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.

# Comments of Oglethorpe Power Corporation

To The

Federal Requirements Under the Underground Injection Control Program for Carbon Dioxide Geologic Sequestration Wells

Docket No. EPA-HQ-OW-2008-0390 73 Fed. Reg. 43492 (July 25, 2008)

JONES DAY

G. Graham Holden

1420 Peachtree Street, N.E.

Suite 800

Atlanta, GA 30309

(404) 581-8220

Counsel for Oglethorpe Power Corporation

December 24, 2008I. Introduction

Oglethorpe Power Corporation 1 (“Oglethorpe Power” or “Oglet horpe”) submits these comments on the Proposal of the Environmental Protection Agency ("EPA" or "the Agency") to establish the regulatory framework for geologic seque stration (“GS”) of carbon dioxide (“CO 2 ”) under the Underground Injection Control (“UI C”) Program, to be promulgated pursuant to the Safe Drinking Water Act ("SDWA"), found at 42 U.S.C. §§ 300f, et seq

. 2

As an owner (or co-owner) and/or operator of a number of fossil-fuel fi red electric generation facilities, Oglethorpe Power has a keen interest in any action EPA may take on issues raised in this rulemaking. Oglethorpe Power is a member of th e National Rural Electric Cooperative Association (“NRECA”). NRECA will also be submitting comme nts on the proposed UIC rules. Oglethorpe Power supports NRECA’s comments, and through this document incorporates those comments by

reference.

II. Background

It appears that GS of CO 2 from fossil-fueled power plants will be a critical part of any national strategy to control greenhouse gas emissions. Ogleth orpe appreciates EPA's work toward developing a regulatory framework for underground injection of CO 2 . EPA's decision to develop regulations under the UIC program and to develop a new class of injection we lls (Class VI) for CO 2 GS seems appropriate. We also support EPA's recognition that while the new regula tions at hand must be within the scope of the SDWA, there are a number of very important issues (such as long term liability) that are outside the scope of the act, but that are cr itical to developing a viable GS program for CO 2 injection and storage.

Oglethorpe Power is encouraged by the efforts EP A has taken thus far to instill "certainty" and "transparency" into the future Class VI CO 2 regulatory regime. 3 The challenge EPA faces is to craft a

Final Rule for commercial CO 2 injection appropriate for activities th at will largely be conducted in the future. EPA has had to confront many technical uncertainties regarding the establishment and operation of GS wells. Because many of the techni cal aspects are unknown, it is also very difficult to develop a clear understanding of project risks and liabili ties. As long as risks and liabilities are largely unknown and open-ended, private companies will not st ep forward to offer insurance and other risk management products, and it will not be possible to obtain the level of financ ing needed to undertake a costly GS operation. The pilot carbon capture and storage (“CCS”) proj ects conducted by DOE and other entities should help resolv e some of these uncertainties.

1 Oglethorpe Power is the largest generation cooperativ e in the United States, in terms of kilowatt-hour (“kW-hr”) sales. Through its Electric Membership Corporation (“EMC”) member - owners, Oglethorpe Power provides power to approximately 70% of the land area of the State of Georgia, providing power on a wholesale basis to 38 of the 42 EMCs in Georgia, wh ich in turn provide electricity to approximately 4.0 million Georgians.

2 The proposal can be found at 73 Fed. Reg. 43492 (July 25, 2008).

3 73 Fed. Reg. at 43496.2 III. Comments Regarding UIC Regulations

The following are Oglethorpe Power’s ge neral comments to the proposed rule.

1. Because of the difficulty of regulating fu ture activities, Oglethorpe urges EPA to continue to use a "performance based" appr oach in developing the requirements for Class VI UIC wells. This way, rules can be readily adjusted and fine-tuned as industry and regulators alike gain e xperience with large-scale CO 2 sequestration.

2. Because information and technology related to carbon sequestration will evolve as industry and regulators gain experience with CCS, Oglethorpe Power strongly encourages EPA to resist placing blanket prohibitions or detailed operational specifications in the Final Rule.

3. EPA should not automatically exclude placem ent of wells in particular geologic

structures. The Final Rule should leave the door open for a range of injection sites and methods, provided the owner or operator can sh ow that the injection and storage will be protective of Underground Sources of Drinking Water (“USDWs”).

4. Oglethorpe Power believes that the states will have the best knowledge of regional geology, existing projects, areas in need of speci al protection, etc. and that states should be allowed to assume primacy for administ ration of the UIC Class VI well program.

5. EPA should be careful not to stigmatize GS operations and to take positive measures to build public acceptance. EPA shoul d avoid characterizing stored CO 2 as a waste.

6. EPA should define the way GS activities will relate to the Resource Conservation and Recovery Act (“RCRA”) and the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) 42 U.S. §§ 9601, et seq . RCRA is simply the wrong tool to use to regulate GS of CO 2 and EPA needs to find a way to insure that the onerous requirements of CERCLA (never intended for GS of CO 2 ) are not applied to this highly specialized storage operation.

7. Appropriately defining the relationship of GS activities with RCRA and CERCLA is critical to the commercial deployment of full scale GS projects and may require Congressional action.

IV. Comments Regarding Liability and Risk Management

Oglethorpe Power supports the comments of the Carbon Capture and Storage Alliance ( the “CCS Alliance”) on the proposed UIC regulations. The CCS Alliance is a coalition of entities, spanning a

number of economic sectors, that share a common in terest in removing impedi ments to investment in and development of carbon capture and storage ( CCS), as well as mitigating the potential risks3 associated with the deploy ment of this technology. 4 Its purpose is to promote development of policy by the states and the federal government to appropriate ly address risks and poten tial liabilities, thereby enabling the further development and increased deployment of CCS. The CCS Alliance believes these technologies can be developed wh ile protecting underground water re sources, signific antly reducing global and U.S. greenhouse gas emissions, and enha ncing U.S. energy security. The Alliance’s purpose is to consider ways of promoting the deve lopment and use of CCS technologies and to support efforts by the private sector, states, the federa l government, non-governmental organizations and others, to help ensure that these technologies can be developed and wide ly, efficiently and costeffectively deployed.

We support the comments of the CCS Alliance and in corporate them here by reference. In addition, Oglethorpe Power defers to NRECA and the CCS A lliance to provide EPA with specific comments on the Financial Assurance and Long Term Liab ility issues discussed in the proposal.

**************************************

4 MidAmerican Energy Holdings Company, National Mini ng Association, National Rural Electric Cooperative Association, NRG Energy, In c., PacifiCorp and Zurich North Ameri ca are all members of the CCS Alliance.Letter ID: 0189

Commenter: G. Graham Holden Organization: Oglethorpe Power Corporation

Letter ID: 0189 Comment ID: 25241 Letter Lines: 51 to 53 ; 142 to 145

Comment Code: 1000 1. General and Administrative Comments

Comment: will also be submitting comments on the pr oposed UIC rules. Oglethorpe Power supports NRECA’s comments, and through this document incorporates those comments by reference.

We support the comments of the CCS A lliance and incorporate them here by reference. In addition, Oglethorpe Power de fers to NRECA and the CCS Alliance to provide EPA with specific comments on th e Financial Assurance and Long Term Liability issues discus sed in the proposal.

Individual Response: EPA acknowledges the comment. Pleas e see the remainder of EPA's responses to this comment, CCS Alliance’s comment, and NRECA’s comment for further

details. For additional information on EPA's final regulatory approach, pl ease see the final rule and preamble as well as the rulemaking docket.

Letter ID: 0189 Comment ID: 25242 Letter Lines: 57 to 62

Comment Code: 1410 1.2.1 Comments in support of EPA/rulemaking

Comment Code: 2020 1.5.1 Support Class VI designation

Comment: It appears that GS of CO2 from fossil-fu eled power plants will be a critical part of any national strategy to contro l greenhouse gas emissions. Oglethorpe appreciates EPA's work towa rd developing a regulatory framework for underground injection of CO2. EPA's decision to deve lop regulations under the UIC program and to develop a new class of injection wells (Class VI) for CO2 GS seems appropriate. We also support EPA's recogniti on that while the ne w regulations at

Individual Response: EPA acknowledges the comment and belie ves that the creation of a new injection well class (VI) under the existing UIC Program is necessary to deployment of GS as a climate change mitigation technology in a manner that protects USDWs from endangerment. EPA agrees that the UIC Program, under the authority of the SDWA, provides a strong framework for regulating injecti on of CO2 for GS and adds that the GS regulation tailors the UIC requirements to address the unique issues as sociated with large-scale GS including large injection volumes, the relative buoyancy of CO2, its corrosivity in the presence of water, the potential presence of impurities in captured CO2, and its mobility within subsurface geologic

formations.

1Letter ID: 0189 Comment ID: 25243 Letter Lines: 62 to 66

Comment Code: 5460 2.9.2 Comments on transfer of lia bility for long-term care

Comment: appropriate. We also support EPA's recogniti on that while the ne w regulations at hand must be within the scope of the SDWA , there are a number of very important issues (such as long term liability) that are outside the scope of the act, but that are critical to developing a viab le GS program for CO2 injection and

storage.

Individual Response: EPA acknowledges the commenter’s con cern regarding the applicability of multiple statutes to GS projects and the need for a single clear liability regime for owners or operators. EPA is working to create a nationally c onsistent financial responsibility regime within its authority to ensure that fi nancial resources are available to protect USDWs throughout the life of the GS project. However, the authority under the SDWA does not extend to release owners or operators from long-term responsib ility for the potential economic costs of impacts unrelated to USDWs. EPA does not have authority to transfer liability from one entity to another and SDWA does not provide for the creation of a third party fi nancial instrument where EPA is the trustee. In the UIC program, liability under SDWA §1423 remain s with the owner or operator for all well classes until all regulatory requirements have been met. EPA understa nds that Congress is considering legislation that may address the liability issue.

See the final rule preamble for furt her discussion of EPA's approach.

Letter ID: 0189 Comment ID: 25244 Letter Lines: 68 to 70 ; 158 to 158

Comment Code: 1410 1.2.1 Comments in support of EPA/rulemaking

Comment: Oglethorpe Power is encouraged by the effo rts EPA has taken thus far to instill "certainty" and "transparency" into the future Class VI CO2 regulatory regime.(Footnote 3) The challenge EPA f aces is to craft a Final Rule for

Footnote 3: 73 Fed. Reg. at 43496.

Individual Response: As described above, EPA believes that the creation of a new injection well class (VI) under the existing UIC Program is neces sary to enable the use of GS as a climate change mitigation technology in a manner th at protects USDWs from endangerment.

Letter ID: 0189 Comment ID: 25245 Letter Lines: 70 to 80

Comment Code: 5430 2.9.1 Comments on proposed financia l responsibility requirements (40 CFR 146.85)

Comment: regime.(Footnote 3) The challenge EPA f aces is to craft a Final Rule for commercial CO2 injection appropriate fo r activities that will largely be

2conducted in the future. EPA has had to confront many technical uncertainties regarding the establishment and operation of GS wells. Because many of the technical aspects are unknown, it is also very difficult to develop a clear understanding of project risk s and liabilities. As long as risks and liabilities are largely unknown and open-ended, private companies will not step forward to offer insurance and other risk manageme nt products, and it will not be possible to obtain the level of financing needed to undertake a costly GS operation. The pilot carbon capture and storage ("CCS") projects conducted by DOE and other entities should help resolve so me of these uncertainties.

Individual Response: EPA anticipates that the availability of a variety of fina ncial responsibility providers and third-party GS financial instrume nts will grow in response to demand. In addition, EPA plans to allow owners or operators to c hoose from a variety of financial instruments, allowing them to select instruments they find easiest to obtain. See the final rule and preamble for further discussion of EPA's final approach to financial responsibility. EPA agrees that the results of the DOE pilot projects will provide some reassurance a nd certainty about the degree of risk involved in GS projects.

Given that the practice of GS is fairly ne w and EPA does not have enough information in supporting future prediction, EPA plans, every six years, to collect and review data on GS projects to determine whether the appropriate amount and types of information and appropriate documentation are being collected, and to determ ine if modifications to the requirements are appropriate or necessary.

Letter ID: 0189 Comment ID: 25246 Letter Lines: 86 to 95

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

Comment: 1. Because of the difficulty of regulating future activities, Oglethorpe urges EPA to continue to use a "performance based" approach in developing the requirements for Class VI UIC wells. This way, rules can be readily adjusted and fine-tuned as industry and re gulators alike gain experien ce with large-scale CO2 sequestration.

2. Because information and technology related to carbon sequestration will evolve as industry and regul ators gain experience with CCS, Oglethorpe Power strongly encourages EPA to resist placi ng blanket prohibitions or detailed operational specifications in the Final Rule.

Individual Response: The Agency believes that the Class VI requirements balance site-specific flexibility with USDW protection. Rather than setting performance or technology-based standards for GS projects, EPA is adopting a flex ible approach, where operators of GS projects would develop and implement site-specific plans for delineating the AoR, testing and monitoring the site, performing corrective actio n, and post-injection site care . EPA believes that the plans— which would be reviewed and approved by the Director and periodical ly updated throughout the life of the project—promote an ongoing dialogue between the operato r and the Director that will

3encourage use of the most appropriate t echnologies for a particular project.

To address the comment that the rule should accommodate future technological developments related to GS, EPA adds that it is using an ad aptive approach to regulating GS under the UIC Program. Even after finalization of the GS regulat ion, EPA plans, every six years, to collect and review project data on GS research projects to determine whether the appropriate amount and types of information and appropriate documenta tion are being collected, and to determine if modifications to the requirements are appropriate or necessary.

Letter ID: 0189 Comment ID: 25247 Letter Lines: 97 to 101

Comment Code: 2100 1.6 Target Geologic Formations for GS

Comment: 3. EPA should not automatically exclude placement of wells in particular geologic structures. The Fi nal Rule should leave the door open for a range of injection sites and methods, provided the owner or operator ca n show that the injection and storage will be protective of Underground Sources of Drinking Water ("USDWs").

Individual Response: EPA clarifies that the GS rule does not categorically prec lude injection of CO2 into any non-USDW formation types. The purpose of the GS rule is to ensure protection of USDWs from endangerment, and the rule requires that owners or operators demonstrate that wells are sited in suitable systems with geologic formations to receive and confine injected CO2, required at §146.83 of the GS rule. The Cla ss VI siting, well cons truction and operation, monitoring and testing, and post-inj ection site care and site closur e requirements are designed to ensure that injected CO2 remains within the target formation. If an owner or operator can

demonstrate to the Director's satisfaction that GS in coal seams, basalts, salt domes, or shales can be accomplished in a manner that protects USDWs a nd meets all of the requirements of the GS rule, the project may be permitted as a Class VI well.

Letter ID: 0189 Comment ID: 25248 Letter Lines: 103 to 106

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

Comment: 4. Oglethorpe Power believes that the st ates will have the best knowledge of regional geology, existing projects, areas in need of special protection, etc.

and that states should be allowed to a ssume primacy for administration of the UIC Class VI well program.

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, Territorial a nd DI UIC Program Direct ors are in the best position to evaluate the unique issues related to well depth, geol ogy, and hydrogeology that are posed by a Class VI well. Some degree of flexibility is needed for Cl ass VI wells because each decision made will be site-specific and conditions will di ffer from state to state. The GS rule balances the need for

4these site-specific decisions with the need for mi nimum standards 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 providing states the flexibility to obtain primacy for Class VI we lls independently of other well classes can help foster effec tive management of CCS. EPA belie ves that allowing independent Class VI primacy may encourage states to take responsibility for impl ementation of Class VI regulations and provide for a more comprehensive approach to managing CCS projects by promoting the integration of GS activities unde r SDWA into a broader framework for managing CCS. The Agency will allow independent primacy for Class VI we lls under §145.1(i) of the final GS rule. Furthermore, GS operations involve an cillary activities (e.g., pi peline operations, pore space ownership, land use rights, and surface access) for which states can call upon other authorities that exist at the state level ( but outside UIC authority) to provide a more comprehensive CCS management approach.

Letter ID: 0189 Comment ID: 25249 Letter Lines: 108 to 110

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

Comment: 5. EPA should be careful not to stigmatize GS operations and to take positive measures to build public acceptance. EPA should avoid characte rizing stored CO2

as a waste.

Individual Response: EPA does not believe that the tailor ed requirements will create a negative public perception of GS. The Agency believes that a demonstration to the pub lic that GS projects are meeting the GS rule's tailored requirement s would likely improve confidence in the project and help address public questions and concerns.

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: 0189 Comment ID: 25250 Letter Lines: 112 to 121

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

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

56 Comment: 6. EPA should define the way GS activ ities will relate to the Resource Conservation and Recovery Act ("RCRA") and the Comprehensive Environmental Response, Compensation and Liability Ac t ("CERCLA") 42 U.S. §§ 9601, et seq. RCRA is simply the wrong tool to use to re gulate GS of CO2 and EPA needs to find a way to insure that the onerous requiremen ts of CERCLA (never intended for GS of CO2) are not applied to this hi ghly specialized st orage operation.

7. Appropriately defining the relationship of GS activities with RCRA and CERCLA is critical to the commercial deployme nt of full scale GS projects and may require Congressional action.

Individual Response: EPA agrees that any requirements a pplicable to CO2 injectate should be clearly identified to the public and to th e regulated community. EPA received many comments regarding the applicability of the RCRA regulat ions and statute to CO2 streams that are geologically sequestered under the final Class VI UIC well requirements. As a result, EPA has decided to initiate a separate proposed rulemaki ng specifically to examine the issue of RCRA applicability to CO2 streams be ing geologically sequestered, in cluding the possible option of a conditional exemption from the RCRA requirement s for CO2 GS in Class VI wells. EPA will consider these comments as part of its devel opment of that proposal. The Agency will consider issues particular to RCRA in the context of th at separate rulemaking, and recommends that the commenter read that proposed rule when it is published. The Agency notes that commenters who wish to submit comments on the RCRA proposal will need to do so during the comment period for that rule. Finally, EPA also notes that the fi nal GS rule, which adds new regulations for Class VI wells under the Safe Drinking Water Act (S DWA), is not making any changes to the RCRA regulations.

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.