as broad as possible while remaining protective

of USDWs. This could mean, for example, effectively authorizing the migration of

constituents contained in the C02 stream (or resulting from injection) outside the scope

of the AoR, provided that such migration does not directly impact a USDW.

We understand that EPA's authority in this rulemaking is limited by the SDWA.

However, given the importance of this issue from a public policy perspective, we urge

EPA to take whatever regulatory measures are available to mitigate the chilling effect

that the potential for such open-ended liability could have on CO2 GS operations, and

DC2DOCS i -#985086v7 17
then consider whether a legislative solution is necessary to eliminate this concern. If so,

we recommend that EPA strongly support such a solution.

8. Modeling

As most models now are proprietary, USWAG supports the use of proprietary

models for use with CO2 GS sites. As EPA recognizes, many popular proprietary codes

in the petroleum-reservoir engineering discipline have been used in peer-reviewed

studies to model CO2 sequestration. 73 Fed. Reg. at 43507. These and other

proprietary models should be available for use in modeling for Class Vi CO2 GS wells,

provided that they are based on accepted science and have been validated, and as long

as the Owners or Operators using proprietary models disclose, as necessary, the code

assumptions, relevant equations, and scientific basis of each modeL. USWAG believes

that the use of computational fluid flow models for delineating the AoR of GS sites is

acceptable but should not be required. 'd.

9. Area of Review and Corrective Action

USWAG appreciates the importance and complexity of proper AoR evaluation.

See id. The Proposal would require Owners or Operators to invest a significant amount

of time and resources in the initial delineation of the AoR. Provided that the Program's

requirements are satisfied in the initial determination of the AoR, USWAG believes that

a requirement for AoR reevaluations every ten years or at any other fixed period is

unnecessary; this will result in the arbitrary imposition of costs that may be wholly

unwarranted. A more appropriate approach would be performance-based, with

DC2DOCS 1-#985086v7 18
reevaluation required upon occurrence of some triggering event. One example of a

triggering event could be a significant deviation from previously modeled scenarios,

provided that the level of deviation that would require reevaluation is clearly defined by

the regulating agency. As with many other decisions related to implementation of the

Class Vi CO2 GS program, determinations such as these are best made on a local level

by regulators having the most familiarity with the characteristics and constraints of a

given geologic setting for a CO2 GS project.

Corrective action - As a threshold matter, USWAG believes that the terminology

used in the Proposal is problematic; use of the phrase "corrective action" to describe

well plugging and repair risks confusion with the concept of corrective action under

either RCRA or CERCLA. As the GAO Report cautions, public perception is critical to

the development of a commercially viable CO2 GS program. GAO Report at 49. To

avoid any unintended and unwarranted negative associations with the phrase

"corrective action," USWAG suggests the Final Rule abandon this phrase and instead

use a phrase such as "well plugging and repair."

Most importantly, USWAG supports a phased approach to corrective action (well

plugging and repair) for CO2 GS wells as contemplated in the ProposaL. 73 Fed. Reg.

at 43507-08. However, a phased approach to well plugging and repair for CO2 GS

wells should be available to all Owners or Operators of CO2 GS wells rather than be

available only at the discretion of the Director. 'd. at 43508 (proposal "would give the

Director the discretion to allow owners or operators to perform corrective action on an

iterative, phased basis... "); see a'so id. at 43536-37 (including proposed § 146.84(b),

which would require Owners or Operators of Class Vi wells to, inter a'ia, "perform

DC2DOCS i .#985086v7 19
corrective action that meets the requirements of this section and is acceptable to the

Director").

As EPA recognizes, the AoR for CO2 GS sites may be extensive; requiring well

plugging and repair to be complete for all wells in a CO2 GS AoR prior to

commencement of the injection project would be overly burdensome, unnecessary, and

unrealistic. This is particularly true given that the AoR may be shown, through periodic

AoR reevaluations, to have expanded or shifted, identifying new wells for plugging and

repair. USWAG supports an approach that would require the Owner or Operator of a

Class Vi well to perform pre-injection well plugging and repair on only those wells within

the portion of the AoR that would be intersected by the CO2 plume or pressure front

during the initial years of injection. Well plugging and repair for the rest of the AoR

should be allowed to take place as the injection project progresses, ensuring that,

eventually, "all wells in the AoR that need corrective action (well plugging and repair)

eventually receive it." 73 Fed. Reg. at 43508.

On a related topic, USWAG would like to ensure that the obligation of Class Vi

Owners or Operators to plug or repair a pre-existing well within the AoR will not be

viewed as excusing prior well owners or operators from fulfilling their own pre-existing

legal obligations under applicable federal or state law to have properly closed the well in

the first instance. Well plugging and repair obligations imposed on Class VI Owners or

Operators should not supersede any pre-existing legal obligations that have yet to be

fulfilled by previous owners or operators. To prevent this from occurring, the Final Rule

should make clear that, in those circumstances where pre-existing wells in an AoR have

not been properly closed and are now subject to well plugging and repair under a Class

DC2DOCS 1-#985086v7 20
Vi UIC permit, EPA and/or the applicable state regulatory agency should first look to

see whether the responsible party for such closure is still available to properly close the

well as legally required before imposing such obligations on the Owner or Operator of

the Class Vi UIC permit.

It also is important to clarify in the Final Rule that well plugging is only necessary

and appropriate for those wells that are potential conduits of contamination to USDWs.

USWAG raises this point because EPA suggests that the Final Rule may give the

Director discretion to require Owners or Operators to conduct surface air monitoring

and/or soil gas monitoring in the AoR. 'd. at 43516. Such a requirement would be

appropriate only to the extent that this monitoring would be done with the goal of

identifying potential endangerment of USDWs as a result of C02 injection and

sequestration activities. 'd. To the extent that such monitoring would be required

simply to guard against potential atmospheric releases or to trigger a corrective action

requirement to terminate such atmospheric releases, it would be outside of the scope of

EPA's authority under this rulemaking. See id. at 43498 ("preventing releases of CO2 to

the atmosphere is not within the scope of this proposal").

Proposed requirements for well drillng. construction, and other characteristics -

With respect to many of the proposed requirements, USWAG believes it is imperative to

craft the Final Rule as a flexible instrument that establishes performance-based

standards, which can be achieved through a variety of methods as long as there is a

sound technical basis underlying each method and assuring its protection of USDWs.

See id. at 43508-09. Because this technology is years from commercial deployment

and is still developing, the Final Rule should allow for the use of technologies and

DC2DOCS i -#985086v7 21
methods that are not yet developed or are only in the beginning stages, provided that

they are shown to be protective of USDWs. This logic also applies to argue against a

prohibition on any type of well drilling, whether horizontal, vertical, or angled. 'd. at

43509. There will likely be a need to maximize capacity for CO2 GS, and it would be

premature at this point to impose a blanket prohibition on any type of well drilling without

knowing whether that drilling could be done in a manner that is protective of USDWs.

10. Proposed Injection Well Operating Requirements

USWAG reiterates that in order to accommodate developing technology and

varied geological settings, the Final Rule must be flexible and avoid overly burdensome

or prescriptive measures that do little to further the protection of USDWs. For example,

a requirement for down-hole shut-off valves would force Owners or Operators to incur

great costs, particularly if those valves malfunction, with minimal benefit. 'd. at 43511.

Additiona' injection sites - As discussed above, it is likely that there will be great

demand for wells in which to inject CO2 for GS, with the potential need for tens of

thousands of additional sites. Accordingly, the goal of the Program should be to provide

as much capacity as possible for CO2 GS while still ensuring that USDWs are not

jeopardized. USWAG supports alternative approaches that would allow injection

between and/or above the lowermost USDW, increasing capacity for CO2 GS, as long

as Owners or Operators of Class Vi wells can show that their CO2 GS operations will be

protective of USDWs. 'd. at 43512. This will be particularly important in areas of the

country with deep USDWs, where an absolute requirement that Class Vi wells be

constructed beneath the lowermost USDW could render the program impracticaL. 'd.

DC2DOCS i -#985086v7 22
USWAG also supports this alternative approach in areas where the Owner or Operator

can show that geologic conditions would prevent fluid movement into adjacent USDWs.

'd. For similar reasons, USWAG opposes an absolute prohibition on use of exempt

aquifers for Class Vi injection; use of exempt aquifers should be permitted where the

specific aquifer exemption criteria are satisfied. 'd.

Hvdrau'ic fracturing - While hydraulic fracturing is not appropriate in all geologic

settings, it should be an available option, subject to approval of the Director. See id. at

43511. For years, EOR operations have employed hydraulic fracturing to enlarge

fractures in rock; hydraulic fracturing has proven an effective way to create permeability

and increase well capacity with minimal risk to USDWs. Because this technique has

been used safely for many years, there are regulatory protocols in place that could be

adopted to ensure safe and effective hydraulic fracturing where appropriate for Class Vi

CO2 GS operations. When used where appropriate, hydraulic fracturing increases the

capacity of existing wells, thereby requiring fewer cap rock penetrations and fewer wells

overall. Again, USWAG shares EPA's underlying goal of protecting USDWs, and

recognizes that hydraulic fracturing may not meet this standard in some situations; we

ask only that the opportunity remain for use of hydraulic fracturing at the Director's

discretion and only when the Owner or Operator can demonstrate that such fracturing

will not jeopardize USDWs.

Tracers - The use of tracers should not be required for CO2 GS operations, even

if only at the discretion of the Director. EPA correctly notes that many drawbacks can

accompany the use of tracers, including the possibility of false positives, the release of

PFCs to the atmosphere, and uncertainty regarding cost-effectiveness. 'd. at 43512-13.

DC2DOCS i -#985086v7 23
These negative aspects argue against allowing the Director to exercise discretion to

require the use of tracers. If anything, the use of tracers should only be an option

available at the discretion of Owners or Operators, subject to the approval by the

Director.

P'ume and pressure front monitoring - USWAG appreciates the importance of

accurate monitoring of the subsurface extent of the plume and pressure front. 'd. at

43514. We believe, however, that over time constant monitoring may prove

unnecessary as more information is gained regarding the accuracy of initial modeling.

Any requirements for plume and pressure front modeling in the Final Rule should be

flexible enough to adjust in the coming years as industry and regulators become more

knowledgeable regarding the reliability of the modeling techniques initially used.

With respect to the Proposal's suggestion for surface monitoring requirements,

USWAG believes that such requirements will come at significant cost with little benefit.

While surface monitoring may reveal CO2 migration, these data will be of limited use

since, by that point, CO2 has already been released to the surface. Moreover, data

from surface air and soil gas monitoring are complicated by a number of factors,

including natural and anthropogenic impacts from fires, development, and population

growth. Rather than spending significant resources on gathering data that are of limited

reliability and of little practical use in preventing surface releases, the Final Rule should

direct that these resources will be put towards detection of subsurface CO2 movement.

This would prove a far more effective use of monitoring resources as it would enable

Owners or Operators to correct any problems before CO2 reaches the surface.

DC2DOCS i -#985086v7 24
11. Permit Application and Reporting Requirements

The Proposal would impose a number of requirements on Class Vi permit

applications that are not currently required under the existing UIC regulations, most

notably the mandatory inclusion of a monitoring and testing plan, an AoR and corrective

action plan, and a post-injection site care and site closure plan. 'd. at 43517. For many

of these requirements, there do not appear to be concrete risks particular to CO2 GS

that would warrant these additional measures.

USWAG is particularly concerned that the level of detail that would be required

for Class Vi permit applications is overly burdensome and unnecessary. A great deal of

this information may be unavailable - or could be speculative at best - because of a

lack of information at the early stages in the application process; an ongoing

requirement for submission of this information over time, as it becomes available

through drilling and operation of the well, would be of greater practical use and would

lead to collection of more accurate data.

For example, some requirements for information related to geologic structure and

hydrogeologic properties of the proposed storage site and overlying formations may be

unavailable until drilling commences, including "data on the depth, areal extent,

thickness, mineralogy, porosity, permeability and capillary pressure... geologic cores,

outcrop data, seismic surveys, ... and lithologic descriptions" of the injection and

confining zones (proposed § 146.82(d)(4)) and "geomechanical information on

fractures, stress, ductility, rock strength, and in situ fluid pressures within the confining

zone" (proposed § 146.82(d)(5)). 73 Fed. Reg. at 43536. While some of this

DC2DOCS i -#985086v7 25
information may be available during the permit application process, other details will be

unavailable prior to drilling.

To require detailed information that may either be unreliable, because it is based

on unrealistic or unfounded predictions, or may simply be unavailable could delay the

permitting process and have an overall chilling effect on C02 GS projects. EPA should

craft these requirements with flexibility and require in the initial permit application on'y

that information which is necessary to determine whether issuance of a Class Vi permit

is appropriate. Submission of additional information as it becomes available - whether

through well drilling, construction, operation, reevaluation, or corrective action - will

allow for more reliable data that will in turn ensure greater protection of USDWs.

Reporting - USWAG agrees that electronic reporting should be an option

available to all states for data exchange related to Class Vi wells, but believes that the

Director should have the discretion to allow other modes of reporting. 'd. at 43517-18.

We appreciate the important steps EPA has taken, including the awarding of grants, to

ensure that all states will have the capability to exchange data electronically. 'd.

USWAG also realizes the benefits of electronic reporting, particularly in terms of

facilitating the application process and streamlining review of CO2 GS projects.

However, while it is likely that all states will eventually have the general capability to

report electronically, some may not have that capacity yet. Additionally, it is foreseeable

that extraordinary circumstances may arise that would preclude access to or limit

availability of electronic resources. Accordingly, any requirement contained in the Final

Rule for electronic reporting should not be absolute but should instead allow the

DC2DOCS 1-#985086v7 26
Director to approve other methods of reporting when he deems such methods more

appropriate.

With respect to the Proposal's suggestion of an annual reporting requirement for

CO2 GS projects, USWAG appreciates the importance of the information EPA seeks to

gather but believes that annual reporting will not always be the best way to collect this

information over the lifetime of the project. 'd. at 43518. The Final Rule will require

some form of periodic reevaluation of the AoR throughout the life of the project; much of

the information sought through the proposed annual reporting requirement would be

gathered and submitted to EPA through the AoR reevaluation process. Gathering this

information through the AoR reevaluations alone, rather than imposing an unnecessary

and duplicative annual reporting requirement, will provide a more cost-effective and

manageable method of information exchange for regulators and Owners or Operators

alike.

12. Well Plugging and Post-Injection Site Care

USWAG believes that the Proposal's suggested fifty-year default fixed timeframe

for the post-injection site care period is arbitrary and will serve to discourage Owners or

Operators of CO2 GS sites from seeking to develop innovative ways to safely close

wells in a shorter time period. 'd. at 43519. EPA acknowledges that it is likely "that the

actual time for CO2 plume stabilization ... will be very site specific, being influenced by

geologic factors such as formation permeability, geochemistry, and the degree of

capillary trapping." 'd. (emphasis added). In fact, EPA observes that the studies used

for their preliminary analysis suggest that the length of time required before plume

DC2DOCS 1-#985086v7 27
stabilization ranges from ten to one hundred years after cessation of injection - quite a

significant range. 'd.

While a ten-year site closure period may be insufficient in some cases, it is clear

that there is no single time period that would apply to every CO2 GS site across the

board. Because of the greatly varied characteristics and needs of different CO2 GS

projects, application of a performance-based standard which is highly site-specific,

rather than any default time period, is the most appropriate approach to the postinjection site care requirements. While the Proposal would give the Director discretion

to decrease or increase the post-injection site care and closure period, the inclusion of a

fifty-year default timeframe is likely to discourage Owners or Operators from working to

develop technology that would facilitate safe and quick site closure; the fifty-year default

may even have a chilling effect on the Program as a whole, discouraging would-be

Owners or Operators from undertaking a CO2 GS project that could impose

requirements decades into the future even when unnecessary. In contrast, by tailoring

requirements to a given site, a performance-based standard would encourage the

development of methods and technology that would achieve long-term protection of

USDWs with well closure after a shorter period of time.

13. Financial Responsibility

The GAO report correctly identifies stakeholders' concerns with the uncertainties

regarding the type of financial instruments that will be acceptable to meet the Final

Rule's financial responsibility requirements, as well as concerns related to the openended nature of post-injection site care liability. GAO Report at 39-40. As the GAO

DC2DOCS i -#985086v7 28
report suggests, further clarity and certainty with respect to these issues is critical to

remove these barriers to the commercial development of CO2 GS wells.

Financia' instruments - With respect to financial responsibility mechanisms,

USWAG is not opposed to EPA's future issuance of guidance describing acceptable

mechanisms provided that the guidance is issued in accordance with OMB's Good

Guidance Practices Bulletin, including an opportunity for public notice and comment

before issuance of any final guidance. 73 Fed. Reg. at 43520-22. In this regard, it is of

paramount importance that self-insurance instruments - including the corporate

financial test - remain available to Owners or Operators as a method of financial

assurance for Class Vi CO2 GS projects. 'd. at 43521. In referencing the assessment

by the Environmental Finance Advisory Board ("EFAB") of various financial

responsibility instruments, including self-insurance instruments, EPA recognizes that

EFAB's assessment was not based on any failures of the corporate financial test. 'd.

Self-insurance instruments, including the corporate financial test and the corporate

guarantee, have been utilized successfully under the RCRA program for over two

decades and these instruments should be included in the final menu of options for

meeting financial responsibility obligations under the Final Rule.

USWAG does not agree with the Preamble's suggestion that the cost of selfinsurance should be based on the cost of retaining an independent third party to

conduct covered activities including well plugging. 'd. In many cases, utilities are

sophisticated, integrated companies and will be able to do the same work in a more

cost-effective method that is just as technically sound and protective of USDWs, if not

more so, than an approach taken by a third party.

DC2DOCS i -#985086v7 29
USWAG supports the Proposal's suggestion to allow separate financial

responsibility demonstrations for different phases of CO2 GS projects, specifically for

well plugging and then post-injection site care. 'd. at 43522. As EPA recognizes, "postinjection site care has the potential to extend many years into the future," and "(t)rying to

determine the cost for post-injection site care... could be difficult, as could the approval

of a financial demonstration." 'd. Requiring all financial demonstrations to be

completed at one time, prior to well plugging, could unnecessarily delay the site closure

process. Allowing a subsequent demonstration for financial responsibility for the postinjection site care period will allow regulators and Owners or Operators to better

understand the site-closure needs for a given CO2 GS project prior to demonstration

and approval of financial responsibility. This would be particularly helpful as the

Program advances, and industry and regulators gain experience and knowledge related

to CO2 GS projects.

Long-term 'iabi'itv - The potential for indefinite financial responsibility on the part

of Class Vi well Owners or Operators for any post-injection migration and contamination

of USDWs at GS sites remains of paramount concern to USWAG. EPA acknowledges

that, under the existing SDWA statutory scheme, the Agency has the authority to

terminate the obligation of an Owner or Operator to maintain financial responsibility

instruments for well plugging and post-injection site care. However, EPA also

acknowledges that "owners or operators may still be held responsible after the postinjection site care period has ended (e.g., for unanticipated migration that endangers

USDWs)." 'd. at 43522. Further, EPA does not currently have the authority "to transfer

DC2DOCS 1-#985086v7 30
liability from one entity to another. Trust responsibility for potential impacts to USDWs

remains with the owner or operator indefinitely under current SDWA provisions." 'd.

The private sector will be extremely reluctant to invest the tremendous amount of

time and resources necessary to finance the development of a commercial-scale CO2

GS program if such investments have open-ended liability. USWAG fully appreciates

that EPA is studying this issue and is compiling information "on a variety of alternative

instruments not currently available under the SDWA" 'd. at 435222. EPA has placed in

the docket a July 2008 EPA report entitled "Approaches to Geologic Sequestration Site

Stewardship After Site Closure" ("Stewardship Report"). See id. The Stewardship

Report provides a discussion of examples of site closure scenarios, as well as

suggestions on how EPA can cap the amount of post-injection site liability for Class Vi

CO2 well Owners and Operators. Two of the important themes that emerge from the

Stewardship Report are (1) the need to equitably balance the risks of CCS between

public and private actors, and (2) "the need to reduce excessive barriers to commercialscale development of GS" which would "deprive the general public of the benefits of

reduced CO2 emissions due to GS technologies." Stewardship Report at 11,26. Any

program or mechanism used to limit the opened-end liability of Class Vi well Owners or

Operators must (1) properly reflect the important public benefit in having utilities

undertake the massive investments necessary to develop a commercial-scale CO2 CCS

program, and (2) remove the economic uncertainties associated with investing in such

large-scale programs.

USWAG urges EPA to place a priority on these issues and to actively pursue a

legislative solution if necessary to provide the Agency with the authority to limit postDC2DOCS i -#985086v7 31
injection site care liability and/or provide a mechanism to transfer the liability after a

certain period of time, as has been done under other statutory programs. While the

issue of open-ended liability need not be wholly resolved in this particular rulemaking,

USWAG respectfully suggests that this problem must be resolved before a successful

CO2 GS program can be implemented in this country.

14. Public Participation

USWAG agrees that public participation is crucial to the success of any individual

CO2 GS project and of the UIC Program as a whole. 'd. at 43523. We urge EPA to

structure the Final Rule's public participation requirements to maximize impact without

unnecessarily slowing down the application process. To this end, the Final Rule should

not require public participation too early in the permit process; USWAG believes that

public participation would prove most useful after an application has been deemed

complete but before it has been approved.

* * * * *

USWAG appreciates the opportunity to comment on this important rulemaking

initiative and looks forward to working with EPA on this effort.

DC2DOCS 1-#985086v7 32
Letter ID: 0173 

Commenter: James Rower 

Organization: Utility Solid Waste Activities Group (USWAG) 

Letter ID: 0173 Comment ID: 23459 Letter Lines: 101 to 107 

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

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment) 

Comment: • EPA must resolve key policy and legal uncertainties to alleviate financial 

concerns of potential Class VI well Owners or Operators and to encourage 

investment in the development and operation of Class VI CO2 injection wells. 

Issues that must be addressed include the interaction of the Resource 

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

Response, Compensation, and Liability Act ("CERCLA") with Class VI injection 

activities as well as long-term post-injection liability. 

Individual Response: EPA received many comments regarding the applicability of the RCRA 

regulations and statute to CO2 streams that are geologically sequestered under the final Class VI 

UIC well requirements. As a result, EPA has decided to initiate a separate proposed rulemaking 

specifically to examine the issue of RCRA applicability to CO2 streams being geologically 

sequestered, including the possible option of a conditional exemption from the RCRA 

requirements for CO2 GS in Class VI wells. EPA will consider these comments as part of its 

development of that proposal. The Agency will consider issues particular to RCRA in the context 

of that separate rulemaking, and recommends that the commenter read that proposed rule when it 

is published. The Agency notes that commenters who wish to submit comments on the RCRA 

proposal will need to do so during the comment period for that rule. Finally, EPA also notes that 

the final GS rule, which adds new regulations for Class VI wells under the Safe Drinking Water 

Act (SDWA), is not making any changes to the RCRA regulations. 

CO2 itself is not listed as a hazardous substance under CERCLA; however, the CO2 stream may 

contain a listed hazardous substance (such as mercury) or may mobilize substances in the 

subsurface that could react with ground water to produce listed hazardous substances (such as 

sulfuric acid). Whether such substances may result in CERCLA liability from a sequestration 

facility depends entirely on the composition of the specific CO2 stream and the environmental 

media in which it is stored (e.g., soil or ground water). CERCLA exempts from liability, under 

CERCLA section 107, 42 U.S.C. 9607, certain “federally permitted releases” (FPR) as defined in 

CERCLA, 42 U.S.C. 9601(10). Class VI permits will need to be carefully structured to ensure 

that they prevent potential releases from the well which are outside the scope of the Class VI 

permit. 

Letter ID: 0173 Comment ID: 23460 Letter Lines: 109 to 116 

Comment Code: 1210 1.1.1 Comments about the proposed rule 

Comment Code: 3140 2.1.4 Comments that the proposed geologic data requirements are too 

1
stringent 

Comment: • In many instances the proposed requirements for Class VI CO2 GS wells are 

unnecessarily more stringent than existing requirements for other well classes 

under the UIC Program. While it is essential that the Final Rule be protective 

of underground sources of drinking water ("USDWs"), many of the more rigorous 

requirements proposed for Class VI wells are not warranted by findings of unique 

risks posed by CO2 GS wells. The Final Rule should craft requirements that 

protect USDWs while avoiding the imposition of unnecessary costs or the creation 

of an unfounded negative public perception of CO2 GS projects. 

Individual Response: EPA disagrees that the requirements at §146.82 are too stringent and 

believes that a detailed geological site characterization is essential to evaluating the presence and 

adequacy of the various geologic features necessary to receive and confine injected CO2 for GS. 

The requirements for geologic site characterization are based on a long standing UIC regulatory 

framework developed to address specific risks to USDWs posed by injection. The Class VI GS 

requirements are tailored so that they are appropriate for the unique nature of injecting large 

volumes of CO2 into a variety of geological formations for long-term storage. 

The mission of the UIC program and the goal of the GS regulation is to protect USDWs from 

endangerment, and every aspect of the GS rule is designed toward that end. Therefore, EPA 

disagrees that any of these protective requirements are unnecessary, and clarifies that waiving 

any of the requirements would not be acceptable. The GS regulation allows flexibility where 

appropriate. Certain requirements (e.g., the need to characterize additional confining layers) are 

at the Director's discretion (§146.83(b)), based on his or her understanding of a particular site. 

EPA disagrees that the requirements would negatively affect public perception of CO2 GS 

projects. Rather, EPA believes that a demonstration to the public that extensive data have been 

collected and evaluated would likely improve confidence in the project and help address public 

questions and concerns. 

Letter ID: 0173 Comment ID: 23461 Letter Lines: 118 to 126 

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

Comment: • Because the technology described in the Proposal will not be commercially 

deployed for a number of years, the Final Rule must be flexible enough to 

accommodate developments in information and technology related to carbon 

sequestration. Similarly, because there is likely to be a significant amount of 

CO2 available for sequestration under the Program, the Final Rule should avoid 

arbitrary absolutes or blanket prohibitions regarding site selection or well 

construction or injection procedures. The Final Rule should keep available as 

many options as possible for site selection and method of injection, subject 

always to the standard that any CO2 GS be protective of USDWs. 

2
Individual Response: The Agency believes that the Class VI requirements balance site-specific 

flexibility with USDW protection. Rather than setting performance or technology-based 

standards for GS projects, EPA is adopting a flexible approach, where operators of GS projects 

would develop and implement site-specific plans for delineating the AoR, testing and monitoring 

the site, performing corrective action, and post-injection site care. EPA believes that the plans—

which would be reviewed and approved by the Director and periodically updated throughout the 

life of the project—promote an ongoing dialogue between the operator and the Director that will 

encourage use of the most appropriate technologies for a particular project. 

To address the comment that the rule should accommodate future technological developments 

related to GS, EPA adds that it is using an adaptive approach to regulating GS under the UIC 

Program. Even after finalization of the GS regulation, EPA plans, every six years, to collect and 

review project data on GS research projects to determine whether the appropriate amount and 

types of information and appropriate documentation are being collected, and to determine if 

modifications to the requirements are appropriate or necessary. 

Letter ID: 0173 Comment ID: 23462 Letter Lines: 128 to 132 

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

Comment: • Because carbon sequestration technology is still developing and the 

characteristics and limitations of CO2 GS projects will vary greatly from one 

site to another, it is essential to incorporate performance-based standards into 

the Final Rule, leading to a site-tailored approach to requirements for Area of 

Review ("AoR") reevaluation and post-injection site care and closure periods. 

Individual Response: The Agency believes that the Class VI requirements balance site-specific 

flexibility with USDW protection. Rather than setting performance or technology-based 

standards for GS projects, EPA is adopting a flexible approach, where operators of GS projects 

would develop and implement site-specific plans for delineating the AoR, testing and monitoring 

the site, performing corrective action, and post-injection site care. EPA believes that the plans—

which would be reviewed and approved by the Director and periodically updated throughout the 

life of the project—promote an ongoing dialogue between the operator and the Director that will 

encourage use of the most appropriate technologies for a particular project. 

EPA adds that it is using an adaptive approach to regulating GS under the UIC Program. Even 

after finalization of the GS regulation, EPA plans, every six years, to collect and review project 

data on GS research projects to determine whether the appropriate amount and types of 

information and appropriate documentation are being collected, and to determine if 

modifications to the requirements are appropriate or necessary. 

Letter ID: 0173 Comment ID: 23463 Letter Lines: 134 to 140 

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

3
Comment: • In discussing the potential applicability of RCRA's hazardous waste rules to 

Class VI CO2 injection activities, EPA prematurely assumes that the CO2 is being 

"discarded" and is a solid waste under RCRA. To the extent there is any 

possibility that CO2 injection operations could be subject to RCRA controls, EPA 

should exempt such activities from RCRA regulation under the well-established 

"contingent management" concept, particularly given that the UIC permit will 

ensure that the injected material is not mismanaged. 

Individual Response: EPA received many comments regarding the applicability of the RCRA 

regulations and statute to CO2 streams that are geologically sequestered under the final Class VI 

UIC well requirements. As a result, EPA has decided to initiate a separate proposed rulemaking 

specifically to examine the issue of RCRA applicability to CO2 streams being geologically 

sequestered, including the possible option of a conditional exemption from the RCRA 

requirements for CO2 GS in Class VI wells. EPA will consider these comments as part of its 

development of that proposal. The Agency will consider issues particular to RCRA in the context 

of that separate rulemaking, and recommends that the commenter read that proposed rule when it 

is published. The Agency notes that commenters who wish to submit comments on the RCRA 

proposal will need to do so during the comment period for that rule. Finally, EPA also notes that 

the final GS rule, which adds new regulations for Class VI wells under the Safe Drinking Water 

Act (SDWA), is not making any changes to the RCRA regulations. 

Letter ID: 0173 Comment ID: 23464 Letter Lines: 142 to 150 

Comment Code: 5434 2.9.1.2 Need for additional instruments (seeking comment) 

Comment: • In developing guidance identifying financial responsibility mechanisms 

available for post-injection care, EPA should retain the option of selfinsurance instruments including the corporate financial test. Self-insurance has 

worked successfully for over two decades under the RCRA program and there is no 

reason why this option should not also be available for Class VI UIC wells. EPA 

must also take steps to mitigate the specter of open-ended financial liability 

for CO2 injection operations after the cessation of the post-injection site care 

period. Such openend liability is one of the major impediments to the 

successful development of a commercial CO2 GS program. 

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 test can be an appropriate option 

for some owners or operators. EPA recognizes that it is important for self-insurers to be creditworthy, otherwise USDWs may not be adequately protected. Owner or operators who choose to 

self-insure and use the financial test must be able to demonstrate profitability, with a margin 

sufficient to cover contingencies and unknown obligations, and stability. 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 financial 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 may arrange a corporate guarantee by demonstrating that its corporate parent meets the 

financial requirements on its behalf. 

4
EPA is developing guidance that describes the types of financial instruments, including self 

insurance, which owners or operators can use to meet financial responsibility requirements for 

Class VI wells. The financial responsibility guidance will include considerations for Directors 

regarding how best to evaluate the appropriateness of a specific financial responsibility 

instrument for a specific project. EPA notes that directors may disallow certain instruments. This 

guidance will be available on EPA's website at 

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

Letter ID: 0173 Comment ID: 23465 Letter Lines: 152 to 156 

Comment Code: 3140 2.1.4 Comments that the proposed geologic data requirements are too 

stringent 

Comment Code: 3300 2.2.1 Delineating the AoR/Modeling CO2 movement 

Comment: • The Final Rule must not make the application process overly burdensome or 

unrealistic by requiring detailed information that may not be available at the 

time of the initial application; instead, the Final Rule should allow for 

submission of updated information regarding a CO2 GS well and its AoR as that 

information becomes available. 

Individual Response: EPA agrees that not all of the information listed at §146.82 of the 

proposed regulation will be available at the time the owner or operator develops their initial 

permit application. In response to comments and based on an evaluation of the proposed 

requirements at §146.82, the Agency revised this subpart so that the final regulation specifies 

separate requirements for information to be submitted with the permit application and before 

well construction is approved (at §146.82(a)) and information to be submitted before operation 

of the well is authorized (at §146.82(c)). 

EPA believes that this revision of §146.82 addresses commenters' concerns regarding the timing 

of information to be submitted. In addition, §146.82 in the final rule is similar to the permit 

application requirements for other injection well classes, which could help avoid confusion about 

how to meet the permitting requirements for Class VI wells. The requirements at §146.82(c) for 

information to be submitted before operation of the well is authorized are very similar to those 

for Class I wells, with modifications and additions that address the unique challenges and types 

of data collected for GS wells. 

Letter ID: 0173 Comment ID: 23466 Letter Lines: 158 to 163 

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

Comment: • Given the similarities between Class VI wells (as envisioned by the Proposal) 

and the existing requirements for those Class I and V wells permitted 

exclusively for CO2 injection, the Final Rule should allow grandfathering of 

5
construction and operating requirements for these existing wells seeking to 

become Class VI wells provided that it can be demonstrated that such carryingover of requirements will be protective of USDWs. 

Individual Response: EPA agrees that many Class I and Class V experimental technology wells 

are designed and constructed to withstand exposure to CO2. The final GS rule provides for the 

construction of these wells to be grandfathered per §146.81(c), provided the owner or operator 

can demonstrate to the Director that the wells were engineered and constructed to meet the 

requirements at §146.86(a) and ensure protection of USDWs, in lieu of requirements at 

§146.86(b) and §146.87(a). EPA clarifies that only the construction requirements are 

grandfathered and that all other Class VI requirements (reporting, monitoring, mechnical 

integrity testing, etc.) must be met following a determination under §146.81(c). 

Letter ID: 0173 Comment ID: 23467 Letter Lines: 165 to 166 

Comment Code: 1200 1.1 General comments about the rulemaking 

Comment: • While directorial discretion is a useful mechanism to ensure flexibility in 

the Final Rule, such discretion must be clearly defined and limited. 

Individual Response: To promote consistency while providing the Director with an appropriate 

level of discretion, EPA is developing guidances for States, Tribes, and Territories that describe 

the process of applying for and receiving primacy for GS Class VI wells under Section 1422 of 

SDWA. EPA is also developing guidance on the technical and administrative issues associated 

with developing GS regulations that are the equivalent of minimum federal criteria and 

requirements. This guidance will be available on EPA’s website at 

http://water.epa.gov/type/groundwater/uic/wells_sequestration.cfm. Please see the remainder of 

EPA's responses to this comment for further details. For additional information on EPA's final 

regulatory approach, please see the final rule and preamble as well as the rulemaking docket. 

Letter ID: 0173 Comment ID: 23468 Letter Lines: 168 to 172 

Comment Code: 5600 2.11 Comments related to UIC Program primacy for Class VI wells 

Comment: • Because state regulators have worked extensively with Owners or Operators of 

UIC Class V experimental CO2 wells and have familiarity with environmental, 

geologic, and financial concerns specific to a given region, state adoption and 

tailored implementation of the CO2 GS rules will be crucial to the success of 

the Program. 

Individual Response: EPA agrees with commenters on the importance of states having primacy 

for GS wells given the variety of geologic settings in which GS will be applied. EPA recognizes 

that State, Tribal, Territorial, and DI UIC Program Directors are in the best position to evaluate 

the unique issues related to well depth, geology, and hydrogeology that are posed by a Class VI 

well. Some degree of flexibility is needed for Class VI wells because each decision made will be 

6
site-specific and conditions will differ from state to state. The GS rule balances the need for 

these site-specific decisions with the need for minimum standards to ensure national consistency. 

The Agency believes that it is important for states to use their unique efficiencies to promote 

adoption of this burgeoning and important technology, while assuring that USDWs are protected 

from endangerment through the UIC regulatory framework. EPA encourages States to accept 

primacy for Class VI, and believes 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. 

However, given the potential for CCS (encompassing capture, transportation, and geologic 

sequestration) to be an important part of a national priority to address climate change, EPA 

believes that providing states the flexibility to obtain primacy for Class VI wells independently 

of other well classes can help foster effective management of CCS. EPA believes that allowing 

independent Class VI primacy may encourage states to take responsibility for implementation of 

Class VI regulations and provide for a more comprehensive approach to managing CCS projects 

by promoting the integration of GS activities under SDWA into a broader framework for 

managing CCS. The Agency will allow independent primacy for Class VI wells under §145.1(i) 

of the final GS rule. Furthermore, GS operations involve ancillary activities (e.g., pipeline 

operations, pore space ownership, land use rights, and surface access) for which states can call 

upon other authorities that exist at the state level (but outside UIC authority) to provide a more 

comprehensive CCS management approach. 

Letter ID: 0173 Comment ID: 23469 Letter Lines: 174 to 192 

Comment Code: 1300 1.1.2.3 Comments on other aspects of CCS (capture, transport) 

Comment: DISCUSSION 

1. Legal and Regulatory Challenges to Commercial-Scale CO2 GS 

It is important to recognize that the development of a viable, large-scale 

commercial CCS program requires resolution of technical, policy, and legal 

issues that are beyond the scope of this rulemaking. The General Accounting 

Office ("GAO") recently issued a report entitled "Climate Change - Federal 

Actions Will Greatly Affect the Viability of Carbon Capture and Storage As a Key 

Mitigation Option" which emphasizes that significant technological barriers 

involving CO2 capture technologies must be resolved before a successful CO2 CCS 

program of the scale envisioned by policymakers can be achieved. GAO-08-1080 at 

3-5 (September 2008) ("GAO Report"). The GAO Report also references a number of 

regulatory and legal uncertainties involving CO2 storage, leakage, and ownership 

issues, the resolution of which is critical to a successful CCS program. Id. 

Federal agencies must also work together to "examine how CO2 pipeline 

infrastructure might be regulated to accommodate commercial-scale CCS," as well 

as how "CO2 emissions reductions from CCS will be treated in a future emissions 

7
trading scheme." Id. at 4. 

Individual Response: EPA emphasizes that the UIC program’s authority under the SDWA is 

focused on ensuring that Class VI CO2 injection projects are permitted, sited, constructed, 

operated, monitored, and closed in a manner that protects USDWs from endangerment. The 

capture and transport of CO2 are not within the UIC program’s authority. 

Letter ID: 0173 Comment ID: 23470 Letter Lines: 194 to 196 

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

ownership 

Comment: In addition, the GAO report discusses the complex and still unresolved property 

rights issues involving CO2 injection on both federal and nonfederal lands. Id. 

at 42-23. Finally, GAO cites a National Academy of Sciences ("NAS") report 

Individual Response: EPA clarifies that pore space ownership and surface and subsurface 

property and mineral rights are outside of the scope of the Class VI GS rulemaking. Rather, the 

purpose of the Class VI GS rule is to ensure that where GS technologies are deployed, GS is 

performed in a manner that protects USDWs from endangerment. EPA clarifies that these issues 

are under the purview of states and any of these issues, as they relate to GS, will need to be 

addressed though state regulations. 

Letter ID: 0173 Comment ID: 23471 Letter Lines: 196 to 203 

Comment Code: 1680 1.3.8 Don't overstate risk, don't stigmatize CO2 

Comment: at 42-23. Finally, GAO cites a National Academy of Sciences ("NAS") report 

emphasizing that a large-scale CO2 UIC program cannot be successful "if a 

significant fraction of the public views it as dangerous or unacceptable," 

concluding that CO2 storage technologies must not only be safe and effective, 

they must be presented "to the public and the regulatory community in such a way 

as to instill confidence that they are in fact safe and effective." Id. at 49 

(quoting National Research Council, NAS, Prospective Evaluation of Applied 

Energy Research and Development at DOE (Phase Two) (2007)). 

Individual Response: EPA does not believe that the tailored requirements will create a negative 

public perception of GS. The Agency believes that a demonstration to the public that GS projects 

are meeting the GS rule's tailored requirements would likely improve confidence in the project 

and help address public questions and concerns. 

Letter ID: 0173 Comment ID: 23472 Letter Lines: 205 to 214 

Comment Code: 1200 1.1 General comments about the rulemaking 

8
Comment: With that being said, this rulemaking can resolve some important policy and 

legal issues and, in doing so, help foster the development of a practical, 

commercially deployable CCS regulatory program. For example, the Final Rule can 

provide much needed clarity regarding (1) the potential for liability under RCRA 

and CERCLA resulting from CO2 injection and GS activities, and (2) the options 

for addressing long-term liability for Class VI wells. GAO Report 

at 39-42. As discussed below, there are practical regulatory and legislative 

options available to resolve these uncertainties that will help assure the 

public and the regulated community that CO2 UIC activities can be conducted in a 

manner that is both safe and effective. 

Individual Response: Please see the remainder of EPA's responses to this comment for further 

details. For additional information on EPA's final regulatory approach, please see the final rule 

and preamble, including the discussions of RCRA/CERCLA and long-term liability, as well as 

the rulemaking docket. 

Letter ID: 0173 Comment ID: 23473 Letter Lines: 216 to 256 ; 944 to 947 

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

Comment Code: 2400 1.8 Comments on EPA's adaptive rulemaking process 

Comment: 2. Necessity of a Flexible Regulatory Scheme 

USWAG applauds the efforts EPA has taken thus far to instill certainty and 

transparency in the future Class VI CO2 regulatory regime. 73 Fed. Reg. at 

43496. At the same time, it is imperative that the Final Rule reflect the 

challenges inherent in crafting regulations for commercial CO2 injection 

activities when large-scale commercial operations are only at the nascent stage. 

The challenge confronting EPA in this rulemaking is to establish a costeffective and environmentally protective regulatory program to cover a range of 

operations for which the technology will not be commercially deployed for a 

number of years. 

To meet this challenge, it is critical that the Final Rule emphasize 

performance-based rules that can be readily adjusted and fine-tuned as industry 

and regulators alike gain experience with large-scale CO2 sequestration. USWAG 

acknowledges EPA's efforts to build flexibility mechanisms into the Proposal, 

including provisions for directorial discretion and the suggestion that 

forthcoming guidance may be used to clarify other requirements. In general, we 

agree that these methods will help create a regulatory framework that can evolve 

as information and technological advancements are gained in the field of carbon 

capture and sequestration. It is important, however, that any directorial 

discretion be clearly defined and limited; this can be achieved while still 

maintaining a rule that is flexible and avoids unnecessary prohibitions. In 

addition, guidance on any aspect of the Final Rule (for example, clarification 

9
of requirements for financial assurance mechanisms) must be developed in 

accordance with OMB's Good Guidance Practices Bulletin, which directs that 

notice and comment be provided on "economically significant" guidance 

documents.[FN2] See 72 Fed. Reg. 3432, 3438 (Jan. 25,2007). 

Because information and technology related to carbon sequestration will develop 

as industry and regulators gain experience with CCS, USWAG urges EPA to avoid 

blanket prohibitions or arbitrary absolutes in the Final Rule. We agree that the 

appropriate standard underlying the technical requirements for CO2 GS wells is 

the protection of USDWs. However, because it is difficult to know at this point 

what methods or technology will be developed for injection and long-term storage 

of CO2 in a manner that is protective of USDWs - and because there is sure to be 

demand for significant capacity for CO2GS - EPA should not prematurely preclude 

the use of specific types of sites or methods for Class VI CO2 injection. The 

Final Rule should leave the door open for a range of injection sites and methods 

(some of which are unknown or not yet fully understood), provided that the Owner 

or Operator can show that the injection and storage will be protective of USDWs. 

[FN2] The Bulletin defines "economically significant guidance document" as "a 

significant guidance document that 'may reasonably be anticipated to lead to' an 

annual effect on the economy of $100 million or more or adversely affect in a 

material way the economy or a sector of the economy." See 72 Fed. Reg. at 3435. 

Individual Response: EPA recognizes the importance of providing clear, flexible, scalable, and 

appropriate regulations. The final GS rule includes a balance of specific criteria to be met by the 

owner or operator and areas of Directorial discretion. The Agency believes this balance allows 

for GS projects to be designed and permitted to address the unique, site-specific aspects of each 

project, while providing consistency in permitting across the U.S. EPA is developing guidances 

for states that describe the process of applying for and receiving primary enforcement 

responsibility (primacy) for GS Class VI wells under Section 1422 of SDWA, as well as the 

technical and administrative issues on developing GS regulations that are the equivalent of 

minimum federal criteria and requirements. The guidance will provide recommended approaches 

for how permitting authorities may exercise Director's discretion. The guidance will be available 

on EPA's web site, at http://water.epa.gov/type/groundwater/uic/wells_sequestration.cfm. 

EPA also agrees that an adaptive approach to rulemaking for GS is appropriate. The Agency 

plans to use such an approach to ensure that USDWs are protected from endangerment and meet 

the potentially fast pace of GS deployment. EPA believes that an adaptive approach will allow 

regulatory development to proceed in time to meet the current and future demand for Class VI 

permits while recognizing the need to: continue to gather data from pilot projects and other 

research as it becomes available; and to enhance understanding of the technical and 

administrative aspects of GS deployment, operation, and technology developments. EPA plans, 

every six years, to collect and review data on GS projects to determine whether the appropriate 

amount and types of information and appropriate documentation are being collected, and to 

determine if modifications to the requirements are appropriate or necessary. 

10
EPA disagrees that the GS rulemaking needs to be based solely on large-volume projects. While 

studying the impact of injecting large volumes of CO2 is important, data on other aspects of 

GS—including the buoyancy and corrosivity of CO2 in the presence of water, the potential 

presence of impurities in captured CO2, and its mobility within subsurface formations—

informed the rulemaking. 

Letter ID: 0173 Comment ID: 23474 Letter Lines: 258 to 265 

Comment Code: 2020 1.5.1 Support Class VI designation 

Comment: 3. Classification and Regulation of CO2 GS Wells 

USWAG believes the creation of a new category of wells under the UIC Program for 

long-term storage of CO2 is appropriate. 73 Fed. Reg. at 43502. USWAG agrees 

with the Proposal's structure that would only apply the requirements for Class 

VI wells to those wells specifically permitted for purposes of geologic 

sequestration, while maintaining a distinct permitting classification (Class II) 

for the injection of CO2 for the purposes of enhanced oil and gas recovery. Id. 

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

address the unique nature of injecting large volumes of CO2 and to ensure that USDWs are 

protected from endangerment. EPA also agrees that the nature and risks of CO2 injection for 

long term storage is different from Class II CO2 injection for ER, and that tailored requirements 

for GS wells are appropriate and necessary to protect USDWs from endangerment. For this 

reason, the Agency tailored UIC requirements for Class VI wells that address the general risks 

deep injection may pose to USDWs and specifically address the unique nature of CO2 GS (i.e., 

very large volumes, very long time-periods, and reservoir pressure conditions). 

The final Class VI regulations require that any owner or operator injecting CO2 for the primary 

purpose of long term storage obtain a Class VI permit with some special consideration for the 

fact that they are transitioning from a well not originally designed to meet Class VI requirements. 

The Director has the authority to determine at what point a Class VI permit is required for those 

projects that are transitioning from the primary purpose of EOR to long term storage of CO2. 

The final regulation provides a set of technical factors for the Director to evaluate in making this 

determination, at §144.19. EPA believes that this approach provides sufficient protection of 

USDWs when there is an increased risk to USDWs as compared to traditional Class II operations 

while allowing for site-specific flexibility. For more information, please see the discussion on 

transition of Class II wells in the preamble to the final GS rule. 

Letter ID: 0173 Comment ID: 23475 Letter Lines: 267 to 281 

Comment Code: 5600 2.11 Comments related to UIC Program primacy for Class VI wells 

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

11
Comment: With respect to the integration of state programs, USWAG agrees that the Final 

Rule should create a delegable program and encourage the adoption and 

implementation of that program by states. Id. at 43497. Our members' experiences 

with Class V experimental CO2 wells underscore the benefits of regulation on a 

state level. State regulators have familiarity with local environmental, 

geologic, and financial concerns, and in many cases have pre-existing 

relationships with the regulated community that will facilitate implementation 

of a new and complex regulatory program. For these reasons, it is appropriate to 

allow states to obtain primacy for only Class VI wells if a particular state so 

chooses. Id. at 43523. Such class-specific primacy is consistent with the 

statutory authorization behind the UIC Program and EPA is correct in predicting 

that states obtaining primacy for Class VI wells - regardless of whether they 

have sought primacy for other well classes under the UIC program - may be more 

likely to develop a comprehensive regulatory program for all aspects of carbon 

capture and storage. Id.; see also 42 U.S.C. § 300h-1 (SDWA § 1422). 

Individual Response: EPA agrees 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 the final GS rule. In the past, EPA has not accepted UIC primacy applications 

for individual well classes under Section 1422 of SDWA. In other words, if a State wanted 

primacy for Class I wells, the State would also need to accept responsibility for Class III, IV, and 

V wells. This policy has been in place since the initiation of the UIC Program in the early 1980s 

and was intended to encourage states to take full responsibility for UIC programs, avoid 

duplication of efforts, and provide for administrative efficiencies. 

However, given the potential for CCS (encompassing capture, transportation, and geologic 

sequestration) to be an important part of a national priority to address climate change, EPA 

believes that providing states the flexibility to obtain primacy for Class VI wells independently 

of other well classes can help foster effective management of CCS. EPA believes that allowing 

independent Class VI primacy may encourage states to take responsibility for implementation of 

Class VI regulations and provide for a more comprehensive approach to managing CCS projects 

by promoting the integration of GS activities under SDWA into a broader framework for 

managing CCS. Furthermore, GS operations involve ancillary activities (e.g., pipeline 

operations, pore space ownership, land use rights, and surface access) for which states can call 

upon other authorities that exist at the state level (but outside UIC authority) to provide a more 

comprehensive CCS management approach. 

The Agency believes that it is important for States to use their unique efficiencies to promote 

adoption of this burgeoning and important technology, while assuring that USDWs are protected 

from endangerment through the UIC regulatory framework. EPA believes 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 longstanding policy of discouraging 

12
"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 Class under Section 1422. EPA will continue to 

discourage applications for partial primacy for all other well types under Section 1422. 

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

well classes provided they develop regulations that are at least as stringent as the minimum 

Federal requirements (e.g., permitting, inspection, operation, monitoring, and recordkeeping 

requirements) in the final GS rule. EPA believes that existing programs can adapt their expertise 

to the new requirements for Class VI wells and will be able to develop a primacy application for 

Class VI wells under section 1422 of SDWA to ensure that their GS programs integrate into 

national climate change priorities and protect USDWs from endangerment. 

EPA recognizes that some states have already begun legislative efforts that are wider in scope 

than the Federal GS rule and believes that allowing Class VI primacy (independent of other well 

classes) may encourage states to take responsibility for implementation of a more comprehensive 

approach to managing CCS projects (e.g., capture, transportation, and geologic sequestration). 

Letter ID: 0173 Comment ID: 23476 Letter Lines: 283 to 299 

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

ownership 

Comment: USWAG also urges EPA to issue more definitive direction in the Final Rule 

regarding the regulation of CO2 injection activities that cross state 

boundaries. This issue is mentioned in the Preamble to the Proposal but receives 

little attention. See 73 Fed. Reg. at 43497. Rather, EPA simply observes that 

"some injection activities may raise cross-state boundary issues that are beyond 

the scope of this rulemaking." Id. EPA should provide more direction regarding 

how such cross-state activities would be regulated, and specifically should make 

clear in the Final Rule that Owners or Operators of Class VI CO2 GS projects 

will seek a Class VI permit for that operation from the state in which the 

wellhead is located. In other words, a given state is the permitting body for 

any Class VI CO2 GS project with a wellhead in that state. EPA should direct 

states to consult and coordinate with other affected states (i.e., other states 

to which the underground portion of the well may extend and/or those to which 

there could be a subsurface release or migration of injected material) in 

determining how to avoid duplicative or dueling regulatory systems. USWAG urges 

EPA to play a leadership role and proactively address these issues by suggesting 

procedural guidelines for interstate regulation and cooperation. 

Individual Response: EPA acknowledges that CO2 plumes may cross state or even international 

boundaries and encourages cooperation and coordination among permitting authorities. The final 

Class VI GS rule, at §146.82(a)(2), requires the owner or operator to identify all State, Tribal, 

and territorial boundaries within the AoR. Based on this information, the Director must provide 

written notification to all States, Tribes, and Territories to inform them of the permit application 

13
and ensure that they are involved in any necessary processes; this new requirement was added to 

the final rule at §146.82(b). The Agency encourages transparency in the permitting process and 

anticipates that State-State/State-Tribal communication on Class VI GS permitting will facilitate 

information sharing and encourage safe, protective projects. 

EPA clarifies that the Class VI permit would be issued by the permitting authority in the state 

where the wellhead is located. 

Letter ID: 0173 Comment ID: 23477 Letter Lines: 301 to 316 

Comment Code: 2062 1.5.3.1 Grandfathering construction of Class I wells (seeking comment) 

Comment Code: 2066 1.5.3.3 Grandfathering construction of Class V wells (seeking comment) 

Comment: 4. Grandfathering Requirements for Class I and V UIC Wells 

Grandfathering is an extremely important issue to USWAG as a number of our 

members have invested substantial resources in developing and permitting 

nonhazardous Class I and V experimental CO2 injection wells to help demonstrate 

the viability of large-scale commercial deployment of CO2 sequestration. Federal 

and state governments are encouraging these efforts as their success is critical 

to the large-scale commercial deployment of CO2 sequestration. Therefore, Owners 

or Operators should be given the opportunity to operate these wells on a regular 

basis as Class VI wells once the wells have been shown to be safe and effective 

on an experimental basis. This will help encourage the substantial upfront 

investment necessary to get these wells permitted. USWAG therefore supports the 

Proposal's provision allowing for the grandfathering of construction 

requirements for existing Class I and V wells developed for the injection of CO2 

if and when Owners or Operators of those wells seek a Class VI permit for GS of 

CO2. Id. at 43502. 

Individual Response: EPA agrees that many Class I and Class V experimental technology wells 

are designed and constructed to withstand exposure to CO2. The final GS rule provides for the 

construction of these wells to be grandfathered per §146.81(c), provided the owner or operator 

can demonstrate to the Director that the wells were engineered and constructed to meet the 

requirements at §146.86(a) and ensure protection of USDWs, in lieu of requirements at 

§146.86(b) and §146.87(a). EPA clarifies that only the construction requirements are 

grandfathered and that all other Class VI requirements (reporting, monitoring, mechnical 

integrity testing, etc.) must be met following a determination under §146.81(c). 

Letter ID: 0173 Comment ID: 23478 Letter Lines: 318 to 345 

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

Comment: However, the Proposal's grandfathering provision does not go far enough. It is 

both necessary and appropriate to allow for grandfathering of requirements 

14
beyond those related to construction where this carrying-over of requirements 

can be done in a manner that is protective of USDWs. This is particularly true 

for the Class I and V wells developed solely for the injection of CO2. It has 

already been determined through the permitting process that the operation of 

these Class I and V wells is protective of USDWs. See 40 C.F.R. § 144 et seq. 

Having made this determination, there should be a regulatory presumption that 

conversion of these wells for the exact same activity albeit at a larger scale 

and for an extended period of time - under the Class VI program is also 

protective of USDWs, with the understanding that grandfathering will not be 

allowed if the Director demonstrates that conversion of these wells to Class VI 

would endanger USDWs. In other words, EPA should bear the burden of showing why 

continued operation of the CO2 injection activities under the Class VI program 

should not be allowed. 

To the extent that EPA can demonstrate that elements of the Class VI program not 

already incorporated into the pre-existing Class I or V permit are necessary to 

protect USDWs, Owners or Operators can be required to incorporate such elements 

into the Class VI permit. This approach would be preferable to a default 

wholesale application of the Class VI program requirements to Class I or V wells 

currently used for the same activity and already proven to be protective of 

USDWs. USWAG recommends that the Final Rule include a presumption that Class I 

and V CO2 injection wells be allowed to transition into Class VI wells based on 

existing conditions, while allowing the Director to incorporate additional 

elements into the Class VI permit if the Director can show that continued 

operation of the pre-existing well under the Class VI program would not be 

protective of USDWs. 

Individual Response: EPA disagrees that other requirements (e.g., MITs, siting, monitoring, 

operational, and AoR requirements) should also be grandfathered for Class V and I wells. 

Following re-permitting of the well as Class VI, many of the unique factors of GS sites (e.g., 

increased reservoir pressures associated with large volumes of stored CO2 and the corrosivity of 

CO2 in the presence of water) will result in an increased risk profile, warranting the specific 

requirements in the final GS rule. Therefore, following re-permitting as Class VI wells, these 

projects would be subject to the operational, MIT, monitoring, reporting, plugging, and postinjection site care and site closure requirements in the final GS rule. See the discussion of EPA's 

final regulatory approach in the preamble to the GS rule for additional detail on these 

requirements. 

Letter ID: 0173 Comment ID: 23479 Letter Lines: 347 to 367 

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

Comment: 5. Siting of CO2 GS Wells 

As a general matter, USWAG believes that EPA must consider the potential impact 

of CO2 GS projects on other pre-existing subsurface activities (e.g., natural 

15
gas storage operations). In particular, the Final Rule should ensure that final 

Class VI permits not inappropriately interfere with these other pre-existing 

subsurface interests and operations. 

With respect to the types of formations into which CO2 may be injected for GS 

under the UIC Program, it is counterproductive at this stage in the development 

of the CO2 GS regulatory regime to categorically preclude any potentially 

feasible injection formations as possible long-term storage sites. EPA 

recognizes that the commercial deployment of CO2 GS activities will result in 

the new production of large volumes of CO2 for which Owners or Operators will 

have to locate new and environmentally protective injection zones. In fact, the 

GAO Report anticipates a need to permit thousands, if not tens of thousands, of 

additional UIC wells to accommodate the increased volumes of CO2 expected to be 

captured in a large-scale CCS program. GAO Report at 40. Therefore, it makes 

sound policy sense for EPA to encourage the identification and utilization of as 

many injection zones as possible, with the prerequisite that injection at any 

site be protective of USDWs. 

Individual Response: EPA believes that the extensive requirements for geologic site 

characterization (at §146.82), AoR evaluation (§146.84), and testing of the well during drilling 

(§146.87) are appropriate to ensure that permitting authorities have the necessary information to 

evaluate whether a specific site will allow safe injection of CO2. EPA adds that submittal and 

review of monitoring data (as required at §146.90) and the AoR reevaluation process 

(§146.84(e)) will provide an opportunity for an ongoing review of the site and a dialogue 

between the Director and the owner or operator to ensure that the project is being operated in a 

manner that protects USDWs from endangerment. EPA believes that any natural gas storage 

operations would be found in site characterization as would any faults or fractures. 

The final rule does not preclude injection into any formations or types of injection sites provided 

that the wells meet the final GS rule requirements. The purpose of the GS regulation is to ensure 

that injection of CO2 for GS is conducted in a manner that is protective of USDWs. This 

includes appropriate site characterization and identification of geologic formations that are 

amenable to injection of potentially large volumes of CO2 for long-term storage. The regulation 

provides flexibility to owners or operators to select appropriate sites and target formations (under 

§146.82), well construction specifics (under §146.86), and injection procedures 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. 

Letter ID: 0173 Comment ID: 23480 Letter Lines: 369 to 372 

Comment Code: 2100 1.6 Target Geologic Formations for GS 

Comment: To achieve this result, the Final Rule should avoid absolute prohibitions on any 

category of injection site and instead keep all options open; injection should 

be allowed as long as it can be demonstrated that injection will be protective 

of USDWs and meet other applicable conditions for Class VI CO2GS wells. As a 

16
Individual Response: EPA clarifies that the GS rule does not categorically preclude injection of 

CO2 into any non-USDW formation types. The purpose of the GS rule is to ensure protection of 

USDWs from endangerment, and the rule requires that owners or operators demonstrate that 

wells are sited in suitable systems with geologic formations to receive and confine injected CO2, 

required at §146.83 of the GS rule. The Class VI siting, well construction and operation, 

monitoring and testing, and post-injection site care and site closure requirements are designed to 

ensure that injected CO2 remains within the target formation. If an owner or operator can 

demonstrate to the Director's satisfaction that GS in coal seams, basalts, salt domes, or shales can 

be accomplished in a manner that protects USDWs and meets all of the requirements of the GS 

rule, the project may be permitted as a Class VI well. 

Letter ID: 0173 Comment ID: 23481 Letter Lines: 372 to 378 

Comment Code: 2200 1.6.4 Other formation types 

Comment Code: 4410 2.4.4.3.1 Comments in favor of allowing injection above/between 

USDWs in certain circumstances 

Comment Code: 4430 2.4.4.3.3 Injection into coal seams above USDWs (seeking comment) 

Comment: of USDWs and meet other applicable conditions for Class VI CO2GS wells. As a 

result, USWAG believes that the Final Rule should not contain a blanket 

prohibition on injection of CO2 into coal seams (whether above or below the 

lowermost USDW) or into other formations such as basalts, salt domes, or shales. 

73 Fed. Reg. at 43503. If it can be demonstrated that the injection of CO2 into 

such sites is protective of USDWs, then such activities should remain available 

options under the Class VI UIC program. 

Individual Response: The final GS rule does not preclude injection into any non-USDW 

formation type provided owners or operators can demonstrate that GS can be performed in a 

manner that protects USDWs from endangerment as required under today’s rulemaking. The 

Agency acknowledges that GS into basalts, coal seams, salt domes, and shales will likely have 

limited application, or that owners or operators seeking Class VI permits for injection into these 

formations may not be able to meet the final GS requirements or demonstrate protection of 

USDWs. 

The purpose of the GS rule is to ensure protection of USDWs, and the rule includes requirements 

to ensure that the geologic formations are adequate to receive and confine injected CO2, at 

§146.83. The siting, well construction, operational, and other requirements in the GS rule are 

designed to ensure that injected CO2 remains within the target formation. 

EPA acknowledges that there may be risks associated with GS, particularly regarding GS into 

basalts, which have been the subject of limited experimental projects in the past. EPA anticipates 

that in the short-term, GS into basalts, coal seams, salt domes, and shales will continue to be 

experimental in nature (i.e., if they are to test GS technologies and collect data), and will likely 

be permitted as Class V experimental technology wells and be subject to UIC Program Guidance 

#83. EPA will continue to review data on early GS projects, including those in such formations, 

17
to determine whether the appropriate amount and types of information and documentation are 

required and being collected. EPA plans, every six years, to collect and review data on GS 

projects to determine whether the appropriate amount and types of information and appropriate 

documentation are being collected, and to determine if modifications to the requirements are 

appropriate or necessary. 

EPA clarifies that the final rule requires that injection for GS be into non-USDWs below the 

lowermost USDW; however, owners or operators may apply for a waiver from this requirement, 

as described in §146.95. For more information, see the discussion of waivers in the preamble to 

the final rule. 

Letter ID: 0173 Comment ID: 23482 Letter Lines: 380 to 399 

Comment Code: 3120 2.1.2 Need to identify additional confining and containment zones 

(seeking comment) 

Comment: On a related subject, EPA requests comment on whether the Final Rule should 

require, or allow the Director to require at his discretion, the identification 

and characterization of additional confining and containment zones above the 

primary (i.e., lowermost) confining zone that could further impede vertical 

fluid movement and allow for pressure dissipation - in effect, a "secondary 

containment" requirement. Id. at 43505-06. As a general matter, USWAG opposes 

the inclusion of a secondary containment requirement, even at the Director's 

discretion, and believes that it will only be in the most unusual situations 

where circumstances warrant the requirement of this additional layer of 

protection. 

In developing this regulatory program, EPA must ensure that CO2 GS is protective 

of USDWs while simultaneously taking care not to unduly burden the permitting 

process or discourage the development of environmentally protective Class VI 

wells. While it is of course true that additional containment zones above the 

confining zone could impede vertical fluid movement, there is no basis for 

requiring these additional zones if it has already been demonstrated that the 

original confining zone is protective of USDWs. A redundant requirement that is 

frequently unnecessary will eliminate otherwise valid injection zones from the 

universe of potential Class VI injection sites. 

Individual Response: EPA retains the requirement to identify additional containment/confining 

zones, if required by the Director, as proposed (§146.83(b)). EPA acknowledges that such 

additional zones may not be needed in all circumstances, and clarifies that this requirement is at 

the Director's discretion, based on his or her understanding of a particular site. EPA believes that, 

in some situations, the presence of additional confining and containment zones above the 

primary (i.e., lowermost) confining zone can improve USDW protection. These layers could 

further impede vertical fluid movement and allow for pressure dissipation, and also provide 

additional sites for monitoring, mitigation, and remediation. The Agency's decision is supported 

by commenters representing states, water associations, and an electric utility who assert that 

18
these requirements promote a flexible, risk-based, site-specific approach to characterizing and 

permitting a site for GS projects, and are intended to improve understanding of the project as a 

whole and promote better modeling of the site. 

Letter ID: 0173 Comment ID: 23483 Letter Lines: 401 to 483 

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

Comment: 6. Interaction with RCRA 

The Agency seeks comment on the proposal to preclude the injection of hazardous 

waste into Class VI injection wells. Id. at 43503. USWAG takes issue with the 

underlying premise behind EPA's discussion regarding the potential applicability 

of the RCRA hazardous waste regulations to CO2 GS. Id. The fundamental error in 

EPA's request for comment on this point is its premature assumption that CO2 is 

being discarded and therefore is a solid waste. A material cannot be a RCRA 

hazardous waste if it is not first a "solid waste." See 40 C.F.R. § 261.2. Under 

the statutory definition of "solid waste," a material cannot be a "solid waste" 

unless it has first been "discarded." 42 U.S.C. § 6903 (RCRA § 3001). 

While there have been numerous judicial decisions addressing what constitutes 

"discard," the fundamental holding from these cases is simple and 

straightforward: Congress intended to extend EPA's authority to regulate "solid 

waste" under RCRA "only to materials that are truly discarded, disposed of, 

thrown away, or abandoned" American Mining Congress v. EPA, 824 F.2d 1177, 1190 

(D.C. Cir. 1987) (emphasis added). The D.C. Circuit has emphasized that the 

"plain meaning" of the term "solid waste" extends only to materials that are 

"discarded" and that the term "discard" should be interpreted with reference to 

its ordinary meaning. Ass'n of Battery Recyclers, Inc. v. EPA, 208 F.3d 1047, 

1051-52 (D.C. Cir. 2000). 

CO2 is a valuable commodity used in a variety of manufacturing operations, 

including in the enhanced oil recovery ("EOR") and enhanced gas recovery ("EGR") 

production process. When used in these commercial applications, CO2 is not 

"discarded" and therefore is not a solid waste. While large volumes of CO2 will 

be produced under the CCS programs contemplated by the UIC Class VI Proposal, it 

is premature for EPA to presume that these additional volumes of CO2 will not 

retain commercial value and that their sequestration in Class VI wells 

automatically means that they have been "discarded" as that term has been 

defined under RCRA. As we have already cautioned, the Agency should refrain from 

making categorical assumptions associated with this still-emerging technology, 

including with respect to the status of captured CO2 destined for GS. 

Assuming, for purposes of argument, that CO2 is "discarded" and exhibits a 

hazardous waste characteristic when injected for long-term sequestration, there 

are compelling policy reasons to exclude such activities from RCRA regulation. 

19
Facilities that have obtained a RCRA "permit by rule" for the operation of a 

Class I UIC hazardous waste injection well are potentially subject to the full 

scope of RCRA's corrective action program for all solid waste management units 

("SWMUs") located at the facility, including units that are in no way related to 

the CO2 injection operations. See 40 C.F.R. §§ 270.1 (c)(1 )(i) and 270.64; see 

also EPA RCRA/Superfund Hotline Monthly Summary, "Corrective Action for UIC 

Wells," 9502.1986(07) (April 1986). The potential for RCRA applicability on such 

a broad scale is a significant economic and practical obstacle for any facility 

considering whether to seek a permit for a new Class VI well, as facility-wide 

RCRA corrective action is an administratively complex and exceedingly expensive 

undertaking. 

The imposition of this obstacle is unwarranted because any well receiving a 

permit under the UIC Program for CO2 GS will be, by definition, protective of 

USDWs. EPA's RCRA program has established a legally sound process, referred to 

as "contingent management," for the exclusion of materials from hazardous waste 

regulation when such materials are already subject to an alternate regulatory 

regime that ensures the wastes are managed in an environmentally protective 

manner. As discussed below, where the potential for mismanagement of a waste is 

already adequately addressed by another regulatory regime - as would be the case 

with the injection of CO2 under the Class VI UIC program - regulation of such 

materials under the RCRA's hazardous waste program is duplicative and 

unwarranted. EPA has successfully employed the contingent management concept in 

various contexts where the Agency determined that other regulatory regimes 

adequately addressed any potential mismanagement scenarios related to certain 

materials; examples include regulation of used oil, mixed radioactive/hazardous 

waste, and military munitions. 

The Court of Appeals for the District of Columbia Circuit has reviewed EPA's 

legal theory underlying the contingent management concept and found it to be a 

"permissible construction of the statute," based on the idea that the statutory 

definition of "hazardous waste" is predicated upon the risks posed by a solid 

waste when "improperly" managed. Military Toxics Project v. EPA, 146 F.3d 948, 

958 (D.C. Cir 1998) (emphasis added). Therefore, "where a waste might pose a 

hazard only under limited management scenarios, and other regulatory programs 

already address such scenarios, EPA is not required to classify a waste as 

hazardous waste subject to regulation under [RCRA] Subtitle C." Id. 

Even if such operations were deemed subject to RCRA regulation, including a RCRA 

permit by rule, EPA could - and should - establish a conditional exclusion from 

RCRA regulation for CO2 GS operations. Such an exclusion would be legally 

justified, consistent with the Agency's past promulgation of conditional 

exclusion rules, and would make sound policy sense by removing a potentially 

significant regulatory barrier to the commercial development of CO2 GS 

operations. 

20
Individual Response: EPA clarifies that the GS rule does not address the status of CO2 as a 

pollutant or a commodity. Under the SDWA and the UIC program, EPA regulates the injection 

of a range of fluids, which may include pollutants and commodities, regardless of how they are 

characterized, for the purpose of protecting USDWs. 

EPA received many comments regarding the applicability of the RCRA regulations and statute to 

CO2 streams that are geologically sequestered under the final Class VI UIC well requirements. 

As a result, EPA has decided to initiate a separate proposed rulemaking specifically to examine 

the issue of RCRA applicability to CO2 streams being geologically sequestered, including the 

possible option of a conditional exemption from the RCRA requirements for CO2 GS in Class 

VI wells. EPA will consider these comments as part of its development of that proposal. The 

Agency will consider issues particular to RCRA in the context of that separate rulemaking, and 

recommends that the commenter read that proposed rule when it is published. The Agency notes 

that commenters who wish to submit comments on the RCRA proposal will need to do so during 

the comment period for that rule. Finally, EPA also notes that the final GS rule, which adds new 

regulations for Class VI wells under the Safe Drinking Water Act (SDWA), is not making any 

changes to the RCRA regulations. 

Letter ID: 0173 Comment ID: 23484 Letter Lines: 485 to 540 ; 949 to 952 

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment) 

Comment: 7. Interaction with CERCLA 

An important issue on which EPA seeks comment is the interaction of CERCLA with 

the CO2 GS regulatory program. While EPA acknowledges that "CO2 itself is not 

listed as a hazardous substance under CERCLA," the Agency raises the possibility 

of potential liability under CERCLA, including liability for natural resource 

damages, if the CO2 stream contains other CERCLA hazardous constituents (e.g., 

mercury), or if other hazardous constituents are formed when the injected 

CO2 stream reacts with groundwater.[FN3] 73 Fed. Reg. at 43504. The potential for 

open-ended CERCLA liability for any contamination resulting from CO2 GS 

activities will act as a serious deterrent to would-be Owners or Operators of 

Class VI wells and could jeopardize the contemplated wide-spread commercial 

deployment of CO2 GS operations. 

EPA correctly acknowledges that CERCLA's "federally permitted release" exemption 

will provide CERCLA protection from those releases that fall within the scope of 

a Class VI permit (e.g., contained within the AoR), but the Agency also 

recognizes the limitations of this exemption, as it does not offer protection 

for any release of a hazardous substance that is beyond the scope of the Class 

VI permit (e.g., outside the AoR). Indeed, EPA states that any permits will have 

to "be carefully structured to ensure that they do not 'authorize' inappropriate 

hazardous releases," including "potential releases from the well which are 

outside the scope of the Class VI permit." Id. 

21
USWAG appreciates that the contamination issue is extremely important. At the 

same time, the potential for open-ended CERCLA liability will impede the ability 

of Owners or Operators to calculate and demonstrate financial responsibility, 

obtain financial assurance, and acquire the initial capital necessary to invest 

in this important technology. The specter of CERCLA liability will serve as a 

significant barrier to the commercial development of CO2 GS -unnecessarily so, 

given EPA's ample civil and criminal enforcement authority under the SDWA for 

violations of UIC permits (see SDWA § 1423(b), 42 U.S.C. § 300h-2(b) 

(authorizing the imposition of $32,500 per day civil penalties and/or criminal 

penalties and imprisonment)). EPA must mitigate the threat of potential CERCLA 

liability to the extent possible in this rulemaking. 

One step that the Agency can take is to ensure that final Class VI permits for 

individual CO2GS projects have the broadest possible reach while remaining 

protective of USDWs in order to maximize the protection offered by the federally 

permitted release exemption. This would mean including in the scope of the 

permit for CO2 injection all other CERCLA hazardous constituents likely to be 

contained in the CO2 stream, including those generated during capture and 

transport as well as any that could be formed in the injection zone as a result 

of the injection of CO2. Similarly, the scope of the authorized "permit zone" 

should be as broad as possible while remaining protective of USDWs. This could 

mean, for example, effectively authorizing the migration of constituents 

contained in the CO2 stream (or resulting from injection) outside the scope of 

the AoR, provided that such migration does not directly impact a USDW. 

We understand that EPA's authority in this rulemaking is limited by the SDWA. 

However, given the importance of this issue from a public policy perspective, we 

urge EPA to take whatever regulatory measures are available to mitigate the 

chilling effect that the potential for such open-ended liability could have on 

CO2 GS operations, and then consider whether a legislative solution is necessary 

to eliminate this concern. If so, we recommend that EPA strongly support such a 

solution. 

[FN3] In the Preamble to the Proposal, EPA suggests that sulfuric acid is one 

such hazardous substance that could be formed when the injected CO2 stream 

reacts with groundwater; it is extremely unlikely that sulfuric acid would be 

produced as a result of the injectate reacting with groundwater. 

Individual Response: The Agency thanks the commenter for their comments regarding the 

scope and possible impacts of CERCLA liability on CCS activities, and in particular comments 

related to the CERCLA exemption for federally-permitted releases. As the commenter points out, 

the GS rule is not promulgated under CERCLA; therefore, the applicability of that statute will 

not be determined under the SDWA or the terms of the GS rule, but rather according to the 

CERCLA statute itself and any implementing regulations that may apply. To the extent the 

commenter is seeking interpretations of CERCLA and its related provisions, such as the 

22
definition of a federally permitted release, such interpretations are beyond the scope of this 

rulemaking. 

Letter ID: 0173 Comment ID: 23485 Letter Lines: 542 to 553 

Comment Code: 3320 2.2.1.2 Comments opposed to requiring computational models to 

delineate the AoR 

Comment Code: 3350 2.2.1.5 Use of proprietary models for GS sites (seeking comment) 

Comment: 8. Modeling 

As most models now are proprietary, USWAG supports the use of proprietary models 

for use with CO2 GS sites. As EPA recognizes, many popular proprietary codes in 

the petroleum-reservoir engineering discipline have been used in peer-reviewed 

studies to model CO2 sequestration. 73 Fed. Reg. at 43507. These and other 

proprietary models should be available for use in modeling for Class VI CO2 GS 

wells, provided that they are based on accepted science and have been validated, 

and as long as the Owners or Operators using proprietary models disclose, as 

necessary, the code assumptions, relevant equations, and scientific basis of 

each model. USWAG believes that the use of computational fluid flow models for 

delineating the AoR of GS sites is acceptable but should not be required. Id. 

Individual Response: EPA agrees that some of the available proprietary models may meet the 

needs for calculating the AoRs of GS sites and will allow their use for GS projects. EPA 

acknowledges that several proprietary models have been used by petroleum-reservoir 

engineering professionals as well as in peer-reviewed studies to model CO2 sequestration. EPA 

plans to allow their use in meeting the requirements for the GS regulation, but clarifies that GS 

well operators using proprietary models are required to disclose, to the Director's satisfaction, the 

code assumptions, relevant equations, and scientific basis. EPA adds that its Confidential 

Business Information requirements at 40 CFR 144.5 will apply to the use of proprietary models. 

EPA clarifies that the final rule will require the use of computational models. EPA believes that 

the unique aspects of GS merit the use of sophisticated computational modeling for delineation 

of the AoR, based on site-specific features and geology, including the presence of faults, 

fractures, and artificial penetrations. EPA believes that computational modeling of the AoR prior 

to injection will provide the best obtainable estimates of the extent of the CO2 plume over 

several years of active injection. 

Letter ID: 0173 Comment ID: 23486 Letter Lines: 555 to 571 

Comment Code: 3530 2.2.3.1 AoR reevaluation frequency (seeking comment) 

Comment: 9. Area of Review and Corrective Action 

23
USWAG appreciates the importance and complexity of proper AoR evaluation. See 

id. The Proposal would require Owners or Operators to invest a significant 

amount of time and resources in the initial delineation of the AoR. Provided 

that the Program's requirements are satisfied in the initial determination of 

the AoR, USWAG believes that a requirement for AoR reevaluations every ten years 

or at any other fixed period is unnecessary; this will result in the arbitrary 

imposition of costs that may be wholly unwarranted. A more appropriate approach 

would be performance-based, with reevaluation required upon occurrence of some 

triggering event. One example of a triggering event could be a significant 

deviation from previously modeled scenarios, provided that the level of 

deviation that would require reevaluation is clearly defined by the regulating 

agency. As with many other decisions related to implementation of the Class VI 

CO2 GS program, determinations such as these are best made on a local level by 

regulators having the most familiarity with the characteristics and constraints 

of a given geologic setting for a CO2 GS project. 

Individual Response: EPA disagrees that the requirement at §146.84(e) for a periodic AoR 

reevaluation is arbitrary. EPA proposed the ten-year frequency based on input from stakeholders 

and experts at the technical workshops on "Geological Considerations and AoR Studies" and 

"Modeling and Reservoir Simulation for Geologic Carbon Storage." EPA also requested 

comment on the ten-year frequency. In the preamble to the proposed rule, EPA identified 

benefits to periodically reevaluating the AoR, including allowing refinement to the AoR 

delineation based on real-world conditions and monitoring results, increasing confidence in the 

modeled predictions, and targeting monitoring in those areas subject to the greatest potential risk. 

Based on the comments received (including those by water associations, an energy company, 

associations, industries, states, and environmental groups), EPA has changed the minimum 

frequency for the AoR reevaluation from 10 years to at least every 5 years. EPA believes that 

this revised frequency addresses commenters' concerns about the inherent uncertainties in 

modeling CO2 movement, the emerging nature of GS technology, risk-based targeting of 

monitoring activities, and the unique nature of CO2 GS. 

EPA adds that the GS rule at §146.84(e) requires the AoR reevaluation, along with the iterative 

process of developing and executing the various plans required of GS well operators (e.g., for 

AoR and corrective action, testing and monitoring, injection well plugging, post-injection site 

care, and emergency and remedial response) instead of period permit renewals (e.g., of 10 years 

for Class I wells). EPA believes the iterative process and subsequent reevaluations of the AoR 

and corrective action, testing and monitoring, and emergency and remedial response plans are 

preferable to a periodic permit reapplication and review of the entire permit because they focus 

time and resources to the most critical aspects of the permit. Additionally, AoRs reevaluated 

after at least every 5 years of injection will provide data on GS projects to inform EPA's adaptive 

rulemaking approach. 

Letter ID: 0173 Comment ID: 23487 Letter Lines: 573 to 580 

24
Comment Code: 1220 1.1.1.1 Terminology and definitions 

Comment Code: 3200 2.2 Proposed Area of Review and Corrective Action Requirements (40 

CFR 146.84) 

Comment: Corrective action - As a threshold matter, USWAG believes that the terminology 

used in the Proposal is problematic; use of the phrase "corrective action" to 

describe well plugging and repair risks confusion with the concept of corrective 

action under either RCRA or CERCLA. As the GAO Report cautions, public 

perception is critical to the development of a commercially viable CO2 GS 

program. GAO Report at 49. To avoid any unintended and unwarranted negative 

associations with the phrase "corrective action," USWAG suggests the Final Rule 

abandon this phrase and instead use a phrase such as "well plugging and repair." 

Individual Response: EPA notes that the term "corrective action" at 146.84(d) has been used to 

describe the process of addressing improperly plugged wells in the AoR of injection wells since 

the inception of the UIC Program, e.g., at 146.7 and 146.64. While EPA is aware that the term 

has a different meaning under RCRA and CERCLA, this has not caused confusion in the past. 

The alternative term, "well plugging," suggested by the commenter is reserved for injection well 

plugging (as indicated at 146.92). 

Letter ID: 0173 Comment ID: 23488 Letter Lines: 582 to 605 

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

Comment: Most importantly, USWAG supports a phased approach to corrective action (well 

plugging and repair) for CO2 GS wells as contemplated in the Proposal. 73 Fed. 

Reg. at 43507-08. However, a phased approach to well plugging and repair for CO2 

GS wells should be available to all Owners or Operators of CO2 GS wells rather 

than be available only at the discretion of the Director. Id. at 43508 (proposal 

"would give the Director the discretion to allow owners or operators to perform 

corrective action on an iterative, phased basis... "); see also id. at 43536-37 

(including proposed § 146.84(b), which would require Owners or Operators of 

Class VI wells to, inter alia, "perform corrective action that meets the 

requirements of this section and is acceptable to the Director"). 

As EPA recognizes, the AoR for CO2 GS sites may be extensive; requiring well 

plugging and repair to be complete for all wells in a CO2 GS AoR prior to 

commencement of the injection project would be overly burdensome, unnecessary, 

and unrealistic. This is particularly true given that the AoR may be shown, 

through periodic AoR reevaluations, to have expanded or shifted, identifying new 

wells for plugging and repair. USWAG supports an approach that would require the 

Owner or Operator of a Class VI well to perform pre-injection well plugging and 

repair on only those wells within the portion of the AoR that would be 

intersected by the CO2 plume or pressure front during the initial years of 

injection. Well plugging and repair for the rest of the AoR should be allowed to 

take place as the injection project progresses, ensuring that, eventually, "all 

25
wells in the AoR that need corrective action [well plugging and repair] 

eventually receive it." 73 Fed. Reg. at 43508. 

Individual Response: EPA acknowledges the commenter’s support of phased corrective action 

and agrees that phased corrective action may provide many benefits to a project including, but 

not limited to, spreading the burden of cost, avoiding delays in project start-up, allowing for use 

of future, improved corrective action techniques and addressing unanticipated changes in the 

movement of the CO2 plume or pressure front. EPA believes that the phased corrective action 

approach is appropriate for GS projects, and retained it at §146.84(b)(2)(iv) in the final GS 

regulation. EPA clarifies that, if monitoring or modeling data indicate a change in the AoR (i.e., 

an expansion or shift), the owner or operator would need to review and amend the AoR and 

corrective action plan and follow the amended plan. 

EPA does not agree that a phased approach to corrective action should be available to all owners 

or operators because phased corrective may not be appropriate at all GS sites. EPA believes that, 

given the wide range of conditions at GS sites, the Director is in the best position to make 

decisions about the appropriateness of phased corrective action based on his or her knowledge of 

the local geologic and site conditions. EPA is developing guidances for states that help to 

describe the technical and administrative issues a state may need to consider when developing 

GS regulations that are the equivalent of minimum federal criteria and requirements; this 

guidance will provided recommended approaches for Directors to exercise discretion. The 

guidances will be available on EPA's web site, at 

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

Letter ID: 0173 Comment ID: 23489 Letter Lines: 607 to 620 

Comment Code: 3400 2.2.2 Corrective Action 

Comment: On a related topic, USWAG would like to ensure that the obligation of Class VI 

Owners or Operators to plug or repair a pre-existing well within the AoR will 

not be viewed as excusing prior well owners or operators from fulfilling their 

own pre-existing legal obligations under applicable federal or state law to have 

properly closed the well in the first instance. Well plugging and repair 

obligations imposed on Class VI Owners or Operators should not supersede any 

pre-existing legal obligations that have yet to be fulfilled by previous owners 

or operators. To prevent this from occurring, the Final Rule should make clear 

that, in those circumstances where pre-existing wells in an AoR have not been 

properly closed and are now subject to well plugging and repair under a Class VI 

UIC permit, EPA and/or the applicable state regulatory agency should first look 

to see whether the responsible party for such closure is still available to 

properly close the well as legally required before imposing such obligations on 

the Owner or Operator of the Class VI UIC permit. 

Individual Response: EPA clarifies that the purpose of the requirement to perform corrective 

action at §146.84(d) is to ensure that all wells in the AoR that have the potential to cause 

26
movement of CO2 or other fluids into or between USDWs receive appropriate corrective action. 

All needed corrective action must be performed by the GS well owner or operator as described in 

the approved AoR and corrective action plan, regardless of ownership of the wells in the AoR. 

Failure to do so would either preclude authorization to inject or, in the case of phased corrective 

action, be considered a violation of the permit and subject to applicable civil, criminal, or 

administrative penalties. EPA clarifies that UIC program authority is limited to the proper 

operation and plugging of injection wells, and that it does not have authority to require plugging 

of other types of wells. 

Letter ID: 0173 Comment ID: 23490 Letter Lines: 622 to 634 

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

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

comment) 

Comment: It also is important to clarify in the Final Rule that well plugging is only 

necessary and appropriate for those wells that are potential conduits of 

contamination to USDWs. USWAG raises this point because EPA suggests that the 

Final Rule may give the Director discretion to require Owners or Operators to 

conduct surface air monitoring and/or soil gas monitoring in the AoR. Id. at 

43516. Such a requirement would be appropriate only to the extent that this 

monitoring would be done with the goal of identifying potential endangerment of 

USDWs as a result of CO2 injection and sequestration activities. Id. To the 

extent that such monitoring would be required simply to guard against potential 

atmospheric releases or to trigger a corrective action requirement to terminate 

such atmospheric releases, it would be outside of the scope of EPA's authority 

under this rulemaking. See id. at 43498 ("preventing releases of CO2 to the 

atmosphere is not within the scope of this proposal"). 

Individual Response: EPA believes that surface air and soil gas monitoring are within the scope 

of the SDWA in that they can provide additional data to pinpoint the location and magnitude (or 

absence) of leaks that could endanger USDWs. Used in conjunction with deep subsurface 

monitoring, as required at §146.90, and as part of a multi-barrier approach to protecting USDWs 

from endangerment, surface air and soil gas monitoring are within the scope of SDWA’s general 

authority (SDWA sections 1421 et al.). 

EPA clarifies that use of surface air and soil gas monitoring as specified in the final GS rule at 

§146.90(h), as a means of identifying leaks that may pose a risk to USDWs and informing 

emergency notification of a Class VI owner or operator and UIC Director in the event of a 

USDW endangerment, pursuant to requirements at §146.91(c), is at the Director's discretion. 

Regarding corrective action for wells in the AoR, EPA clarifies that the rule, at §146.84(d), 

requires owners or operators to perform corrective action on all deficient wells in the AoR. This 

requirement is independent of the testing and monitoring requirements at §146.90. 

27
Letter ID: 0173 Comment ID: 23491 Letter Lines: 636 to 644 

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

Comment: Proposed requirements for well drilling, construction, and other characteristics 

With respect to many of the proposed requirements, USWAG believes it is 

imperative to craft the Final Rule as a flexible instrument that establishes 

performance-based standards, which can be achieved through a variety of methods 

as long as there is a sound technical basis underlying each method and assuring 

its protection of USDWs. See id. at 43508-09. Because this technology is years 

from commercial deployment and is still developing, the Final Rule should allow 

for the use of technologies and methods that are not yet developed or are only 

in the beginning stages, provided that they are shown to be protective of USDWs. 

Individual Response: The Agency believes that the Class VI requirements balance site-specific 

flexibility with USDW protection. Rather than setting performance or technology-based 

standards for GS projects, EPA is adopting a flexible approach, where operators of GS projects 

would develop and implement site-specific plans for delineating the AoR, testing and monitoring 

the site, performing corrective action, and post-injection site care. EPA believes that the plans—

which would be reviewed and approved by the Director and periodically updated throughout the 

life of the project—promote an ongoing dialogue between the operator and the Director that will 

encourage use of the most appropriate technologies for a particular project. 

To address the comment that the rule should accommodate future technological developments 

related to GS, EPA adds that it is using an adaptive approach to regulating GS under the UIC 

Program. Even after finalization of the GS regulation, EPA plans, every six years, to collect and 

review project data on GS research projects to determine whether the appropriate amount and 

types of information and appropriate documentation are being collected, and to determine if 

modifications to the requirements are appropriate or necessary. 

Letter ID: 0173 Comment ID: 23492 Letter Lines: 645 to 650 

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

Comment Code: 3840 2.3.2 Horizontal well drilling techniques (seeking comment) 

Comment: This logic also applies to argue against a prohibition on any type of well 

drilling, whether horizontal, vertical, or angled. Id. at 43509. There will 

likely be a need to maximize capacity for CO2 GS, and it would be premature at 

this point to impose a blanket prohibition on any type of well drilling without 

knowing whether that drilling could be done in a manner that is protective of 

USDWs. 

Individual Response: In the final rule, EPA allows the use of horizontal wells at GS projects. In 

the proposed rule, EPA sought comment on the appropriateness of horizontal drilling techniques 

for Class VI wells, and commenters representing energy companies, electric utilities, the oil and 

28
gas industry, CCS associations, states, and the public, unanimously supported the concept and 

provided many reasons why horizontal wells could be beneficial at GS sites. Based on an 

evaluation of these comments and additional research by EPA, the Agency has concluded that 

horizontal wells that are properly constructed, logged, and tested for mechanical integrity (i.e., to 

meet the requirements of the GS rule) can ensure the protection of USDWs from endangerment. 

Letter ID: 0173 Comment ID: 23493 Letter Lines: 652 to 659 

Comment Code: 4200 2.4.2 Down-hole shut-off valves in GS wells (seeking comment) 

Comment: 10. Proposed Injection Well Operating Requirements 

USWAG reiterates that in order to accommodate developing technology and varied 

geological settings, the Final Rule must be flexible and avoid overly burdensome 

or prescriptive measures that do little to further the protection of USDWs. For 

example, a requirement for down-hole shut-off valves would force Owners or 

Operators to incur great costs, particularly if those valves malfunction, with 

minimal benefit. Id. at 43511. 

Individual Response: After evaluating the risks and benefits of down-hole shut-off systems and 

considering additional research, EPA will not require automatic down-hole shut-off devices for 

onshore Class VI wells since it is not necessary in all cases to ensure protection of USDWs from 

endangerment. Instead, the final rule, at §146.88(e)(2), requires that owners or operators of 

onshore Class VI wells install automatic surface shut-off devices. The rule affords Director's 

discretion to mandate automatic down-hole shut-off devices in onshore situations that may 

warrant their use. However, the Agency believes that offshore Class VI wells present unique 

construction and operational conditions, including isolation from shorelines and the need to 

construct wells through the water column and the subsurface, which may delay response time in 

the event of well difficulties. The rule requires, at §146.88(e)(3), that owners or operators of 

offshore wells within State territorial waters install automatic down-hole shut-off systems. EPA 

believes that these requirements at §146.88(e) ensure that proper precautions are taken to prevent 

subsurface fluid movement and ensure protection of USDWs. 

EPA clarifies that down-hole shut-off devices are currently used in situations where loss of well 

integrity could result in damage to the well or harm to humans (e.g., near high-density population 

areas, or in onshore acid gas injection; IEA, 2003). EPA has identified examples of documented 

logging techniques, including ultrasonic and temperature logs, that can be performed with an 

automatic down-hole device emplaced (Julian et al., 2007; Somaschini et al., 2009). They are 

also used in high pressure, high temperature onshore wells and in permafrost areas. 

Letter ID: 0173 Comment ID: 23494 Letter Lines: 661 to 673 

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

USDW 

29
Comment: Additional injection sites - As discussed above, it is likely that there will be 

great demand for wells in which to inject CO2 for GS, with the potential need 

for tens of thousands of additional sites. Accordingly, the goal of the Program 

should be to provide as much capacity as possible for CO2 GS while still 

ensuring that USDWs are not jeopardized. USWAG supports alternative approaches 

that would allow injection between and/or above the lowermost USDW, increasing 

capacity for CO2 GS, as long as Owners or Operators of Class VI wells can show 

that their CO2 GS operations will be protective of USDWs. Id. at 43512. This 

will be particularly important in areas of the country with deep USDWs, where an 

absolute requirement that Class VI wells be constructed beneath the lowermost 

USDW could render the program impractical. Id. USWAG also supports this 

alternative approach in areas where the Owner or Operator can show that geologic 

conditions would prevent fluid movement into adjacent USDWs. Id. For similar 

Individual Response: EPA acknowledges that there are limited circumstances where injection 

above the lowermost USDW can be performed 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 owners or operators can seek a waiver of the Class VI injection 

depth requirements for injection into non-USDW formations above and/or between USDWs. 

EPA believes that these requirements will ensure USDW protection while providing flexibility to 

UIC program Directors and owners or operators who undertake CO2 injection for GS. The 

Agency believes this approach: 1) responds to concerns about local and regional geologic storage 

capacity limitations imposed by the proposed injection depth requirements; 2) allows for a more 

site-specific assessment of injection depth for GS projects; 3) accommodates injection into 

different formation types; 4) allows 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 aquifer exemptions for GS. Finally, 

EPA’s approach to addressing injection depth variability through a waiver process responds to 

concerns about future drinking water resource availability and the need to ensure that high 

quality water remains available in sufficient quantities to supply drinking water needs. 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: 0173 Comment ID: 23495 Letter Lines: 673 to 676 

Comment Code: 4460 2.4.4.4.1 Comments in favor of allowing aquifer exemptions in certain 

circumstances 

Comment: conditions would prevent fluid movement into adjacent USDWs. Id. For similar 

reasons, USWAG opposes an absolute prohibition on use of exempt aquifers for 

Class VI injection; use of exempt aquifers should be permitted where the 

specific aquifer exemption criteria are satisfied. Id. 

Individual Response: EPA acknowledges that there are limited circumstances where aquifer 

exemptions for GS may be warranted. The final rule allows for the expansion of the areal extent 

30
of existing aquifer exemptions for Class II EOR/EGR wells transitioning to Class VI injection 

for GS pursuant to requirements at §§146.4 and 144.7(d). Class VI owners or operators granted 

expansions of existing Class II EOR/EGR aquifer exemptions for GS projects must meet all of 

the tailored requirements for GS wells in the final GS rule. 

However, the final rule precludes the issuance of new aquifer exemptions for Class VI GS wells; 

that is, aquifer exemptions will only be granted for projects that are transitioning from Class II 

EOR/EGR wells to Class VI. 

The Agency clarifies that the aquifer exemption requirements and the injection depth waiver 

requirements serve different purposes. Class VI owners or operators granted expansions of 

existing Class II EOR/EGR aquifer exemptions for GS projects must meet all of the tailored 

requirements for GS wells in the final GS rule, including the requirements at §146.83 for site 

criteria. EPA believes that, in most cases, the injection depth waiver is a more appropriate option 

than aquifer exemptions for Class VI injection, and believes that aquifer exemption expansions 

for GS should be granted in limited circumstances. 

EPA clarifies that all decisions regarding whether expansion of existing aquifer exemptions will 

be at the Director's discretion and based on site-specific information. If an owner or operator 

applies for a Class VI permit to inject CO2 into a previously exempted aquifer (non-USDW) that 

is located above and/or between USDWs, the permit applicant must also apply for a waiver of 

the injection depth requirements pursuant to §146.95 to ensure that if a waiver is granted, 

USDWs above and below the injection zone are protected from endangerment. 

This approach is designed to ensure that the differences between traditional Class II EOR/EGR 

operations and Class VI operations are considered during the aquifer exemption application 

process and the Class VI permitting process. These differences include the anticipated large CO2 

injection volumes associated with GS, the buoyant and mobile nature of the injectate, and its 

corrosivity in the presence of water. The Agency believes that this process will encourage 

owners or operators and Directors to consider the use of alternative formations for GS, including 

non-USDW formations through the waiver process, prior to applying for or approving aquifer 

exemption expansions for Class II EOR/EGR wells transitioning to Class VI GS operations. 

For additional information on aquifer exemptions for Class VI wells, please see the final rule and 

preamble, as well as EPA's responses to comments on the Notice of Data Availability and 

Request for Comment. 

Letter ID: 0173 Comment ID: 23496 Letter Lines: 678 to 692 

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

Comment: Hydraulic fracturing - While hydraulic fracturing is not appropriate in all 

geologic settings, it should be an available option, subject to approval of the 

Director. See id. at 43511. For years, EOR operations have employed hydraulic 

fracturing to enlarge fractures in rock; hydraulic fracturing has proven an 

effective way to create permeability and increase well capacity with minimal 

31
risk to USDWs. Because this technique has been used safely for many years, there 

are regulatory protocols in place that could be adopted to ensure safe and 

effective hydraulic fracturing where appropriate for Class VI CO2 GS operations. 

When used where appropriate, hydraulic fracturing increases the capacity of 

existing wells, thereby requiring fewer cap rock penetrations and fewer wells 

overall. Again, USWAG shares EPA's underlying goal of protecting USDWs, and 

recognizes that hydraulic fracturing may not meet this standard in some 

situations; we ask only that the opportunity remain for use of hydraulic 

fracturing at the Director's discretion and only when the Owner or Operator can 

demonstrate that such fracturing will not jeopardize USDWs. 

Individual Response: The final rule allows the use of hydraulic fracturing for purposes of Class 

VI injection, where approved by the Director. Hydraulic fracturing is one of several stimulation 

technologies available to improve wellbore and formation injectivity. 

EPA clarifies that all stimulation, including hydraulic fracturing, must be approved by the 

Director and that §146.88(a) permits injection pressure to exceed 90 percent of the fracture 

pressure only during well stimulation. Owners or operators must submit a proposed stimulation 

program as part of the permit application under §146.82(a)(9); the plan must demonstrate that 

any stimulation activities will not compromise the integrity of the confining zone. The Director 

will evaluate the owner or operator's proposed stimulation plan in the context of all information 

about the site, and the owner or operator must perform stimulation only as approved. EPA 

clarifies that UIC regulations prohibit fracturing of the confining zone at any time during 

injection or stimulation. 

Letter ID: 0173 Comment ID: 23497 Letter Lines: 694 to 701 

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

(seeking comment) 

Comment: Tracers - The use of tracers should not be required for CO2 GS operations, even 

if only at the discretion of the Director. EPA correctly notes that many 

drawbacks can accompany the use of tracers, including the possibility of false 

positives, the release of PFCs to the atmosphere, and uncertainty regarding 

cost-effectiveness. Id. at 43512-13. These negative aspects argue against 

allowing the Director to exercise discretion to require the use of tracers. If 

anything, the use of tracers should only be an option available at the 

discretion of Owners or Operators, subject to the approval by the Director. 

Individual Response: EPA agrees that the use of tracers may not be appropriate for all GS sites, 

but should be available as an option. For this reason, EPA does not require the use of tracers at 

all GS sites; however, the Director has discretion to require their use if he/she determines that the 

use of tracers could improve monitoring of the site and enhance USDW protection from 

endangerment. The rule will also allow their use if proposed by the owner or operator and 

approved by the Director. 

32
Letter ID: 0173 Comment ID: 23498 Letter Lines: 703 to 710 

Comment Code: 4600 2.6 Proposed Plume and Pressure Front Monitoring Requirements (40 

CFR 146.90) 

Comment: Plume and pressure front monitoring - USWAG appreciates the importance of 

accurate monitoring of the subsurface extent of the plume and pressure front. 

Id. at 43514. We believe, however, that over time constant monitoring may prove 

unnecessary as more information is gained regarding the accuracy of initial 

modeling. Any requirements for plume and pressure front modeling in the Final 

Rule should be flexible enough to adjust in the coming years as industry and 

regulators become more knowledgeable regarding the reliability of the modeling 

techniques initially used. 

Individual Response: EPA agrees that flexibility is appropriate, and clarifies that the specific 

plume and pressure front monitoring requirements will be established in the monitoring and 

testing plan submitted by the owner or operator along with the permit application. EPA believes 

that the monitoring requirements for GS sites at §146.90 provide an appropriate level of 

flexibility in structuring a testing and monitoring plan that protects USDWs from endangerment. 

In addition, EPA is using an adaptive approach to regulating GS. EPA will collect and review 

project data on early GS projects to determine whether the appropriate amount and types of 

information and appropriate documentation are required and being collected. The Agency will 

evaluate the information and determine if modifications to the requirements are necessary. 

EPA believes that this approach provides flexibility to develop a site-specific monitoring plan, 

ensures that direct monitoring is available to track movement of the CO2 and validate models, 

and recognizes that indirect techniques are not appropriate in all situations. The owner or 

operator's approved testing and monitoring plan will include the site-specific details, 

technologies, testing and monitoring frequencies, and other pertinent information. 

Pressure monitoring in the injection zone is necessary to track the development and movement of 

the pressure front and CO2 plume. When combined with information on temperature, pressure 

data provide an indication of the phase (e.g., gas, supercritical) and distribution of the injected 

CO2 (73 FR 43515). Monitoring can also identify needed remedial actions, provide inputs for 

AoR reevaluation modeling, evaluate predictions of plume movement, and target additional 

geochemical and surface monitoring needs. 

Letter ID: 0173 Comment ID: 23499 Letter Lines: 712 to 723 

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

comment) 

Comment: With respect to the Proposal's suggestion for surface monitoring requirements, 

USWAG believes that such requirements will come at significant cost with little 

33
benefit. While surface monitoring may reveal CO2 migration, these data will be 

of limited use since, by that point, CO2 has already been released to the 

surface. Moreover, data from surface air and soil gas monitoring are complicated 

by a number of factors, including natural and anthropogenic impacts from fires, 

development, and population growth. Rather than spending significant resources 

on gathering data that are of limited reliability and of little practical use in 

preventing surface releases, the Final Rule should direct that these resources 

will be put towards detection of subsurface CO2 movement. This would prove a far 

more effective use of monitoring resources as it would enable Owners or 

Operators to correct any problems before CO2 reaches the surface. 

Individual Response: EPA acknowledges that air and soil gas monitoring are subject to 

variability and may not be suitable in all settings as a method to ensure USDW protection. 

However, the Agency believes that surface air and soil gas monitoring, when coupled with 

subsurface monitoring, may be appropriate at some GS projects 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 information on its 

location and magnitude to assist owners and operators in identifying what USDWs may have 

been impacted by a leak. EPA clarifies that the various air and soil gas monitoring methods (e.g., 

chambers, eddy covariance, hyperspectral imaging) all have different capabilities that may prove 

useful in specific GS projects (Miles et al., 2005; Pickles and Cover, 2005; IPCC, 2005; Menzies 

et al., 2001). The occurrence of false positives will be reduced by comparing monitoring data to 

baseline data collected prior to injection or from a nearby area away from the GS project. 

Letter ID: 0173 Comment ID: 23500 Letter Lines: 725 to 741 

Comment Code: 4710 2.7.1 Proposed submissions required for permit applications (seeking 

comment) 

Comment: 11. Permit Application and Reporting Requirements 

The Proposal would impose a number of requirements on Class VI permit 

applications that are not currently required under the existing UIC regulations, 

most notably the mandatory inclusion of a monitoring and testing plan, an AoR 

and corrective action plan, and a post-injection site care and site closure 

plan. Id. at 43517. For many of these requirements, there do not appear to be 

concrete risks particular to CO2 GS that would warrant these additional 

measures. 

USWAG is particularly concerned that the level of detail that would be required 

for Class VI permit applications is overly burdensome and unnecessary. A great 

deal of this information may be unavailable - or could be speculative at best - 

because of a lack of information at the early stages in the application process; 

an ongoing requirement for submission of this information over time, as it 

becomes available through drilling and operation of the well, would be of 

greater practical use and would lead to collection of more accurate data. 

34
Individual Response: EPA believes that the unique characteristics of CO2 injection (e.g., its 

relative buoyancy, the large volume that may be injected, or the potential for chemical 

interaction with the subsurface) warrant the additional information required to be submitted by 

GS operators under §146.82. All of the tailored requirements of the GS rule are necessary to 

protect USDWs from endangerment; therefore Directors must have all site-specific data listed 

under §146.82 to make well-informed decisions when establishing permit conditions and 

granting permits. 

In response to concerns that some data will not be available until the well has been drilled, EPA 

acknowledges that not all of the information listed at §146.82 of the proposed regulation would 

be available at the time the owner or operator develops the permit application. Based on 

comments and evaluation of the proposed requirements, EPA revised this subpart so that the 

final regulation specifies separate requirements for information to be submitted for approval with 

the permit application before well construction, as required at §146.82(a), and information to be 

submitted after the well is constructed yet before injection is authorized, as required at 

§146.82(c). 

Letter ID: 0173 Comment ID: 23501 Letter Lines: 743 to 762 

Comment Code: 3140 2.1.4 Comments that the proposed geologic data requirements are too 

stringent 

Comment: For example, some requirements for information related to geologic structure and 

hydrogeologic properties of the proposed storage site and overlying formations 

may be unavailable until drilling commences, including "data on the depth, areal 

extent, thickness, mineralogy, porosity, permeability and capillary pressure ... 

geologic cores, outcrop data, seismic surveys, ... and lithologic descriptions" 

of the injection and confining zones (proposed § 146.82(d)(4)) and 

"geomechanical information on fractures, stress, ductility, rock strength, and 

in situ fluid pressures within the confining zone" (proposed § 146.82(d)(5)). 73 

Fed. Reg. at 43536. While some of this information may be available during the 

permit application process, other details will be unavailable prior to drilling. 

To require detailed information that may either be unreliable, because it is 

based on unrealistic or unfounded predictions, or may simply be unavailable 

could delay the permitting process and have an overall chilling effect on CO2 GS 

projects. EPA should craft these requirements with flexibility and require in 

the initial permit application only that information which is necessary to 

determine whether issuance of a Class VI permit is appropriate. Submission of 

additional information as it becomes available - whether through well drilling, 

construction, operation, reevaluation, or corrective action - will allow for 

more reliable data that will in turn ensure greater protection of USDWs. 

Individual Response: EPA agrees that not all of the information listed at §146.82 of the 

proposed regulation will be available at the time the owner or operator develops their initial 

35
permit application. In response to comments and based on an evaluation of the proposed 

requirements at §146.82, the Agency revised this subpart so that the final regulation specifies 

separate requirements for information to be submitted with the permit application and before 

well construction is approved (at §146.82(a)) and information to be submitted before operation 

of the well is authorized (at §146.82(c)). 

EPA believes that this revision of §146.82 addresses commenters' concerns regarding the timing 

of information to be submitted. In addition, section §146.82 in the final rule is similar to the 

permit application requirements for other injection well classes, which could help avoid 

confusion about how to meet the permitting requirements for Class VI wells. The requirements at 

§146.82(c) for information to be submitted before operation of the well is authorized are very 

similar to those for Class I wells, with modifications and additions that address the unique 

challenges and types of data collected for GS wells. 

Letter ID: 0173 Comment ID: 23502 Letter Lines: 764 to 778 

Comment Code: 4740 2.7.4 Electronic reporting (seeking comment) 

Comment: Reporting - USWAG agrees that electronic reporting should be an option available 

to all states for data exchange related to Class VI wells, but believes that the 

Director should have the discretion to allow other modes of reporting. Id. at 

43517-18. We appreciate the important steps EPA has taken, including the 

awarding of grants, to ensure that all states will have the capability to 

exchange data electronically. Id. USWAG also realizes the benefits of electronic 

reporting, particularly in terms of facilitating the application process and 

streamlining review of CO2 GS projects. However, while it is likely that all 

states will eventually have the general capability to report electronically, 

some may not have that capacity yet. Additionally, it is foreseeable that 

extraordinary circumstances may arise that would preclude access to or limit 

availability of electronic resources. Accordingly, any requirement contained in 

the Final Rule for electronic reporting should not be absolute but should 

instead allow the Director to approve other methods of reporting when he deems 

such methods more appropriate. 

Individual Response: EPA believes that electronic formatting is the most appropriate format for 

submitting Class VI project information to the Director, and based on comments received on the 

proposed rule, the majority of Class VI well owners or operators will have the capability to 

report electronically, and requires this at §146.91(e). 

EPA is developing guidance for states that describes the recordkeeping, reporting, and additional 

data management needs associated with GS activities and provides recommended guidelines on 

the types of data to be collected for tracking GS projects, reporting to EPA for compliance 

tracking, and transfer of data to EPA's GS data system. The recordkeeping and reporting 

guidance will be available on EPA's web site, at 

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

36
Letter ID: 0173 Comment ID: 23503 Letter Lines: 780 to 790 

Comment Code: 4750 2.7.5 Comments on the merit of annual reports (seeking comment) 

Comment: With respect to the Proposal's suggestion of an annual reporting requirement for 

CO2 GS projects, USWAG appreciates the importance of the information EPA seeks 

to gather but believes that annual reporting will not always be the best way to 

collect this information over the lifetime of the project. Id. at 43518. The 

Final Rule will require some form of periodic reevaluation of the AoR throughout 

the life of the project; much of the information sought through the proposed 

annual reporting requirement would be gathered and submitted to EPA through the 

AoR reevaluation process. Gathering this information through the AoR 

reevaluations alone, rather than imposing an unnecessary and duplicative annual 

reporting requirement, will provide a more cost-effective and manageable method 

of information exchange for regulators and Owners or Operators alike. 

Individual Response: The final GS regulation retains the reporting requirements as proposed, 

which does not include a requirement for an annual report. Instead, EPA believes that periodic 

reevaluation of the AoR, as required at §146.84(e), along with any revisions to the required plans 

that may be necessary based on the AoR reevaluation, will promote an ongoing relationship 

between the permitting authority and the owner or operator. The final GS rule, at §§146.84(c), 

146.90(j), and 146.94(d), requires owners or operators to review and update the AoR and 

corrective action plan, the testing and monitoring plan, and the emergency and remedial response 

plan throughout the life of the project. Owners or operators must review each plan and identify 

necessary amendments to the plan or demonstrate to the Director that no amendment is needed. 

These reviews must be performed within one year of an AoR reevaluation, following any 

significant changes to the facility (e.g., the addition of monitoring or injection wells), or when 

required by the Director. In no case can reviews occur less often than once every five years. For 

additional information, please see the final rule and the preamble for a discussion of EPA's final 

approach to recordkeeping and reporting. 

EPA also encourages and expects owners and operators to share monitoring and operating data 

with the public voluntarily (e.g., through the Internet), however. Providing the public with 

information throughout the GS project will help clear up and avoid public misperceptions about 

the nature and safety of GS. 

The Agency plans to, every six years, evaluate the information and determine if modifications to 

the requirements are appropriate or necessary to ensure protection of USDWs from 

endangerment. 

Letter ID: 0173 Comment ID: 23504 Letter Lines: 792 to 821 

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

Comment: 12. Well Plugging and Post-Injection Site Care 

37
USWAG believes that the Proposal's suggested fifty-year default fixed timeframe 

for the post-injection site care period is arbitrary and will serve to 

discourage Owners or Operators of CO2 GS sites from seeking to develop 

innovative ways to safely close wells in a shorter time period. Id. at 43519. 

EPA acknowledges that it is likely "that the actual time for CO2 plume 

stabilization ... will be very site specific, being influenced by geologic 

factors such as formation permeability, geochemistry, and the degree of 

capillary trapping." Id. (emphasis added). In fact, EPA observes that the 

studies used for their preliminary analysis suggest that the length of time 

required before plume stabilization ranges from ten to one hundred years after 

cessation of injection - quite a significant range. Id. 

While a ten-year site closure period may be insufficient in some cases, it is 

clear that there is no single time period that would apply to every CO2 GS site 

across the board. Because of the greatly varied characteristics and needs of 

different CO2 GS projects, application of a performance-based standard which is 

highly site-specific, rather than any default time period, is the most 

appropriate approach to the postinjection site care requirements. While the 

Proposal would give the Director discretion to decrease or increase the postinjection site care and closure period, the inclusion of a fifty-year default 

timeframe is likely to discourage Owners or Operators from working to develop 

technology that would facilitate safe and quick site closure; the fifty-year 

default may even have a chilling effect on the Program as a whole, discouraging 

would-be Owners or Operators from undertaking a CO2 GS project that could impose 

requirements decades into the future even when unnecessary. In contrast, by 

tailoring requirements to a given site, a performance-based standard would 

encourage the development of methods and technology that would achieve long-term 

protection of USDWs with well closure after a shorter period of time. 

Individual Response: EPA agrees with commenters that there will be circumstances where it 

can be demonstrated in less than 50 years that the plume and pressure front no longer pose a risk 

of endangerment to USDWs. For this reason, the final GS regulation offers owners or operators 

flexibility regarding the duration of the PISC timeframe by: (1) allowing the Director discretion 

to shorten or lengthen the PISC timeframe during the post-injection period based on site-specific 

data, pursuant to requirements at §146.93(b); or (2) affording the Director discretion to allow a 

Class VI well owner or operator to demonstrate, during the permitting process based on 

substantial data, that an alternative PISC timeframe may be appropriate if it ensures nonendangerment of USDWs pursuant to requirements at §146.93(c). 

EPA believes however, that to ensure USDW protection from endangerment, 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 protective monitoring period based on a review of 

research studies, industry reports, and existing environmental programs, and evaluation of public 

comments. 

EPA believes that a default post-injection site care timeframe of 50 years, with flexibility to 

adjust the timeframe for a limited number of GS projects during the permitting process where 

38
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 accommodate site-specific circumstances and various 

geologic conditions, and addresses commenters’ concerns, while ensuring USDW protection. 

Both approaches will utilize site-specific data, and be based on pressure monitoring and USDW 

impacts. 

EPA adds that the purpose of the GS rule is not to incentivize the use of GS; rather, the purpose 

of the GS rule is to ensure that, where GS is deployed, it is conducted in a manner that protects 

USDWs from endangerment. 

Letter ID: 0173 Comment ID: 23505 Letter Lines: 823 to 831 

Comment Code: 5400 2.9 Proposed Financial Responsibility and Long-Term Care 

Requirements 

Comment: 13. Financial Responsibility 

The GAO report correctly identifies stakeholders' concerns with the 

uncertainties regarding the type of financial instruments that will be 

acceptable to meet the Final Rule's financial responsibility requirements, as 

well as concerns related to the openended nature of post-injection site care 

liability. GAO Report at 39-40. As the GAO report suggests, further clarity and 

certainty with respect to these issues is critical to remove these barriers to 

the commercial development of CO2 GS wells. 

Individual Response: EPA acknowledges the commenter's need for additional certainty on the 

financial responsibility requirements for GS projects. EPA has specified reasonable financial 

responsibility instruments and requirements in the final GS regulation at §146.85. Additionally, 

EPA is developing guidance (available on EPA's website at 

http://water.epa.gov/type/groundwater/uic/wells_sequestration.cfm) that describes the types of 

financial instruments that owners or operators can use to meet financial responsibility 

requirements for GS wells. EPA has taken the concerns expressed by commenters on the 

proposed regulation, including the acceptability of various financial instruments and the 

timeframe for PISC, into consideration as it develops the financial responsibility guidance. 

EPA acknowledges the commenter's concern about financing PISC activities. EPA anticipates 

that the availability of third-party GS financial instruments will grow in response to demand for 

such financial instruments by GS well owners or operators as deployment of GS technology 

increases in the future. In addition, EPA plans to allow owners or operators to choose from a 

variety of financial instruments to meet their financial responsibility needs, thereby allowing 

owners or operators to select instruments they find easiest to obtain. See the final rule and 

preamble for further discussion of EPA's final approach to post-injection site care. 

Letter ID: 0173 Comment ID: 23506 Letter Lines: 833 to 848 

39
Comment Code: 5434 2.9.1.2 Need for additional instruments (seeking comment) 

Comment: Financial instruments - With respect to financial responsibility mechanisms, 

USWAG is not opposed to EPA's future issuance of guidance describing acceptable 

mechanisms provided that the guidance is issued in accordance with OMB's Good 

Guidance Practices Bulletin, including an opportunity for public notice and 

comment before issuance of any final guidance. 73 Fed. Reg. at 43520-22. In this 

regard, it is of paramount importance that self-insurance instruments - 

including the corporate financial test - remain available to Owners or Operators 

as a method of financial assurance for Class VI CO2 GS projects. Id. at 43521. 

In referencing the assessment by the Environmental Finance Advisory Board 

("EFAB") of various financial responsibility instruments, including selfinsurance instruments, EPA recognizes that EFAB's assessment was not based on 

any failures of the corporate financial test. Id. Self-insurance instruments, 

including the corporate financial test and the corporate guarantee, have been 

utilized successfully under the RCRA program for over two decades and these 

instruments should be included in the final menu of options for meeting 

financial responsibility obligations under the Final Rule. 

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 test can be an appropriate option 

for some owners or operators. EPA recognizes that it is important for self-insurers to be creditworthy, otherwise USDWs may not be adequately protected. Owner or operators who choose to 

self-insure and use the financial test must be able to demonstrate profitability, with a margin 

sufficient to cover contingencies and unknown obligations, and stability. 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 financial 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 may arrange a corporate guarantee by demonstrating that its corporate parent meets the 

financial requirements on its behalf. 

Owners or operators may choose from a variety of financial instruments to meet their financial 

responsibility obligations under the rule, provided the Director determines that the operator's 

proposed financial responsibility demonstration is adequate to protect USDWs from 

endangerment, which means the ability of the owner or operator to pay for each activity for 

which financial responsibility must be demonstrated, including corrective action on wells in the 

AoR, injection well plugging, PISC and site closure, and emergency and remedial response 

throughout the life of the project. The final GS rule specifies at §146.85(a)(1) the permitted types 

of financial responsibility instruments. See the final rule and preamble for further discussion of 

EPA's final approach to financial responsibility. 

EPA is developing guidance that describes the types of financial instruments, including self 

insurance, which owners or operators can use to meet financial responsibility requirements for 

Class VI wells. The financial responsibility guidance will include considerations for Directors 

regarding how to evaluate the appropriateness of a specific financial responsibility instrument for 

a specific project. This guidance will be available on EPA's website at 

40
http://water.epa.gov/type/groundwater/uic/wells_sequestration.cfm. 

EPA plans to take OMB's Good Guidance Manual into consideration as financial responsibility 

guidance is developed. OMB's Good Guidance Manual establishes policies and procedures for 

the development, issuance, and use of significant guidance documents by Executive Branch 

departments and agencies. 

Letter ID: 0173 Comment ID: 23507 Letter Lines: 850 to 855 

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

CFR 146.85) 

Comment: USWAG does not agree with the Preamble's suggestion that the cost of 

selfinsurance should be based on the cost of retaining an independent third 

party to conduct covered activities including well plugging. Id. In many cases, 

utilities are sophisticated, integrated companies and will be able to do the 

same work in a more cost-effective method that is just as technically sound and 

protective of USDWs, if not more so, than an approach taken by a third party. 

Individual Response: The GS rule, at §146.85(c), requires the owner or operator to have a 

detailed written estimate, in current dollars, of the cost of: performing corrective action on wells 

in the AoR, plugging the injection well(s), PISC and site closure, and emergency and remedial 

response. A cost estimate must be prepared separately for each of these activities and be based 

on the costs to the owner or operator of hiring a third party (who is neither a parent nor a 

subsidiary of the owner or operator) to perform the activities. The cost estimate is prepared in the 

same manner regardless of whether self-insurance or a third-party instrument is used because if 

at any point a self-insured owner or operator no longer meets corporate financial test criteria the 

cost estimate will be used to inform the required value of a third party instrument. 

EPA will retain the use of self-insurance as an instrument for financial responsibility for Class 

VI wells. Owners or operators may self insure through a financial test provided certain 

conditions are met. The owner or operator needs to pass a financial test to demonstrate 

profitability, with a margin sufficient to cover contingencies and unknown obligations, and 

stability. If the owner or operator meets, this is an indication that the owner or operator can 

guarantee its ability to satisfy financial obligations based solely on the strength of the company’s 

financial condition. An owner or operator who is not able to meet corporate financial test criteria 

may arrange a corporate guarantee by demonstrating that its corporate parent meets the financial 

test requirements on its behalf. The parent’s demonstration that it meets the financial test 

requirement is insufficient if it has not also guaranteed to fulfill the obligations for the owner or 

operator. 

EPA acknowledges that states may not be authorized under state law to allow for self insurance 

or other financial instruments. Therefore, states may prohibit the use of any financial instruments 

included in the rule, including self insurance, for Class VI wells. See the final rule and preamble 

for further discussion of EPA's final approach to financial responsibility. 

41
Additionally, EPA is developing guidance that describes the types of financial instruments, 

including self insurance, which owners or operators can use to meet financial responsibility 

requirements for Class VI wells. The financial responsibility guidance will include 

considerations the Director may choose to take into account regarding how to evaluate the 

appropriateness of a specific financial responsibility instrument for a specific project. EPA notes 

that Directors may disallow certain instruments. The guidance will be available on EPA's 

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

Letter ID: 0173 Comment ID: 23508 Letter Lines: 857 to 870 

Comment Code: 5436 2.9.1.3 Allowing separate financial demonstrations for plugging and 

abandonment and post-injection site care (seeking comment) 

Comment: USWAG supports the Proposal's suggestion to allow separate financial 

responsibility demonstrations for different phases of CO2 GS projects, 

specifically for well plugging and then post-injection site care. Id. at 43522. 

As EPA recognizes, "postinjection site care has the potential to extend many 

years into the future," and "[t]rying to determine the cost for post-injection 

site care ... could be difficult, as could the approval of a financial 

demonstration." Id. Requiring all financial demonstrations to be completed at 

one time, prior to well plugging, could unnecessarily delay the site closure 

process. Allowing a subsequent demonstration for financial responsibility for 

the postinjection site care period will allow regulators and Owners or 

Operators to better understand the site-closure needs for a given CO2 GS project 

prior to demonstration and approval of financial responsibility. This would be 

particularly helpful as the Program advances, and industry and regulators gain 

experience and knowledge related to CO2 GS projects. 

Individual Response: EPA recognizes that there are challenges associated with estimating costs 

for activities that will occur far in the future. However, the Agency believes that owners or 

operators must demonstrate that financial resources are available to plug the injection well and 

provide post-injection care at the time the Class VI well is permitted. EPA clarifies at 

§146.85(a)(6) that, prior to obtaining a Class VI permit, an owner or operator may demonstrate 

financial responsibility by using one or multiple qualifying financial instruments for specific GS 

activities, thereby realizing greater flexibility and cost savings from this regulation. In the event 

that the owner or operator combines more than one instrument for a specific GS activity (e.g., 

well plugging), such combination must be limited to instruments that are not based on financial 

strength or performance (i.e., self insurance or performance bond), for example trust funds, 

surety bonds guaranteeing payment into a trust fund, letters of credit, escrow account, and 

insurance. In this case, it is the combination of instruments, rather than the single instrument, 

which must provide financial responsibility for an amount at least equal to the current cost 

estimate. 

EPA also believes that it is important to periodically update cost estimates that support financial 

responsibility determinations. The final GS rule, at §146.85(c), requires the owner or operator to 

provide annual updates to the cost estimate to account for any amendments to the AoR and 

42
corrective action plan, the injection well plugging plan, the PISC and site closure plan, and the 

emergency and remedial response plan. Owners or operators must also adjust the estimates for 

inflation annually under §146.85(c)(2). EPA adds that the Director can also require the owner or 

operator to provide an adjustment of the cost estimate if the Director determines that the original 

demonstration is no longer adequate, as specified at §146.85(e). 

In order to assist owners or operators and financial institutions in achieving accurate cost 

estimates for all GS activities, EPA plans to issue financial responsibility guidance that will 

include a discussion of how to estimate costs, including how to adjust cost estimates for inflation 

to account for the long-term nature of GS projects, in its guidance on meeting financial 

responsibility requirements for GS wells. This guidance will be available on EPA's website at 

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

EPA agrees that GS technologies and cost estimating methods are likely to change and improve 

as GS is deployed nationwide. However, EPA believes that past injection practices provide a 

good foundation for estimating the necessary costs and demonstrating financial responsibility. 

EPA envisions that financial responsibility updates required at the time of AoR reevaluation or at 

other frequencies specified by the Director, will provide opportunities to refine the cost estimates 

and adjust the financial responsibility instruments as appropriate. 

Letter ID: 0173 Comment ID: 23509 Letter Lines: 872 to 883 

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

Comment: Long-term liability - The potential for indefinite financial responsibility on 

the part of Class VI well Owners or Operators for any post-injection migration 

and contamination of USDWs at GS sites remains of paramount concern to USWAG. 

EPA acknowledges that, under the existing SDWA statutory scheme, the Agency has 

the authority to terminate the obligation of an Owner or Operator to maintain 

financial responsibility instruments for well plugging and post-injection site 

care. However, EPA also acknowledges that "owners or operators may still be held 

responsible after the postinjection site care period has ended (e.g., for 

unanticipated migration that endangers USDWs)." Id. at 43522. Further, EPA does 

not currently have the authority "to transfer liability from one entity to 

another. Trust responsibility for potential impacts to USDWs remains with the 

owner or operator indefinitely under current SDWA provisions." Id. 

Individual Response: Under the final GS rule, once an owner or operator has met all regulatory 

requirements under Part 146 for Class VI wells and the Director has approved site closure 

pursuant to requirements at §146.93, the owner or operator will generally no longer be subject to 

enforcement for regulatory noncompliance. Furthermore, their financial instrument as required 

under §146.85 will be released if it was not used. However, even if a site closure is approved 

under §146.93, an owner or operator may be held liable for regulatory noncompliance (including 

violation of 40 CFR 144.12) in certain circumstances. For example, an owner or operator may be 

held liable for regulatory noncompliance even after site closure was approved if the Director 

relied on erroneous information (e.g., erroneous modeling data) provided by the owner or 

43
operator when approving site closure. 

Separate from EPA’s authority to enforce regulatory compliance, an owner or operator may be 

subject to a §1431 response order even after proper site closure is approved under §146.93. 

Under §1431 the Administrator may require an owner or operator to take necessary response 

measures if he or she receives information that a contaminant is present or is likely to enter a 

public water system or an USDW, which may present an imminent and substantial endangerment 

to the health of persons, and the appropriate State and local authorities have not acted to protect 

the health of such persons. The action may include issuing administrative orders or commencing 

a civil action for appropriate relief against the owner or operator of a Class VI well. If the owner 

or operator fails to comply with the order, they may be subject to a civil penalty for each day in 

which such violation occurs or failure to comply continues. 

Furthermore, after site closure an owner or operator may remain liable under tort and other 

remedies, or under other federal statutes including, but not limited to, Clean Air Act, 42 U.S.C. 

§§ 7401-7671; CERCLA, 42 U.S.C. § 9601-9675; and RCRA, 42 U.S.C. § 6901-6992. EPA 

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

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

EPA's final approach. 

Letter ID: 0173 Comment ID: 23510 Letter Lines: 885 to 913 

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

Comment: The private sector will be extremely reluctant to invest the tremendous amount 

of time and resources necessary to finance the development of a commercial-scale 

CO2 GS program if such investments have open-ended liability. USWAG fully 

appreciates that EPA is studying this issue and is compiling information "on a 

variety of alternative instruments not currently available under the SDWA." Id. 

at 435222. EPA has placed in the docket a July 2008 EPA report entitled 

"Approaches to Geologic Sequestration Site Stewardship After Site Closure" 

("Stewardship Report"). See id. The Stewardship Report provides a discussion of 

examples of site closure scenarios, as well as suggestions on how EPA can cap 

the amount of post-injection site liability for Class VI CO2 well Owners and 

Operators. Two of the important themes that emerge from the Stewardship Report 

are (1) the need to equitably balance the risks of CCS between public and 

private actors, and (2) "the need to reduce excessive barriers to 

commercialscale development of GS" which would "deprive the general public of 

the benefits of reduced CO2 emissions due to GS technologies." Stewardship 

Report at 11,26. Any program or mechanism used to limit the opened-end liability 

of Class VI well Owners or Operators must (1) properly reflect the important 

public benefit in having utilities undertake the massive investments necessary 

to develop a commercial-scale CO2 CCS program, and (2) remove the economic 

uncertainties associated with investing in such large-scale programs. 

USWAG urges EPA to place a priority on these issues and to actively pursue a 

44
legislative solution if necessary to provide the Agency with the authority to 

limit postinjection site care liability and/or provide a mechanism to transfer 

the liability after a certain period of time, as has been done under other 

statutory programs. While the issue of open-ended liability need not be wholly 

resolved in this particular rulemaking, USWAG respectfully suggests that this 

problem must be resolved before a successful CO2 GS program can be implemented 

in this country. 

Individual Response: EPA acknowledges the commenter’s concern regarding the applicability 

of multiple statutes to GS projects and the need for a single clear liability regime for owners or 

operators. EPA is working to create a nationally consistent financial responsibility regime within 

its authority to ensure that financial resources are available to protect USDWs throughout the life 

of the GS project. However, the authority under the SDWA does not extend to release owners or 

operators from long-term responsibility for the potential economic costs of impacts unrelated to 

USDWs. EPA does not have authority to transfer liability from one entity to another and SDWA 

does not provide for the creation of a third party financial instrument where EPA is the trustee. In 

the UIC program, liability under SDWA §1423 remains with the owner or operator for all well 

classes until all regulatory requirements have been met. EPA understands that Congress is 

considering legislation that may address the liability issue. EPA adds that the GS rule does not 

promote or encourage the use of GS; rather it is designed to ensure consistency in permitting 

injection of CO2 at GS operations across the U.S. and provide requirements to prevent USDW 

endangerment in anticipation of the eventual use of GS to reduce CO2 emissions. 

Once an owner or operator has met all regulatory requirements under Part 146 for Class VI wells 

and the Director has approved site closure pursuant to requirements at §146.93, the owner or 

operator will generally no longer be subject to enforcement for regulatory noncompliance. 

Further, the financial instrument required under §146.85 will be released if it has not been used. 

However, even if a site closure is approved under §146.93, an owner or operator may be held 

liable for regulatory noncompliance (including violation of 40 CFR 144.12) in certain 

circumstances, for example, if the Director relied on erroneous information provided by the 

owner or operator when approving site closure. Additionally, an owner or operator may always 

be subject to any action the Administrator deems necessary to protect the health of persons under 

§1431 of the SDWA after site closure if there is unanticipated migration towards or into a 

USDW that causes or threatens imminent and substantial endangerment to public health. The 

action may include issuing administrative orders or commencing a civil action for appropriate 

relief. If the owner or operator fails to comply with the order, they may be subject to an ongoing 

civil penalty. 

The Agency clarifies that Class VI well permits may be transferred to another owner or operator 

pursuant to §144.38, including all potential liabilities associated with meeting the requirements 

of that permit. See further clarification on the issue of long term liability in the preamble of the 

final rule. 

After site closure an owner or operator may remain liable under tort and other remedies, or under 

other federal statutes including Clean Air Act, 42 U.S.C. §§ 7401-7671; CERCLA, 42 U.S.C. § 

9601-9675; and RCRA, 42 U.S.C. § 6901-6992. 

45
EPA notes that under SDWA, it has general authority to set financial responsibility requirements 

for injection well owners or operators to ensure that adequate resources are available to protect 

USDWs throughout the life of the GS project. However, this authority does not extend to 

allowing EPA to create a financial instrument with EPA as the trustee. Furthermore, EPA does 

not have authority in the SDWA to create a trust fund. EPA clarifies that trust funds that are 

addressed as financial responsibility instruments through the GS rule are set up by individual 

owners or operators and are different from a national-level trust described by the commenters 

that would cover large numbers of GS projects. See the final rule preamble for further discussion 

of EPA's approach. 

Letter ID: 0173 Comment ID: 23511 Letter Lines: 915 to 924 

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

Comment: 14. Public Participation 

USWAG agrees that public participation is crucial to the success of any 

individual CO2 GS project and of the UIC Program as a whole. Id. at 43523. We 

urge EPA to structure the Final Rule's public participation requirements to 

maximize impact without unnecessarily slowing down the application process. To 

this end, the Final Rule should not require public participation too early in 

the permit process; USWAG believes that public participation would prove most 

useful after an application has been deemed complete but before it has been 

approved. 

Individual Response: The Agency believes that public participation is an important part of the 

UIC permitting process and wants to ensure wide access to decision-making processes and 

information on projects that may affect the public. GS permitting authorities must follow the 

existing public participation requirements for UIC permits as specified in 40 CFR Part 124. 

These regulations lay out the procedures for decision making and include requirements such as 

requiring the Director to notify the public regarding the availability of the draft permit and allow 

him or her to request a public hearing on the draft permit. EPA encourages operators and 

permitting agencies to begin involving the public by providing information as early in the 

process as possible. Encouraging public participation allows the permitting authority to 

understand public viewpoints, preferences, and concerns about the project, which might help 

avoid public misperceptions about the nature and safety of GS projects and forestall resistance 

later in the permitting effort. 

EPA disagrees with commenters who claim that early public involvement may slow the 

application process. Encouraging public participation allows the permitting authority to 

understand public viewpoints, preferences, and concerns about the project, which might help 

avoid public misperceptions about the nature and safety of GS projects and forestall resistance 

later in the permitting effort. 

46