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ASSESSMENT OF THE POTENTIAL COSTS, BENEFITS, AND OTHER IMPACTS OF THE CONDITIONAL EXCLUSI ON FROM THE RCRA DEFINITION OF HAZARDOUS WASTE FOR CO 2 STREAMS MANAGED IN UIC CLASS VIWELLS FOR THE PURPOSES OF

GEOLOGIC SEQUESTRATION

– FI NAL RULE

Economics and Risk Analy sis Staff Office of Resource Conservation and Recovery U. S. Environmental Prot ection Agency 1200 Pennsylvania Ave., N. W. Washington, DC 20460

October 18 , 201 2***E.O. 12866 Review

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**Introduction and Purpose**  The U.S. Environmental Protection Agency regulates the generation, transfer, treatment, and disposal of hazardous waste under Subtitle C of the Resource Conservation and Recovery Act (RCRA). The hazardous waste regulations are designed to ensure that hazardous waste is handled in a manner that protects human health and the environment. Currently , c arbon dioxide (CO 2 ) streams are not liste d as RCRA hazardous wastes, but may be classified as a RCRA hazardous waste if they

exhibit hazardous characteristics such as ignitability, corrosivity , reactivity, or toxicity . Comments on the proposed rule were generall y supportive. The Agency has de termined that the management of these CO 2 streams under conditions outlined in the final rule w ill not present a substantial risk to human health or the environment . As a result, EPA is finalizing the regulations for hazardous waste management under RCRA to conditionally exclude carbon dioxide ( CO 2 ) streams from th e definition of hazardous waste, provided these CO 2 streams are captured from emission sources, are injected into Class VI Underground Injection Control (UI C) wells for purposes of geologic seque stration (GS), and meet certain other conditions. This final action is expect ed to substantially reduce the uncertainty

associated with identifying these CO 2 streams under RCRA subtitle C, and may also help facilitate the deploy ment of GS by providing regulatory clarity . With this final rule, additional CO 2 regulation s pursuant to RCRA’s hazardous waste are considered unnecessary . The purpose of this Assessment is to present the Agency ’s best estimate of th e potential cost s and cost savings, benefits, and other impacts of the final rule. **Summary of Changes to the Assessment**  **from Proposal to Final** Th is final rule Assessment applies the same general methodology as was used in the Assessment for the proposal. 1 However, there are three general areas of change that will impact findings. One is a minor change to the regulatory requirements of the rule, and the two others reflect changes in market conditions and anal ytical assumptions. These are describ ed below: a) Certification Statements **:** Requirements for the signed certification statements change slightly . This modification is expected to result in negligible cost impacts , beyond those estimated for the proposal. b ) Number of Facilities Affected: Market dy namics affecting the capture, compression, and sequestration of CO 2 streams have changed since the Agency prepared the Assessment document for the proposed action. These altered market conditions will be reflected in the revised number of facili ties believed to be affected b y the final rule. Compared to proposal findings , this change
1 U.S. EPA , Office of Resource Conservation and Recovery. June 2, 2011. A ssessment of the Potential C osts, B enefits, and O ther I

mpacts of the C

onditional E

xclusion from the RCRA D efinition of H azardous W

aste for CO2 Streams M

anaged in UIC Class VI W

ells for the Purposes of Geologic S equestration, as Proposed***E.O. 12866 Review

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will result in a decrease in the high - end aggregate annualized net cost savings estimate for the rule. c ) Percent of CO2 Streams that are RCRA Hazardous Waste : The preamble to the proposed rule and the June 2, 2011 Assessment document discussed the Agency ’s high level of uncertainty regarding the percent of CO 2 streams that may be characterized as RCRA Subtitle C hazardous waste. Available information at the tim e indicated that it was possible that some CO 2 streams might meet the definition of hazardous waste , but the Agency considered this information to be insufficient to make a justifiable point estimate or reasonable range. As a result, the Assessment prepared in support of the proposed rule applied a broad range of 10 percent to 90 percent of CO 2 streams that would be defined as RCRA hazardous waste , reflecting significant uncertainty . The proposed rule requested that commenters provide characterization data relevant to whether CO 2 streams meet the definition of RCRA hazardous waste , and indicated that the Agency would continue to research and assess this issue . Inresponse to our request, EPA receive d no new information or data that would indicate what p ercentage of captured CO 2 streams would be defined as a RCRA hazardous waste; instead, many commenters asserted that CO 2 streams are not hazardous wastes, do not exhibit hazardous characteristics, and are unlikely to be mixed with hazardous wastes . Two commenters indicated concern over the potential hazardous waste status of these streams but provided no data or supporting information indicating that such streams could, or are likely

to be hazardous waste. Therefore , there remains a degree of unc ertainty as to what percentage of CO 2 streams might be defined as a RCRA hazardous waste. H owever, within this uncertainty , EPA believes that the high - end estimate of 90 percent is probably an overestimate, based on the Agency ’s best professional judgement. In addition, the high - end estimate result s in a commensuratel y high estimated costs savings for the rule. Therefore, in an effort to present a more conservative estimate of costs savings, we are dropping the high - end 90 percent hazardous waste scenari o for our final rule Assessment . **Need for Regulation** Without this rule, a carbon dioxide (CO 2 ) stream that is determined to be a h azardous waste would be subject to the requirements of RCRA Subtitle C. EPA has determined that the full set of hazardous waste regulations is unnecessary for captured CO 2 streams . E xisting regulations governing the transport and injection of CO2 into a UIC Class VI permitted injection well are sufficient to ensure protection of human health and the environment. Furthermore, as indicated above, this action is expect ed to substantially reduce the uncertainty associated with identifying CO 2 streams under RCRA subtitle C, and may also help facilitate the deployment of GS. **Summary of Current Rul es**  Without this rule, if a captured CO 2 stream is a solid waste and determined to be a RCRA hazardous waste that is discarded, the generator would be subject to the various hazardous waste generator standards in 40 CFR 262. Hazardous waste CO 2 streams destined for disposal would be required to be managed in a Class IUI C hazardous waste well that is permitted to accept RCRA hazardous waste. A RCRA hazardous waste CO 2 stream could not be injected into a well***E.O. 12866 Review

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that is permitted as a Class VIwell under th e UIC Class VIregulations. The owners and operators of Class I hazardous waste wells are subject to the hazardous waste management requirements in 40 CFR 264 (Standards for Owners and Operators of Hazardous Waste Treatment, Storage, and Disposal Facilitie s) and 265 (Interim Status Standards for Owners and Operators of Hazardous Waste Treatment, Storage, and Disposal Facilities) if they store or treat hazardous waste prior to injection . The UIC Class Ihazardous well , permitted under the Safe Drinking Water Act (SDWA) , is subject to RCRA permit - by- rule (see 270.60(b)) . In addition, these Class I hazardous waste well owners and operators would have to build their sequestration units to meet EPA’s requirements for a Class V I UI C well. 2 If the CO 2 stream is not a RCRA hazardous waste, the generator would not be subject to the hazardous waste generator standards, and could transport the waste to a Class VI well for injection. The Class VI well would be required to meet the Class VI UIC requirements, which in some regards are similar to the requirements for hazardous waste wells permitted under UI C Class I , but are geared specificall y toward CO 2 sequestration. 3 CO 2 streams captured for the purpose of injection are typicall y transported by pipeline and are sub ject to the Department of Transportation (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA) regulations in 49 CFR 195 (Transportation of Hazardous L iquids by Pipeline) through 199 (Drug and Alcohol Testing) . Pipelines are not classified as modes of transportation under RCRA and therefore pipeline transportation would be subject to the same DOT requirements regardless of a CO 2 stream’s RCRA status . I f a RCRA hazardous waste CO 2 stream was to be transported by other means, such as truck or rail, the transporter would be subject to EPA’s standards for transporters of hazardous waste in 40 CFR 263 (Standards Applicable to Transporters of Hazardous Waste) , as well as the applicable PHMSA Hazardous Materials Regulations in 49 CFR Parts 171 (Gene ral Information, Regulations, and Definitions) through 180 ( Continuing Qualification and Maintenance of Packagings ) . **Summary of Changes Established in the Final Rule**  Under the final rule , 4 carbon dioxide streams that are captured and transported for purposes of injection into an underground injection well are not hazardous waste if managed according to Class VIUnderground In jection Control well requirements, including the requirements in 40 CFR Parts 144 and 146 of the Underground Injection Control Program of the Safe Drinking Water Act . However, s elected conditions must be met . 5 Class VIwells injecting excluded CO 2 would therefore not be subject to EPA’s RCRA hazardous waste requirements. The exclusion would apply

to captured CO 2 streams only and would not apply to any hazardous wastes that are mixed with or co - injected with CO 2 streams.
2 Permit writers may require the RC RA hazardous waste CO 2 injection well to meet both the Class VI UIC requirements and the Class I hazardous UIC requirements; however, there is no specific UIC regulation that would require this. . 3 C ertain U.S. Department of Energy CO 2 injection demonstration projects have been permitted under the UIC Class V experimental technology well program, while other demonstration projects have been permitted under the UIC Class I non - hazardous waste well program. 4 Hazardous Waste Management Sy stem: Identification and Listing of Hazardous Waste: Carbon Dioxide ( CO 2 ) Streams in Geologic Sequestration Activities

– Final Rule 5 See : §261.4 Exclusions (h)

– Carbon Dioxide Stream Injected for Geologic Sequestration***E.O. 12866 Review

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Owners and operators of CO 2 capture facilities and sequestration wells claiming the exclusion would be required to sign , annually renew, and make available independent certification statement s . These statements must indicat e that the CO 2 stream for which they are claiming the exclusion meets the conditions of the exclusion and is being injected into a well subject to the Class VIUI C requirements. **Characterization of the Regulated Community** The entities that may

be directly

affected by

the final rule include CO 2 capture facilities, transporters, and sequestration facilities. CO2 Capture Facilities: CO 2 capture facilities are entities that collect their CO 2 by products and manage them in a manner other than releasing them into the atmosphere . For the Proposal, we estimated that anywhere from 13 to 27 capture facilities 6 may be affected by the rule. This range wa s based on the best available data at the time and our anal ys is. The low - end estimate considered only 13 CO 2 capture facilitie s. This include d ten existing capture facilities , two capture projects associated with named DOE pilot projects, and one capture facility that was an ongoing federal/private partnership . Th e high - end estimate include d the thirteen low - end facilities plus an additional 1 4 planned commercial projects that were expected to begin CO 2 capture at some point in the future. The Assessment for the P roposal recognized that some of the planned projects may be cancelled or delayed due to approval and funding issues . It was further recognized that, without climate change legislation , a significant economic driver for both capture and sequestration would be lost. The future market for CO 2 capture depends, to a large extent, on the degree to which Federal and state governments pass legislation and adopt regulations designed to restrict or penalize CO 2 emissions. Aside from research and subsidized pilot projects, a facility is un likely

to install the expensive technology

necessary

to capture CO2 from emissions until it is required, or there is an economic reason to do so. Since the Proposal, it has become apparent that Federal climate change legislation is will not materialize any time in the near future. In creasing CO 2 demand is important to the creation of a sustainable market for captured carbon. Unfortunately , in addition to the lack of climate change legislation (and onl y limited EPA regulatory enhancements) , current market conditions continue to diminish the economic incentives for expanded CO 2 capture. For example, the Global CCS Institute estimates that the current market price for bulk CO 2 is in the range of $15 metric ton to $19 per metric ton, and that this is believed to represent an upper limit of prices that may be expected in the future. 7 Recent m odel calculations indicate that CCS systems will begin to be deployed on a wide scale wh en the market price for CO 2 reaches approximately

$25 /ton to 30/t on, assuming that capture plus sequestration costs decline to at least this level. 8 This price range compares unfavorabl y to the estimated cost of capture

6 See Section 2 of the June 2, 2011 Assessment . 7 Global CCS Institute at: http://www.globalccsinstitute.com 8 World Energy Council. Carbon Capture and Storage: A WEC Interim Balance. 2007***E.O. 12866 Review

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alone ranging from $15/ton to $75/ton for coal or gas - fired power plants, which are the largest source of CO 2 emissions . 9 , 10 Furthermore, the addition of carbon capture and sequestration (CCS) systems to both existing and future power plants will likely add between 25 percent and 100 p ercent to the cost of producing electricity . 11 , 12 This is an unlikely scenario in a continued slow econom y, as we have at the time of this writing . The total number of CO 2 capture facilities potentially affected by

th e final rule remain s uncertain . However, based upon current market conditions and the existing regulatory framework, as discussed above, it appears unlikely that there will be any significant expansion in CCS management for CO 2 over the next several ye ars. As a result, we have revised o ur high - end estimate of the number of capture facilities potentially affected, as presented in the Assessment for the Proposal. We now estimate that there may be a maximum of 19 capture facilities potentially

affected by

the final rule. These facilities are identified in Appendix A. Our low end estimate remains unchanged from the proposal . CO2 Transporters Pipeline transportation of captured CO 2 falls under the “all other pipeline transportation” (i.e., transportation of substances other than crude oil, natural gas and refined petroleum products) industry (NAICS 486990). 13 In response to EPA’s request for comments on non - pipeline transportation, all commenters who replied indicated that, given the volumes of CO 2 involved , non - pipeline transpor

t is not anticipated, except at pilot scale s . Therefore, our anal ys is for the final rule will continue to assume that all transportation of CO 2 is, and will continue to be conducted via pipeline, subject to appropriate Department of Transportation (DOT) Pipeline and Hazardous Material Safety Administration (PHMSA) requirements. In the Assessment for the proposal, we estimated there were 30 operating CO 2 pipelines, operated b y 29 separate entities. These operators were estimated to be transporting 34.4 billion barrel - miles of carbon dioxide in 2008. Th e analysis for the proposal addressed only the se 29 operators of pipelines reported to be operating in 2008. Our post - proposal research indicated that for 2010, there were an estimated 25 operators transporting nearl y 2 trillion barrel - miles of carbon dioxide . 14 The 2010 barrel - mile quantities represent a significant increase over the 2008 values . The reason fo r this increase has not been documented. The largest shipper of carbon 9 Global CCS Institute at: http://www.globalccsinstitute.com 10 We recognize that CO 2 demand is largely regional specific, and that the more expensive captured CO 2 may represent a low

cost option in selected regions where industries may be located far away from natural reservoir pipelines or low - cost emitters . 11 World Energy Council. Carbon Capture and Storage: A WEC Interim Balance. 2007 . [ Note: Another source estimates increases production costs between 50 to 70 percent.( Carbon Capture and Sequestration. Pike Research Report, December 2009 )] 12 Part of this increased cost is due to the parasitic load from CCS, resulting in as much as a 30 percent increase in coal usage (See: Richard k. Morse, Varun Rai, and Gang He. August 2009. “T he Real Drivers of Carbon Capture and Storage in China and Implications for Climate Policy”) 13 Some of the entities conducting pipeline transportation of CO 2 also may fall into other industrial source categories (e.g., oil and gas extraction), but this analysis only considers NAICS 486990 because it is the industry category most relevant to the a ctivity affected by the rule. 14U.S. EPA Report. Carbon Dioxide Pipelines in the United States . Submitted by The Cadmus Group, Inc. , Under Subcontract to Eastern Research Group, Inc . June 25, 2012***E.O. 12866 Review

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dioxide in 2010 was Exxon/Mobil , followed by Kinder Morgan, Enmark, and Bravo. All of the major operators saw significant increases between 2008 and 2010.. Sequestration Facilities: CO 2 sequestration facilities receive captured CO 2 streams and inject them into UI C wells for the purposes of sequestration . Inthe Assessment for the Proposal, we estimate d that a potential maximum of 29 planned sequestration facilities could be affected by the rule. This estimate , projected over a fifty- ye ar time frame, include d 15 planned commercial CO 2 sequestration projects and 14 planned projects funded b y DOE. The 15 planned commercial projects include d 12 enhanced oil recovery projects that were p rojected to transition to sequestration over the long term (beyond twenty ye ars but within the fifty- ye ar time frame) . 15 Our low - end estimate for the proposal consider ed only six potential CO 2 Class VI UIC sequestration facilities . This included five sequ estration projects associated with named DOE pilot projects and one sequestration facility associated with the FutureGen federal/private partnership . Class VI UIC wells fall under the o ther non
- hazardous waste treatment and disposal (i.e., management by methods other than landfill, combustion, and incineration) industry (NAI CS 562219). These Class VI well facilities are not currentl y operational. We recognize that if there is no climate legislation , or related legislative interventi on within the earl y part of the projected time frame , a significant economic driver for Class VI storage may not be realized . It is possible that these projects may store CO 2 in domes as a staging point for future EOR, EGR, and working fluids for fracturing tight gas sands and shale. Under this model , it is possible that many of these projects would never be subject to th e final rule. Based on these considerations, o ur anal ysis for the final rule adjusts the high - end estimate for the number of potentially affected sequestration facilities based on the perc entage increase for capture facilities (13 low to 19 high) . Thus, the low - end number of potentially affected sequestration facilities for the final action remains at six, while the calculated high - end number is now estimated at just under nine facilities [( I 13 - 19/13 I+1)*6)) = 8.8]. **Baseline Conditions**  **and Post -**  **Rule Practices**  This part of the Assessment anal yz es the expected costs and benefits of the final rule. The anal ytical methodology

remains generally

unchanged from the Assessment developed for the proposal. 16 However, our cost impact range now reflects only the discount rate and the number of facilities potentially

affected. For this final analy sis we appl y onl y a single point estimate for the percent of CO 2 streams potentially RCRA hazardous waste (see further discussion below). Furthermore, because cost impacts are directly linked to the number of facilities affected, the revised high - end estimates for th e final rule are derived as a simple linear adjustment based on the number of affected facilities , for both capture and sequestration facilities. Government impacts (EPA and States) remain unchanged fro m the proposal. 15 U.S. EPA , Office of Resource Conservation and Recovery. June 2, 2011. A ssessment of the Potential C osts, B enefits, and O ther I

mpacts of the C

onditional E

xclusion from the RCRA D efinition of H azardous W

aste for CO2 Streams M

anaged in UIC Class VI W

ells for the Purposes of Geologic S equestration, as Proposed 16 See the June 2, 2011 Assessment document for a complete discussion of the analytical methodology.***E.O. 12866 Review

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Assessment of Baseline Conditions: This section discusses hazardous waste determination and expected baseline practices . A more comprehensive discussion of baseline practices and conditions can be found in Section 3.2 of the June 2, 2011 Assessment . This section does not address baselin e transportation practices. Because the most efficient and most commonly used method of transporting CO 2 is by pipeline (as confirmed b y commenters on the proposal), our anal ys is assumes that all CO 2 transportation is done via pipelines both in the baseline and under the final rule. Thus, as with the proposal, no incremental impacts to CO 2 transporters are estimated or expected under the final rule. Hazardous Waste Determination Without the final rule, generators of captured CO 2 streams must determine whether the se stream s, if destine for geological sequestration , would be a RCRA hazardous waste. A captured CO 2 stream may

be a RCRA hazardous waste depending on its characteristics. Facilities m ay determine whether the captured C O 2 stream qualifies as hazardous waste either by testing the waste for hazardous characteristics or b y applying knowledge of the materials and processes used to generate the waste, as required b y 40 CFR 262.11 (Hazardous waste determination). As for the proposal, this anal ys is assumes that the facilities capturing CO 2 streams from fossil fuel electric power generation, natural gas distribution, ethyl alcohol manufacturing, and nitrogenous fertilizer manufacturing would rely on process knowledge and limit ed testing to determine if their CO 2 stream is a RCRA hazardous waste. Th is anal ys is further assumes that the remaining facilities capturing CO 2 streams from oil and gas extraction would test their CO 2 streams as a gas to determine if it is a RCRA hazardo us waste. Section 3.2.1 of the June 2, 2011 Assessment presents a full discussion of waste determination methods and costs. Throughout the development of the proposal, the Agency was unable to identified adequate information necessary

to confirm the percent of captured CO 2 streams that may be RCRA hazardous waste. As a result, our anal ys is for the proposal applied a broad range of 10 percent to 90 percent of CO 2 streams that would be defined as RCRA hazardous waste in an effort to address this uncertainty . The proposed rule requested that commenters provide characterization data relevant as to whether CO 2 streams meet the definition of hazardous waste in the hope of deriving a more refined estim ate for the final rule. In response to our request, EPA did not receive any new information or data that would indicate what percentage of captured CO 2 streams would be defined as a RCRA hazardous waste. O ne commenter provided information indicating th at CO 2 levels in all five samples exceeded 99.7% (i.e., few impurities) , without any correlation to RCRA hazardous waste characterization. M ost commenters asserted only that CO 2 streams do not meet the RCRA definition of hazardous waste , without providing any supporting data. These c ommenters generally stated that CO 2 streams are not hazardous wastes, do not exhibit hazardous characteristics, and are unlikel y to be mixed with any hazardous wastes . Some commenters cited a study by L awrence Li vermore Nation al Laboratory

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insignificant or at concentrations similar to ambient levels. Once again, no correlation was made to the level of RCRA hazardous waste that this finding may represent. O ne commenter stated that, “ EPA should not exempt CO 2 streams from subtitle C without a better understanding of the hazards” (EPA - HQ - RCRA - 2010 - 0695 - 0 082). Another commenter expressed concern about the “dangerous gases considered without being defined as hazardous” (EPA - HQ - RCRA - 2010 - 0695 - 0081). There remains a high level of uncertainty regarding the percentage of CO 2 streams that might be defined as a RCRA hazardous waste. However, within this uncertainty , EPA believes that the high - end estimate of 90 percent is probably an overestimate, based on the Agency ’s best professional judgement. In addition, the high - end estimate results in a commensuratel y high estimated costs savings for the rule. Therefore, in an effort to present a more conservative estimate of costs savings, we are dropping the high - end 90 percent hazardous waste scenario for our final rule Assessment . For the final rule Assessment we are onl y using the low - end single point estimate of 10 percent RCRA hazardous waste. This change is the main driver for the significant decline in the high - end estimate for aggregate annualized cost savings. The new range presented in the Assessment reflects onl y the high and low estimated number of affected facilities, and the assumed discount rate. Expected Baseline Practices Capture Facilities: Applying the same approach used in the Assessment for the proposal, we assume that a capture facil ity would engage in one of four baseline practices to manage its CO 2 stream: 1) transportation of a non hazardous CO 2 stream to a sequestration facility for injection in a Class VIwell, and, 2) one of the following for CO 2 determined to be hazardous waste , a) cease capturing the CO 2 stream, b) transport the CO 2 stream to a facility for injection in a Class I hazardous well, c) treat the CO 2 stream and transport it to a sequestration facility for injection in a Class VI well . Each generator’s choice in how to manage a RCRA hazardous waste CO 2 stream would depend on several factors , with the cost of each management option likely to be a significant factor. However, a generator’s management decision will be affected b y factors beyond the cost of managing the CO 2 stream , including: eligib ility for government subsidies, improve d public image, and prepar ation for anticipated regulatory or market changes. As discussed above, we have assumed that 10 percent of the captured and managed CO 2 is RCRA hazardous waste. We further assume that there will be equal distribution among baseline management practices for th is hazardous material (3.3 percent each) , and that all non hazardous material (remaining 90%) will be s ent directl y to a Class VI s equestration well . These assumptions are the same as those applied for the low - end analy sis in the Assessment for the proposal. A complete discussion of this approach , including all assumptions and the projected facility impact schedule, may

be found in Section 3.2.2 of the June 2, 2011 Assessment .***E.O. 12866 Review

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Sequestration Facilities: Our anal ys is for the final rule applies the same methodology and assumptions in the determination of baseline practices as was applied in the anal ys is for the proposal (see Section 3.2.3 of the June 2, 2011 Assessment). However, consistent with our justification for the revised facility count for CO 2 generators/capturers, we use only the low - end assumptions for the sequestration facilities. Thus, this analy sis assumes that, in the baseline, approximately 97 percent of the sequestration wells would manage non - hazardous CO 2 streams and treated CO 2 streams in Class VI wells. 17 The remaining sequestration wells would manage RCRA hazardous CO 2 streams as Class I haz ardous waste wells . Post Final Rule Practices Our anal ys is for the final rule assumes that all CO 2 capture facilities will claim the exclusion and send their CO 2 streams to Class VIwells as a result of the final rule. Under the final rule, e xempt generators /capture facilities would not be required to conduct testing of their CO 2 streams for hazardous characteristics or be required to evaluate the hazardous constituent content of the CO 2 stream based on the materials and processes used to generate the waste. The se facilities would only be required to post and potentially submit an annual certification that the captured CO 2 stream is exempt. CO 2 capture facilities would also be able to send their CO 2 streams to Class VI wells without the additional cost of treating the CO 2 stream. Under the final rule, all CO 2 sequestration facilities are expected to be permitted as Class VI wells. 18 Under the rule, CO 2 managed through geological sequestration in Class VI wells would not be classified as RCRA hazardous waste . Thus, there would be no need for the owners and operators of these wells to pursue a Class I hazardous waste well permit. **Incremental Cost**  **s and Cost Savings**  This section presents aggregate annual incremental net cost savings under the low - end and revised high - end scenario. Both scenarios assume only 10 percent of managed CO 2 streams are RCRA hazardous waste (See above under Hazardous Waste Determination) . Compliance Costs:

17 Consistent with the methodology applied for the proposal, our analysis assumes that 93.3 percent of CO 2 capture facilities would transport non - hazardous or treated CO 2 streams to Class VI sequestration wells for injection. Another 3.3 percent of CO 2 capture facilities would transport hazardous CO 2 streams to Class I sequestration wells for injection. Of this total (96.6 percent), 93.3 percent transport thei r waste to Class VI wells only. Thus, to match the practices of CO 2 capture facilities, we estimate that 97 percent (93.3/96.6) of CO 2 sequestration wells in the baseline would be Class VI wells. The remaining 3 percent of CO 2 sequestration wells in the b aseline would be Class I wells. 18 With the possible exception of some sequestration demonstration projects that may be permitted as Class V experimental wells.***E.O. 12866 Review

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In corporated int o the net cost savings estimates presented into this section are the estimated compliance cost requirements 19 for both capture and sequestration facilities. Also included are costs to government entities (states and the Federal government) associated with the request and review of selecte d certification statements. 20 T otal compliance costs are negligible compared to overall cost savings and are therefore not discussed further in this supplementary analy sis. A comp lete discussion of these costs, including the analy tical methodology

and ass umptions is presented in Section 3.4 of the June 2, 2011 Assessment . Cost Savings: Under the final rule, management of CO 2 streams by geological sequestration would result in various exclu sions from the RCRA hazardous waste requirements. Th ese exclusions would result in three areas of savings for CO2 stream capturers/generators: exclusion from hazardous waste determination, exclusion from compliance with RCRA training, planning, and reporting requirements , and exclusion from hazardous waste treatment requirements . CO 2 sequestration facilities managing RCRA hazardous waste CO 2 streams in a Class I hazardous waste or Class VIwell would also realize savings related to hazardous waste determination and compliance with the training, planning, an d reporting requirement s. On a per facility basis, avoided CO 2 treatment costs were found to account for approximately 99.9 percent of all cost savings to capture facilities that generate hazardous CO 2 streams in the baseline. Total savings (waste determination, training/recordkeeping/reporting, and treatment) are calculated for the number of facilities affected each ye ar , projected over a 50 - ye ar period , beginning in 2012. These results are then averaged without a discount rate and annualiz ed using a 3 and 7 percent discount rate. Sections 3.5.1, 3.5.2, 3.5.3 , and 3.5.4 of the June 2, 2011 Assessment contain a comprehensive discussion of how cost savings for capture facilities were derived. This anal ys is incorporate s the same approach used for the proposal but refined the aggregate and annualized findings based on a simple linear adjustment for the number of facilities estimated to be affected b y the final action (see discussion above under CO 2 Capture Facilities ) . Cost savings to sequestration facilities as a result of the final rule represent less than one percent of total cost savings. On a per facility basis, waste determination savings represent approximately

68 percent of all cost savings to sequestration faci lities. As for capture facilities, total savings (waste determination, and hazardous waste requirements) to sequestration facilities are calculated for the number of facilities affected each ye ar , projected over a 50 - ye ar period , then averaged without a discount rate and annualized using a 3 and 7 percent discount rate. Sections 3.5.5 and 3.5.6 of the June 2, 2011 Assessment discuss the methodology , data, and findings for sequestration facility cost savings. Again, our anal ys is for the final rule incorpo rates this same approach, but develops refined aggregate and annualized estimates based on a simple

19 I nitial certification statement preparation, annual certification renewals, and selected certi fication submissions to the state or EPA authorities. 20 As with the analysis for the proposal, this analysis assumes that, combined, EPA and state governments will request certification statements from approximately 30 percent of capture facilities and Class VI well operators annually, and that state governments will account for about 90 percent of those requests .***E.O. 12866 Review

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linear adjustment for the number of facilities affected by the final action (see discussion above under Sequestration Facilities). **Findings** The Table s b elow summarize s 50 - ye ar net savings, average annual net savings, and annualized net savings in total, and for capture/generation facilities, sequestration facilities, and governmental entities. Findings assume 10 percent of all managed CO 2 is RCRA hazardo us waste, and reflect high - end and low - end scenarios based on the total number of facilities potentially

affected over the projected 50 - year period. Annualized estimates assume a 3 percent and 7 percent discount rate. Our findings indicate that CO 2 ca pture/generation facilities and sequestration facilities will experience net cost savings as a result of the final rule. 21 CO 2 transporters must continue to meet the baseline Department of Transportation requirements and are expected to experience no incre mental costs, or cost savings. Increased costs associated with the review of selected CO 2 exclusion certification statements are expected for EPA and state governments. The Tables below indicate that the final rule is expected to result in undiscounted total average net cost savings ranging from $4.96 million/year to $7.23 million/year. Applying a 3 percent discount rate, total annualized net savings were found to range from $4.68 million/year to $6.83 million/year. Application of the 7 percent discount rate resulted in total annualized net savings ranging from $4.24 million/year to $6.19 million/year. These figures represent more than an eighty percent reduction from estimates presented for the proposal, reflecting our revised assumptions concerning the percent of CO 2 streams that may be hazardous and the total number of potentially

affected facilities . Impacts to sequestration facilities represent less than one half of one percent of the total annualized net cost savings, in all cases examined. The revised annualized estimates for EPA and state government costs associated with the review of selected CO 2 exclusion certification statements remain negligible (i.e.,< $1,000/ye ar) , compared to total impacts .

21 This analysis does not attempt to mo del any potential productivity impact of the final rule. However, any such im pacts are likely to be pri mar ily positive, as affected facilities could use savings associated with the rule to increase productive efficiency and/or output.***E.O. 12866 Review

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Page 13 **Estimated Net Cost Savings for the**  **Final Rule: Conditional Exclusion from the RRA Definition of Hazardous Waste for CO**  **2 Streams**  **Managed in UIC Class VI Wells for the Purpose of Geologic Sequestration Undiscounted**  **(2010 dollars) Type of Entity**  **50 -**  **year Net Savings**  **Average Annual**  **Net**

**Savings 50**  **- year Net** 

**Savings Average**  **Annual Net** 

**Savings** Low-End Estimate High
-End Estimate Capture Facilities $247,009,847 $4,940,197 $361,014,392 $7,220,288 Sequestration Facilities $438,453 $8,769 $640,816 $12,817 State Governments - $12,444 - $249 - $18,187 - $364 EPA - $1,504 - $30 - $2,198 - $44 **Total $247,816,205**  **$4,956,324 $361,634,822**  **$7,232,697 3% Discount Rate**  **(2010 dollars) Type of Entity**  **Present Value of**

**50 -**  **year Net Savings**  **Annualized Net**

**Savings Present Value of** 

**50 -**  **year Net Savings**  **Annualized Net**

**Savings** Low-End Estimate High
-End Estimate Capture Facilities $123,718,061 $4,668,314 $180,818,704 $6,822,921 Sequestration Facilities $223,177 $8,421 $326,181 $12,308 State Governments - $5,779 - $218 - $8,446 - $319 EPA - $580 - $22 - $848 - $32 **Total $124,110,912**  **$4,683,138 $181,135,592**  **$6,834,878 7% Discount Rate**  **(2010 dollars) Type of Entity**  **Present Value of**

**50 -**  **year Net Savings**  **Annualized Net**

**Savings Present Value of** 

**50 -**  **year Net Savings**  **Annualized Net**

**Savings** Low-End Estimate High
-End Estimate Capture Facilities $62,471,161 $4,230,515 $91,304,004 $6,183,061 Sequestration Facilities $114,714 $7,768 $167,659 $11,354 State Governments - $2,656 - $180 - $3,882 - $263 EPA - $188 - $13 - $275 - $19 **Total $62,666,600**  **$4,243,750 $91,467,507**  **$6,194,132*****E.O. 12866 Review

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**Human Health ,**  **Environmental and Other**  **Benefits** The baseline requirements that apply to captured RCRA hazardous waste CO 2 streams are designed to protect the human health and the environment. However, EPA has determined that CO 2 streams may

be managed in an equally protective manner outside of the RCRA hazardous waste program. The Class VIUI C well requirements are designed to isolate the CO 2 stream and prevent it from migrating to Underground Sources of D rinking Water (USDWs ) . In addition, permit writers for Class VI UIC wells have discretion in whether to allow the sequestration of certain wastes depending on factors such as the composition of the waste, the structure of the well, and the proximity

of th e well to USDWs. Therefore, EPA has determined that the management of exempted CO 2 streams in Class VI UIC wells would not pose an unacceptable risk to human health and the environment . 22 In addition to the quantifi ed savings discussed above, this final rule represents a step toward establishing a supporting regulatory framework for the future development and deploy ment of carbon capture sequestration (CCS) technology . The rule will help provide the regulatory certainty needed to foster industry adoption of carbon capture and sequestration ( CCS ) . **Relevant Executive Orders and Acts**  Executive Order 12866: Regulatory Planning and Review EPA, in conjunction with the Office of Management and Budget (OMB) has determined that this final rule is a "significant regulatory action" as defined by Executive Order 12866 because it raises novel legal or policy

issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. Accordingly, EPA submitted the proposed and final action to the Office of Management and Budget (OMB) for review under EO 12866. Any changes made in response to OMB recommendations are documented in the docket for this action. This final rule is not an economically significant action. The expected annual costs and benefits of the final rule do not exceed $100 million. Furthermore, the rule does not create inconsistencies or interfere with an action taken or planned b y another agency . This rule is designed to complement related actions from the EPA Office of Water and Office of Air. Finally , this rule does not materially alter the budgetary

impact or the rights and obligations of recipients of entitlements, grants, user fees, or loan programs . Regulatory Flexibility Analysis The Regulatory

Flexibility

Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) , 5 U.S.C. §§ 601 - 612, generally requires an agency

to conduct a regulatory

flexibility

analysis for any

rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact 22 T he final rule conditional exclusion is based upon the Agency’s existing knowledge of the composition of CO 2 streams, and its analysis that compliance with the existing standards and regulations designed to prevent any exposure of CO 2 (and any associated impurities) would render additional regulation under RCRA subtitle C unnecessary . We reserve the right to modify the conditional exclusion in the future.***E.O. 12866 Review

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on a substantial number of small entities. Small entities include small businesses, small not - for profit enterprises, and small governmental jurisdictions. This final rule relieves the regulatory burden associated with EPA’s hazardous waste regulations on CO 2 capture and sequestration facilities b y exempting CO 2 captured for the purpose of GS in Class VIwell from the definition of hazardous waste. For each small entity claiming the exclusion , savings are expected to outweigh cost s necessary to prepare , post, maintain and potentially

submit the required certification statement. Furthermore, the Agency interprets SBREFA to be concerned only with net cost increases to small entities. Net cost savings are not considered under SBREFA. Therefore, this final rule is determined to not have a significant economic impact on a substantial number of small entities . Executive Order 13132: Federalism The final rule does not have Federalism implications. EPA does not anticipate that the rule will have substantial direct impacts on the states, the relationship between the Federal government and the states, or on the distribution of power and responsibilities among the various levels of government. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments The final rule is not expected to have substantial tribal implications . No Tribal governments are known to own or operate current or planned CO 2 capture or sequestration facilities. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks EPA does not find that the final rule will have environmental health or safety impacts that disproportionately

affect children. Therefore, Executive Order 13045 does not pertain to this action. Executive Order 13211: Actions that Significantly Affect Energy Supply, Distribution, or Usage Although the aff

ected universe of the final rule includes energy suppliers such as coal power plants, the rule is not expected to result in behavioral changes that would affect energy suppl y, distribution , or usage. National Technology Transfer Advancement Act This final rulemaking does not involve technical standards. Therefore, the consideration of voluntary consensus standards is not applicable. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low
-Income Populati ons The final rule is not expected to have disproportionately high or adverse human health or environmental effects on minority or low - income populations. EPA finds that the actions***E.O. 12866 Review

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allowed b y the final exclusion s are safe and do not present significant adverse health or environmental impacts . Appendix C of the June 2, 2011 Assessment presents a comprehensive review of Environmental Justice Impacts. Executive Order 12630: Regulatory Takings Analysis The final rule does not constitute a regulatory takin g because it is not expected to result in the phy sical invasion of property and should not negatively impact the economic viability of property. Unfunded Mandates Reform Act Analysis No anal ys is is required under the Unfunded Mandates Reform Act (UMRA) because the final rule does not include any mandate that is expected to result in expenditure by the private sector or aggregate expenditure by State, local, and tribal governments in ex cess of $100 million in any one year. The rule is expected to result in net savings to the private sector and insignificant costs to state governments. **Joint Impacts of Rules** The final rule will exempt CO 2 streams captured for the purpose of geological sequestration in a Class VIUI C well from the definition of hazardous waste. Such waste will not be subject to EPA’s hazardous waste regulations. These CO 2 streams may still qualify as solid wastes per the definition in 40 CFR 261.2 (Definition of solid waste). The management of these CO 2 streams would be subject to the Underground Injection Control Program (UICP) requirements in 40 CFR Parts 144 (Requirements for wells injecting hazardous waste) and the technical criteria and standards for Class VI UIC wells in 40 CFR Part 146 (Underground Injection Control Program: Criteria and Standards). CO 2 capture and sequestration facilities claiming the exclusion would remain subject to the mandatory reporting requirements for greenhouse gas emissions in 40 CFR P art 98 (Mandatory

Greenhouse Gas Reporting) . The transportation of captured CO 2 streams by pipeline would remain subject to the Department of Transportation (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA) under 49 CFR Parts 195 - 199 . The transportation of captured CO 2 by air, water, or highway

would remain subject to the PHMSA requirements in 49 CFR Parts 171 - 180.***E.O. 12866 Review

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### Identified U.S. **Carbon Capture Projects and Estimated Status**  **a**
**Project Type**  **Operating Status (May 2012)**  **First Year of Class VI**

**Sequestration (estimated)**  **Current CO**  **2 Fate**  **Comments Maintain for Final**  **Rule?**

Capture Active - Permitting Planning 2034 EOR GS year estimated. Add to final analysis. Y - H Capture Undergoing engineering design for retrofit 2013? undetermined Assumed to GS after retrofit. On - site or off - site, unknown. Y - H Capture Undergoing Plant Design 2034 EOR and some Saline GS? Fossil fuel electric power generation. Planning full CCS according to WEB site. Y - H Capture and Injection Planning 2013 uncertain Nitrogenous Fertilizer manufacturing Planning GS for 2013 Y - L Capture and Injection Active – in operation 2012 GS (plus EOR?) fossil fuel electric power generation Assessment indicates GS started in 2012 Y - H Capture and Injection Full project under construction, expected to be completed in late Summer 2015 2015? - 2017? Saline Fossil fuel electric power generation. Planned sequestration Y - L Capture and Injection Active – EOR Injection Ongoing 2030 EOR Natural Gas Distribution. Y - L capture Active – Operational as EOR 2030 EOR Not identified in Appendix Table but in Assessment as active (see comment above) GS switch - over uncertain Y - L Capture and Injection Active - Injection Ongoing 2030 EOR Year of GS identified in Assessment . Y - L Capture and Injection Active operation and preparation for capture and sequestration. Planned sequestration

firm but date unknown EOR (according to MIT) Coal and natural gas powered power plant. Started as CCS pilot project See: Southeast Regional Carbon Sequestration Partnership (SECARB) Newsletter, April 20, 2010. Y - H***E.O. 12866 Review

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Page 19 **Project Type**  **Operating Status (May 2012)**  **First Year of Class VI**

**Sequestration (estimated)**  **Current CO**  **2 Fate**  **Comments Maintain for Final**  **Rule?**

Capture and Injection Active – EOR Injection Ongoing 2030 EOR Most CO2 is currently sold to companies for EOR Assumed will switch over to GS in 20 yrs but may be uncertain Y - L Capture and Injection Active and operational 2030 EOR Assumed will switch over to GS after approximately 20 yrs of EOR operation Y - L Capture and Injection Active and operational 2030 EOR Assumed will switch over to GS after approximately 20 yrs of EOR operation Capture and Injection Active and operational 2030 EOR Assumed will switch over to GS after approximately 20 yrs of EOR operation Y - L Capture and Injection Active and operational 2030 EOR Assumed will switch over to GS after approximately 20 yrs of EOR operation Y - L Capture and Injection Active and Operational 2030 EOR Not identified in Appendix Table but in Assessment. Verified by Cadmus as one of Val Verde facilities. Y - L

Capture and Injection On Hold or cancelled? undetermined (2012 previously planned) saline CCS pilot project that is on hold (MIT)Fossil fuel electric power generation. Project has been cancelled. Left in analysis for final rule due to uncertainty of status. Y - L
Capture and Injection Active - Site Selection 2017 GS Assumed one or more units will be operational for GS by 2017 Y - H DOE Pilot (capture and Inject) Project may be cancelled or moved to Michigan. Facility included in low - end Assessment for proposal. Left in Final Analysis due to uncertainty of status. Y - L***E.O. 12866 Review

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Page 20 **Project Type**  **Operating Status (May 2012)**  **First Year of Class VI**

**Sequestration (estimated)**  **Current CO**  **2 Fate**  **Comments Maintain for Final**  **Rule?**

Note s : Lo w facility count is all “Y - L” (13 facilities) High facility count is all “Y - L” plus “Y - H” (19 facilities) Note : Facility information presented in this table is used for general analytical estimates only and should not be considered the Agency’s f inal determination as to facility status or plans. Sources : U.S. EPA. June 2, 2011. Assessment of the Potential Costs, Benef its, and Other Impacts of the Conditional Exclusion from the RCRA Definition of Hazardous Waste for CO 2 Streams Managed in UIC Class VI Wells for the Purposes of Geologic Sequestration, as Proposed, Cadmus/ERG,. June 25, 2012. A Review of CO 2 Capture and Processing Carbon Capture and Sequestrati on Technologies @ MIT Located at : http://sequestration.mit.edu/tools/projects/index_capture.html