This comment letter response contains two parts:

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

Notes about the response letters:

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

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

was assigned a Letter ID that corresponds to the last four digits of the docket number of the

original comment (as posted on www.regulations.gov).

• Each response letter includes: comment text; an EPA

‐ assigned comment code; and an

individual response. These are described and explained below.

• The data base contains Comment text from the letters submitted by commenters.

Many hard copy letters were scanned into electronic format for inclusion in the data

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

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

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

appropriately addressed.

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

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

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

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

construction requirements).

• Following decisions on the final rule requirements, Individual responses were drafted

by topic area to ensure completeness and consistency of the responses with the final

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

commenter was given a unique response.

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

Each letter response is a compilation of each comment and its individual response, compiled in the order of the original comment letter. As a result of this process, there is

repetition in the response text. The Agency believes this approach ensures completeness

and attention to each comment letter that was submitted.

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

Responses on each topic area are compiled and are also available in the rulemaking docket.Cynthia C. Dougherty

Director

Office of Ground Water and Drinking Water U. S. Environmental Protection Agency 1200 Pennsylvania Ave., NW. Washington, DC 20460

Mar 17, 2009

Proposed Rule on Geologic Sequestration of Carbon Dioxide

Dear Director Dougherty,

Now that the public comment period for EP A’s Proposed Rule on Geologic Sequestration of Carbon Dioxide (GS) has closed and the Ag ency is considering next steps, we are writing to summarize our views in relation to a few key points fo llowing our individual and joint comments of Dec24, 2008 and to bring them to the attention of the workgroup for its upcoming work and meetings.

First we stress again the importance of prom ulgating adequate regu lations for GS in a timely fashion. GS has an important role to play in reducing carbon dioxide emissions in the U.S. and, although projects can be permitted under existing rules, a dedicated set of regulations is needed both to increase certain ty further but also adequately to safeguard

human health and the environment. Therefore, in considering whet her a Notice of Data Availability (NODA) is needed, we urge EPA to choose the most expeditious option that is accountable, transparent, legally robust and defensible, and also to ensure that whichever option is chosen does not delay the promulgation of the rule.

Second, we highlight that the fi nal rule needs to cater for GS in hydrocarbon reservoirs as well, and not just saline formations as propos ed. Hydrocarbon reservoi rs are likely to be among the first ones to be used for GS, and th ey need to be regulat ed appropriately. We do not believe that automatic delegation to Class II “as long as any production is occurring” is suitable. Under the economic dr iver of carbon constraints, additional risks might be posed in these reservoi rs if operators inject larger volumes or at higher rates and pressures than they have been doing to date under Class II. Moreover, site characterization, operation, monitoring and cl osure requirements over and above the existing Class II will be needed to certify and assure “geologic sequestration” of injected carbon dioxide in hydrocarbon reservoirs.

Third, we raise the issue of authority. The rulemaking to date has only cited authority under the Safe Drinking Water Act (SDWA). As we stated in our comments of Dec24, 2008, an appropriate regulatory regime for GS must also be grounded on authority to prevent re-emissions of inject ed carbon dioxide to the atmosphere. The proposed rule defines GS solely for the purposes of prot ecting Underground Sources of Drinking Water (USDWs). Climate legislation is presently be ing drafted in Congre ss however, and will very likely rely on EPA’s injection classes to certify GS. Specifically, the legislation willvery likely exempt carbon dioxide emissions fr om large facilities that are geologically sequestered according to regulations promul gated by EPA and/or other agencies. We stress the importance of EPA being ready and prepared to meet such requirements. Accounting protocols for carbon allowances is an issue that can be dealt with outside the scope of the current rulemaking, and is likel y to have a far narrower remit than the current rule’s specific requirements for si te screening, monitoring, and various plans. EPA, therefore, must define and regulate GS from the outset in a way that assures not only that USDWs are not endangered, but that GS for the purposes of climate protection is also taking place.

To that effect, we make the following recommendations:

• EPA must promulgate appropriate require ments for GS in hydrocarbon reservoirs in the current rulemaking. The mere c ontinuation of hydrocarbon production in

those fields is not a valid cr iterion for well classification;

• “Geologic sequestration” s hould not be defined only fo r the purpose of protecting USDWs, but also for the purpose of pr eventing re-emissions of injected carbon dioxide to the atmosphere according to a defined permanence standard, as NRDC

stated in its Dec24, 2008 comments;

• Class II as it exists today s hould continue to apply to operations that inject carbon

dioxide for the sole purpose of enhanced oil r ecovery as opposed to GS;

• Class II as it exists toda y should not be associated with the definition or the purpose of GS;

• A separate injection class or subclass with appropriate site characterization, operation, monitoring and closur e provisions should govern all injection in hydrocarbon reservoirs for the (sole or concurrent) purpose of GS as defined above (which includes earning carbon credits) and injection that exceeds business-as-usual Class II volume, pressure or other key thresholds that result in greater risk;

• The primacy delegation criteria for this cl ass or subclass should be subject to the primacy delegation requirements that appl y to Class VI as proposed, and not to the more general showing used for Class II; and

• In order to be able to ut ilize existing wells in hydrocar bon reservoirs for GS, this

class or subclass could allow for the tran sition of existing Class II wells into the class or subclass, provided that appropriate construction and mechanical integrity parameters are met, and provided that those wells begin compliance with the

added site characterization, operation, monitoring, closur e and other requirements

in the new class or subclass.

We thank you for your ongoing work and efforts on this rulemaking.

Sincerely,

George Peridas, Natural Resources Defense CouncilLetter ID: 0291 Commenter: George Peridas Organization: Natural Re sources Defense Council

Letter ID: 0291 Comment ID: 25285 Letter Lines: 35 to 43

Comment Code: 1200 1.1 General comments about the rulemaking

Comment: First we stress again the importance of pr omulgating adequate regulations for GS in a timely fashion. GS has an important role to play in re ducing carbon dioxide emissions in the U.S. and, although projects can be permitted under existing rules, a dedicated set of regulations is needed both to increase certainty further but also adequately to safeguard human health and the environment. Therefore, in considering whether a No tice of Data Availability (NODA) is needed, we urge EPA to choose the most expeditious option that is accountable, transparent, legally robust and defensible , and also to ensure that whichever option is chosen does not delay the promulgation of the rule.

Individual Response: EPA clarifies that the GS rule does not promote or encourage the use of GS; rather it is designed to ensure consistenc y in permitting underground in jection of CO2 at GS operations across the United States and provide requirements to prevent endangerment of USDWs in anticipation of the eventual use of GS to reduce CO2 emissions. EPA believes that the GS regulation will provide regu latory certainty and oversight that operators have requested, and allow for the deployment of this key clim ate change mitigation technology that could be deployed to reduce CO2 emissions.

Please see the remainder of EPA' s responses to this comment le tter for further details. For

additional information on EPA's fina l regulatory approach, please se e the final rule and preamble as well as the rulemaking docket.

Letter ID: 0291 Comment ID: 25286 Letter Lines: 45 to 55

Comment Code: 2046 1.5.2.3 Continuing to classify CO2 in jection for EOR/EGR as Class II/ dividing line between Class II and Class VI (seeking comment)

Comment Code: 2146 1.6.2.2 Comments opposing injection into depleted reservoirs

Comment: Second, we highlight that the final rule needs to cater for GS in hydrocarbon reservoirs as well, and not just saline formations as proposed. Hydrocarbon reservoirs are likely to be among the firs t ones to be used for GS, and they need to be regulated appropriately. We do not believe that automatic delegation to Class II "as long as any production is occurring" is suitable. Under the economic driver of carbon constraints, a dditional risks might be posed in these reservoirs if operators inject larger vo lumes or at higher rates and pressures than they have been doing to date under Class II. Moreover, site characterization, operation, m onitoring and closure requirements over and above

1the existing Class II will be needed to certify and assure "geologic sequestration" of injected carbon di oxide in hydrocarbon reservoirs.

Individual Response: EPA clarifies that the final rule is designed to address all types of formations in which GS could take place. All applicants for GS wells must demonstrate that the proposed injection zone is suitable for receiving carbon dioxide and that the confining zone can contain the injected carbon dioxide a nd any displaced formation fluids.

EPA believes that large-scale GS presents uniqu e technical challenges, including large injection volumes, the relative buoyancy of CO2, its corrosivity in the presence of water, the potential presence of impurities in captured CO2, and its m obility within subsurface geologic formations. For this reason, EPA has finalized the ta ilored requirements in the GS rule.

EPA further clarifies that the GS rule is not intended to promote a preference for GS in any particular formation type, to addr ess use of resources, or to reduce costs associated with GS into

various formations. The focus of the GS rule is to ensure that, where GS is deployed, it is conducted in a manner that prot ects USDWs from endangerment.

EPA clarifies that owners and operators of tr aditional EOR projects ar e subject to limits on injection established under their Class II permits . If they exceed those limits, they will be

considered to be in violation of their Class II permit. EPA further clarifies that wells injecting into oil and gas formations for the primary pur pose of long-term containment of carbon dioxide are subject to the site characte rization, operation, mon itoring, and closure requirements for Class VI wells in Subpart H of 40 CFR 146. For mo re information, please see the discussion on transition of Class II wells in the preamble to the final GS rule.

Letter ID: 0291 Comment ID: 25287 Letter Lines: 57 to 73

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

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

Comment: Third, we raise the issue of authority. The rulemaking to date has only cited authority under the Safe Drinking Water Act (SDWA). As we stated in our comments of Dec24, 2008, an appropriate regulatory re gime for GS must also be grounded on authority to prevent re-emissions of inj ected carbon dioxide to the atmosphere. The proposed rule defines GS solely fo r the purposes of protecting Underground Sources of Drinking Water (USDWs). Clim ate legislation is presently being drafted in Congress however, and will ve ry likely rely on EPA’s injection classes to certify GS. Specifically, the legislation will very likely exempt carbon dioxide emissions from large facili ties that are geologically sequestered according to regulations promulgated by EPA and/or other agencies. We stress the importance of EPA being ready and prepared to meet such requirements. Accounting protocols for carbon allowances is an issu e that can be dealt with outside the scope of the current rulema king, and is likely to have a far narrower remit than the current rule’s specific requirement s for site screening, monitoring, and

2various plans. EPA, therefore, must defi ne and regulate GS from the outset in a way that assures not only that USDWs ar e not endangered, but that GS for the purposes of climate protection is also taking place.

Individual Response: EPA clarifies that the scope of the GS regulation is limited to injection of CO2, and that all requirements in the GS rule are designed for the purpose of protecting USDWs from endangerment. Consequently, this commen t is outside the scope of the rulemaking. The SDWA does not provide the UIC Program with the authority to develop re gulations for all areas related to GS, such as releases to the atmosphere.

EPA acknowledges that GS falls within the broade r context of CCS and the need for regulatory clarity to ensure that USDWs are protected from endangerment. In develo ping the final GS rule,

the Office of Water coordinated with other Agency program offices and across federal agencies (e.g., with the Department of Energy; United Stat es Geological Survey; Bureau of Ocean Energy Management, Regulation, and Enforcement, formerly the Minerals Management Service; Bureau of Land Management). The Agency continues to eval uate areas of potential applicability of other Federal environmental statutes including, but not limited to: the Clean Air Act; the Resource Conservation and Recovery Act; the Comprehe nsive Environmental Response, Compensation, and Liability Act; and the Marine Protection, Resear ch and Sanctuaries Act to various aspects of GS and CCS. The Agency will continue to coordinate on GS and CCS related issues to minimize redundancy and maximize efficiencies for owners or operators. For additional information, please see the discussion entitle d "How Does This Rulemaking Relate to Other Federal

Authorities and GS and CCS Activities?" in the preamble to the final GS rule.

To protect USDWs from endangerment and meet the potentially fast pace of GS deployment, EPA is using an adaptive approach to regula ting CO2 injection for GS. The Agency plans to collect and review data every six years on GS projects to dete rmine whether the appropriate amount and types of information and appropria te documentation are being collected, and to determine if modifications to the requiremen ts are appropriate or necessary. An adaptive approach will allow regulatory development to pr oceed in time to meet the current and future demands for Class VI permits while EPA continues to gather data from pilot projects and other

research as it becomes available.

Letter ID: 0291 Comment ID: 25288 Letter Lines: 77 to 79

Comment Code: 2046 1.5.2.3 Continuing to classify CO2 in jection for EOR/EGR as Class II/ dividing line between Class II and Class VI (seeking comment)

Comment Code: 2146 1.6.2.2 Comments opposing injection into depleted reservoirs

Comment: • EPA must promulgate appr opriate requirements for GS in hydrocarbon reservoirs in the current rulemaking. The mere c ontinuation of hydrocarbon production in

those fields is not a valid crit erion for well classification;

Individual Response: As described above, the final GS rule does not preclude injection into any non-USDW formation type, includ ing hydrocarbon reservoirs, provi ded owners or operators can demonstrate that GS can be performed in a mann er that protects USDWs from endangerment.

3EPA agrees that tailored requi rements for Class VI wells are necessary to address the unique nature of injecting la rge volumes of CO2 and to ensure that USDWs are protected from endangerment. The GS rule contains tailored requirements for the permitting, geologic site characterization, AoR and correc tive action, well construction, ope ration, mechanical integrity testing, monitoring, well plugging, po st-injection site care, and site closure of GS wells that directly address issues unique to the natu re of large-scale CO2 injection for GS.

Letter ID: 0291 Comment ID: 25289 Letter Lines: 81 to 84

Comment Code: 1220 1.1.1.1 Terminology and definitions

Comment: • "Geologic sequestration" should not be defined only for the purpose of protecting USDWs, but also for the pu rpose of preventing re-emissions of injected carbon dioxide to the atmosphe re according to a defined permanence standard, as NRDC stated in its Dec24, 2008 comments;

Individual Response: EPA clarifies that atmospheric emi ssions monitoring and quantification are outside the scope of the Cl ass VI GS rulemaking. The UIC program’s authority under the SDWA focuses on ensuring that GS projects are permitted, sited, constructed, operated, monitored, and closed in a manner that protects USDWs from endangerment.

In a separate rulemaking under authority of th e Clean Air Act, EPA is amending the Greenhouse Gas Reporting Program at 40 CFR Part 98 to ad d reporting requirements for CO2 injection and geologic sequestration. The greenhouse gas repo rting requirements build on the Class VI requirements outlined in the final rule with the additional goals of verifying the amount of CO2 sequestered and collecting data on any CO2 emissi ons to the surface from Class VI GS facilities.

Based on its evaluation of all public comments and input on the proposed rule and the NODA and Request for Comment, EPA has made many revisions to the Cla ss VI GS rule. Please see the final rule and preamble for additional information.

Letter ID: 0291 Comment ID: 25290 Letter Lines: 86 to 108

Comment Code: 2046 1.5.2.3 Continuing to classify CO2 in jection for EOR/EGR as Class II/ dividing line between Class II and Class VI (seeking comment)

Comment: • Class II as it exists today should continue to apply to operations that inject carbon dioxide for the sole purpose of enha nced oil recovery as opposed to GS;

• Class II as it exists today should not be associated with the definition or the purpose of GS;

• A separate injection class or subclass with appropriate site characterization, operation, monitoring and closure provisions should govern all injection in

4hydrocarbon reservoirs for the (sole or concurrent) purpose of GS as defined above (which includes earning carbon cr edits) and injection that exceeds business-as-usual Class II volume, pressure or other key thresholds that result in greater risk;

• The primacy delegation criteria for this class or subclass should be subject to the primacy delegation requirements that apply to Class VI as proposed, and not to the more general showing used for Class II; and

• In order to be able to utilize existin g wells in hydrocarbon reservoirs for GS, this class or subclass could allow for the transition of existing Class II wells into the class or subclass, provi ded that appropriate construction and mechanical integrity parameters are met, and provided that those wells begin compliance with the added site charac terization, operation, monitoring, closure and other requirements in th e new class or subclass.

Individual Response: EPA agrees that injection of CO2 for the primary purpose of enhancing oil and gas recovery should remain under the Cla ss II Program. The Agency also believes that the nature and risks of CO2 inj ection for the primary purpose of long term storage poses different risks than injection for the primary purpose of EOR, and therefore has developed new Class VI regulations to address these unique risks. For example, the volu me of CO2 anticipated to be injected for long term storage is significan tly greater than for EO R operations. Reservoir pressure conditions will also be different, with Class VI injection ope rations involving large volumes of CO2 and likely having higher pressures w ithin their storage formations than Class II EOR projects.

The final Class VI regulations re quire that any owner or operato r injecting CO2 for the primary purpose of long term storage obtain a Class VI pe rmit with some special consideration for the fact that they are transitioning from a well not or iginally designed to meet Class VI requirements. The Director has the authority to determine at wh at point a Class VI permit is required for those projects that are transitioning from the primar y purpose of EOR to long term storage of CO2. The final regulation provides a set of technical factors for the Direct or to evaluate in making this determination, at §144.19. EPA believes that this approach provides su fficient protection of

USDWs when there is an increased risk to USDWs as compared to traditi onal Class II operations while allowing for site-specific flexibility.

EPA anticipates that there will be GS/ER projects that were formerly classified as Class II that will seek to be permitted as Class VI injection wells. EPA is allowing 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 believes that allowing for grandfathering of select construction requirements, if approved by the Director, will ease the transiti on to Class VI from an existi ng ER project while protecting USDWs from endangerment.

EPA is developing guidance on transitioning perm its from Class II to Class VI. The guidance

5will assist Directors in determining whether an injection project should be transitioned from Class II where the primary purpose is oil and gas production to Class VI where the primary purpose is long-term storage of large volumes of CO2. The guidance describes recommended methods the Director may use to evaluate change s in risk to USDWs from projects, and how the Director may determine whether a project should be regulated within th e Class II or Class VI UIC program. This guidance will be available on EPA’s website at http://water.epa.gov/type/groundwat er/uic/wells_sequest ration.cfm. For more information, please

see the discussion on transition of Class II well s in the preamble to the final GS rule.

Letter ID: 0291 Comment ID: 25291 Letter Lines: 92 to 101

Comment Code: 5600 2.11 Comments related to UIC Program primacy for Class VI wells

Comment: • A separate injection class or subclass with appropriate site characterization, operation, monitoring and closure provisions should govern all injection in hydrocarbon reservoirs for the (sole or concurrent) purpose of GS as defined above (which includes earning carbon cr edits) and injection that exceeds business-as-usual Class II volume, pressure or other key thresholds that result in greater risk;

• The primacy delegation criteria for this class or subclass should be subject to the primacy delegation requirements that apply to Class VI as proposed, and not to the more general showing used for Class II; and

Individual Response: EPA clarifies that Class VI wells are regulated under Section 1422 of SDWA, and adds that states should be able to obtain primacy for Class VI wells independent of other well classes provided they develop regulations that are at l east as stringent as the minimum Federal requirements (e.g., permitting, inspec tion, operation, monitoring, and recordkeeping requirements) provided in the final GS rule.

In order for States, Tribes, or Territories to obtain Primacy for Class VI wells (under Section 1422 of the SDWA) they must dem onstrate that they have require ments that are at least as stringent as the federal Class VI requirements; have the authority to inspect and assess construction and operation of the we lls as well as have the necessary legal authorities to take administrative, civil and criminal enforcement actions required by the SDWA under §1423, impose criminal, civil, and administrative pena lties on owners and operators for non-compliance with regulatory requirements; and demonstrate sufficient/appropriate t echnical capacity (e.g., personnel, infrastructure, and technical expert ise) to implement their Class VI program.

EPA agrees that a separate well classificati on is appropriate for GS and that tailored requirements for Class VI wells are necessary to address the unique natu re of injecting large

volumes of CO2 and to ensure that USDWs are protected fro m endangerment. The GS rule contains tailored requirements for the perm itting, geologic site ch aracterization, AoR and corrective action, well construc tion, operation, mechanical integr ity testing, monitoring, well plugging, post-injection site care, an d site closure of GS wells that directly address issues unique

67 to the nature of large-scale CO2 injection for GS.