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.

# Department of Environmental Quality

To protect, conserve and enhance the quality of Wyoming's

environment for the benefit of current and future generations.

Dave Freudenthal, Governor

Water Docket

Environmental Protection Agency

Mailcode: 2822T

1200 Pennsylvania Ave., NW Washington, DC 20460 John Corra, Director

Re: Wyoming Department of Environmental Quality Comments on the Federal Requirements

Under the Underground Injection Control ([lIe) Programfor Carbon Dioxide (C0 2 ) Geologic Sequestration (OS) Wells; Proposed Rule (Docket ID No. EPA-HQ-OW-2008-0390)

To Whom it May Concern:

On behalf of the Wyoming Department of Environmental Quality I would like to thank the Agency for the opportunity to comment on the Proposed Carbon Sequestration Rule as published

in the Federal Register on July 25,2008 (40 CFR Parts 144 and 146). Our overall comments, as well as more specific points are provided below.

General Comments:

1. Funding: It is essential that the US EP A provide adequate funding to states assuming primacy jurisdiction under the UIC program to administer C02 storage regulatory

activities. EPA funding to states to administer federal environmental programs, such as UIC, continues to decline in terms of real dollars. Recognizing the scope of work anticipated for C02 sequestration in this country alone, substantial additional skills and

resources will be required at the state level in order to develop and implement effective permitting and oversight programs. It is imperative that EPA recognize that need and begin to establish special provisions to set aside funds that states and tribes, will need to
operate those programs.

2. Primacy for Class VI Wells: The US EPA should allow for separate delegation of primacy to the states and tribes for Class VI wells unless the state or tribe requests that

the delegation be made part of their existing UIC program for Class I, II, III or V wells.

3. Permit Fees: The US EPA should consider a permit fee formula for Class VI wells that is

sufficient to support state, tribal, and permitting programs, provides consistency of fee

amounts between such programs, and provides certainty of fee expenses to those

interested in or applying for a Class VI permit.

ADMIN/OUTREACH

(307) 777-7937

FAX 777-3610 Herschler Building • 122 West 25th Street • Cheyenne, WY 82002 • http://deq.state.wy.us

ABANDONED MINES AIR QUALITY INDUSTRIAL SITING LAND QUALITY SOLID & HAZ. WASTE WATER QUALITY

(307) 777-6145 (307) 777-7391 (307) 777-7369 (307) 777-7756 (307) 777-7752 (307) 777-7781

FAX 777-6462 FAX 777-5616 FAX 777-5973 FAX 777-5864 FAX 777-5973 FAX 777-59734. Training: The U.S. EPA should establish, on a regional level, training programs that

assist in building state's capacity in the science and technology necessary to effectively regulate C02 sequestration.

Specific Comments:

1. Prohibiting C02 injection into formations if they are above the lowermost USDW:

a. We believe it's imperative that the Director be allowed discretion to allow injection above or between USDWs in specific geologic settings Where the depth

of the USDWs may preclude geologic sequestration, make Geologic Sequestration (GS) technically challenging, or significantly limit C02 storage capacity." Such approval by the Director would allow injection between USDWs
(and thereby allowing injection above the lowermost USDW) in circumstances in

which it can be demonstrated that USDWs would not be endangered.

b. Furthermore, we support providing Direc.tors the flexibility and discretion to:

1. Exempt all USDWs below the injection zone (if necessary to meet a requirement that injection is only allowed beneath the deepest USDW).

11. Exempt aquifers for the purpose of C02 injection in accordance with the

. requirements of 40 CFR 144.7.

111. Exempt aquifers for the purpose of C02 injection in accordance with the requirements of 40 CFR 146.4.

c. In the event that aquifer exemptions are not feasible, we urge the US EP A to

allow C02 injection into aquifers previously exempted for Class I and Class II injection operations, provided that the operator obtains a new aquifer exemption

for the purpose of GS.

2. Requiring a minimum depth of injection:

a. Given the variety in subsurface geologic conditions that exist both within, and

between states, we would not support setting a minimum injection depth requirement for C02 GS in lieu of requiring that such injection take place below

the lowermost USDW.

3. Prohibiting the injection of C02 for long-term storage into coal seams where they are
above the lowermost USDW:

a. We believe there are likely circumstarices where injection into formations (including deep, unmineable coal seams) situated above the lowermost USDW

may be practical and protective of overlying and underlying USDWs.4. Requiring a fixed timeframe post-injection site care (monitoring) period of 50 years:

a. We recommend that a performance standard be applied to determine the period of post-injection site care

- that post-injection site care continues until the plume is

stabilized and will not endanger USDWs.

b. We recommend that the Director should be provided discretion to shorten or lengthen the proposed post-injection site care period of 50 years accordingly.

5. Not allowing for the use of separate financial demonstrations to be submitted for the plugging ofthe injection well and for the post-injection site care requirements:

a. It may be advantageous to require the approval of the well plugging financial

demonstration at permit issuance and the post-injection site care financial

demonstration at a later time (e.g., within 180 days of notifying the Director that

the well will be plugged and abandoned.). We recommend that the regulation provide for accepting separate financial demonstrations not only for well plugging

and post-injection site care phases, but for the other operational and nonoperational phases of GS, including Operation/Injection, Monitoring/Measurement/V erification, etc., as may be necessary.

6. Various issues where we agree with US EPA that the Director should have the discretion

to determine, or require:

a. Grandfathering the construction requirements for existing Class I and Class II

wells seeking a permit for geologic sequestration of C02, provided that they

conform to Class VI requirements as proposed in the regulation.

b. Identifying and characterizing 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.

c. Allowing for the use of proprietary models.

d. Allowing for a phased approach to corrective action.

7. Permit application content:

a. We agree with the US EPA that permit applications for GS sites should include

several plans not currently required under existing UIC regulations. These plans

include a monitoring and testing plan, an AoR and corrective action plan, and a post-injection site care and site closure plan.Please feel free to contact me directly at 307-777-7192 should you have any questions regarding

these comments. Thank you.

.

Sincerely,

# ~v:~

J" V.

# ~orra, Director Wyoming Department of Environmental Quality

NC/KDF/rm/8-1035

c: Governor David Freudenthal

Don Likwartz, Director, Wyoming Oil and Gas Conservation Commission

Ron Surdam, State Geologist

. John Wagner, Administrator, Water Quality Division

Kevin Frederick, Manager, Groundwater Section, Water Quality Division'Letter ID: 0205

Commenter: John Corra Organization: Wyoming Department of Environmental Quality (DEQ)

Letter ID: 0205 Comment ID: 22189 Letter Lines: 31 to 40

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

Comment: 1. Funding: It is essential that the US EPA provide adequate funding to states assuming primacy jurisdiction under the UIC program to administer CO2 storage regulatory activities. EPA funding to states to administer federal environmental programs, such as UIC, continues to decline in terms of real dollars. Recognizing the scope of work anticipated for CO2 sequestration in this country alone, substantial additional skills and re sources will be required at the state level in order to develop and implement effective permitting and oversight programs. It is imperative that EPA rec ognize that need and begin to establish special provisions to set aside funds th at states and tribes, will need to operate those programs.

Individual Response: EPA acknowledges that there may be technical and administrative challenges including resource concerns , and will work closely with the states to assist them in resolving funding issues or acquiri ng the resources, personnel, and training needed to address the unique technical challenges associated with GS.

EPA will also incorporate Class VI wells into the UIC Program's grant allocation process. The

States/Tribes/Territories must also demonstrate th at they have adequate resources to implement the program through matching resources against those allocated by the UIC Program's grant allocation formula. Currently, primacy programs ar e required to meet a minimum of 25 percent matching requirement.

Letter ID: 0205 Comment ID: 22190 Letter Lines: 42 to 45

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

Comment: 2. Primacy for Class VI Wells: The US EPA should allow for separate delegation of primacy to the states and tribes for Class VI wells unless the state or tribe requests that the delegation be made part of their existing UIC program for Class I, II, III or V wells.

Individual Response: EPA agrees with commenters that states should be allowed to obtain primacy for Class VI wells independently of other well classes, and will allow independent primacy for Class VI wells under §145.1(i) of th e final GS rule. Given the potential for CCS (encompassing capture, transportation, and geologic sequestration) to be an important part of a national priority to address clim ate change, EPA believes that provi ding states the flexibility to obtain primacy for Class VI wells independently of other well cla sses can help foster effective

1management of CCS. EPA believes that allowing independent Class VI primacy may encourage states to take responsibility for implementation of Class VI regulations and provide for a more comprehensive approach to managing CCS projects by promoting the integrat ion of GS activities

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

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

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

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

Letter ID: 0205 Comment ID: 22191 Letter Lines: 47 to 51

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

Comment: 3. Permit Fees: The US EPA should consider a permit fee formula for Class VI wells that is sufficient to support st ate, tribal, and permitting programs, provides consistency of fee amounts be tween such programs, and provides certainty of fee expenses to those inte rested in or applying for a Class VI permit.

Individual Response: EPA clarifies that it does not have au thority to set permit fees for Class VI well owners or operators under SDWA.

EPA recognizes that states may face technical an d administrative challenges including resource concerns, and will work closely w ith the states to assist them in resolving funding issues or acquiring the resources, personnel, and traini ng needed to address the unique technical

2challenges associated with GS. EPA will also incorporate Class VI GS wells into the UIC program's grant allocation process. The States/Tribes/Territories mu st also demonstrate that they have adequate resources to implement the pr ogram through matching resources against those allocated by the UIC program's grant allocati on formula. Currently, primacy programs are required to meet a minimum of 25 percent matching requirement.

Letter ID: 0205 Comment ID: 22192 Letter Lines: 53 to 55

Comment Code: 1435 1.2.1.3 EPA should develop guidance

Comment Code: 1530 1.2.3.1 State regulatory effort s on GS (seeking comment)

Comment: 4. Training: The U.S. EPA should esta blish, on a regional level, training programs that assist in building state's capacity in the scie nce and technology necessary to effectively re gulate CO2 sequestration.

Individual Response: EPA is developing guidance material s and plans to conduct on-line and in-person training for states and tribes that describes 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 administra tive issues associated with developing GS regulations that are the equivalent of minimu m federal criteria and requirements. These are

available on EPA’s website at http://water.epa.gov/type/groundwater /uic/wells_sequestration.cfm.

Letter ID: 0205 Comment ID: 22193 Letter Lines: 59 to 68

Comment Code: 4410 2.4.4.3.1 Comments in favor of allowing injection above/between

USDWs in certain circumstances

Comment: 1. Prohibiting CO2 injection into formati ons if they are above the lowermost

USDW:

a. We believe it's imperative that the Di rector be allowed discretion to allow injection above or between USDWs in spec ific geologic settings Where the depth of the USDWs may preclude geologic se questration, make Geologic Sequestration (GS) technically challenging, or signifi cantly limit CO2 storage capacity." Such approval by the Director would allow in jection between USDWs (and thereby allowing injection above the lowermost USDW ) in circumstances in which it can be demonstrated that USDWs would not be endangered.

Individual Response: EPA acknowledges that there are lim ited circumstances where injection above the lowermost USDW can be performe d in a manner that protects USDWs from endangerment, as long as appropriate protections are in place. The final GS rule at §146.95 establishes a process by which owne rs or operators can seek a waiv er of the Class VI injection depth requirements for inject ion into non-USDW formations above and/or between USDWs. Determinations about the appropriateness of a wa iver would be made by the Director, based on

3evaluation of site-specific conditions.

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

Letter ID: 0205 Comment ID: 22195 Letter Lines: 70 to 74 ; 76 to 85

Comment Code: 4320 2.4.4.1 Injection beneath the lowermos t formation containing a USDW

Comment Code: 4460 2.4.4.4.1 Comments in favor of allowing aquifer exemptions in certain

circumstances

Comment: b. Furthermore, we support providing Di rectors the flexibility and discretion

to:

i. Exempt all USDWs below the injection zo ne (if necessary to meet a requirement that injection is only allowed beneath the deepest USDW).

ii. Exempt aquifers for the purpose of CO2 injection in accordance with the requirements of 40 CFR 144.7.

iii. Exempt aquifers for the purpose of CO2 injection in accordance with the requirements of 40 CFR 146.4.

c. In the event that aquifer exemptions are not feasible, we urge the US EPA to allow CO2 injection into aquifers previ ously exempted for Class I and Class II injection operations, provided that the operator obtains a new aquifer exemption for the purpose of GS.

Individual Response: EPA acknowledges that there are lim ited circumstances where aquifer exemptions for GS may be warranted. The final rule allows for the expansion of the areal extent 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.

4EPA clarifies that all decisions regarding whethe r expansion of existing aquifer exemptions will

be at the Director's discretion and based on site-specific information.

EPA adds that the final rule precludes the issuan ce of new aquifer exemptions for Class VI GS wells. Aquifer exemptions will only be granted fo r projects that are transitioning from Class II EOR/EGR wells to Class VI. Aquifer exemption expansions are limited to Class II EOR/EGR wells transitioning to Class VI injection for GS. The aquifer exemption requirements in the final rule provide flexibility and affo rd owners or operators an opportunity to assess and select a suitable GS site while also preserving USDW s (i.e., formations/aquifers afforded SDWA protection). 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.

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 Da ta Availability and Request for Comment.

Letter ID: 0205 Comment ID: 22196 Letter Lines: 87 to 92

Comment Code: 4344 2.4.4.2.2 Comments opposed to setting a minimum injection depth

Comment: 2. Requiring a minimum depth of injection:

a. Given the variety in subsurface geologi c conditions that exist both within, and between states, we would not suppor t setting a minimum injection depth requirement for CO2 GS in lieu of requiri ng that such injectio n take place below

the lowermost USDW.

Individual Response: EPA agrees that it is not appropriate to set a mi nimum injection depth for GS projects and the Agency believes that a determ ination of site-suitabili ty for GS (i.e., that

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

EPA acknowledges that there are limited circum stances where injectio n above the lowermost USDW can be performed in a manner that protec ts USDWs, as long as appropriate protections are in place. The final GS rule at §146.95 establis hes a process by which owners or operators can seek a waiver of the Class VI injection de pth requirements for in jection into non-USDW

formations above and/or between USDWs. The waiver approach requires the submission of extensive, site-specific information (in conjunc tion with the permit appl ication submission) to demonstrate that injection of CO2 into a non-US DW that is above or between USDWs can be done in a manner that is protective of USDWs. Th e requirements are designed to ensure that the owner or operator, the Director, and the Regional Administrator cons ider, on a site specific basis,

5the implications, benefits, and challenges associat ed with GS and ensuring water availability and USDW protection. For additional information on the waiver approach, please see the final rule and preamble, as well as EPA's responses to comments on the Notice of Data Availability and Request for Comment.

Letter ID: 0205 Comment ID: 22197 Letter Lines: 94 to 99

Comment Code: 4430 2.4.4.3.3 Injection into coal seams above USDWs (seeking comment)

Comment: 3. Prohibiting the injection of CO2 for long-term storage into coal seams where they are above the lowermost USDW:

a. We believe there are li kely circumstances where injection into formations (including deep, unmineable coal seams) situ ated above the lowermost USDW may be practical and protective of ove rlying and underlying USDWs.

Individual Response: The final GS rule does not categorica lly preclude or prohibit injection into any type of formation, including coal se ams. Instead, the requirements are designed to ensure protection of USDWs from endange rment through proper siting, well construction, operation, monitoring, and PISC at all sites selected for GS.

EPA recognizes that some types of formations, such as coal s eams and basalts, are typically shallow and above the lowermost USDW. EPA exp ects that most injection wells conducting GS in these shallow formations will be permitted as Class VI wells and such wells will be issued waivers, provided that their owners or operators can meet all of the requirements for an injection depth waiver at §146.95 and demonstr ate that such injection can be performed in a manner that protects USDWs, as long as appropriate protec tions are in place. The Class V experimental technology well classification, may, in some instan ces be an appropriate permitting alternative. This decision should be informed through a di scussion between the injection well owner or operator and the Director to determine the purpose and proper design of the well.

For additional information on the waiver approa ch and aquifer exemptions for Class VI wells, please see the final rule and pr eamble, as well as EPA's responses to comments on the Notice of Data Availability and Request for Comment.

Letter ID: 0205 Comment ID: 22198 Letter Lines: 101 to 109

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

Comment Code: 5260 2.8.2.3 Adjusting the post-injecti on timeframe (seeking comment)

Comment: 4.Requiring a fixed timeframe post-injecti on site care (monitoring) period of 50

years:

a.We recommend that a performance standard be applied to determine the period of post-injection site care -that post-inje ction site care continues until the

6plume is stabilized and will not endanger USDWs.

b. We recommend that the Director should be provided discreti on to shorten or lengthen the proposed post-injection site care period of 50 years accordingly.

Individual Response: EPA agrees with commenters that th ere 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 GS rule 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 pos t-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 ensu res non-endangerment of USDWs pursuant to requirements at §146.93(c).

EPA believes however, that to ensure USDW protection from enda ngerment, a default timeframe for post-injection site care will be necessary in al l but a limited number of cases. This default 50 year post-injection site care ti meframe represents a reasonable and protective monitoring period based on a review of research studies, industr y reports, and existing environmental programs, and evaluation of public comments.

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

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

Letter ID: 0205 Comment ID: 22199 Letter Lines: 111 to 122

Comment Code: 5436 2.9.1.3 Allowing separate financial demonstrations for plugging and abandonment and post-injection si te care (seeking comment)

Comment: 5. Not allowing for the use of separate financial demonstrations to be submitted for the plugging of the injection well and for the post-injection site care requirements:

a. It may be advantageous to require the approval of the well plugging financial demonstration at permit issuance and the post-injection site care financial demonstration at a later time (e.g., within 180 days of notifying the Director that the well will be plugged and abandone d.). We recommend th at the regulation provide for accepting separate financial demonstrations not only for well plugging and post-injection si te care phases, but for the other operational and nonoperational phases of GS, in cluding Operation/Injection,

7Monitoring/Measurement/Verificati on, etc., as may be necessary.

Individual Response: In the final rule, owners or operators are required to demonstrate, with their permit application, adequate financial resp onsibility for specific GS activities, including plugging and post-injection site ca re, per §146.85(a). EPA clarifies at §146.85(a)(6) that, prior to obtaining a Class VI permit, an owner or opera tor 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 re gulation. 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 th at are not based on fi nancial strength or performance (i.e., self insurance or performa nce 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, rath er than the single instru ment, which must provide financial responsibility for an amount at l east equal to the current cost estimate.

Additionally, EPA is deve loping guidance (available on EPA's website at http://water.epa.gov/type/groundwat er/uic/wells_sequest ration.cfm) that describes the types of financial instruments that owners or operato rs can use to meet financial responsibility requirements for Class VI wells; this guidance w ill also address how different instruments may be applied for various GS activities.

Letter ID: 0205 Comment ID: 22200 Letter Lines: 124 to 129

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

Comment: 6. Various issues where we agree with US EPA that the Director should have the

discretion to determ ine, or require:

a. Grandfathering the construction requirements for ex isting Class I and Class II wells seeking a permit for geologic seque stration of CO2, provided that they conform to Class VI requirements as proposed in the regulation.

Individual Response: EPA agrees that many Class I, Cl ass II, and Class V experimental technology wells are designed and constructed to withstand exposure to CO2. The final GS rule

allows the construction of these wells to be grandfathere d 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 prot ection 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 fo llowing a determination under §146.81(c).

Conversion of the well is at the Director's discretion following an evaluation of all other sitespecific information about the well and the pr oject, e.g., modeling, monitoring, and other data under §146.81. Any wells that have de teriorated due to contact with incompatible injected or formation fluids may not be approved for conversion.

8Letter ID: 0205 Comment ID: 22201 Letter Lines: 124 to 125 ; 131 to 133

Comment Code: 3120 2.1.2 Need to identify additional confining and containment zones (seeking comment)

Comment: 6. Various issues where we agree with US EPA that the Director should have the

discretion to determ ine, or require:

b.Identifying and characterizing additiona l confining and containment zones above the primary (i.e., lowermost) confin ing zone that could further impede

vertical fluid movement and a llow for pressure dissipation.

Individual Response: EPA agrees with the commenter that, in some situations, the presence of additional confining and containment zones above the primary (i.e., lowermost) confining zone can improve USDW protection from endangerment. The final regulation re tains the requirement at §146.83(b) which affords the Director discretion to require owners or op erators to identify and

characterize additional zones.

Letter ID: 0205 Comment ID: 22202 Letter Lines: 124 to 125 ; 135 to 135

Comment Code: 3350 2.2.1.5 Use of proprietary models for GS sites (seeking comment)

Comment: 6. Various issues where we agree with US EPA that the Director should have the

discretion to determ ine, or require:

c. Allowing for the use of proprietary models.

Individual Response: EPA agrees that some of the availa ble proprietary models may meet the needs for calculating the AoRs of GS sites. EPA will 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 sa tisfaction, the code assumptions, re levant equations, and scientific basis. 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. Information including model assumptions and eq uations are used by the Director to inform his/her decision to issue the permit and ensure that the requirements are met and the GS well will not endanger USDWs. EPA adds that its Confidential Business Information requirements at 40 CFR 144.5 will apply to the use of proprietary models.

Letter ID: 0205 Comment ID: 22203 Letter Lines: 124 to 125 ; 137 to 137

Comment Code: 3630 2.2.4.1 Comments in favor of allowing phased corrective action

Comment: 6. Various issues where we agree with US EPA that the Director should have the

discretion to determ ine, or require:

9d. Allowing for a phased appro ach to corrective action.

Individual Response: EPA agrees that there are potential be nefits to phased corrective action, including distributing the burden and costs of corrective action over time and not delaying initiation of the GS project. EPA believes that the phased corrective action approach is appropriate for GS projects, and retained it at §146.84(b)(2)(iv) in th e final GS regulation. However, EPA recognizes that a phased approach to corrective action may not be appropriate in all situations, and that the Director is in the best po sition to make decisions about the appropriateness of phased correc tive action based on his or her knowledge of the local geologic and site conditions. For this reason, the GS rule affords the Director discretion in determining whether phased corrective action is a ppropriate at a given GS site.

Letter ID: 0205 Comment ID: 22204 Letter Lines: 139 to 144

Comment Code: 4610 2.6.1 Testing and monitoring plan requirement (seeking comment)

Comment Code: 4710 2.7.1 Proposed submissions required for permit applications (seeking comment)

Comment: 7. Permit application content:

a. We agree with the US EPA that permit applications for GS sites should include several plans not currently required under existing UIC regulations. These plans include a monitoring and testing plan, an AoR and corrective action plan, and a post-injection site care a nd site closure plan.

Individual Response: EPA agrees with commenters that developing and following testing and monitoring plans is an important pa rt of assuring that a GS projec t is operating properly and is crucial for the early detection of potential endang erment to USDWs. The final rule retains this requirement.

EPA agrees that incorporating the plans into the permit rather than establishing specific requirements for corrective action, monitoring, in jection well plugging, and post-injection site care in the regulation provide the appropriate flexibility to address the variety of site-specific conditions that may be enc ountered at GS sites.

EPA believes that it is appropriate and necessary to require owners and operators to submit all plans, including the injection well plugging and post-injection site care and site closure plans, at the time of permit application for the Director to make a proper permit decision. EPA believes

that the Director needs a satisfa ctory level of assurance that th e owner or operator has planned for these events before injection commences a nd that the owner or ope rator has ensured that appropriate financial resources are available to fund all require d activities, as required at §146.85. The final rule retains requirements for submitting these plans with the permit application at §146.82(a). EPA expect s that the requirement for this and other plans associated with GS projects will promote an ongoing dialog ue between the owner or operator and the Director to ensure USDWs are protected from endangerment. In addition, these plans will

1011 support a demonstration under §146. 85 that owners and operators have adequate financial resources to meet well plugging and post-injection site car e and site closure requirements. Please

see the final rule and the discussion of the GS project plans for additional information.