### ATTACHMENT B



## Technical Comments of the Texa s Carbon Capture and Storage

Association

In Response to EPA’s Proposed Rule: Federal Requirements Under the Underground Injection Cont rol (UIC) Program for Carbon Dioxide (CO2) Geologic Sequestrati on (GS) Wells; Proposed Rule

Docket ID No. EPA–HQ–OW–2008–0390 (73 Fed. Reg. 43,492 (July 25, 2008))

Submitted December 23, 2008

By

Texas Carbon Capture a nd Storage Association

P.O. Box 42022 Austin, Texas 78704 Contact: Darrick Eugene

512.542.881412/24/2008
www.txccsa.org


## Technical Comments to the EPA Proposed Rules

on Geologic Sequestration of CO 2



### 1. § 146.81 Applicability

The proposed rule provides that owners or operator s of authorized Class I industrial, Class II, or Class V experimental CO 2 injection projects who seek to “c onvert” these wells to Class VI wells and apply for a Class VI permit may be exempted, at the Director’s discretion, from the proposed casing and cementing requirements a pplicable to Class VI wells.

EPA Proposed § 146.81(c) This subpart applies to owners and operators of permit or rule-authorized Class I industrial, Class II, or Class V experimental carbon dioxide injection projects who seek to apply for a Cla ss VI geologic sequestration permit for their well or wells. If the Director determines th at USDWs will not be endangered, such wells are exempt, at the Director’s discretion, fr om the casing and cementing requirements at §§ 146.86(b) and 146.87(a)(1 ) through (3).

It is helpful that EPA recognizes that entities may wish to convert other classes of wells (such as

Class II wells used for CO 2 enhanced oil recovery projects) into Class VI wells and that flexibility is necessary for this conversion process. This flexibility should be maintained in the final rules but should be enhanced. In addition, the rules should be expanded to provide further detail on the conversion process. It is critical that owners and operators have clear and concise rules to rely on when seeking to grandfather their existing wells. Th is provision should be

revised to limit the Director’s di scretion and address all variances resulting in modifications to existing wells. For instance, while the ru les waive the Class VI casing and cementing requirements for existing wells be ing converted to Clas s VI wells, the rules do not address other

construction or construction-related Class VI we ll requirements that create variances between Class VI and Class I, II and V we lls. Those requirements include:

1. Down hole automatic shut-off valve with wellhead hydraulics;

2. Annulus liquid level detector;

3. Wellhead corrosion monitoring equipment; and

4. Mechanical integrity testing.

Each of these requirements applicable to Class VI wells would require retrofitting or modifications to existing wells and could make c onversion of wells imprac ticable or excessively expensive. Rather than requiri ng existing wells to meet prescr iptive rules that may not be necessary or applicable, the deci sion to grandfather an existing well should be based solely on the well’s passing a mechanical in tegrity test without physical we ll modification and meeting all other Class VI permit requirements that may be met without well modification. This change could be accomplished by revisi ng proposed § 146.81(c) as follows:

(c) This subpart applies to owners and opera tors of permit or rule-authorized Class I industrial, Class II, or Class V experimental carbon dioxide injection projects who seek to

Page 2 of 16

Austin 1042121v.112/24/2008
www.txccsa.org

apply for a Class VI geologic se questration permit for their well or wells. If the Director

determines that USDWs will not be endange red through the results of mechanical integrity testing pursuant to § 146.89 that the well is effective in preventing endangerment of USDWs, such wells are exempt, at the Director’s discretion, from the casing and cementing requirements at §§ 146.86(b) and 146.87(a)(1) through (3) any requirement imposing physical well modificati ons, subject to meeting all other Class VI well requirements.

The TxCCSA also comments on the definition of Geologic Sequestration Pr oject referenced in

this section.

Geologic sequestration project means an injection well or wells used to emplace a

carbon dioxide stream beneath the lowermos t formation containing a USDW. It includes the subsurface three-dimensional extent of the carbon dioxide plume, associated pressure front, and displaced brine, as well as the surface area above that delineated region.

This definition restricts geologi c sequestration projects to the lowermost formation containing a USDW. Restricting injection fo rmations to the lowermost US DW is not necessary for the protection of USDWs and would rem ove a vast number of viable fo rmations from consideration. The drilling industry has shown that it can operate CO 2 injection wells in an enhanced oil recovery (EOR) context without endangering USDWs that are located below the injection zone. There should be no blanket prohibiti on against injection into any a pproved geologic zone even if

above the lowermost USDW. The decision should be site-specific and based on evaluation of local geology. We fully support the change pr oposed by the Texas Railroad Commission in its

comments.

Geologic sequestration project means an inje ction well or wells used to emplace a carbon dioxide stream beneath the lowermost formation containing a USDW , or another formation, if the Director determines that injection into the other formation will not endanger USDWs . It includes the subsurface three- dimensional extent of the carbon dioxide plume, associated pressure front, and displaced brine, as well as the surface area above that delineated region.



### 2. § 146.82 Required Class VI permit information

This section of the proposed rule sets forth the information which the owner or operator must submit to the Director in order to obtain a Class VI well permit. All of the information specified must be part of the permit application. But so me data are not necessary in light of other provisions of the current proposal, and some are not attainable prior to well drilling (applicants will not drill the well until it has been approved, othe rwise they risk drilling an unusable well). Still other data can only be obtained after injec tion activities have been initiated. Post drilling and post injection data should not be required as part of the application process but instead should be considered confirmatory data that may be submitted after they are obtained. In general, the proposed rule should be modified to require submissi on of only those data which are

needed for consideration of the initial permit application, and only those data that may be reasonably obtained prior to commencement of in stallation and operation of the injection well.

Page 3 of 16

Austin 1042121v.112/24/2008
www.txccsa.org

EPA Proposed : §146.82 (f) Maps and stratigraphic cross sections indicating the general vertical and lateral limits of all USDWs, water wells and springs within the area of review, their positions rela tive to the injection zone(s ) and the direction of water movement, where known;

So long as the Applicant proposes to inject CO 2 below the lowermost USDW, as required by the proposed rule, there is no justif ication to require maps and stra tigraphic cross sections for the

entire extent of those USDWs above the lo wermost USDW, although mapping and stratigraphic

cross sections in the immediat e vicinity of the proposed inje ction locations (e.g. where the injection wells will be drilled) should still be required. Data regarding all USDWs in the AoR will likely be costly and/or difficult to collect and, except as noted above, the usefulness of those data seems questionable.

Accordingly, TxCCSA suggests that subparagraph (f) should be modified as follows:

(f) Maps and stratigraph ic cross sections indicating the ge neral vertical and lateral limits

of all the lowermost USDW s
, all USDWs in the immediate vicinity of the proposed injection well(s), water wells and springs within th e area of review, their positions relative to the injec tion zone(s) and the direction of water movement, where known;

EPA Proposed : §146.82(l) The results of the formati on testing program as required in paragraph (j) of this section; (r) All available logging and testing pr ogram data on the well required by§ 146.87; (s) A demonstration of mechanica l integrity pursuant to § 146.89;

The requirements of subparts (l ), (r) and (s) of § 146.82 cannot be met until after the well is drilled. For example, subparagraph (l) referen ces (j), formation testing. Clearly formation testing is a drilling or post completion operation. Similarly, l ogging and mechanical integrity testing also are drilling or pos t well completion operations. Because this information will be collected post applicatio n approval, it should not be required pr ior to the granting of the Class VI permit.

TxCCSA suggests that EPA modify § 146.82 to elimin ate subparts (l), (r) and (s) because those data do not belong in and in fact may not be available as part of a permit application.



### 3. §146.84 Area of review and corrective action.

EPA’s proposed rule allows each applicant to de fine the Area of Review (“AoR”) associated with the sequestration project. TxCCSA has no obj ection to this flexible approach as it allows the size and shape of the AoR to re flect the unique geology of each CO 2 sequestration project. However, under §146.84 (a), to define the AoR, an applicant must us e a model capable of considering the physical a nd chemical properties of all phases of the injected carbon dioxide

stream. TxCCSA is uncertain that there is a model that can satisfy this requirement. Accordingly, TxCCSA suggests that the pr oposed rule be amended as follows:

Page 4 of 16

Austin 1042121v.112/24/2008
www.txccsa.org

§146.84 Area of review and corrective action

. (a) The area of review is th e region surrounding the geolog ic sequestration project that may be impacted by the injection activity. The area of review is based on computational modeling that

, to the extent practicable and to the extent determined to be necessary by the Director, accounts for the material physical and chemical properties of all

critical phases of the injected carbon dioxide stream.



### 4. § 146.86 Corrosiveness of the carbon dioxide stream, and formation fluids;

Under the proposed rule, the Dire ctor is required to determine and specify casing and cementing requirements to ensure that a proposed Class VI well is constructed and co mpleted to prevent the

movement of fluids into or between USDWs or into any unaut horized zones and to permit appropriate testing and monitoring. The proposed ru le does not adequately explain or justify the information requirements set forth therein.

EPA Proposed §146.86 (b) Casing and Cementing of Class VI Wells.(1)(v) Corrosiveness of the carbon dioxid e stream, and formation fluids;

The proposed rule requires an applicant to subm it to the Director information on the corrosiveness of the carbon dioxide stream, and formation fluids. Neither the proposed rule nor the Preamable adequately explains whether the information requested is corrosiveness of the

combined streams of CO 2 and formation fluids, or each independent stream (which seems unnecessary). Further, the proposed rule or the Preamble should elaborate on what type of data may be acceptable –laboratory data for hypothetical streams, empirical testing, analogous wells? Clarification is requested on th e aforementioned requirements.

EPA Proposed §146.86 (b) Casing and Cementing of Class VI Wells. (3) At least one long string casing, using a suffic ient number of centralizers, must extend to the injection zone and must be cemented by circulating cemen t to the surface in one or more stages.

*

*

* (5) Cement and cement additives mu st be compatible with th e carbon dioxide stream and formation fluids and of suff icient quality and quan tity to maintain integrity over the design life of the geologic sequestration projec t. The integrity and lo cation of the cement shall be verified using technology capable of evaluating cement quality radially and identifying the location of channels to ensure that USDWs are not endangered.

Additional proposed requirements affecting casing and cementing of Class VI wells is set forth

in §§ 146.86 (b)(3) and (5) as quoted above. The requirement, to cement the casing to the surface is unnecessary, expensive and contrary to best practices. Under acceptab le best practices, the long string casing would not be cem ented to the surface so that th e pressure between the surface casing and long string can be monitored to dete rmine if there is migration between the longstring casing and the surface casing. The cemen ting requirement proposed above would limit the

Page 5 of 16

Austin 1042121v.112/24/2008
www.txccsa.org

ability to monitor for migration of injected fluids, in this case CO 2 , behind the casing. Additionally, TxCCSA’s field data indicate s that the proposed casing and cementing requirements are costly while providing limited, if any benefit. Accordin g to our findings, under existing Class II UIC rules, a conventional cementing program costs approximately $20,000 per well. Under the cementing program proposed fo r Class VI wells the cost could escalate to approximately $193,000 per well a potential $173,000 increase, representing a 10% increase in total per well costs. 1

TxCCSA suggests an alternative th at protects USDWs, but at a reasonable cost. Rather than require cementing of the long string casing to the surface, the proposed rule should require cement and cement additives to be compatible with the carbon dioxide stream and formation fluids that cover the injection zone and the c onfining zone, and then require standard (API, ASTM International, or comparable standards) industry cements to a cert ain distance above the confining zone. This would pla ce cements that may require special additives at the point where USDWs are most effectively protected from the mixture of carbon dioxide and formation fluids that could produce carbonic acid.

TxCCSA suggests the following revision:

§146.86 (b) Casing and Cementing of Class VI Wells. (3) At le ast one long string casing, using a sufficient number of centralizers, must extend to the injection zone and must be cemented by circulating cement across the surface injection zone and confining zone and an authorized distance above the confining zone, submitted by the permittee and approved by the Director in one or more stages

. *

*

* (5 ) To protect USDWs

, C cement and cement additives must be compatible with the

carbon dioxide stream and formation fluids and of sufficient quality and quantity to maintain integrity over the design operating life of the well geologic s equestration project must be used through the injection zone and confining zone . The integrity and

location of the cement shall be verified using technology capable of evaluating cement quality radially and identifying the location of channels to ensure that USDWs are not endangered.



### 5. § 146.87 Logging, sampling, and testing prior to injection well operation.

EPA’s proposed § 146.87 delineates the information a permittee must collect during the drilling and construction of a Class VI well, prior to actual in jection activities

. Although the proposed rule generally allows the Director to approve alternative methods that provide equivalent or better information, it is not clear th at the Director can utilize that regulatory flexibility to waive unnecessary, duplicative testing wh ich the proposed rule requires in several subparagraphs.

1 For a typical well completed under Class II UIC rules, the total costs equals $1,700,000.

Page 6 of 16

Austin 1042121v.112/24/2008
www.txccsa.org

EPA Proposed § 146.87 (a)(2) Before and upon installati on of the surface casing:... (ii) A cement bond and variable de nsity log, and a temperature l og after the casing is set

and cemented

.

The requirements in §146.87(a)(2)(ii) to secure and submit specified logs before, upon and after surface casing installati on is excessive. The proposed rule fails to provide a sufficient justification for requiri ng a cement bond and variable densit y log before and upon installation of the long string casing, and requiring a temperature log after the casing is set and cemented. Temperature logs are seldom used in the drilli ng industry to determine cement characteristics as they do not provide useful data regarding the bon ding of cement. The ru les should be modified to allow the permittee to select between the speci fied logs and any other logging tool approved by the Director as follows:

§146.87(a)(2)(ii) A cement bond an d variable density log or other approved tool

, and or a temperature log after the casing is set and cemented. [see § 146.12(d)(2)(i)(B) Criteria and Standards applicable to Class I nonhazardous wells: Construction Requirements .]

*

*

* (5) Any alternative methods that provide equi valent or better information and that are required of and/or approved of by the Director. The Director may waive any log or test specified in this subparagraph.

EPA Proposed §146.87 (a)( (3) Before and upon installa tion of the long string casing: (i) Resistivity, spontaneous pot ential, porosity, calip er, gamma ray, fracture finder logs, and any other logs the Direct or requires for the given ge ology before the casing is installed; and

Once again, the proposed rule re quires testing that would be of little benefit in protecting USDWs, but would impose significant costs on ope rators. For example, TxCCSA sees no basis to run a fracture finder log in every well. Fracture finder logs will only see minor fractures within the individual formations. The log does not provide information on whether these minor fractures can act as conduits between the inj ection zone and confining zone. To avoid unnecessary data collection and submittal, the ru les should allow the applicant to propose and justify a logging suite based on the reservoir and geology associated w ith the particular CO 2 project. The Director of course should be allowed to approve, or r ecommend revisions to the proposed suite. This would avoid mandating un needed testing. TxCCSA suggests the following revised rule, incorporating this proposed change:

§146.87 (a)( (3) Before and upon installa tion of the long string casing: (i) Resistivity, spontaneous potential, porosit y, caliper, gamma ray, fracture finder logs, and any other or any suite of logs submitted by the permittee and approved by logs

the Director before the casing is installed requires for considering the given geology before the casing is installed ; and

Page 7 of 16

Austin 1042121v.112/24/2008
www.txccsa.org

*

*

*

The proposed rule also requires unnecessary and duplicative logging with respect to the longstring casing.

EPA Proposed §146.87(a)( (3) Before and upon insta llation of the long string casing : (ii) A cement bond and variable density log, and a te mperature log after the casing is set and

cemented.

TxCCSA suggests that the logging options it recommends with resp ect to surface casing also apply for the long-string casing. Thus, the pr oposed rule should be revised as follows:

§146.87(a)(3)(ii) A cement bond an d variable density log or other approved tool

, and or a temperature log after the casing is set and cemented. [see § 146.12(d)(2)(ii)(C) Criteria and Standards applicable to Class I nonhazardous wells: Construction Requirements .]

EPA Proposed §146.87(b) The owner or operator must take and submit to the Director whole cores or sidewall cores of the inj ection zone and confining system and formation fluid samples from the injection zone(s). The Director may accept cores from nearby wells if the owner or operator can demonstrate that core retrieval is not possible and that such cores are representative of conditions at the well. The Director may require the owner or operator to core othe r formations in the borehole.

TxCCSA opposes the requirement to collect cores from more than one (1) well within a CO 2 project. As a practical matter, the majority of the important physical and geophysical properties of the injection reservoir, includ ing the particular attributes of the confining formations can and are required to be evaluated from logs and other scientific, reliable measures. A “whole core”, as specified in §146.87(b) is only a very small sample of the attributes of a re servoir and a sidewall core, an even smaller sample. The former is very expensive to collect, and the latter often not

available. Neither is essentia l given the vast amount of data otherwise required, and multiple samples, as proposed by the rule, is not reasona ble. The unreasonableness of the whole core, sidewall core and extra core sampling is evident upon consideration of the sheer volume of physical evidence that this provis ion alone may produce. For exam ple, in Texas there are over 5000 existing Class II CO 2 injection wells. If a small fraction of these wells are converted to

Class VI CO 2 injection wells following the completion of production activities, there will be a large universe of cuttings. Where will the regula tory agency store this magnitude of cuttings? This may become a particular problem given the total number of CO 2 sequestration projects that may be proposed.

TxCCSA suggests the following:

§146.87(b) At the specific request of the Direct or and only where core retrieval is possible, t T he owner or operator must take and submit to the Director a whole core s or sidewall core s of the injection zone and confini ng system and formation fluid samples

Page 8 of 16

Austin 1042121v.112/24/2008
www.txccsa.org

from the injection zone(s). The Director may accept cores from nearby wells if the owner or operator can demonstrate that core retrie val is not possible and that such cores are representative of conditions at the well. The Director may require the owner or operator
to core other formations in the borehole.

EPA Proposed §146.87(d) At a minimum, the owner or operator must determine or calculate the following information concer ning the injection and confining zone(s): (1) Fracture pressure; (2) Other physical and chemical characteristics of the inje ction and confining zones; and (3) Physical and chemical characteristics of the formation fluids in the injection zone.

Subparagraph (d) of §146.87 provides permittees with a generic list of data that is required regarding the injection and confining zone. Fracture pressure is specified. Under the circumstances, fracture pressure should only be calculated, rather than “determined” as any determination based on techniques beyond mathematical calculation will require coring or perforation of the casing, potential ly decreasing the mechanical in tegrity of the well and running directly counter to the obj ective of the proposed rules.

With respect to other generic data EPA seeks regarding the injection and confining zones, the proposed rule does not to provide sufficient gui dance to the permittee on the scope of data required on the formation fluids and reservoi r zones. TxCCSA requests clarification and specifics both with respect to the nature and type of “physical and chemical characteristics” EPA expects a permittee to submit in response to the requireme nts of 146.87(d) (2) & (3).

EPA Proposed §146.87(f) The owner or operator must provide the Director with the opportunity to witness all logging and testing by this subpart. The owner or operator must submit a schedule of such activities to the Director 30 days prior to conducting the first test and submit any changes to the schedul e 30 days prior to the next scheduled test.

The agency requires the submission of a proposed logging and testing schedule at least 30 days in advance of those proposed activities. Althoug h a logging and testing sc hedule certainly can be designed 30 or more days in advance, the actu al date that logging is performed is usually available only 24 to 48 hours in advance of actual logging operations . A mandatory 30 day notice is simply not practi cal for logging and testing.

TxCCSA asks that notice requireme nts in this subpart be adjust ed to take in to account the practical limitations experienced ro utinely in field operations. Sugge sted revised language is set

forth below.

§146.87(f) The owner or operator must provide the Director with the opportunity to witness all logging and testing by this subpa rt. The owner or operator must submit a proposed schedule of such activities to the Director at least 30 days prior to conducting

the first test and submit notice at least 24 hours in advance of the conduct of any actual logging and testing. an y changes to the schedule 30 days prior to the next

schedul ed test

.

Page 9 of 16

Austin 1042121v.112/24/2008
www.txccsa.org



### 6. § 146.88 Injection well operating requirements.

EPA Proposed §146.88(c) The owner or operator must fill the annulus between the tubing and the long string casing with a non-co rrosive fluid approved by the Director. The owner or operator must maintain on the annulus a pressure that exceeds the operating injection pressure, unless the Director determines that such requirement might harm the integrity of the well.

EPA’s suggested Mechanical Integrity (“MI”) rule to maintain pressure on the annulus exceeding the operating injection pressure will, in most cas es, result in an exceedance of the burst pressure of the casing. If the operator is required to main tain pressure on the annulus at a rate that is greater than the injec tion pressure (as indicated in EP A proposed §146.88(c)), monitoring the annulus pressure may not be an accurate indicator of mechanical integrity. The EPA appears to recognize this likeli hood and thus allows the Director to waive the requirement. However, the rule should not require a questionable practice and then permit its waiver. Rather, the practice should only be required if the Director makes a determination that the conduct of the test will NOT cause a problem. The suggested revision is encapsulated below:

(c) The owner or operator must fill the a nnulus between the tubing and the long string casing with a non-corrosive flui d approved by the Director. If the Director determines that such requirement will not ha rm the integrity of the well, T t he owner or operator

must maintain a positive pressure on the annulus a pressure that exceeds the operating injection pressure. ., unless the Director determines that such requirement might harm the integrity of the well

.

EPA Proposed §146.88(e) The owner or operator mu st install and use continuous recording devices to monitor: The injecti on pressure; the rate, volume, and temperature of the carbon dioxide stream; and the pressure on the annulus between the tubing and the long string casing and annulus fluid volu me; and must install and use alarms and automatic down-hole shut-off systems, designe d to alert the operator and shut-in the well when operating parameters such as annulus pre ssure, injection rate or other parameters approved by the Director diverge beyond perm itted ranges and/or gradients specified in the permit;

The installation and use of automatic down-hole s hut-off systems creates a potential avenue for leakage and is unnecessary on land-based onshore systems. Down-hole shut-off systems, more commonly used in off-shore operations, serve to shut in the well and prevent reservoir fluids from exiting the wellbore. They are used in off- shore operations because of the risk of damage to the wellhead from atmospheric or anthr opogenic phenomenon, such as a hurricane causing extensive platform damage or a ship colliding with a platform. But in an onshore injection system, a down-hole shut-off system will not determine or deter leakage of fluids in the wellbore and therefore is not effective in protecting US DWs. Also, the likelihood of damage to an onshore wellhead is extremely remote. The greater risk in a Class VI onshore operation is that the mechanics of the down-hole shut-off system will be compromised or malfunction. Such a malfunction would require remova l of the tubing and shut-off system equipment, thereby

Page 10 of 16

Austin 1042121v.112/24/2008
www.txccsa.org

creating a potential unwanted migration path. The use of automatic down-hole shut-off systems should be limited to off-shore operations.

Furthermore, the requirement to continuously m onitor the annulus fluid volume is impractical, because it does not provide any meaningful data regarding potential pr oblems with the operation of the well. Requiring the continuous monitori ng of the amount of annulus fluid added during operations is more practical a nd will reveal potential leakag e paths. TxCCSA recommends the following:

§146.88(e) The owner or operator must install and use conti nuous recording devices to monitor: The injection pressure; the rate, volume, and temperature of the carbon dioxide stream; and the pressure on the annulus betw een the tubing and the long string casing and

the volume of annulus fluid added to the annulus volume ; and the owner or operator

must install and use alarms and automatic down

- hole shut-off systems, designed to alert the operator and shut

- in off the well when operating parame ters such as annulus pressure, injection rate or other parameters approve d by the Director diverge beyond permitted ranges and/or gradients specified in the permit. If the operation involves off-shore injection, the owner or operator must in stall and use alarms and automatic downhole shut-off systems, designed to alert the operator and shu t-in the well if the wellhead is damaged or when operating parameters such as annulus pressure, injection rate or other parameters approved by the Director diverge beyond permitted ranges and/or grad ients specified in the permit ;

(f) If a n down

- hole automatic shutdown is triggered or a loss of mechanical integrity is discovered, the owner of operator must i mmediately investigate and identify as expeditiously as possible the cause of the shutoff.

*

*

*



### 7. § 146.89 Mechanical integrity.

EPA Proposed §146.89(c) At least once per year, the owner or operator must use one of the following methods to determine the abs ence of significant fluid movement under paragraph (a)(2) of this section: (3) A casing inspection log, if required by the Director.

Among the test protocols prescribed by the proposed rule to conf irm lack of significant fluid movement is a casing inspection log. Although this log is optiona l, it may be required by the Director. Conducting a casing inspection log will require the tubing to be pulled from a well, and that in turn substantially increases the possi bility of a well control event (that is a loss of control over well operation). Accordingly, the technique shoul d only be mandated when other testing methodologies are unavailable . TxCCSA suggests the following edit:

Page 11 of 16

Austin 1042121v.112/24/2008
www.txccsa.org

§146.89(c) At least once per year, the owner or operator must use one of the following methods to determine the absence of signi ficant fluid movement under paragraph (a)(2)

of this section: (3) A casing inspection log, if a tracer survey or a temperature or noise log cannot be obtained and a casing inspection log is thus required by the Director.



### 8. § 146.90 Testing and monitoring requirements.

EPA Proposed §146.90(b) Installation and use, except during well workovers as defined in § 146.86(d), of continuous recording devices to monitor injection pressure, rate and volume; the pressure on the annulus between the tubing and the long string casing; and the annulus fluid volume;

Consistent with our comment regarding propo sed § 146.88(e) in Sect ion 5 above, TxCCSA is unaware of a methodology to monitor the actual volume of annular flui d in the annulus on a continuous basis, and thus seeks agency clarif ication on this portion of the proposed rule.

EPA Proposed §146.90 (c) Corrosion monitoring of the well materials for loss of mass, thickness, cracking, pitting and other signs of corrosion must be performed on a quarterly basis to ensure th at the well components meet the minimum standards for material strength and performan ce set forth in § 146.86(b) by: (1) Placing coupons of the well construction ma terials in contact with the carbon dioxide

stream; or (2) Routing the carbon dioxide stream through a loop constructed with the material used in the well; or (3) Using an alternative met hod approved by the Director;

TxCCSA believes the requirements in EPA propos ed §146.90(c) related to corrosion monitoring are inapplicable. In the vast majority of cases, the CO 2 will be transported to the injection site through pipelines, will be dehydrated prior to trans portation and therefore when injected it will

be non-corrosive. 2 In those instances, the test met hods described in § 146.90(c)(1) and (c)(2) (except of course alternatives approved by the Director) will not provide meaningful information regarding the mechanical integrity of down-hol e casing, tubing and other equipment because the

CO 2 will simply not be corrosive at the surface. Consequently, to have any relevance such requirements should be reserved for situations where water saturated CO 2 is being injected.

2 For evidence on CO 2 corrosivity in the absence of free water see Don Duttlinger, Enhanced Recovery Intertwines Naturally With CO 2 Sequestration , Tech Connections Column, January 2 004, American Oil and Gas Reporter,

available at http://www.pttc.org/aogr_columns_archived/aogrcojan04.htm (From the processing/injection standpoint, CO 2 is noncorrosive as long as it is dry. Proving that point, Kinder Morgan has hydro-tested the 32- year-old CRC Pipeline built in 1971 to transport CO 2 . Only one minor failure occurred. After testing, the line was rated for 2,025 psi maximum operating pressure, which esta blished a 200 psi increase over most recent ratings); see J. Layne, Results of the Hydrotest of the 30-year old Canyon Reef Carriers CO 2 Pipeline , 2003 CO 2 Flooding Conference, December 11-12, 2003, Midland,Texas (University of Texas of the Permian Basin’s Center for Energy and Economic Diversification).

Page 12 of 16

Austin 1042121v.112/24/2008
www.txccsa.org

§146.90(c) Corrosion monitoring of the well ma terials for loss of mass, thickness, cracking, pitting and other signs of corrosion must be performed on a quarterly basis to

ensure that the well components that contact water saturate d carbon dioxide streams meet the minimum standards for material strength and performance set forth in § 146.86(b) by: (1) Placing coupons of the well construction ma terials in contact with the carbon dioxide

stream; or (2) Routing the carbon dioxide stream through a loop constructed with the material used in the well; or (3) Using an alternative me thod approved by the Director. The requirements of this subpart are waiv ed when the carbon dioxide stream is dehydrated to meet pipeline specifications.

EPA Proposed §146.90(f) A pressure fall-off test at least once every five years unless more frequent testing is re quired by the Director based on site specific information;

The scope of this proposed requirement is not clear. Does the EPA proposal require the submittal of the actual data, or merely an analysis of the pressure fall-off test?

EPA Proposed §146.90(i) Any additional monitori ng, as required by the Director, necessary to support, upgrade, and improve co mputational modeling of the area of review evaluation required under § 146.84( b) and to determine compliance with

standards under 40 CFR 144.12

This section effectively proposes a “catch all” to allow the Director undefined discretion to order unlimited and unspecified additional monitoring to improve modeling and ensure compliance. Vesting the Director with such additional undefined discretional authority increases the regulatory risks of the Class VI permitting process and accordingly increases costs. In the event that experience implementing the proposed rule requires some future revisions to include additional monitoring requirements, such ch anges should be proposed and adopted through appropriate rulemaking procedures and based on an adequate fact ual and scientific record. However, adopting an open-ended power to requi re “any” additional mon itoring, at this early stage, undermines the purpose of providing a define d set of rules that members of the public may evaluate prior to making the large investments that will be involved in a Class VI projects. Such uncertainty can only tend to increase costs, crea ting a barrier to capital formation and discourage geologic sequestration. Acco rdingly, TxCCSA would recomme nd deleting this section:

§146.90 (i) Any additional monitoring, as required by the Director, necessary to support, upgrade, and improve computational modeling of the area of review evaluation required

u nder § 146.84(b) and to determine comp liance with standards under 40 CFR 144.12

.



### 9. § 146.92 Injection well plugging.

Page 13 of 16

Austin 1042121v.112/24/2008
www.txccsa.org

EPA Proposed §146.92 (b) Well Plugging Plan. (5) Th e type and grade and quantity of material to be used in plugging. The material must be compatible w ith the carbon dioxide

stream;

The proposed regulation requires the wellbore to be flushed prior to plugging and thus it is unnecessary to use cement “compa tible with the carbon dioxide st ream”. In the absence of water, CO 2 is non-corrosive and compatible with conventional cements (see discussion under Comment #7). Accordingly, the rule should be revised as follows:

§146.92 (b) Well Plugging Plan. (5) The type and gr ade and quantity of material to be used in plugging. The material must be compatible with the carbon dioxide stream;



### 10. § 146.93 Post-injection site care and site closure.

The proposed rule establishes a 50 year default period for post-injection site care. There is, however, no factual or scientific basis for such an extensive period. Under EPA’s Resource Conservation and Recovery Act rules, which re gulate the disposal of hazardous wastes, post closure care is limited to 30 years. Defaulting to an excessively long peri od will increase costs and introduce greater regulatory uncertainty, which will discourage capital formation around

CO 2 sequestration.

Additionally, even though the propos ed rule appears to include a 50 year default post injection site care period, in reality, that de adline is illusory as it is not self executing. Under the rules, post injection site care must continue indefinite ly until the Director authorizes closure. The closure approval process could take years, even decades, as the Director has no regulatory incentive to act on any post injection site care report. Meanwhile, a permittee may be required to continue unnecessary and expensive m onitoring and reporting indefinitely.

Whether the post-injection site car e period is site-specific, or 10 to 50 years, TxCCSA suggests that the post-injection site care provision be reconfigured to be self-executing and allow for closure at the end of that period unless the Direct or affirmatively acts to extend the post-injection site care period. These changes are cont ained in the suggested text below:

§ 146.93 Post-injection site care and site closure. (a) The owner or operator of a Class VI well must prepare, maintain, and comply with a plan for post-injection site care and site clos ure that meets the requirements of paragraph (a)(2) of this sect ion and is acceptable to the Director. (1) The owner or operator must submit the post-injection site care and site closure plan as a part of the permit appli cation to be approved by the Director. (2) The post-injection site care and site closure plan must include the following

information: (i) The pressure differential between pre-injection and predicted postinjection pressures in the injection zone; (ii) The predicted position of the carbon dioxide plume and associated pressure front at site closure as demons trated in the area of review evaluation required under § 146.84(b);

Page 14 of 16

Austin 1042121v.112/24/2008
www.txccsa.org

(iii) A description of post-injectio n monitoring location, methods, and proposed frequency; and (iv) A proposed schedule for subm itting post-injection site care monitoring results to the Director. (3) Upon cessation of injection, owners or ope rators of Class VI wells must either submit an amended post-injection site care an d site closure plan or demonstrate to the Director through monitoring data and modeling results that no amendment to the plan is

needed. (4) The owner or operator may modify a nd resubmit the post-injection site care and site closure plan for the Director’s approval within 30 days of such change. (b) The owner or operator shall monitor the site following the cessation of injection to show the position of the carbon dioxide plume and pressure front a nd demonstrate that USDWs are not being endangered.

*

*

* (3) Prior to authorization for the expiration of the peri od specified in subpart (b)(1), site closure , the owner or operator must submit to the Director a demonstration, based on monitoring and other site specifi c data, that the carbon dioxide plume and pressure front have stabilized and that no additional monitoring is needed to assure that the geologic sequestration project does not pose an endangerment to USDWs. (4) If within 180 days after the submittal of the data required under subparagraph (3), the Director determines th at the geological sequestration project may continue to pose an endangerment to USDWs, he shall so notify the owner or operator of his determination and the basis therefore, and If such a demonstration cannot be made (i.e., if the carbon dioxide pl ume and pressure front have not stabilized)

after the 50

- year period, the owner or operator must subm it to the Director a plan to continue post-injection site care. (5) If within 180 days after the submittal of the data required under subparagraph (3) above the Director fails to determine and to notify the owner or operator that the geological sequestration project may continue to pose an endangerment to USDWs, site closure shall be deemed authorized by rule (c) Notice of intent for site closure. The owner or operator must notif y the Director at least 120 da ys before site closure. At this time, if any changes have been made to the original post-injection site care and site closure plan, the owner or operator must also provide the re vised plan. At the discretion of the Director, a shorter notice period may be allowed. (d) After the Director has authorized site closure or site closure is authorized by rule

, the owner or operator must plug all monitoring wells in a manner which will not allow movement of injection or formati on fluids that endangers a USDW. (e) Once the Director has authorized site closure, or site closure is authorized by rule

, the owner or operator must submit a site cl osure report within 90 days that must

thereafter be retained at a location designated by the Direct or. The report must include: (1) Documentation of appropriate inj ection and monitoring well plugging as specified in § 146.92 and paragr aph (c) of this section. Th e owner or operator must provide a copy of a survey plat which has been submitted to the local zoning authority

Page 15 of 16

Austin 1042121v.112/24/2008
www.txccsa.org

designated by the Director. The plat must indicate the location of the injection well relative to permanently surveyed benchmarks . The owner or operator must also submit a copy of the plat to the Regional Administra tor of the appropriate EPA Regional Office; (2) Documentation of appropria te notification and information to such State, local and tribal authorities as have authority over drilling activities to enable such State and local authorities to impose appropriate cond itions on subsequent drilling activities that may penetrate the injection and confining zone(s); and (3) Records reflecting the nature, composition and volum e of the carbon dioxide

stream. (f) Each owner or operator of a Class VI inj ection well must record a notation on the deed to the facility property or any other document that is normally examined during title search that will in perpetuity provide a ny potential purchaser of the property the following information: (1) The fact that land has been used to sequester carbon dioxide; (2) The name of the State agency, local authority, and/or tribe with which the survey plat was filed, as well as the addres s of the Regional Environmental Protection Agency Office to which it was submitted; and (3) The volume of fluid injected, the inje ction zone or zones into which it was injected, and the period over which injection occurred. (g) The owner or operator must retain for th ree years following si te closure, records collected during the post-injec tion site care period. The owne r or operator must deliver

the records to the Director at the conclusion of the retenti on period, and the records must

thereafter be retained at a location de signated by the Director for that purpose.

Page 16 of 16

Austin 1042121v.1