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.Chris M. Hobson

Senior Vice President

Research and

Environmental Affairs 600 North 18th Street
Birmingham, AL 35203

Tel 205.257.2812

Fax 205.257.7938 

# SOUTHERNÂ.

COMPANY

December 23, 2008 Energy to ServeYtmr Worlt~

VIA MESSENGER AND ELECTRONIC SUBMISSION

Water Docket EPA Docket Center (EPNDC)

EPA West Room 3334
1301 Constitution Avenue NW Washington, DC

Re: Proposal for Federal Requirements Under the Underground Injection Control Program for Geologic Sequestration of Carbon Dioxide
Docket No.: EPA-HQ-OW-2008-0390

Dear Sir or Madam:

Enclosed please find the comments of Southern Company on the Environmental Protection Agency's Proposed Rule for Geologic Sequestration ("GS") of Carbon Dioxide ("C02") under the Underground Injection Control ("UIC") Program.

Southern Company believes that carbon capture and storage has the potential to lead to substantial environmental benefits in terms of avoided CO2 emissions. Therefore, a workable CCS program, including a regulatory framework for long-term CO2 sequestration as anticipated by this rulemaking, is an essential element in the full portfolio of options needed to ensure continued affordable and reliable electric service to customers throughout the United States while reducing CO2 emissions.

We appreciate the opportunity to comment on this important rulemaking and look forward to continuing to work with EPA on this issue.

Sincerely,

# Ck; M ~çEnclosuresCOMMENTS OF SOUTHERN COMPANY

on the Environmental Protection Agency's Proposal for

FEDERAL REQUIREMENTS UNDER THE

UNDERGROUND INJECTION CONTROL PROGRAM FOR

GEOLOGIC SEQUESTRA nON OF CARBON DIOXIDE

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

INTRODUCTION

Southern Company submits these comments on the Proposal of the Environmental

Protection Agency ("EPA" or "the Agency") to establish a regulatory framework for geologic

sequestration ("GS") of carbon dioxide ("C02") under the Underground Injection Control

("UIC") Program pursuant to the Safe Drinking Water Act ("SDWA"). 73 Fed. Reg. 43492

(July 25, 2008).1 Southern Company (NYSE: SO) is a super-regional energy company with

more than 42,000 megawatts of electric generating capacity in the Southeast. Southern

Company is one of the largest producers of electricity in the country, supplying energy to a

120,000-square mile service territory spanning most of Georgia and Alabama, southeastern

Mississippi, and the panhandle region of Florida and serving nearly 4.4 milion customers.

Southern Company is ranked number 166 on the latest Fortune 500 listing of the largest United

States corporations, with approximately 26,000 employees and reported earnings in 2007 of



### $1.73 bilion. Southern Company owns four regulated retail electric utilities: Georgia Power,

Alabama Power, Gulf Power, and Mississippi Power.

In addition, Southern Company is a leader in environmental research. Through 2007,

Southern Company has invested approximately $4.6 bilion in environmental controls and plans

¡ Southern Company also endorses the comments fied on this Proposal by the Utility Solid Waste Activities Group, Edison Electric Institute, and the Carbon Sequestration Council Carbon Capture and Sequestration Contact Group.

### to spend an additional $3.9 bilion through 2010 to further reduce emissions. Southern Company

is committed to the deployment of a variety of energy sources including renewable energy.

Southern Company has already begun a CO2 injection project at a deep saline-filled geologic

formation in Mississippi as part of the Southeast Carbon Sequestration Regional Partnership.

We believe that carbon capture and storage ("CCS") is critical to the likely federal goal of

reducing greenhouse gas emissions and to the implementation of a number of federal and state

energy reform initiatives; we are proud of our efforts to help bring this important technology

towards commercial viability and generally support EPA's efforts in this rulemaking.

Carbon capture and storage has the potential to lead to substantial environmental benefits

in terms of avoided CO2 emissions. Therefore, a workable CCS program, including a regulatory

framework for long-term carbon dioxide sequestration as anticipated by this rulemaking, is an

essential element in the full portfolio of options needed to ensure continued affordable and

reliable electric service to customers throughout the United States while reducing CO2 emissions.

It is critical, therefore, that EPA promulgate flexible regulations that can develop as industry and

regulators alike gain experience with large-scale CO2 sequestration. These regulations should be

built around performance-based standards that encourage tailoring of the Program's requirements

to the geologic and technical needs of a given CO2 GS site.

Southern Company agrees that the appropriate standard underlying the technical

requirements to be applied to Class VI wells should be the protection of underground sources of



### drinking water ("USDWs"). See id. at 43497. With this standard in mind, it is imperative that

EP A fashion the Final Rule with sufficient flexibility to meet two primary goals: first, adequately

addressing the varied geologic conditions of different CO2 GS sites; second, ensuring

adaptabilty as industry and regulators gain experience with and information regarding CO2 GS.

-2-It is important that the Final Rule not exclude the existing experience and knowledge gained

from current CO2 injection and GS demonstration projects. To encourage use of this

information, Southern Company supports faciltated GS in oil and gas reservoirs with the

protection of USD W s and the transition of Class II and Class V C02 inj ection operations to GS.

The Final Rule should establish a regulatory framework built around the standard of protecting

USDWs while allowing Directors to issue permits with site-specific requirements. An emphasis

on site selection, site characterization, and careful permit-writing wil further strengthen a



### regulatory scheme that wil provide protection ofUSDWs while maximizing the beneficial

environmental and economic impacts of carbon sequestration.

The Proposal includes many provisions for directorial discretion that will help ensure that

the C02 GS program has the flexibility it needs to succeed. While EPA must take care to clearly

define the circumstances in which directorial discretion may be exercised and to limit the scope

of that discretion, in many cases this discretion wil allow Directors to consider the unique

characteristics of a given CO2 GS project and adopt a site-specific approach that wil meet the

Final Rule's performance-based standards.

Classification of CO2 GS Wells and Interaction with Other Regulatory Regimes

Southern Company supports EPA's approach of creating a new category of wells under

the UIC program for the long-term sequestration of C02. ¡d. at 43502. The new Class VI

designation is appropriate for the injection of CO2 streams captured from an emission source,

including incidental associated substances derived from source materials and the capture process,

as well as substances added to the stream to facilitate the injection process. As EPA observes,

the addition of such substances may sometimes prove a necessary step in the injection process.

-3-See id. at 43493. Accordingly, the removal of these incidental associated substances should only

be required as necessary to avoid interference with capture, transportation, injection and

containment of CO2 streams.

Potential interaction with RCRA - Southern Company commends EPA for avoiding

characterization of the CO2 stream to be injected into Class VI wells. See id. at 43503. We,

however, are concerned with the Preamble's vague reference to potential interaction with the

Resource Conservation and Recovery Act ("RCRA"). ¡d. EPA should pursue all available

regulatory and legislative avenues to preclude applicabilty of RCRA to Class VI well

operations. For example, EPA could make use of the established "contingent management"

concept, which allows for the exclusion of certain materials from RCRA hazardous waste

regulation when those materials are' adequately regulated under another environmental regime.

The contingent management approach would allow EPA to sidestep any chiling effect that

potential RCRA liability would have on CO2 GS operations under the UIC Program without



### jeopardizing protection ofUSDWs.

Potential interaction with CERCLA - EPA also raises the potential for liability under the

Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA")

stemming from CO2 GS operations. 73 Fed. Reg. at 43504. The potential for liability under

CERCLA wil have similar adverse implications as the potential for RCRA applicability _



### specifically, potential CERCLA liabilty wil act as a significant deterrent to participation or

investment in CO2 GS projects. Southern Company again encourages EPA to pursue whatever

regulatory and/or legislative avenues are available to remove this obstacle without jeopardizing

the Program's standard of 

### protection ofUSDWs.

-4-Permit Application

Southern Company opposes EPA's proposed requirements for Class VI permit

applications to the extent that those requirements are more burdensome than current permit



### application requirements for other classes ofUIC wells. ¡d. at 43517. C02 GS does not pose

unique risks warranting many of the Proposal's additional requirements for detailed information.

EP A should craft the Final Rule to require in the initial permit application information

that the Director will need to determine whether issuance of a Class VI permit is appropriate.

EP A could require submission of supplemental information as it becomes available through

driling, construction, and reevaluation of the welL. This wil not only prevent against the

chiling effect that overly burdensome permit application requirements would have on the CO2

GS program, but wil simultaneously ensure the ultimate collection of more thorough and

reliable data.

Duration oj permit - Southern Company supports EPA's proposal to issue Class VI

injection well permits for the operating life of the GS project. ¡d. at 43523. EPA correctly

observes that the requirements for periodic reevaluation of site data, corrective action status,

monitoring results, and operating parameter modifications would render mandatory five- and tenyear permit reviews unnecessary and duplicative. ¡d. Issuance of permits extending through the

operating life of the GS project, including the post-injection site care period, wil provide

Owners or Operators and investors with certainty and wil encourage investment in CO2 GS

projects.

-5-Area of Review ("AoR") and Corrective Action

Southern Company encourages EPA to avoid arbitrary absolutes or blanket prohibitions

in the Final Rule and to instead craft regulations allowing Class VI permit applicants and

Directors to focus on scientific data and technical demonstrations in characterizing potential

geologic sequestration sites. It is premature to categorically preclude injection in certain types of

formations as CO2 injection and sequestration technology may develop to make injection in



### those formations feasible while stil protecting against endangerment ofUSDWs. A recent

report by the Government Accountability Offce ("GAO") predicts a demand for thousands, if

not tens of thousands, ofUIC permits to accommodate the volumes of CO2 to be captured once



### CCS is deployed on a commercial scale. Climate Change - Federal Actions Wil Greatly Affect

the Viabilty oJCarbon Capture and Storage as a Key Mitigation Option, GAO-08-1080 at 40

(September 2008) ("GAO Report"). Given the likelihood for such demand, EPA should

encourage the identification and utilzation of as many injection zones as possible, provided that

the Director determines that injection in a given site would be protective ofUSDWs before

issuing a permit for injection at that site.

To maximize capacity for CO2 injection that is protective ofUSDWs, the Final Rule

should avoid arbitrary exclusions of whole categories of injection zones. For example, a

requirement that all injection zones be located below the lowermost USDW is unnecessary; there

may be situations in which injection can occur above the lowermost USDW without endangering

USDWs - for example, in current oil and gas reservoirs with demonstrated trapping capabilties.

¡d. at 43512. In situations where the Owner or Operator could not demonstrate that injection

above the lowermost USDW could occur without endangering USDWs, the permit could

preclude injection into such formations.

-6-The same logic argues against blanket prohibitions on injection in coal seams or other

formations such as basalts, salt domes, or shales: if a scientific and technical demonstration can

be made showing that the injection of CO2 into one of these formations wil be protective of

USDWs, then that formation should remain an available option under the Class VI UIC Program.

See id. at 43503. There is also no need for a minimum injection depth requirement for CO2 GS



### projects, provided that protection ofUSDWs can be demonstrated. ¡d. at 43512. For similar

reasons, Southern Company opposes an absolute prohibition on use of exempt aquifers for Class

VI injection (including sole source aquifers); use of exempt aquifers should be permitted where

the specific aquifer exemption criteria are satisfied. ¡d. The Final Rule should give Directors

latitude to approve injection plans for a range of sites based on scientific data and technical

demonstrations that the site wil contain the injected CO2 streams, thereby preventing



### endangerment ofUSDWs.

EP A also seeks comment on whether the Final Rule should require, or allow the Director

to require at his discretion, the identification and characterization of additional confining and

containment zones above the primary confining zone that could further impede vertical fluid

movement and allow for pressure dissipation. ¡d. at 43505-06. As a general matter, Southern

Company opposes the inclusion of any sort of "secondary containment" requirement - even at

the Director's discretion - as it would unnecessarily burden Owners or Operators of Class VI



### wells while providing litte or no benefit in terms ofUSDW protection. An emphasis on proper

site selection and characterization combined with performance-based standards wil ensure that

Class VI permits are only issued for CO2 GS projects where the primary containment zone wil

protect against endangerment ofUSDWs in the first instance. Identification of redundant

-7-confining and containment zones would only serve to confuse the permit application and

approval process and unduly restrict siting of CO2 GS projects.

Modeling- Southern Company supports EPA's suggestion to allow for use of proprietary

models with CO2 GS sites, provided that the permit applicant discloses the code assumptions,

relevant equations, and scientific basis of the modeL. ¡d. at 43507. Based on the valuable

experience Southern Company has gained through our C02 GS pilot project, we also support the

use of computational fluid flow models for AoR delineation, provided that these models are

available for use at the option of the Owner or Operator and are not required for all CO2 GS



### projects. See id.

Corrective action - As the GAO Report observes, public perception of carbon

sequestration wil likely playa determinative role in the success of any CO2 GS regulatory

scheme. GAO Report at 49. The use of the phrase "corrective action" to describe plugging and

repair of Class VI wells risks confusion and possibly negative associations with the concept of

corrective action under RCRA and CERCLA. We encourage EPA to replace the phrase

"corrective action" with more appropriate terminology in the Final Rule.

Operating and Monitoring Requirements

It is important to reiterate that, because CO2 GS technology is stil developing, additional



### information wil be gained and technological advancements made that wil allow Owners or

Operators to make use of a broader range of tools and methods in Class VI well operation while

being fully protective ofUSDWs. For example, our pilot projects as part of the Southeast

Carbon Sequestration Regional Partnership will lead to greater technical expertise related to CO2



### injection. In addition, the geologic characteristics and limitations of Class VI wells wil vary

-8-significantly from site to site. For these reasons, the Final Rule should be flexible enough to

incorporate new information and technological advancements which, in turn, will help promote a

more robust and environmentally protective CO2 injection program. To achieve this result, the

Final Rule should establish performance-based standards and allow permit applicants and

Directors to work together to fashion a plan that wil best suit the needs of a particular Class VI

site and any associated USDWs.

While some requirements are appropriate for all Class VI wells, as a general matter

operating and monitoring requirements for individual Class VI projects should be set forth in a

Director-approved plan as part of the permit application and approval process. For example,

while Southern Company supports a default requirement for automatic shut-off mechanisms for

Class VI wells, we oppose a uniform requirement for down-hole shut-off valves. ¡d. at 34511.

These valves are designed to meet unique offshore risks and are, in many instances, il-suited to

UIC operations, including C02 GS. A requirement for down-hole shut-off valves would provide

little benefit but would come at a significant cost and would preclude the use of some tools that

are critical to operation, monitoring, and repair of CO2 GS wells.

Southern Company also opposes a requirement for Owners or Operators to use tracers in

CO2 GS operations. As EPA observes, there are many adverse technical and environmental

consequences associated with the use of tracers, including the possibility of false positives and

the release of per 

### fluorocarbon ("PFC") to the atmosphere. ¡d. at 43512-13. Southern Company

supports the use of tracers in the CO2 GS program only if at the option of the Owner or Operator.

Finally, Southern Company urges EPA to focus operating and monitoring requirements

on containment and preventive measures rather than to impose requirements that wil not

indicate C02 migration until potentially damaging migration has occurred. In particular, we

-9-encourage containment monitoring only, such as one or at most two above-zone monitoring wells

that measure pressure to detect non-containment. ¡d. at 43514. The Final Rule should encourage

Owners or Operators to invest monitoring resources towards detecting subsurface movement of

CO2 or other substances at a point when action may be taken to address any potential problems

and prevent further migration, whether below or to the surface.

Financial Responsibility

As GAO observed in its recent report, there is a great deal of uncertainty regarding the

type of financial instruments that wil be available to meet the financial responsibility

requirements of 

### the Final Rule. GAO Report at 39-40. This uncertainty has the potential to slow

development on CO2 GS programs; EPA can ease stakeholders' fears and facilitate commercial

deployment of the CO2 GS UIC Program by providing further clarity regarding these

requirements in the Final Rule where possible. In some situations, it may be more appropriate to

provide further clarification at a later date in the form of guidance, as EPA suggests in the

Preamble to the Proposal. ¡d. at 43520-22. Such guidance, however, must be issued in

accordance with the Good Guidance Practices Bulletin issued by the Offce of Management and

Budget ("OMB"), including provision of public notice and opportunities for comment before

issuance of any final guidance. 72 Fed. Reg. 3432, 3438 (Jan. 25, 2007).

The continued availabilty of self-insurance instruments as methods of financial

assurance for Class VI CO2 GS projects is crucial to the viabilty of the CO2 GS regulatory

scheme set forth in the Final Rule. Self-insurance instruments, including the corporate financial

test and the corporate guarantee, have been used successfully under the RCRA program for more

than two decades and wil be important elements of a full menu of options for meeting financial

-10-responsibilty mechanisms under the Final Rule. Given the likelihood that many Class VI

Owners or Operators wil use a combination of approaches and instruments to meet the

Program's financial assurance requirements, EPA should take care not to constrain the

development of any otherwise acceptable means of achieving financial assurance. We urge EPA

to craft flexible requirements that allow Owners or Operators to use multiple instruments and

adjust their methods as necessary as industry, regulators, and markets gain experience with the

financial aspects of CO2 GS projects.

Post-Injection Site Care and Closure

Southern Company opposes a default fifty-year timeframe - or any fixed default length



### of time - for the post-injection site care period. ¡d. at 43519. A default post-injection site care

period is of little value given the widely varied characteristics of future CO2 GS sites, and the

significant discrepancy between the appropriate post-injection site care period for various Class

VI wells. As EPA itself recognizes, the actual time required for plume stabilization following



### cessation of injection wil be "very site specific." ¡d. A site-specific determination, based on

conditions at a particular Class VI well, wil be necessary in the case of every CO2 GS project

under the UIC Program. The Final Rule should define a performance-based standard for site

closure and leave the site-specific analysis and determination of appropriate post-injection site

care period to the Director. Potential Owners or Operators are likely to shy away from

undertaking a CO2 GS project if the Program's requirements may extend decades into the future

even when those requirements are no longer necessary. A performance-based standard allowing



### for site-specific closure period determinations wil avoid the chiling effect that any default fixed

timeframe for post-injection site care and closure wil have on participation and investment in

-11-

### C02 GS projects. Moreover, the site-specific approach wil ensure that an appropriate postinjection site care period is identified to meet the needs of each individual Class VI operation.

Public Perception and Participation

Southern Company encourages EPA to take steps to ensure that the public fully

understands that it is extremely unlikely that C02 GS projects wil harm USDWs or human

health. Effective dissemination of information regarding the limited risks posed by CO2 GS wil

lead to more informed and meaningful public participation in the permitting process. One step

EP A can take to adequately inform the public is to tie the requirements of the Final Rule more

closely to actual risks. The Class VI requirements are unprecedented in the UIC Program in

terms of their stringency; this wil create unnecessary public apprehension without improving



### protection ofUSDWs.

Southern Company supports EPA's suggestion to modify existing public notice and

comment requirements under the UIC Program to reflect the availability of new tools and

technology, particularly web-based technology, for gathering and disseminating information. ¡d.

at 43523. Use of internet-based tools can playa key role in connecting regulators, permit

applicants, and the public through all stages of the comment period. Southern Company

understands that the public must be kept informed and allowed an opportunity to provide input

on potential Class VI projects; however, we urge EPA to establish requirements in the Final Rule

that call for public notice after submission of a Class VI permit application, but not before that

application has been deemed complete.

* * * * *

-12-Southern Company applauds the EPA's initial efforts to create a clear and flexible

regulatory scheme that wil promote carbon capture and storage technology and projects while

protecting underground sources of drinking water. We appreciate the opportunity to comment on

this rulemaking and look forward to continuing to work with EPA on this important issue.

-13-Letter ID: 0201

Commenter: Chris M. Hobson Organization: Sout hern Company

Letter ID: 0201 Comment ID: 22151 Letter Lines: 33 to 45

Comment Code: 1420 1.2.1.1 Support the GS rulemaking

Comment: Enclosed please find the comments of Southern Company on the Environmental Protection Agency's Proposed Rule for Geologic Sequestration ("GS") of Carbon Dioxide ("C02") under the Underground In jection Control (" UIC") Program. Southern Company believes that carbon captu re and storage has the potential to

lead to substantial environmental benef its in terms of avoided CO2 emissions. Therefore, a workable CCS program, incl uding a regulatory fra mework for longterm CO2 sequestration as anticipated by this rulemaking, is an essential element in the full portfolio of options n eeded to ensure continued affordable

and reliable electric serv ice to customers throughout th e United States while reducing CO2 emissions.

We appreciate the opportunity to comment on this important rulemaking and look forward to continuing to work with EPA on this issue.

Individual Response: EPA believes that the creation of a new injection well class (VI) under the existing UIC Program is necessary to enable the use 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 fram ework for regulating injection of CO2 for GS and adds that the GS regulati on tailors the UIC requirements to address the unique issues associated with large-scale GS including large injection volumes, the relative buoyancy of CO2, its corrosivity in the presence of water, the potenti al presence of impurities in captured CO2, and its mobility within subsurface geologic formations.

Letter ID: 0201 Comment ID: 22152 Letter Lines: 61 to 84

Comment Code: 1000 1. General and Administrative Comments

Comment: Southern Company submits these comments on the Proposal of the Environmental Protection Agency ("EPA" or "the Agency ") to establish a re gulatory framework for geologic sequestration ("GS") of carbon dioxide ("C02") under the Underground Injection Cont rol ("UIC") Program pursuan t to the Safe Drinking Water Act ("SDWA"). 73 Fed. Reg. 43492 (J uly 25, 2008). [FN1 Southern Company

also endorses the comments filed on this Proposal by the Utility Solid Waste Activities Group, Edison Electric Inst itute, and the Carbon Sequestration Council Carbon Capture and Sequestration Cont act Group.] Southern Company (NYSE: SO) is a super-regional energy company with more than 42,000 megawatts of electric generating capacity in the Southeast. Southern Company is one of the

1largest producers of elect ricity in the country, su pplying energy to a 120,000- square mile service territor y spanning most of Georgia and Alabama, southeastern Mississippi, and the panhandl e region of Florida and se rving nearly 4.4 million customers. Southern Company is ranke d number 166 on the latest Fortune 500 listing of the largest United States corporations, with approximately 26,000 employees and reported earnings in 2007 of $1.73 billion. Southern Company owns four regulated retail electri c utilities: Georgia Power, Alabama Power, Gulf Power, and Mississippi Power.

In addition, Southern Company is a lead er in environmental research. Through 2007, Southern Company has invested appr oximately $4.6 billion in environmental controls and plans to spend an additi onal $3.9 billion through 2010 to further reduce emissions. Southern Company is committed to the deployment of a variety of energy sources including renewable ener gy. Southern Company has already begun

Individual Response: EPA acknowledges the comment. Pleas e see the remainder of EPA's responses to this letter for further details. Fo r additional information on EPA's final regulatory approach, please see the final rule and pr eamble as well as the rulemaking docket.

Letter ID: 0201 Comment ID: 22153 Letter Lines: 84 to 98

Comment Code: 1330 1.1.3.1 Support use of GS in general

Comment Code: 1420 1.2.1.1 Support the GS rulemaking

Comment: of energy sources including renewable ener gy. Southern Company has already begun a CO2 injection project at a deep sa line-filled geologic formation in Mississippi as part of th e Southeast Carbon Sequestra tion Regional Partnership. We believe that carbon capture and storag e ("CCS") is criti cal to the likely federal goal of reducing greenhouse gas emi ssions and to the implementation of a number of federal and state energy refo rm initiatives; we are proud of our efforts to help bring this important te chnology towards commercial viability and generally support EPA's efforts in this rulemaking.

Carbon capture and storage has the pot ential to lead to substantial

environmental benefits in terms of avoide d CO2 emissions. Therefore, a workable CCS program, including a regulatory fr amework for long-term carbon dioxide sequestration as anticipated by this rule making, is an essential element in the full portfolio of options needed to ensu re continued affordable and reliable electric service to customers throughout the United States while reducing CO2

Individual Response: EPA believes that the creation of a new injection well class (VI) under the existing UIC Program is necessary to enable the use 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 fram ework for regulating injection of CO2 for GS and adds that the GS regulati on tailors the UIC requirements to address the unique issues associated with large-scale GS including large injection volumes, the relative

2buoyancy of CO2, its corrosivity in the presence of water, the potenti al presence of impurities in captured CO2, and its mobility within subsurface geologic formations.

Letter ID: 0201 Comment ID: 22154 Letter Lines: 99 to 103

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

Comment: emissions. It is critical, therefore, that EPA promulgate flex ible regulations that can develop as industry and regulators alike gain experience with largescale CO2 sequestration. These regulations should be built around performancebased standards that encourage tailoring of the Program's requirements to the geologic and technical needs of a given CO2 GS site.

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

EPA adds that it is using an adaptive approach to regulati ng GS under the UIC Program. Even after finalization of the GS regula tion, EPA plans, every six years, to collect and review project data on GS research projects to determine wh ether the appropriate amount and types of information and appropriate documentation are being collected, and to determine if modifications to the requirements are appropriate or necessary.

Letter ID: 0201 Comment ID: 22155 Letter Lines: 105 to 122

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

Comment Code: 1610 1.3.1 Risks to USDWs

Comment: Southern Company agrees that the appropr iate standard underl ying the technical requirements to be applied to Class VI wells should be the protection of underground sources of drinking water (" USDWs"). See id. at 43497. With this standard in mind, it is imperative that EPA fashion the Final Rule with sufficient flexibility to m eet two primary goals: first, adequately addressing the varied geologic conditions of differe nt CO2 GS sites; second, ensuring adaptability as industry and regulators gain experience with and information regarding CO2 GS. It is important that the Final Rule not exclude the existing experience and knowledge gained from current CO2 injection and GS demonstration projects. To encourage use of this in formation, Southern Company supports

facilitated GS in oil and gas reservoirs with the pr otection of USDWs and the

transition of Class II and Class V C02 in jection operations to GS. The Final

3Rule should establish a regulatory fra mework built around the standard of protecting USDWs while allowing Directors to issue permits with site-specific requirements. An emphasis on site select ion, site characterization, and careful permit-writing will further strengthen a regulatory scheme that will provide protection of USDWs while maximizing the beneficial environmental and economic impacts of carbon sequestration.

Individual Response: EPA notes that the final rule does a llow owners or operators flexibility. EPA has taken a regulatory approach that promot es USDW protection, incorporates flexibility or the discretion of the permitting authority when appropriate, seeks to limit burden on owners or operators and permitting agencies, and provides a foundation for national consistency inpermitting of GS projects. Many Class VI permit requirements must be established through sitespecific plans developed by the owner or operato r and approved by the Director. Consequently, EPA anticipates that owners or operators will consult with the Direct or as they develop, implement, and update these plans. In addition, the final rule affords the Di rector flexibility to approve alternatives to the requirements in some cases. For example, the Director may in certain situations modify the length of the post-injecti on site care period or appr ove an alternative postinjection site care timeframe as part of th e permitting process under §146.93, allow the use of alternate methods for mechanical integrity testing (if approved by EPA), and waive the requirement that wells be designed to inject below the lowermost USDW.

EPA recognizes that technologies will evolve an d improve over time, and for these reasons, the Agency is using an adaptive approach to regulate GS injection. The Agency plans, every six years, to collect and review data on GS projects to determin e whether the appropriate amount and types of information and appropriate documentation are being collected, and to determine if modifications to the requirements are appropriate or necessary.

EPA is allowing the construction of Class II and V wells to be re-permitted as Class VI wells pursuant to §146.81(c), provided the ow ner or operator can demonstrate to the Director that the wells were engineered and constructed to m eet the requirements at §146.86(a) and ensure protection of USDWs, in lieu of requiremen ts at §146.86(b) and §146.87(a) . EPA believes that allowing for grandfathering of select construction requirements, if approved by the Director, will

ease the transition to Class VI from an exis ting ER project while protecting USDWs from endangerment.

EPA clarifies that the GS rule does not promote GS in specific settings, nor does it limit injection activities to any specific type of formation, geographic region, or depth. The focus of the GS rule is to ensure that, where GS is deployed, it is conducted in a manne r that is protective of USDWs.

Letter ID: 0201 Comment ID: 22156 Letter Lines: 124 to 130

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

Comment: The Proposal includes many provisions for di rectorial discretion that will help ensure that the C02 GS program has th e flexibility it needs to succeed. While EPA must take care to clearly define th e circumstances in which directorial

4discretion may be exercised and to limit the scope of that discretion, in many

cases this discretion will allow Dir ectors to consider the unique characteristics of a given CO2 GS project and adopt a site-specific approach

that will meet the Final Rule's performance-based standards.

Individual Response: EPA is developing guidances for Stat es that describe the process of applying for and receiving primary enforcement au thority (primacy) for GS Class VI wells under Section 1422 of SDWA, as well as the technical and administrative issues on developing GS regulations that are the equivalent of minimum federal criteria and re quirements. The guidance

will describe areas of Directorial discretion and considerations for how that discretion would be exercised. This guidance will be available on EPA’s website at http://water.epa.gov/type/groundwater /uic/wells_sequestration.cfm.

Letter ID: 0201 Comment ID: 22157 Letter Lines: 132 to 144

Comment Code: 1614 1.3.1.2 Impurities in captured CO 2; purity standards for CO2

Comment Code: 2020 1.5.1 Support Class VI designation

Comment: Classification of CO 2 GS Wells and Interaction with Other Regulatory Regimes

Southern Company supports EPA's approach of creating a new category of wells under the UIC program for the long-term sequestration of C02. Id. at 43502. The new Class VI designation is appropriat e for the injection of CO2 streams captured from an emission source, includi ng incidental associ ated substances derived from source materials and the captu re process, as well as substances

added to the stream to facilitate the in jection process. As EPA observes, the addition of such substances may sometimes prove a necessary step in the injection process. See id. at 43493. Accordingly, the removal of these

incidental associated substances should only be required as ne cessary to avoid interference with cap ture, transportation, injection and containment of CO2

streams.

Individual Response: EPA agrees that tailored requirements for Class VI wells are necessary to address the unique nature of in jecting large volumes of CO2 a nd to ensure that USDWs are protected from endangerment. The GS rule c ontains tailored requirements for the permitting, geologic site characterization, AoR and corre ctive action, well construction, operation, mechanical integrity testing, monitoring, well plu gging, post-injection site care, and site closure of GS wells that directly addre ss issues unique to the nature of large-scale CO2 injection for GS.

Letter ID: 0201 Comment ID: 22158 Letter Lines: 146 to 157

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

Comment: Potential interaction with RCRA - Southern Company commends EPA for avoiding

characterization of the CO2 stream to be injected into Class VI wells. See id.

5at 43503. We, however, are concerned with the Preamble's vague reference to potential interaction with the Resource C onservation and Recovery Act ("RCRA"). Id. EPA should pursue all available regul atory and legislative avenues to preclude applicability of RCRA to Cla ss VI well operations. For example, EPA could make use of the established "continge nt management" concept, which allows

for the exclusion of certain materials fr om RCRA hazardous waste regulation when those materials are' adequately regulat ed under another environmental regime. The contingent management approach woul d allow EPA to sidestep any chilling effect that potential RCRA liability woul d have on CO2 GS operations under the UIC Program without jeopardiz ing protection of USDWs.

Individual Response: EPA agrees that any requirements for the CO2 stream should be clearly identified. With respect to providing clarity on RCRA, EPA has decided to initiate a separate proposed rulemaking specifically to examine the issue of RCRA applicability to CO2 streams being geologically sequestered, including the po ssible 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 Agen cy will consider issues particular 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 commenters who wish to submit comments on the RCRA proposal will need to do so during the co mment period for that rule. Finally, EPA also notes that the final GS rule, which adds new regulations for Class VI wells under the Safe Drinking Water Act (SDWA), is not maki ng any changes to the RCRA regulations.

EPA clarifies that the GS rule requires owner or operators of Class VI we lls to characterize their injection stream prior to injection, and throughout the operational life of the injection facility. Since the GS rule, at §146.81(d), prohibits CO2 st reams that meet the definition of a hazardous waste under 40 CFR part 261, owners or operators w ill need to characterize their CO2 stream as part of their permit application to determine if the injectate is a RCRA hazardous waste. If so, injection may only occur in a Class I hazardous waste injection well.

EPA adds that promoting 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 conducted in a manner that protects USDWs from endangerment.

Letter ID: 0201 Comment ID: 22159 Letter Lines: 159 to 167

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

Comment: Potential interaction with CERCLA - EPA also raises the poten tial for liability under the Comprehensive Environmental Res ponse, Compensation, and Liability Act ("CERCLA") stemming from CO2 GS operati ons. 73 Fed. Reg. at 43504. The potential for liability under CERCLA will have sim ilar adverse implications as the potential for RCRA applicabil ity _ specifically, potential CERCLA liability will act as a significant deterrent to par ticipation or invest ment in CO2 GS projects. Southern Company again encourag es EPA to pursue whatever regulatory and/or legislative avenue s are available to remove this obstacle without

6jeopardizing the Program's standa rd of protection of USDWs.

Individual Response: CO2 itself is not listed as a hazardous substance 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 sulf uric acid). Whether such subs tances may result in CERCLA liability from a sequestration f acility depends entirely on the composition of the specific CO2

stream and the environmental media in which it is stored (e.g., soil or ground water). CERCLA exempts from liability, under CERCLA section 107, 42 U.S.C. 9607, certain “federally 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 well which are outside the scope of the Class VI permit. Furthermore, EPA is promulgating the GS rule under the authority of the SDWA. To the extent the comm enter is seeking interp retations of CERCLA and its related provisions, such as the definition of a federally permitted release, such interpretations are beyond the scope of this rulemaking.

EPA adds that promoting 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: 0201 Comment ID: 22160 Letter Lines: 169 to 184

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

Comment Code: 4720 2.7.2 Operational record keeping and reporting

Comment: Permit Application

Southern Company opposes EPA's proposed requirements for Class VI permit applications to the extent that those requirements are more burdensome than current permit application requirements fo r other classes of UIC wells. id. at 43517. C02 GS does not pose unique risks warranting many of the Proposal's additional requirements for detailed information.

EPA should craft the Final Rule to requi re in the initial permit application

information that the Director will need to determine whether issuance of a Class VI permit is appropriate. EPA could re quire submission of supplemental

information as it becomes availabl e through drilling, construction, and

reevaluation of the well. This will not only prevent against the chilling effect that overly burdensome permit application requirements would have on the CO2 GS program, but will simultaneously ensure the ultimate collection of more thorough

and reliable data.

Individual Response: EPA believes that the unique charact eristics of CO2 injection (e.g., its relative buoyancy, the large volum e that may be injected, or the potential for chemical interaction with the subsurface) warrant the additional information required to be submitted by

7Class VI operators under §146.82. EPA disagrees that Directors should have the authority to waive some of the application requirements. In order to prot ect USDWs from endangerment, Directors must have all the data necessary to make well-informed decisions on establishing permit conditions and granting permits.

In response to concerns that some data will not be available until the well has been drilled, EPA acknowledges that not all of the information listed at §146.82 of the proposed regulation will be available at the time the owner or operator deve lops their Class VI permit application. Based on comments and evaluation of the proposed requireme nts, EPA revised this subpart so that the final regulation specifies separate requirements for information to be submitted for approval with the permit application before well construction, as required at §146.82(a), and information to be submitted after the well is constructed; however, a ll data must be provided before injection is authorized, as required at §146.82(c).

Letter ID: 0201 Comment ID: 22161 Letter Lines: 186 to 194

Comment Code: 5700 2.12 Comments on the proposed durati on of Class VI permits (seeking comment)

Comment: Duration of permit - Southern Company suppor ts EPA's proposal to issue Class VI injection well permits for the operating life of the GS project. Id. at 43523. EPA correctly observes that the requirement s for periodic reevaluation of site data, corrective action status, monitori ng results, and operating parameter modifications would render mandatory five- and ten year permit reviews unnecessary and duplicative. Id. Issuance of permits extending through the operating life of the GS project, incl uding the post-injection site care period, will provide Owners or Operators and invest ors with certainty and will encourage investment in CO2 GS projects.

Individual Response: EPA agrees with commenters that Cl ass VI permits should be issued for the operating life of the GS project. EPA clarifies th at the final GS rule specifies that Class VI permits will be issued for the operating life of the facility and the post-injection site care period (144.36(a)). The final rule also a dds a requirement that the Direct or review each Class VI permit at least every five years to determine whether it should be modified, revoked and reissued, terminated, or a minor modification ma de as provided in §§144.39, 144.40, or 144.41. The Director’s review will be informed by the owne rs’ or operators’ iterative reevaluation of the project. Specifically, the final rule includes a requirement that the AoR be reevaluated at least every five years, and also requires owners or operators to review and update the AoR and corrective action plan, the testi ng and monitoring plan, and the emergency and remedial response plan throughout the lif e of the project (146.84(e), 146.90(j), and 146.94(d)). Owners or operators must review each plan and identify necessary ame ndments or demonstrate to the Director that no

amendment is needed. In no case can reviews o ccur less often than once every five years.

EPA adds that the required reviews of the Ao R and corrective action plan, the testing and monitoring plan, and the emergency and remedial re sponse plan throughout the life of the project are preferable to a periodic permit reapplication. The iterative process and subsequent plan

8reevaluations ensure that time and resources are committed to the most critical aspects of the permit in preventing enda ngerment to USDWs.

Letter ID: 0201 Comment ID: 22162 Letter Lines: 196 to 223

Comment Code: 4324 2.4.4.1.2 Comments opposed to requiring injection below the lowermost

USDW

Comment: Area of Review ("AoR") and Corrective Action

Southern Company encourages EPA to a void arbitrary absolutes or blanket prohibitions in the Final Rule and to in stead craft regulati ons allowing Class VI permit applicants and Directors to fo cus on scientific data and technical demonstrations in characterizing potentia l geologic sequestration sites. It is premature to categorically preclude injecti on in certain types of formations as CO2 injection and sequestr ation technology may develop to make injection in those formations feasible while still prot ecting against endanger ment of USDWs. A recent report by the Government Acc ountability Office ("GAO") predicts a demand for thousands, if not tens of t housands, of UIC permits to accommodate the volumes of CO2 to be captured once CCS is deployed on a commercial scale. Climate Change - Federal Actions Will Gr eatly Affect the Viability of Carbon Capture and Storage as a Key Mitigat ion Option, GAO-08-1080 at 40 (September 2008) ("GAO Report"). Given th e likelihood for such demand, EPA should encourage

the identification and utilization of as many injection zones as possible, provided that the Director determines that injection in a given site would be protective of USDWs before issuing a permit for injection at that site.

To maximize capacity for CO2 injection that is protective of USDWs, the Final Rule should avoid arbitrary exclusions of whole categor ies of injection zones. For example, a requirement that all in jection zones be located below the lowermost USDW is unnecessary; there may be situations in which injection can

occur above the lowermost USDW without endangering USDWs - for example, in current oil and gas reservoirs with dem onstrated trapping capa bilities. ¡d. at 43512. In situations where the Owner or Op erator could not de monstrate that injection above the lowermost USDW coul d occur without endangering USDWs, the permit could preclude injection into such formations.

Individual Response: EPA acknowledges that there are lim ited circumstances where injection above the lowermost USDW can be performe d in a manner that protects USDWs from endangerment, as long as appropriate protections are in place. The final GS rule at §146.95 establishes a process by which owne rs or operators can seek a waiv er of the Class VI injection depth requirements for inject ion into non-USDW formations above and/or between USDWs. Additionally, the final GS rule doe s not categorically preclude or prohibit injection into any type

of formation.

EPA believes that these requirements will ensure USDW protection while providing flexibility to

9UIC program Directors and owne rs or operators who undertak e CO2 injection for GS. The Agency believes this approach: 1) responds to co ncerns about local and re gional geologic storage capacity limitations imposed by th e proposed injection depth require ments; 2) allows for a more site-specific assessment of injection depth for GS projects; 3) accommodates injection into different formation types; 4) a llows for injection of CO2 for GS into non-USDWs above and/or between USDWs when appropriate and where it can be demonstrated that USDWs will be protected; and 5) responds to concerns about the use of aqui fer exemptions for GS. Finally, EPA’s approach to addressing injection depth va riability through a waiver process responds to concerns about future drinking wa ter resource availability and the need to ensure that high quality water remains available in sufficient quantities to supply dr inking water needs.

For additional information on the waiver approa ch, please see the final rule and preamble, as well as EPA's responses to comments on the No tice of Data Availability and Request for

Comment.

Letter ID: 0201 Comment ID: 22163 Letter Lines: 225 to 229

Comment Code: 2163 1.6.3.1 Comments in favor of injection into unmineable coal seams

Comment Code: 2200 1.6.4 Other formation types

Comment: The same logic argues against blanket proh ibitions on injection in coal seams or other formations such as basalts, salt do mes, or shales: if a scientific and

technical demonstration can be made showing that the in jection of CO2 into one of these formations will be protective of USDWs, then that formation should remain an available option under the Cl ass VI UIC Program. See id. at 43503.

Individual Response: The final GS rule does not precl ude injection into any non-USDW formations, such as basalts, salt domes, or shales , provided the site-suitability requirements in the GS rule are met, and owners or operators can de monstrate that GS can be performed in a manner that protects USDWs from endangerment.

EPA acknowledges that there are un knowns associated with GS, par ticularly regarding GS into formations such as coal seams, basalts, salt dom es, or shales, which have been the subject of limited experimental projects in the past. For this reason, the Agency is using an adaptive approach to regulate GS injecti on. EPA will collect and review proj ect data on early GS projects, including those that inject into various formation types, to determine whether the appropriate amount and types of information and documentati on are being collected. EPA plans, every six years, to collect and review data on GS projects to determin e whether the appropriate amount and types of information and appropriate documentation are being collected, and to determine if modifications to the requirements are appropriate or necessary.

EPA clarifies that the final rule requires that injection for GS be into non-USDWs below the lowermost USDW; however, owners or operators may apply for a waiver from this requirement, as described in §146.95. For more information, see the discussion of waivers in the preamble to

the final rule.

10Letter ID: 0201 Comment ID: 22164 Letter Lines: 230 to 231

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

Comment: There is also no need for a minimum in jection depth requirement for CO2 GS projects, provided that protection of USDWs can be demonstrated. ¡d. at 43512.

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

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

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

formations above and/or between USDWs. The waiver approach requires the submission of extensive, site-specific information (in conjunc tion with the permit appl ication submission) to demonstrate that injection of CO2 into a non-US DW that is above or between USDWs can be done in a manner that is protective of USDWs. The requirements are designed to ensure that the owner or operator, the Director, and the Regi onal Administrator consid er, on a site-specific basis, the implications, benefits, and challe nges associated with GS and ensuring water availability and USDW protecti on. For additional information on the waiver approach, please see the final rule and preamble, as well as EPA' s responses to comments on the Notice of Data Availability and Request for Comment.

Letter ID: 0201 Comment ID: 22165 Letter Lines: 232 to 238

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

circumstances

Comment: For similar reasons, Southern Company oppos es an absolute prohibition on use of exempt aquifers for Class VI injection (i ncluding sole source a quifers); use of exempt aquifers should be permitted where the specific aquifer exemption

criteria are satisfied. Id. The Final Rule should give Direct ors latitude to approve injection plans for a range of sites based on scientific data and

technical demonstrations that the site will contain the injected CO2 streams, thereby preventing enda ngerment of USDWs.

Individual Response: EPA acknowledges that there are lim ited circumstances where aquifer exemptions for GS may be warranted. The final rule allows for the expansion of the areal extent of existing aquifer exemptions for Class II EOR/ EGR wells transitioning to Class VI injection

11for GS pursuant to requirements at §§146.4 and 144.7( d). Class VI owners or operators granted expansions of existing Class II EOR/EGR aquifer exemptions for GS projects must meet all of the tailored requirements for GS wells in the final GS rule.

However, the final rule precludes the issuance of new aquifer exemptions for Class VI GS wells; that is, aquifer exemptions will only be granted for projects that are transitioning from Class II

EOR/EGR wells to Class VI.

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

be at the Director's discretion and based on site -specific information. If an owner or operator applies for a Class VI permit to inject CO2 into a previously exempted aquifer (non-USDW) that is located above and/or between USDWs, the perm it applicant must also apply for a waiver of the injection depth requirements pursuant to §146 .95 to ensure that if a waiver is granted, USDWs above and below the injection z one are protected from endangerment.

For additional information on aquifer exemptions for Class VI wells, please see the final rule and preamble, as well as EPA's responses to comments on the Notice of Da ta Availability and Request for Comment.

Letter ID: 0201 Comment ID: 22166 Letter Lines: 240 to 253

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

Comment: EPA also seeks comment on whether the Fi nal Rule should require, or allow the Director to require at hi s discretion, the identifica tion and characterization of additional confining and containment z ones above the primar y confining zone that could further impede vertical fl uid movement and allow for pressure dissipation. Id. at 43505-06. As a general matter, Southern Company opposes the inclusion of any sort of "secondary cont ainment" requirement - even at the

Director's discretion - as it would unnecessarily burden Owners or Operators of Class VI wells while providing little or no benefit in terms of USDW protection. An emphasis on proper site selection a nd characterization combined with performance-based standards will ensure that Class VI permits are only issued for CO2 GS projects where the primary c ontainment zone will protect against endangerment of USDWs in the first in stance. Identification of redundant confining and containment zones woul d only serve to confuse the permit application and approval process and unduly restrict siting of CO2 GS projects.

Individual Response: EPA believes that the Class VI requir ements, including the level of site characterization required under §§146.82 and 146.83, appropria tely address the unique challenges posed by large-scale GS including large injection vol umes, the relative buoyancy of CO2, its corrosivity in the presence of water, th e potential presence of impurities in captured CO2, and its mobility within subsurface geologic formations.

EPA retains the requirement to identify additi onal containment/confining zones, if required by

12the Director, as proposed (§146.83(b)). The Agency believes that in some geologic settings, the presence and identification of additional confining and containment zones above the primary (i.e., lowermost) confining zone can improve US DW protection. These formations could further impede vertical fluid movement, allow for pressu re dissipation, and provi de additional sites for monitoring, mitigation, and remediat ion, while also affording the greatest protection of USDWs from endangerment.

Letter ID: 0201 Comment ID: 22167 Letter Lines: 255 to 258

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

Comment: Modeling- Southern Company supports EP A's suggestion to allow for use of proprietary models with CO2 GS sites, provided that the permit applicant discloses the code assumptions, relevant equations, and scientific basis of the

model. Id. at 43507. Based on the valuable experience Southern Company has

Individual Response: EPA agrees with commenters that av ailable proprietary models may meet the complex needs for calculating the AoRs of GS sites, and shar es their concern about the need to evaluate the inputs and assumptions used. EP A will allow the use of proprietary models in meeting the requirements for the GS regulation, as long as GS well operators using a proprietary model clearly disclose, to the Director's satisf action, the code assumptions, relevant equations,

and scientific basis. EPA adds that its Confid ential Business Information requirements at 40 CFR 144.5 will apply to the use of proprietary models.

Letter ID: 0201 Comment ID: 22168 Letter Lines: 258 to 262

Comment Code: 3320 2.2.1.2 Comments opposed to requiring computational models to

delineate the AoR

Comment: model. Id. at 43507. Based on the valuable experience Southern Company has gained through our C02 GS pilot pr oject, we also support the use of computational fluid flow models for AoR delineation, provided that these models are available for use at the option of the Owner or Operator and are not required for all CO2 GS projects. See id.

Individual Response: EPA clarifies that the final rule requires the use of computational modeling at 146.84(c)(1). EPA believes that the use of computational modeling, rather than reliance on a fixed radius or simple computation, is necessary to account for the complexity of GS projects. EPA believes that predicting the complex multiphase , buoyant flow of the CO2, coinjectates, and compounds that may be mobilized due to injection require s the sophistication of computational models. Models can predict CO2 fate and transport, as well as changes in formation pressure, in three dimensions, as a func tion of time in order to delineate the subsurface storage site and the AoR. Models can account fo r site-specific and pred icted operating conditions

13as well as geologic heterogeneitie s and potential migration through fa ults, fractures, and artificial penetrations.

Letter ID: 0201 Comment ID: 22169 Letter Lines: 264 to 270

Comment Code: 1220 1.1.1.1 Terminology and definitions

Comment: Corrective action - As the GAO Report obs erves, public perception of carbon sequestration will likely play a determina tive role in the success of any CO2 GS regulatory scheme. GAO Report at 49. The us e of the phrase "corrective action" to describe plugging and repair of Class VI wells risks confusion and possibly negative associations with the concep t of corrective acti on under RCRA and CERCLA. We encourage EPA to replace the ph rase "corrective action" with more appropriate terminology in the Final Rule.

Individual Response: EPA notes that the term "corrective action" at §146.84(d) has been used to describe the process of a ddressing improperly plugged wells in the AoR of injection wells since the inception of the UIC program, e.g., at §§146.7 and 146.64. While EPA is aware that the term has a different meaning under the UIC re gulations than it does under RCRA and CERCLA, this has not caused confusion in the past. An alternative term , "well plugging," suggested by another commenter is reserved for inj ection well plugging, as indicated at §146.92.

Based on its evaluation of all public comments and input on the proposed rule and the NODA and Request for Comment, EPA has made many revisions to the Cla ss VI GS rule. Please see the final rule and preamble for additional information.

Letter ID: 0201 Comment ID: 22170 Letter Lines: 272 to 287

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

Comment: Operating and Monitoring Requirements

It is important to reiterate that, because CO2 GS technology is still developing, additional information will be ga ined and technological advancements made that will allow Owners or Operators to make use of a broader range of tools and methods in Class VI well operation wh ile being fully prot ective of USDWs. For example, our pilot projects as part of the Southeast Carbon Sequestration Regional Partnership will l ead to greater technical expertise related to CO2 injection. In addition, the ge ologic characteristics and limitations of Class VI wells will vary significantly from site to site. For these reasons, the Final Rule should be flexible enough to incorpor ate new information and technological advancements which, in turn, will help pr omote a more robust and environmentally protective CO2 injection program. To achieve this result, the Final Rule should establish performance-based st andards and allow permit a pplicants and Directors to work together to fashion a plan that will best suit the need s of a particular

14Class VI site and any associated USDWs.

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

EPA adds that it is using an adaptive approach to regulati ng GS under the UIC Program. Even after finalization of the GS regula tion, EPA plans, every six years, to collect and review project data on GS research projects to determine wh ether the appropriate amount and types of information and appropriate documentation are being collected, and to determine if modifications to the requirements are appropriate or necessary.

Letter ID: 0201 Comment ID: 22171 Letter Lines: 289 to 299

Comment Code: 4200 2.4.2 Down-hole shut-off valves in GS wells (seeking comment)

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

Comment: While some requirements are appropriate for all Class VI wells, as a general matter operating and monitoring requiremen ts for individual Cl ass VI projects should be set forth in a Director-app roved plan as part of the permit application and approval process. For exam ple, while Southern Company supports a default requirement for automatic shut-off mechanisms for Class VI wells, we oppose a uniform requirement for down-hol e shut-off valves. ¡d. at 34511. These valves are designed to meet unique offs hore risks and are, in many instances, ill-suited to UIC operations, including C02 GS. A requirement for down-hole shut-off valves would provide little bene fit but would come at a significant cost and would preclude the use of some tools that are criti cal to operation, monitoring, and repair of CO2 GS wells.

Individual Response: After evaluating the risks and benefi ts of down-hole shut-off systems and considering additional research, EPA will not re quire automatic down-hole shut-off devices for onshore Class VI wells since it is not necessary in all cases to ensure protection of USDWs from endangerment. Instead, the final rule, at §146.88(e)(2 ), requires that owne rs or operators of

onshore Class VI wells install automatic surface shut-off devices. The rule affords Director's

discretion to mandate automatic down-hole shut -off devices in onshore situations that may

warrant their use.

The GS rule, at §146.88(e)(3), requ ires the installation of down- hole shut-off devices for Class VI wells located in the offshore submerged lands within the jurisdiction of a State UIC program. The Agency agrees that offshore Class VI we lls present unique construction and operational

15conditions, including isolation from shorelines and the need to c onstruct wells th rough the water column and the subsurface, which may delay re sponse time in the event of well difficulties. These conditions merit requiring automatic down-hol e shut-off devices for offshore wells in the submerged lands of a State.

While EPA acknowledges that the likelihood of damage to onshore f acilities is lower than that for off-shore facilities, down-hole shut-off valv es are still commonly used in onshore facilities such as acid gas injection wells and high pressu re, high-temperature wells. While valve failure is a concern, EPA believes that technology has advanced sufficiently to make valve failure a rare occurrence and to appropriately hand le such failure if it occurs. Fo r example, wireline retrievable devices can allow repair or replacement of da maged devices without necessitating pulling the tubing.

EPA believes that requiring the in stallation of automatic surfa ce shut-off devices for onshore wells (and affording Director's discretion to requir e down-hole devices where necessary) and

automatic down-hole shut-off devices for offsho re wells in submerged lands within the jurisdiction of a State ensures that proper pre cautions are taken to prevent subsurface fluid movement and ensure pr otection of USDWs.

Letter ID: 0201 Comment ID: 22172 Letter Lines: 301 to 306

Comment Code: 4490 2.4.5 Use of tracers and potential im pact on human health or ecosystems (seeking comment)

Comment: Southern Company also opposes a requireme nt for Owners or Operators to use tracers in CO2 GS operations. As EPA obser ves, there are many adverse technical and environmental consequences associated with the use of tracers, including the possibility of false positives and the re lease of per fluorocarbon ("PFC") to the atmosphere. ¡d. at 43512-13. Southern Company supports the use of tracers in the CO2 GS program only if at the option of the Owner or Operator.

Individual Response: EPA agrees that tracer use is not appropriate in all situations. Some tracers may have the potential to cause harm to people or the environmen t. Nevertheless, there are many different types of tr acers and not all are problematic ; research is being done to overcome problems with existing tracers. EPA belie ves that tracers have been used safely and successfully in other applications. For this reason , EPA does not require the use of tracers at all GS sites; rather, the Director ha s discretion to require their use if he/she determines that the use of tracers could improve monitoring of the site and enhance USDW protection from endangerment. The rule will also allow their use if proposed by the owner or operator and approved by the Director.

EPA has been following new and ongoing research on the safety and efficacy of tracers, and believes that, in some circumstances, tracers can be an effective part of monitoring GS projects.

EPA will continue to track research related to tra cer use and plans to, every six years, collect and review data on GS projects to determine wh ether the appropriate amount and types of

16information and appropriate documentation are being collected, and to determine if modifications to the requirements are appropriate or necessary.

Letter ID: 0201 Comment ID: 22173 Letter Lines: 308 to 317

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

Comment: Finally, Southern Company urges EPA to focus operating and monitoring requirements on containment and preventive measures rather than to impose requirements that will not indicate C02 migration until potentially damaging migration has occurred. In particular, we encourage containment monitoring only,

such as one or at most two above-zone m onitoring wells that measure pressure to detect non-containment. ¡d. at 43514. The Fi nal Rule should encourage Owners or Operators to invest monitoring resources towards detecting subsurface movement of CO2 or other substances at a point wh en action may be taken to address any potential problems and prevent further migration, whether below or to the

surface.

Individual Response: EPA disagrees that pressure monitoring above the confining zone is appropriate. Instead, the final GS regulation, at §146.90(g)(1), requi res all GS project operators to monitor for pressure changes in the injecti on zone. EPA believes that pressure monitoring in the injection zone is necessary to track the deve lopment and movement of the pressure front and CO2 plume. Pressure monitoring within the in jection zone is necessary because any such monitoring above the confining z one would not detect movement of the pressure front unless a breach of the confining zone occurs. EPA believe s that monitoring using wells in the injection zone (i.e., that penetrate the conf ining zone) can be safely perform ed if the wells are constructed to prevent flow between the injection zone and USDWs or other layers above the confining zone. Such construction technologies ex ist and have been used in the oil and gas industry for years. EPA believes that the benefits of monitoring in the injection formation outweigh the manageable risk of those monitoring wells serving as conduits for fluid movement. EPA adds that owners or operators may consider performi ng additional pressure monitoring in wells that are above the confining zone (e.g., in the same wells used to perform ground water quality monitoring required at §146.90(d)) to provide additional verification that no pressure ch anges are occurr ing above the confining zone due to CO2 leakage.

In addition, EPA believes that shal low monitoring above the confini ng layer is an important part of a rigorous monitoring program. The final ru le, at §146.90(d) requires periodic monitoring of the ground water quality and geochemical changes above the confining z one(s). Monitoring in additional formations, e.g., the injection zone, may also be necessary, and if the Director believes such monitoring is warranted he/she has the authority to require th at it be included in the testing and monitoring plan.

Letter ID: 0201 Comment ID: 22174 Letter Lines: 319 to 348

Comment Code: 5432 2.9.1.1 Need to adjust financial responsibility mechanisms (seeking

17comment)

Comment Code: 5434 2.9.1.2 Need for additional instruments (seeking comment)

Comment: Financial Responsibility

As GAO observed in its recent report, th ere is a great deal of uncertainty regarding the type of financial instruments that will be available to meet the financial responsibility requirements of the Final Rule. GAO Report at 39-40. This uncertainty has the potential to sl ow development on CO2 GS programs; EPA

can ease stakeholders' fears and facilitate commercial deployment of the CO2 GS UIC Program by providing furt her clarity regarding these requirements in the Final Rule where possible. In some situa tions, it may be more appropriate to provide further clarification at a later date in the form of guidance, as EPA suggests in the Preamble to the Propos al. ¡d. at 43520-22. Such guidance, however, must be issued in accordance with the Good Guidance Practices Bulletin issued by the Office of Management and Budget ("OMB"), including provision of public notice and opportunities for commen t before issuance of any final guidance. 72 Fed. Reg. 3432, 3438 (Jan. 25, 2007).

The continued availability of self-insurance instruments as methods of financial assurance for Class VI CO2 GS projects is crucial to the viability of the CO2 GS regulatory scheme set forth in the Fina l Rule. Self-insuran ce instruments, including the corporate financial test and the corporate guarantee, have been used successfully under the RCRA program fo r more than two decades and will be important elements of a full menu of options for meeting financial responsibility mechanisms under the Final Rule. Given the likelihood that many Class VI Owners or Operat ors will use a combination of approaches and instruments to meet the Program's financ ial assurance requirements, EPA should take care not to constrain the developmen t of any otherwise acceptable means of achieving financial assurance. We urge EP A to craft flexible requirements that allow Owners or Operators to use multiple instruments and adjust their methods as necessary as industry, regulators, a nd markets gain experience with the financial aspects of CO2 GS projects.

Individual Response: Owners or operators may choose from a variety of financial instruments to meet their financial responsibility obligations under the rule, provided th e Director determines that the operator's proposed financ ial responsibility demonstration is adequate to protect USDWs from endangerment, which means the ability of th e owner or operator to pay for each activity for which financial responsibility must be demonstr ated, including correctiv e action on wells in the AoR, injection well plugging, PISC and site cl osure, and emergency and remedial response throughout the life of the project. The final GS rule specifies at §146.85(a)(1) the permitted types of financial responsibility instru ments. See the final rule and pr eamble for further discussion of EPA's final approach to financial responsibility.

EPA will retain self insurance as an option for financial responsibility for Class VI wells. EPA believes that if properly used, the financial test can be an appropriate option for some owners or

18operators. EPA recognizes that it is important fo r self-insurers to be credit-worthy, otherwise USDWs may not be adequately protected. Owners or operators who choos e to self-insure and

use the financial test must be able to demonstrat e profitability, with a margin sufficient to cover contingencies and unknown obligations, and stabilit y. If the owner or operator meets corporate financial test criteria, this is an indication that the owner or operator can guarantee its ability to satisfy financial obligations based solely on the strength of the company’ s financial condition. If an owner or operator is not able to meet the corporate financial test criteria, they may arrange a corporate guarantee by demonstrating that its cor porate parent meets the financial requirements

on its behalf.

Additionally, EPA is deve loping guidance (available on EPA's website at http://water.epa.gov/type/groundwat er/uic/wells_sequest ration.cfm) that describes the types of financial instruments that owners or operato rs can use to meet financial responsibility requirements for GS wells. EPA plans to take OMB's Good Guidance Manual into consideration as financial responsibility gui dance is developed. OMB's Go od Guidance Manual establishes policies and procedures for the development, issuance, and use of significant guidance documents by Executive Branch departments and agencies.

Letter ID: 0201 Comment ID: 22175 Letter Lines: 350 to 371

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

Comment Code: 5300 2.8.3 Site closure activities (40 CFR 146.93)

Comment: Post-Injection Site Care and Closure

Southern Company opposes a default fifty-y ear timeframe - or any fixed default length of time - for the post-injec tion site care period. ¡d. at 43519. A default post-injection site care period is of little value given the widely

varied characteristics of future CO2 GS sites, and the signif icant discrepancy between the appropriate post-injection s ite care period for various Class VI wells. As EPA itself recognizes, th e actual time required for plume stabilization following cessation of inject ion will be "very site specific." ¡d. A site-specific determination, based on conditions at a part icular Class VI well, will be necessary in the case of every CO2 GS project under the UIC Program. The Final Rule should define a performance-based standard for site closure and leave the site-specific analys is and determination of appropriate post-injection site care period to the Di rector. Potential Owners or Operators are likely to shy away from undertaki ng a CO2 GS project if the Program's requirements may extend decades into the fu ture even when those requirements are no longer necessary. A performance-based standard allowing for site-specific closure period determinations will avoid the chilling effect that any default fixed timeframe for post-injection s ite care and closure will have on participation and investment in C02 GS projects. Moreover, the site-specific approach will ensure that an appropri ate post-injection site care period is

identified to meet the needs of each individual Class VI operation.

19Individual Response: EPA agrees with commenters that th ere will be circumstances where it can be demonstrated in less than 50 years that the plume and pressure front no longer pose a risk of endangerment to USDWs. For this reason, the GS rule offers owners or operators flexibility regarding the duration of the PISC timeframe by: (1) allowing the Director discretion to shorten or lengthen the PISC timeframe during the pos t-injection period based on site-specific data, pursuant to requirements at §146.93(b) ; or (2) affording the Director discretion to allow a Class VI well owner or operator to demonstrate, during the permitting process based on substantial data, that an alternative PISC timeframe may be appropriate if it ensu res non-endangerment of USDWs pursuant to requirements at §146.93(c).

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

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

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

Letter ID: 0201 Comment ID: 22176 Letter Lines: 373 to 394

Comment Code: 5540 2.10.2 Need for additional public partic ipation requirements/ use of new information technology (seeking comment)

Comment: Public Perception and Participation

Southern Company encourages EPA to take steps to ensure that the public fully understands that it is extremely unlikely that C02 GS projects will harm USDWs or human health. Effective dissemination of information regarding the limited risks posed by CO2 GS will lead to mo re informed and meaningful public participation in the permitting process. One step EPA can take to adequately inform the public is to tie the requireme nts of the Final Rule more closely to actual risks. The Class VI requirements ar e unprecedented in the UIC Program in terms of their stringency; this will create unnecessary public apprehension without improving protection of USDWs.

Southern Company supports EPA's suggesti on to modify existi ng public notice and comment requirements under the UIC Program to reflect the availability of new tools and technology, particularly web- based technology, for gathering and disseminating information. ¡d. at 43523. Use of internet-based tools can playa

20key role in connecting regulators, permit applicants, and the p ublic through all stages of the comment period. Southern Co mpany understands that the public must be kept informed and allowed an opportuni ty to provide input on potential Class VI projects; however, we urge EPA to es tablish requirements in the Final Rule that call for public notice after submission of a Class VI permit application, but not before that application has been deemed complete.

Individual Response: EPA agrees that informing the public on all aspects of GS projects is important. GS permitting authorities must follow the existing public partic ipation requirements for UIC permits as specified in 40 CFR Part 124. These regulations lay ou t the procedures for decision-making and include requirements such as requiring the Director to notify the public regarding the availability of th e draft permit and allow him or he r to require a public hearing on the draft permit.

The Agency encourages permitting authorities and GS operators to provide the public, including residents near the project, with as much pr oject-specific information as possible. This information may include, but is not limited to, speci fic technologies used at the GS injection site, potential/new GS projects, and opportunities fo r public involvement. In addition to requiring public notice of all draft permits under §124.10(a)(1)(ii), stakeholders can request that they be notified about draft permits. In addition, §124.10(d) requires that the pu blic notice state how stakeholders can obtain a copy of the permit a pplication and draft permit. GS operators and permitting authorities are also encouraged to make this information available on the Internet.

EPA is not requiring the use of new information technologies. EPA encourages GS operators to use new information technologies whenever possible to keep the public informed of GS projects. The Agency believes that flexibility is importa nt and does not want to limit use of public participation and notification tec hnologies developed in the future.

Letter ID: 0201 Comment ID: 22177 Letter Lines: 396 to 400

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

Comment Code: 1420 1.2.1.1 Support the GS rulemaking

Comment: Southern Company applauds the EPA's initial efforts to create a clear and flexible regulatory scheme that w ill promote carbon capture and storage technology and projects while protecting underground source s of drinking water. We appreciate the opportunity to comment on this rulemaking and look forward to continuing to work with EPA on this important issue.

Individual Response: As described above, EPA agrees that the UIC Program, under the authority of the SDWA, provides a strong framew ork for regulating injec tion of CO2 for GS.

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