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.Western Business Roundtable | 200 Union Blvd., #105 | Lakewood, CO 80228 | 303-384-9911

info@westernroundtable.com | www.westernroundtable.com

The opinions expressed in this letter represent the views of a ma jority of Roundtable Members, but not necessarily all of our m embers. December 24, 2008

Water Docket U.S. Environmental Protection Agency

Mail Code: 2822T 1200 Pennsylvania Avenue, N.W. Washington, DC 20460

Re: Docket ID No. EPA-HQ-OW-2008-0390

Dear Sir/Madam:

I am writing, on behalf of the multi-sector membership of the Western Business Roundtable (the “Roundtable”), in response to the Enviro nmental Protection Agency’s (the “Agency’s”) request for public comments regarding its proposed rulemaking to implement federal requirements under the Safe Drinking Water Act (“SDWA”) Underground Injection Control (UIC) Program for carbon dioxide (C O2) geologic sequestration wells (73 Federal Register 43492, August 28, 2008).

The whole issue of CO2 management has tremendous macro-economic, consumer pocketbook, environmental and national securi ty implications. Extensive Congressional and regulatory reviews are underway regarding the efficacy of mandatory carbon regulations. A necessary predicate to any su ch regime must be a clear understanding of:

 The effectiveness of sequestration and storage options;

 Hurdles to the efficient implementation of those options;

 CO2 transportation system challenges; and

 Liability issues associated with both transportation and storage of CO2.

The Roundtable strongly supports the aggr essive research and development efforts underway to facilitate commercial-scale CO2 ca pture and sequestration (“CCS”) projects. We also believe that expans ion of enhanced oil recovery (“EOR”) present a meaningful opportunity to utilize CO2 in a way that is be neficial to the global environment and both our nation’s economy and its energy security.

Clearly, a viable large-scale commercial CCS program requires resolution of a broad range of technical, policy and legal questions, most of which are beyond the scope of this rulemaking. A good synopsis of those challenges was documented in the recent General Accounting Office (“GAO”) report, “Climate Change – Federal Actions Will Greatly Affect the Viability of Carbon Capture and Storage as a Key Mitigation Option” ( GAO-08-1080, September, 2008 ). That said, we think EPA’s efforts here are an important first step andRoundtable Comments –SDWA CCS Regulations

will set the tone for how EPA and other federa l and state regulatory bodies will approach CCS going forward.

This rulemaking will also set the tone for ho w the public perceives CCS. Public acceptance is a crucial linchpin to any meaningful CCS program. This point was emphasized in a 2007 National Academy of Sciences report, which noted that a large-scale CCS program cannot be successful “if a significant fraction of the public views it as dangerous or unacceptable.” (National Research Council, NAS, Prospective Evaluation of Applied Energy Research and Development of DOE (Phase Two) (2007).

The Western Business Roundtable is a broad-based coalition of companies doing business in

the Western United States. Our members are engaged in a wide array of enterprises, including: manufacturing; retail energy sale s; mining; electric power generation and transmission; energy infrastructure development; and oil and gas exploration, development, transportation and distribution. We work to defend the interests of the West and support policies that encourage economic growth and opportunity, freedom of enterprise and a common-sense, balanced approach to cons ervation and environmental stewardship.

Most of our members are centrally involved in the development, transportation and processing of a wide variety of energy resource s -- fossil, renewable and nuclear -- as well as the generation and distribution of electrici ty across the West and technologies that facilitate greater energy conservation and effi ciency. Roundtable members also are on the cutting edge of technology de velopment related to the management of CO2 emissions.

I hope you will find the broad perspective and expertise reflected in this letter helpful as the Agency moves forward with its deliber ations on this important policy issue.

ROUNDTABLE CONCERNS

As policymakers and project developers work through the many nuances involved with large-scale CCS, we believe that it is important to keep focused on this central tenet: strong and early investment in CCS techno logies and infrastructure is a necessary foundation for any viable climate change regulatory regime.

One of the biggest impediments to commercial -scale CCS projects today is regulatory uncertainty. Meaningful investments in CCS w ill only occur in the presence of clear, carefully tailored regulatory constructs that help encourage early and robust development of projects and which aid in eliminating liabilit y risk for such early investments. In that regard, we appreciate EPA’s statement, in the rule’s preamble, that it recognizes CCS as a key climate change mitigation technology and t hat the rule is intended to support its development.

With that goal in mind, we would offer th e Agency the following thoughts on how the proposed regulations might be clarified and strengthened:Roundtable Comments –SDWA CCS Regulations

1. Don’t Chill On-Going Enhanced Oil Recovery (EOR) Activities -- EPA’s search for a regulatory structure to manage geologic sequestration of CO2, in the context of CO2 capture initiatives contemplated in CCS initiatives, has resulted in this proposal to create a new SDWA UIC “Class VI” category . This effort reflects the fact that geologic sequestration wells do not fa ll neatly into any of the current SWDA UIC

classes. We understand that rationale and generally support the distinction being drawn. In fact, we want to make sure t hat the distinction is drawn clearly enough that it doesn’t confuse or impede the ex isting CO2 uses, such as EOR, already covered under Class II of the UIC regime.

2. Appropriately Characterize CO2

-- We strongly urge EPA to be very careful in its characterization of CO2 under the UIC prog ram. As has been previously noted, a successful climate change control program will necessarily be predicated on development of -- and public support for -- CCS. EPA could inadvertently, and inappropriately, stigmatize CCS, if it v eers into an unwarranted categorization of CO2 as a pollutant or a hazardous waste. Such suggestions would imply a liability risk that would chill further development of both CCS and Enhanced Oil Recovery (EOR) operations.

3. Avoid Regulatory Creep – We are extremely concer ned by arguments that the whole suite of environmental laws -- including the Comprehensive Environmental Response, Compensation, and Liabilit y Act (“CERCLA”) and the Resource Conservation and Recovery Act (“RCRA”) -- be applied to CCS projects.

These laws, if applied broadly to CCS, would impose significant obligations and potential liabilities not only on project op erators, but also potentially on other

entities in the CO 2 chain, such as entities producing the CO 2 that is ultimately injected. That would put advancement of CCS commercialization into a deep freeze. Such an outcome would clearly be counter-pro ductive. Thus, we urge the Agency to pursue options that will limit CCS pr ojects’ liability under CERCLA and RCRA.

4. Characterize Carefully Risks of th e Geologic Sequestration of CO2

– It is, of course, crucial that the final rule meet EP A’s objective of protecting drinking water supplies. We are concerned, however, that some of the more stringent requirements being proposed for Class VI wells are no t supported by findings of unique risks actually posed by CCS wells. EPA’s regulations should be based upon an accurate characterization of the potential risks po sed by the geologic sequestration of CO 2 and be specifically tailored accordingly to addre ss those identified risks. This will ensure that EPA meets its obligation to provide appropriate protection of underground sources of drinking water, while avoidi ng unnecessary regulations that may hamper CCS or EOR projects from going forward or call into question the general safety of

CO 2 storage.

EPA should consider applying a tiered se t of site characterization requirements

based on demonstrable and known site charac teristics. For example, potential sitesRoundtable Comments –SDWA CCS Regulations

that are deep saline formations located one or more kilometers below the ground surface are generally recognized as among the most favorable and secure site options for assuring public safety. If such sites do not have a Underground Source of Drinking Water (USDW) aquifer located betw een it and the ground surface above, a more streamlined regulatory site char acterization and risk review may be appropriate.

On the other hand, an example of a potential site that may require a more rigorous

site characterization and risk assessme nt are “sole source aquifers” which are aquifers that are the sole supply of water for a region and are critically important to protect. Some stakeholders may assert that there should be no CO2 storage above or below a sole source aquifer. However, such a restriction could essentially prohibit storage in many Western areas. Rather, a better approach would allow EPA to permit UIC Class VI wells in areas where it can be shown that there are sufficient caps and protections to prevent the migratio n of CO2 in overlying aquifers, even in proximity to aquifers designated as sole source. An early detection monitoring program could be established to provide sufficient opportunity to mitigate any unlikely release of CO2 from geologic storage unit.

Approaches like this illustrate how EPA can streamline UIC regulations for site characterizations and permit UIC Class VI wells that first and foremost protect public safety, yet reflect a workable balance in adapting site characterization and risk assessments based on criteria adaptable to unique candidate sites.

5. Make Risk Management Approaches Reasonable – We strongly urge EPA to avoid utilizing risk management approach es that discourage CCS deployment. Regulatory certainty is absolutely crucial, if meaningful investment is going to flow to CCS technologies and implementation.

EPA can be helpful in that regard by brin ging certainty to the long-term obligations and risks associated with geologic seques tration projects. For example, EPA should refrain from requiring financial assuranc e for potential liabilities more than 50 years in the future. Extending those re quirements any further may deter and even prevent investment in CCS projects. Li kewise, post-injection monitoring and financial assurance requirements are important , but need to be tailored to comport with the potential risks, which decrease s ubstantially after injection is complete.

6. Respect State Primacy on SDWA Permitting

– EPA should respect states’ expertise in administering the SDWA, by providing a reasonable process whereby they can obtain primacy over regulation of Class VI (CCS) wells. Many states already administer SDWA programs and have long experience regulating CO 2 injection through Class II EOR programs. Further, a number of states are moving ahead with developing their own initiative s and regulations to solve other issues associated with CCS -- incentives provisio ns and provisions clarifying the nature of potentially affected property rights as two examples.Roundtable Comments –SDWA CCS Regulations

Clearly, in determining state primacy, EPA will have to consider how to handle projects that span multiple states. We do not believe that issue to be insurmountable. Rules could include, for example, provisions for establishing a primary state for permitting purposes, with other affected states provided an opportunity for notice and comment.

7. Avoid Over-Generalization in Regulations – We strongly urge EPA to avoid blanket prohibitions or arbitrary absolutes in the rule. As currently proposed, EPA’s regulations contain a number of default provisions that presume universal application. We believe that approach is problematic. It is too early to fully understand precisely which methods or techno logies will ultimately prove optimal.

Further, the geologic variability involved in different conceivable GS projects needs to be taken into account in issues rangin g from site characterization to area of review (AOR) to containment requirements. The regulations should encourage sitespecific, performance-based determinations at the permitting stage to handle these important issues.

EPA should leave the door open for a rang e of injection sites and methods (some of which are not yet fully understood), provided that the Owner or Operator can show that the injection and storage will be pr otective of drinking water supplies.

8. Put Limits on EPA Authority and Discretion

-- The Roundtable fully recognizes the difficulty EPA faces in establishing regulations for CCS. We fully support the

notion that some level of discretion is ne cessary for the Agency to adjust to changes or new information that emerges as pilot pr ojects move forward. Having said that, the balance here is a delicate one. Too much discretion can undermine the certainty that is so important to encourage CCS proj ects. Certainly, any discretion that is afforded should be bound by reasonable cri teria. Equally important: EPA should adhere to its limited authority under the SDWA and not use this as an opportunity

to seek to extend it.

CONCLUSION

On behalf of the many member organization s of the Western Business Roundtable, thank you for the opportunity to provide our input on this crucially important public policy issue, the implications of which are so pivotal to the continued vitality of the West.

Sincerely,

James T. Sims

President and CEORoundtable Comments –SDWA CCS Regulations

Western Business Roundtable

cc:

White House Council on Environmental Quality Office of Management and Budget

Senate Environment and Public Works Committee Members Senate Energy and Natural Resource Committee Members House Energy and Commerce Committee Members American Legislative Exchange Council Western House and Senate Delegations

Western Governors

Western Governors Association Western State Legislators

Counsel of State Governments – WestLetter ID: 0249

Commenter: James T. Sims Organization: Western Business Roundtable

Letter ID: 0249 Comment ID: 22253 Letter Lines: 27 to 43

Comment Code: 1000 1. General and Administrative Comments

Comment: I am writing, on behalf of the multi-sector membership of the Western Business Roundtable (the "Roundtable"), in res ponse to the Environmental Protection Agency’s (the "Agency’s") request for public comments regarding its proposed rulemaking to implement federal requirem ents under the Safe Drinking Water Act ("SDWA") Underground Injection Control (UIC) Program for carbon dioxide (CO2) geologic sequestration wells (73 Fe deral Register 43492, August 28, 2008).

The whole issue of CO2 management has tremendous macro-economic, consumerpocketbook, environmental and nationa l security implications. Extensive Congressionaland regulatory reviews are underway regarding the efficacy of mandatory carbon regulations. A necessary pred icate to any such regime must be a clear understanding of:

“ The effectiveness of sequest ration and storage options; “ Hurdles to the efficient implementation of those options; “ CO2 transportation syst em challenges; and “ Liability issues associated with both transportation and storage of CO2.

Individual Response: EPA acknowledges the comment. Pleas e see the remainder of EPA's responses to this comment for further deta ils. For additional information on EPA's final regulatory approach, please see the final rule and preamble as well as the rulemaking docket. EPA clarifies that climate change policy, eval uating the barriers to CO2 storage, and CO2 transport are outside the scope of the GS rulemaking. Rather, the purpose of the GS regulation is to ensure consistency in permitting underground injection of CO2 at GS operations across the United States and provide requirements to prev ent endangerment of USDWs in anticipation of

the eventual use of GS to reduce CO2 emissions.

Letter ID: 0249 Comment ID: 22254 Letter Lines: 45 to 49

Comment Code: 1330 1.1.3.1 Support use of GS in general

Comment: The Roundtable strongly supports the aggressi ve research and development efforts underway to facilitate comme rcial-scale CO2 capture a nd sequestration ("CCS") projects. We also believe that expansi on of enhanced oil recovery ("EOR") present a meaningful opportuni ty to utilize CO2 in a way that is beneficial to the global environment and both our natio n’s economy and its energy security.

1Individual Response: EPA clarifies that injection of CO2 for the purposes of enhanced oil and gas recovery will continue to be permitted under the Class II program, as long as any oil or gas production is occurring. The UIC GS requirements will apply to wells used for the purpose of long-term GS. The intent of the Class VI regulati ons is not to promote or encourage the use of GS, but, instead to ensure protection of USDWs where GS technol ogies are deployed.

For additional information on EPA’s approach to wells that are transitioning from ER to GS, see

the discussion of Class II wells under “How Does This Rule Affect Existing Injection Wells Under the UIC Program?” in the preamble to the final GS rule.

Letter ID: 0249 Comment ID: 22255 Letter Lines: 51 to 67

Comment Code: 1200 1.1 General comments about the rulemaking

Comment: Clearly, a viable large-scale commercial CCS program requires resolution of a broad range of tec hnical, policy and legal questio ns, most of which are beyond the scope of this rulemaking. A good s ynopsis of those challenges was

documented in the recent General Acc ounting Office ("GAO") report, "Climate Change - Federal Actions Will Greatly Aff ect the Viability of Carbon Capture and Storage as a Key Mitigation Option" ( GAO-08-1080, September, 2008). That said, we think EPA’s efforts here are an impor tant first step and will set the tone

for how EPA and other federal and stat e regulatory bodies will approach CCS going forward.

This rulemaking will also set the tone fo r how the public perceives CCS. Public acceptance is a crucial linchpin to any m eaningful CCS program. This point was emphasized in a 2007 National Academy of Sc iences report, which noted that a large-scale CCS program cannot be successf ul "if a significant fraction of the public views it as dangerous or unaccepta ble." (National Research Council, NAS, Prospective Evaluation of Applied Energy Re search and Development of DOE (Phase Two) (2007).

Individual Response: The GS regulation will provide certainty to industry and the public by providing consistency in requireme nts across the U.S. and transpar ency about what requirements apply to owners or operators. Furthermore, the tailored requirements in the GS rule will help allay public concerns about th e technology and its impacts on USDWs and, in turn, promote acceptance of GS projects.

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; and the Bureau of Land Management). The Agency continue s to evaluate areas of potential applicability

of other Federal environmental statutes incl uding, but not limited to: the Clean Air Act; the Resource Conservation and Recovery Act; th e Comprehensive Environmental Response,

2Compensation, and Liability Act; and the Marine Protection, Res earch, 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 efficien cies for owners or ope rators. For additional information, please see the discussion entitled "How Does This Rulemaking Relate to Other

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

Letter ID: 0249 Comment ID: 22256 Letter Lines: 69 to 87

Comment Code: 1000 1. General and Administrative Comments

Comment: The Western Business Roundtable is a broa d-based coalition of companies doing

business inthe Western United States. Our me mbers are engaged in a wide array of enterprises, including: manufacturing; reta il energy sales; mining; electric power generation and transmission; energy infrastructure development; and oil and gas exploration, development, trans portation and distribution. We work to

defend the interests of the West and s upport policies that encourage economic growth and opportunity, freedom of enterp rise and a common-sense, balanced approach to conservation and environmental stewardship.

Most of our members are centrally involve d in the development, transportation and processing of a wide variety of en ergy resources -- fossil, renewable and nuclear -- as well as the ge neration and distribution of electricity across the West and technologies that facilita te greater energy conservation and efficiency. Roundtable members also ar e on the cutting edge of technology development related to the management of CO2 emissions.

I hope you will find the broad perspective and expertise reflected in this letter helpful as the Agency moves fo rward with its deliberations on this important policy issue.

Individual Response: EPA acknowledges the comment. Pleas e see the remainder of EPA's responses to this comment for further deta ils. For additional information on EPA's final regulatory approach, please see the final rule an d preamble, as well as the rulemaking docket.

Letter ID: 0249 Comment ID: 22257 Letter Lines: 89 to 95

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

Comment: ROUNDTABLE CONCERNS

As policymakers and project developers work through the many nuances involved with large-scale CCS, we believe that it is important to keep focused on this central tenet: strong and early inve stment in CCS technologies and infrastructure is a necessary foundation for any viable climate change regulatory

3regime.

Individual Response: EPA clarifies that the purpose of th e Class VI GS rule is to ensure consistency in permitting underground injection of CO2 at GS operations across the United States and provide requirement s to prevent endangerment of USDWs in anticipation of the

eventual use of GS to reduce CO2 emissions. EPA agrees that GS is one technology in a portfolio of options, including energy conserva tion, efficiency improvements, and the use of alternative fuels and renewable energy sources, th at could be deployed to reduce CO2 emissions. However, the intent of the Class VI GS regulatio ns is not to promote or incentivize the use of GS, but, instead to ensure protection of USDWs where GS technol ogies are deployed.

EPA recognizes the importance of providing cl ear, flexible, scalable, and appropriate regulations. EPA believes that the Class VI GS regulation will provi de certainty to industry and the public by providing consistency in requirements across the U.S. and tr ansparency about what requirements apply to ow ners or operators.

Letter ID: 0249 Comment ID: 22258 Letter Lines: 97 to 106

Comment Code: 1200 1.1 General comments about the rulemaking

Comment: One of the biggest impediments to co mmercial-scale CCS projects today is regulatory uncertainty. Meaningful invest ments in CCS will only occur in the presence of clear, carefully tailored regul atory constructs that help encourage early and robust development of projects a nd which aid in eliminating liability risk for such early investments. In that regard, we appreciate EPA’s statement, in the rule’s preamble, that it rec ognizes CCS as a key climate change mitigation technology and that the rule is intended to support its development.

With that goal in mind, we would offer the Agency the following thoughts on how the proposed regulations might be clarified and strengthened:

Individual Response: EPA believes that the GS regulation will provide regulatory certainty and oversight that operators have requested, and allo w for the deployment of this key climate change mitigation technology that could be deployed to reduce CO2 emissions. EPA adds that the GS rule does not promote or encourage the use of GS; rather, it is designed to ensure consistency in permitting underground injection 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.

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: 0249 Comment ID: 22259 Letter Lines: 108 to 117

4Comment Code: 2020 1.5.1 Support Class VI designation

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: 1. Don’t Chill On-Going Enhanced Oil Recove ry (EOR) Activities -- EPA’s search for a regulatory structure to manage ge ologic sequestration of CO2, in the context of CO2 capture initiatives contem plated in CCS initiatives, has resulted in this proposal to create a new SDWA UIC "Class VI" category . This effort reflects the fact that geologic sequestra tion wells do not fall neatly into any

of the current SWDA UIC classes. We unde rstand that rationale and generally support the distinction being drawn. In fact, we want to make sure that the distinction is drawn clearly enough that it doesn’t confuse or impede the existing CO2 uses, such as EOR, alre ady covered under Class II of the UIC regime.

Individual Response: EPA believes that injection for the primary purpose of long-term storage is sufficiently different from Class II EOR opera tions and warrants tail ored requirements. EPA agrees that the nature and risks of CO2 injection for long-term st orage is different from Class II CO2 injection for EOR, and that tailored requ irements for GS wells are appropriate and necessary to protect USDWs fr om endangerment. For this reason, the Agency tailored UIC requirements for Class VI wells that address the general risks deep injection may pose to USDWs and specifically address th e unique nature of CO2 GS (i.e ., very large volumes, very long time-periods, and reservoi r pressure conditions).

EPA clarifies that the purpose of the GS rule is not to incentivize or encourage the use of GS or to address the use of pore space. The purpose of the GS rule is to ensure that, where GS is deployed, it is conducted in a manne r that does not e ndanger USDWs.

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. For more information, please see the discussion on transition of Class II wells in the preamble to the final GS rule.

Letter ID: 0249 Comment ID: 22260 Letter Lines: 119 to 126

Comment Code: 1480 1.2.2.2.2 CO2 is not a pollutant

Comment Code: 1680 1.3.8 Don't overstate ris k, don't stigmatize CO2

Comment: 2. Appropriately Characterize CO2 - We str ongly urge EPA to be very careful in

its characterization of CO 2 under the UIC program. As has been previously

5noted, a successful climate change control program will necessarily be predicated on development of -- and public support for -- CCS. EPA could inadvertently, and inappropriately, stigmatize CCS, if it veers into an unwarranted categorization of CO2 as a pollutant or a hazardous waste. Such suggestions would imply a liability risk that would ch ill further development of both CCS and Enhanced Oil Recovery (EOR) operations.

Individual Response: EPA disagrees that the requirements in the GS rule overstate the risk associated with GS or imply that CO2 is a waste. The requirements for Class VI wells are tailored to address the unique nature of full-scale CO2 GS, including the injection volumes anticipated for long-term storage, the buoyant natu re of the injectate, its corrosivity in the presence of water, and its mobility w ithin subsurface geologic formations.

In addition, although the requirement s were based on the existing regulatory framework for deep wells, including Class I wells, the GS rule does not address the stat us of CO2 as a pollutant or commodity. While the Class I requirements fo rmed the basis of many of the specific requirements for GS wells, EPA clarifies that the GS rule is tailored to th e unique nature of GS. EPA based many of the GS requirements on the Cla ss I regulations because, like Class VI wells, Class I wells are typically deep and involve wa ste streams that, if not properly managed, can

harm the well and lead to contamination.

Under §146.82(a)(7), owners or operators of GS wells must characterize their CO2 stream as part of their permit application. If the injectate is de termined to meet the definition of a hazardous waste under RCRA, and as defined in 40 CFR Part 261, the stringent UIC Class I hazardous waste requirements for injection of hazardous waste apply. Thus, injection of corrosive CO2 into Class VI wells is prohibited. In addition, owners or operators must peri odically monitor their injectate throughout injecti on operations under §146.90(a).

EPA adds that the requirements of the GS rule ar e tailored to the nature of the CO2 itself and risks associated with the injec tion of CO2, and do not address th e status of CO2 as either a pollutant, commodity, or waste.

Letter ID: 0249 Comment ID: 22261 Letter Lines: 128 to 139

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

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

Comment: 3. Avoid Regulatory Creep - We are extr emely concerned by arguments that

the whole suite of environmental la ws -- including th e Comprehensive Environmental Response, Compensation, a nd Liability Act ("CERCLA") and the Resource Conservation and Recovery Act (" RCRA") -- be applied to CCS projects.

These laws, if applied broadly to CCS, w ould impose significant obligations and potential liabilities not only on projec t operators, but also potentially on

other entities in the CO2 ch ain, such as entities pr oducing the CO2 that is ultimately injected. That would put advan cement of CCS commercialization into a

6deep freeze. Such an outcome would clea rly be counter-productive. Thus, we urge the Agency to pursue options that will limit CCS projects’ liability under

CERCLA and RCRA.

Individual Response: EPA received many comments regardi ng the applicability of the RCRA regulations and statute to CO2 st reams that are geologically seque stered under the final Class VI UIC well requirements. As a result, EPA has deci ded to initiate a sepa rate proposed rulemaking specifically to examine the issue of RCRA appl icability to CO2 streams being geologically sequestered, including the possible option of a conditional exemption from the RCRA requirements for CO2 GS in Class VI wells. EPA will consider these comments as part of its development of that proposal. The Agency will consider issues pa rticular to RCRA in the context of that separate rulemaking, and recommends that the commenter read that proposed rule when it is published. The Agency notes that comment ers who wish to submit comments on the RCRA proposal will need to do so during the comment period for that rule.

CO2 itself is not listed as a hazardous substan ce under CERCLA; however, the CO2 stream may contain a listed hazardous substance (such as mercury) or may mobilize substances in the subsurface that could react with ground water to produce listed hazardous substances (such as sulfuric acid). Whether such substances may result in CERCLA liability from a sequestration facility depends entirely on th e composition of the specific CO2 stream and the environmental media in which it is stored (e.g., soil or gr ound water). CERCLA exempts from liability, under CERCLA section 107, 42 U.S.C. 9607, certain “feder ally permitted releases” (FPR) as defined in CERCLA, 42 U.S.C. 9601(10). Class VI permits will need to be carefully structured to ensure that they prevent potential releases from the we ll which are outside the scope of the Class VI permit.

EPA adds that encouraging the use of GS is outsi de the scope of the GS rule. Rather, the purpose of the GS regulation is to ensu re that, where deployed, GS is c onducted in a manner that protects USDWs from endangerment.

Letter ID: 0249 Comment ID: 22262 Letter Lines: 141 to 151

Comment Code: 1680 1.3.8 Don't overstate ris k, don't stigmatize CO2

Comment: 4. Characterize Carefully Risks of the Geol ogic Sequestration of CO2 - It is, of course, crucial that the final rule meet EPA’s objective of protecting drinking water supplies. We are concerned, however, that some of the more stringent requirements being proposed for Class VI wells are not supported by findings of unique risks actually posed by CCS wells. EPA’s regulations should be based upon an accurate characterization of the potential risks posed by the geologic sequestration of CO2 and be specifically tailored accordingly to address those

identified risks. This will ensure that EPA meets its obligation to provide appropriate protection of underground sources of drinking water, while avoiding unnecessary regulations that may hamper CCS or EOR projects from going forward or call into question the genera l safety of CO2 storage.

7Individual Response: EPA disagrees that the GS regulation overstates the risk of CO2 injection or that the requirements are not supported by findings associated with CO2’s unique risks. EPA recognizes that injecting large volumes of CO 2 for GS poses unique challenges that, if not properly managed, could endanger drinking water sources and ha ve other adverse impacts. However, with proper site sele ction, the final, tailored, Class VI requirements address the large volumes of CO2 injected, its buoyancy, potential corrosivity in the presence of water, and potential impurities in the CO2 stream. In addition, EPA expect s the tailored permitting, siting, construction, operation, monitoring, and post-injection site care re quirements in the GS rule to prevent leakage from injection formations and protect USDWs.

EPA adds that the intent of the GS rule is not to promote CCS; rather, th e purpose of the rule is to ensure that, where deployed, GS is perf ormed in a manner that protects USDWs from endangerment.

Letter ID: 0249 Comment ID: 22263 Letter Lines: 153 to 178

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

Comment Code: 3100 2.1 Proposed Geologic Siting Requirements (40 CFR 146.83)

Comment: EPA should consider applying a tiered set of site characterization requirements

based on demonstrable and known site char acteristics. For example, potential sites that are deep saline formations located one or more kilometers below the ground surface are generally recognized as among the most favorable and secure site options for assuring public safe ty. If such sites do not have a Underground Source of Drinking Water (USD W) aquifer located between it and the ground surface above, a more streamlined regulatory site char acterization and risk review may be appropriate.

On the other hand, an example of a pote ntial site that may require a more rigorous site characterizati on and risk assessment are "sole source aquifers" which are aquifers that are the sole supply of water for a region and are critically important to protect. Some stak eholders may assert that there should be no CO2 storage above or below a sole source aquifer. However, such a restriction could essentially prohibit stor age in many Western areas. Rather, a better approach would allow EPA to permit UIC Class VI wells in areas where it

can be shown that there are sufficient caps and protections to prevent the migration of CO2 in overlying aquifers, even in proximity to a quifers designated as sole source. An early detection mon itoring program could be established to provide sufficient opportunity to mitigate any unlikely rele ase of CO2 from geologic storage unit.

Approaches like this illustrate how EPA can streamline UIC regulations for site characterizations and permit UIC Class VI wells that first and foremost protect public safety, yet reflect a workable bala nce in adapting site characterization

and risk assessments based on criteria adaptable to unique candidate sites.

8Individual Response: EPA believes that requiring appr opriate, site-specific, site characterization by the owner or operator (und er §146.82) and providing an appropriate degree of flexibility to the Director to evaluate site -specific geologic data will afford the greatest protection of USDWs from endangerment. EPA belie ves that it is important for the Director to have as much site-specific information as possi ble in order to make an informed decision to permit injection for GS at a specific site. This approach allows the permit writer to establish requirements considering varying site conditions eliminating the need for tiered requirements. GS in areas that may pose risks to USDWs, as assessed and identified by the owner or operator and the Director during the site selection proces s, would not be permitted. EPA disagrees that a tiering system for GS sites or formations is appropriate. Instead, the GS rule focuses on evaluating the suitability of a site based on site-specific ge ological and oper ational data.

EPA adds that the final GS rule contains a prov ision (at 146.95) for owners or operators to apply for waivers from the requirement that injection be below the lowermost USDW. EPA believes this waiver provision will reduce potential limita tions on the re-permitting of Class II wells as Class VI wells, provided they meet the requi rements at 146.95 while still protecting USDWs from endangerment.

Letter ID: 0249 Comment ID: 22264 Letter Lines: 180 to 192

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

Comment Code: 5400 2.9 Proposed Financial Respons ibility and Long-Term Care Requirements

Comment: 5. Make Risk Management Approaches Reas onable - We strongly urge EPA to avoid utilizing risk management approaches that discourage CCS deployment. Regulatory certainty is absolutely crucial, if mean ingful investment is going to flow to CCS technologies and implementation.

EPA can be helpful in that regard by bringing certainty to the long-term obligations and risks associated with geologic sequestrati on projects. For example, EPA should refrain from requi ring financial assurance for potential liabilities more than 50 years in the future. Extending those requirements any further may deter and even prevent invest ment in CCS projects. Likewise, postinjection monitoring and financial assu rance requirements are important, but need to be tailored to comport with the potential risks, which decrease substantially after injection is complete.

Individual Response: EPA disagrees that a post-injection si te care timeframe of 50 years is excessive for most Class VI wells. EPA recognize s that there are challenges associated with assuring funding for activities that will occur fa r in the future. However, the Agency believes that operators must demonstrate that financial resources are available to plug the injection well and provide post-injection care at the point in time that the first CO2 is injected.

EPA disagrees that the requirements for financial responsibility are overly stringent. The goal of

9financial responsibility is to ensure that fi nancial resources are available to prevent the endangerment of USDWs from improper plugging, remediation, and management of wells in the event that the owner or operator experiences financial difficulties th roughout the life of the project.

EPA believes that minimum financial responsibi lity requirements are necessary to hold well owners or operators accountable for the safe ope ration and through closure of the well and avoid expense and risk to the public. EPA adds that th e purpose of the GS rule is not to encourage the use of GS; rather, the purpose of the GS rule is to ensure th at, where GS is deployed, it is conducted in a manner that protects USDWs from endangerment. See the final rule and preamble

for further discussion of EPA's final approach to financial responsibility.

Under SDWA authority, owners or operators of injection well s must ensure protection of USDWs from endangerment and are subject to liab ility for enforcement under the Act. The final rule requires that an owner or operator must c onduct post-injection site car e that is consistent with the approved PISC plan or for the durati on of the alternative tim eframe approved by the Director pursuant to requirements in §146.93(c) , until a demonstration can be made to the

satisfaction of the Director th at the plume and pressure front no longer pose a risk of endangerment to USDWs. For additional info rmation about the PISC and site closure requirements, see the preamble to the final GS rule.

EPA also recognizes the concerns associated with assuring fina ncial responsibil ity for the long time-frames over which post-injection site care will be conducted. EPA is developing guidance on financial responsibility to a ssist owners or operators in evaluating the requirements of §146.85 and to assist Directors in evaluating fi nancial responsibility demonstrations. The guidance describes the types of financial mechanisms that operators may choose to use when evaluating the financial responsibility requireme nts for GS wells, and it will also include a section on how to estimate costs to support accura te financial responsibility demonstrations. The guidance will be available at h ttp://water.epa.gov/type /groundwater/uic/wells_sequestration.cfm.

EPA adds that the purpose of the GS rule is not to incentivize the use of GS; rather, the purpose of the GS rule is to ensure that, where GS is deployed, it is conducted in a manner that protects USDWs from endangerment. See the final rule and preamble for further discussion of EPA's final approach to financial responsibility.

EPA acknowledges that there will be circumstances where it can be demonstrated in less than 50 years that the plume and pressure front no longe r pose a risk of endangerment to USDWs. For this reason, the GS rule offers ow ners or operators flexibility re garding the duration of the PISC timeframe by: (1) allowing the Director discretio n to shorten or lengthen the PISC timeframe during the post-injection period based on site-s pecific data, pursuant to requirements at §146.93(b); or (2) affording the Dire ctor discretion to allow a Cla ss 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 that a default post-injection site car e timeframe of 50 years, with flexibility to

10adjust 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: 0249 Comment ID: 22265 Letter Lines: 194 to 207

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

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

Comment: 6. Respect State Primacy on SDWA Perm itting - EPA should respect states’ expertise in administering the SDWA, by providing a reasonable process whereby they can obtain primacy over regulation of Class VI (CCS) wells. Many states already administer SDWA programs and have long experience regulating CO2 injection through Class II EOR programs. Further, a number of states are moving ahead with developing their own initiatives and re gulations to solve other

issues associated with CCS -- incentive s provisions and provisions clarifying the nature of potentially affected property rights as two examples.

Clearly, in determining state primacy, EPA will have to consider how to handle projects that span multiple states. We do not believe that issue to be insurmountable. Rules could include, for ex ample, provisions for establishing a primary state for permitting purposes, with other affected states provided an opportunity for notice and comment.

Individual Response: EPA agrees with commenters on the importance of states having primacy for GS wells given the variety of geologic settin gs in which GS will be applied. EPA recognizes that State, Tribal, and Territorial, and DI UIC Program Directors are in the best position to evaluate the unique issues re lated to well depth, geology, and hydrogeology that are posed by a Class VI well. Some degree of flexibility is needed for Class VI wells because each decision made will be site-specific and conditions will differ from state to state. The GS rule balances the need for these site-specific decisions with the need for minimum standa rds to ensure national consistency.

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 encourages states to accept primacy for Class VI, and believes that, due to the importance of implementing an effective, comprehensive, and seamless CCS program, States should be provided the flexibility to obtain primacy for Class VI only.

Given the potential for CCS (encompassing captur e, transportation, and geologic sequestration) to be an important part of a national priority to address climate change, EPA believes that

11providing states the flexibility to obtain primacy for Class VI we lls independently of other well classes can help foster effective management of CCS. The Agency will allow independent primacy for Class VI wells under §1 45.1(i) of the final GS rule.

EPA understands that the CO2 plumes for large GS projects may cross State, Tribal, Territorial, or EPA Regional boundaries. The final GS rule, at §146.82(a)(2), requires the owner or operator to identify all State, Tribal, and Territorial boundaries within the AoR. Based on this information, the Director must provide written notif ication to all States, Tribes, and Territories to inform them of the permit app lication, as specified in §146.82(b) , and ensure that they are involved in any necessary processes (e.g., develo pment of the emergency and remedial response plan, as specified in §146.94). The Agency enc ourages transparency in the permitting process and anticipates that State-State/State-Tribal communication on GS permitting will facilitate information sharing and encourag e safe, protective projects.

Because some GS projects will require coordi nation across State, Tribal, and Territorial jurisdictions, the Agency will work with the appropriate entities to facilitate communication among States, Tribes, and Territori es interested in obtaining Pr imacy during the implementation phase of the GS regulation. Such communication may involve other organizations such as the Sierra Club, NDWAC, associations, and other experts. However, the responsibility for addressing such subjects ultimately rests with the States, Tribes, and Territories with primacy. In addition, EPA is developing guidances for states that describe the proc ess of applying for and receiving primary enforcement responsibility (p rimacy) for GS Class VI wells under Section 1422 of SDWA, as well as the tech nical and administrative issues on developing GS regulations that are the equivalent of mi nimum federal criteria and requ irements. The guidance will be available at http://water.epa.gov/type/g roundwater/uic/wells _sequestration.cfm.

EPA clarifies that issuance a nd oversight of a GS permit, including any associated AoR boundary related coordination, is th e responsibility of the primacy (State, Tribal, or Territorial) or regional DI program in the state where the injection well is located.

Letter ID: 0249 Comment ID: 22266 Letter Lines: 209 to 225

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

Comment: 7. Avoid Over-Generalization in Regulations - We strongly urge EPA to avoid blanket prohibitions or ar bitrary absolutes in the ru le. As currently proposed, EPA’s regulations contain a number of defa ult provisions that presume universal application. We believe that approach is problematic. It is too early to fully understand precisely which methods or technologies will ultimately prove optimal.

Further, the geologic variability involved in different conceivable GS projects

needs to be taken into account in issu es ranging from site characterization to area of review (AOR) to containment re quirements. The regulations should encourage site-specific, performance-ba sed determinations at the permitting

12stage to handle these important issues.

EPA should leave the door open for a range of injection sites and methods (some of which are not yet fully understood), pr ovided that the Owner or Operator can show that the injection and storage will be protective of drinking water supplies.

Individual Response: EPA agrees that permitting decisions for GS wells should be based on site-specific factors. The GS ru le requires owners or operators to submit, and Directors to consider, extensive site-specific data, specified at §146.82, to demons trate that a site is suitable for GS. Additionally, many of the permit require ments for GS wells are established through individualized site-specific pl ans for AoR and corrective actio n, testing and monitoring, and injection well plugging and post-injection site care and site closure. EPA adds that the final GS rule includes a balance of speci fic criteria to be met by the owner or operator and areas of

Directorial discretion and consider ations for how that discretion would be exercised. The Agency believes this balance allows for GS projects to be designed and permitted to address the unique, site-specific aspects of each project, while prov iding consistency in permitting across the U.S.

Rather than setting performance- or technol ogy-based standards for GS projects, EPA isadopting a flexible approach, where operators of GS projects would develop and implement sitespecific plans for delineating the AoR, testing and monitoring the site , performing corrective action, and post-injection site car e. EPA believes that the plans— which would be reviewed and approved by the Director and pe riodically updated throughout the life of the project—promote an ongoing dialogue between the operator and the Dire ctor that will encourage use of the most appropriate technologies for a particular project.

Letter ID: 0249 Comment ID: 22267 Letter Lines: 227 to 236

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

Comment: 8. Put Limits on EPA Authority and Discretion - The Roundtable fully recognizes the difficulty EPA faces in es tablishing regulations for CCS. We fully support the notion that some level of discretion is necessary for the Agency to adjust to changes or new info rmation that emerges as pilot projects move forward. Having said that, the bala nce here is a delicate one. Too much

discretion can undermine the ce rtainty that is so impor tant to encourage CCS projects. Certainly, any discretion th at is afforded should be bound by reasonable criteria. Equally importan t: EPA should adhere to its limited authority under the SDWA and not use this as an opportunity to seek to extend

it.

Individual Response: While EPA agrees with commenters that a stable, predic table, nationally consistent, and workable regulatory framework is important, EPA stresses that the focus of the GS rule is to ensure that, where GS is deploye d, it is conducted in a manner that protects USDWs from endangerment.

13To 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: 0249 Comment ID: 22268 Letter Lines: 238 to 243

Comment Code: 1000 1. General and Administrative Comments

Comment: CONCLUSION

On behalf of the many member organizati ons of the Western Business Roundtable, thank you for the opportunity to provide our input on this crucially important public policy issue, the impli cations of which are so pi votal to the continued vitality of the West.

Individual Response: EPA acknowledges the comment. Pleas e see the remainder of EPA's responses to this letter for further details.

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