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.
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)

Comments of the National Rural Electric Cooperative Association

The National Rural Electric Cooperative Association (NRECA”) submits these comments 

on the Proposal of the Environmental Protection Agency ("EPA" or "the Agency") to 

establish the regulatory framework for geologic sequestration (“GS”) of carbon dioxide 

(“CO2”) under the Underground Injection Control (“UIC”) Program pursuant to the Safe 

Drinking Water Act ("SDWA"). 73 Fed. Reg. 43492 (July 25, 2008).

NRECA greatly appreciates EPA's work toward developing a regulatory framework for 

underground injection of CO2. EPA's decision to develop regulations under the UIC 

program and to develop a new Class VI for CO2 GS well is appropriate. NRECA also 

appreciates EPA's recognition that while the new 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 are highly pertinent to developing a 

viable GS program and we are glad that EPA is willing to discuss these issues as part of 

this regulatory proposal. 

It appears that GS of CO2 from fossil-fueled power plants will be a necessary part of any 

national strategy to control green house gas emissions. Many of NRECA's members 

operate coal-fired power plants and these plants are likely to be directly affected by new 

GS regulations. NRECA has worked with our members to develop these comments and 

we ask EPA to carefully consider them because of the significant stake cooperative 

generating plants have in the outcome of this important rulemaking. NRECA is a 

member of the Utility Solid Waste Activities Group (USWAG). USWAG will also be 

submitting comments on the proposed UIC rules. NRECA supports USWAG's 

comments, and incorporates them here by reference.

SUMMARY

NRECA applauds the efforts EPA has taken thus far to instill "certainty" and 

"transparency" into the future Class VI CO2 regulatory regime. 73 Fed. Reg. at 43496. 

The obvious challenge confronting EPA is to craft a Final Rule for commercial CO2 

injection activities when large-scale commercial operations are only at the nascent stage.

In the process of developing regulations for activities that 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 technical aspects are unknown, it is also 

very difficult to develop a clear understanding of project risks 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 management products, and it will not be 

possible to obtain the level of financing needed to undertake a costly GS operation.
The challenge confronting EPA in this rulemaking is twofold: 1) to establish clear, 

reasonable and environmentally protective regulations to cover a range of operations for 

which the technology will not be commercially deployed for a number of years, and 2) to 

the extent practicable establish a single, clear, reasonable and protective liability regime

for an activity where the nature of the risks are different from many other industrial 

activities and the full extent of possible risks from full scale CCS operations are presently 

unknown.

Again, NRECA admires the work EPA has done to take on these two, closely related 

challenges. NRECA will remain available to assist EPA as the agency moves forward 

with this regulatory initiative. At this time, we offer our comments and suggestions in 

the following areas.

Principles for new regulations

§ Because of the difficulty of regulating future activities, we urge 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 regulators alike gain experience with large-scale CO2 sequestration.

§ Because information and technology related to carbon sequestration will evolve

as industry and regulators gain experience with CCS, NRECA urges EPA to resist

placing blanket prohibitions or detailed operational specifications in the Final 

Rule.

§ EPA should not automatically exclude placement 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 show that the injection and 

storage will be protective of Underground Sources of Drinking Water (USDWs).

§ NRECA believes that the states will have the best knowledge of regional geology, 

existing projects, areas in need of special protection, etc. and that states should be 

allowed to assume primacy for administration of the UIC Class VI well program.

§ EPA should be careful not to stigmatize GS operations and to take positive 

measures to build public acceptance. EPA should avoid characterizing stored 

CO2 as a waste.

§ EPA must settle the way GS activities will relate to RCRA and CERCLA. RCRA 

is simply the wrong tool to use to regulate GS of CO2 and EPA needs to find a 

way to insure that the onerous requirements of CERCLA, (never intended for GS 

of CO2), are not applied to this highly specialized gas storage operation.

§ Dealing with these last two hazardous waste issues appears to NRECA to be one 

of the most difficult hurdles standing in the way of commercial deployment of full 

scale GS projects and we recognize that Congressional action may be needed.

Principles for Managing Liability

NRECA is a member of the Carbon Capture and Storage Alliance (CCS or the Alliance) 

and this group is planning to submit comments on the proposed UIC rules for GS of CO2. 
The CCS Alliance is a coalition of entities, spanning a number of economic sectors that 

share a common interest in removing impediments to investment in and development of 

carbon capture and storage (“CCS”), as well as mitigating the potential risks associated 

with the deployment of this technology. Its purpose is to promote development of policy

by the states and the federal government to appropriately address risks and potential 

liabilities, thereby enabling the further development and increased deployment of CCS. 

The CCS Alliance believes these technologies can be developed while protecting 

underground water resources, significantly reducing global and U.S. greenhouse gas 

(“GHG”) emissions, and enhancing U.S. energy security. The Alliance’s purpose is to 

consider ways of promoting the development and use of CCS technologies and to support 

efforts by the private sector, states, the federal government, non-governmental 

organizations and others, to help ensure that these technologies can be developed and 

widely, efficiently and cost-effectively deployed. 

We support the comments of the Alliance and incorporate them here by reference. 

NRECA is relying on the Alliance and USWAG to provide EPA with specific comments 

on the Financial Assurance and Long Term Liability issues discussed in the proposal. 

We are not experts on these matters, however we do believe that the following principles 

for managing risk and liability associated with GS should be considered in the Final Rule.

§ It appears to NRECA that a tiered approach with a government back-stop as used 

in the framework of the Price-Anderson Act for nuclear faculties could be a 

rational way of structuring liability management for GS of CO2. This is 

discussed further below in the comments section. 

§ EPA should consider a broad array of financial mechanisms owners or operators 

can use to meet financial responsibility requirements specified in the regulations.

§ While Self Insurance mechanisms belong on EPA's menu of Financial Assurance 

options, many of NRECA's members are small business and may have a 

relatively small capitalization so Corporate Guarantees or Self Insurance may not 

be an available option for them.

COMMENTS

1. NRECA acknowledges EPA's efforts to use a "performance-based" approach and to 

build flexibility into the Proposal, including the use of directorial discretion and the 

provision for forthcoming guidance to clarify other requirements. In general, we agree 

that these methods will help create a regulatory framework that can evolve as information 

and technological advancements are gained in the field of carbon capture and 

sequestration. It is important, however, that any directorial discretion be clearly defined 

and limited; this can be achieved while still maintaining a rule that is flexible and avoids 

unnecessary prohibitions. In addition, guidance on any aspect of the Final Rule (for 

example, clarification of requirements for financial assurance mechanisms) must be 

developed in accordance with OMB’s Good Guidance Practices Bulletin, which directs 

that notice and comment be provided on “economically significant” guidance documents. 

See 72 Fed. Reg. 3432, 3438 (Jan. 25, 2007).
2. It is counterproductive at this stage in the development of a CO2 GS regulatory

regime to categorically preclude any potentially feasible injection formations as possible 

long-term storage sites. EPA recognizes that the commercial deployment of CO2 GS 

activities will result in the production of large volumes of CO2 for which Owners or 

Operators will have to locate new and environmentally protective injection zones. 

Therefore, it makes sound policy sense for EPA to encourage the identification and 

utilization of as many protective zones as possible, with the prerequisite that any injection 

site be protective of USDWs. To achieve this result, the Final Rule should avoid absolute 

prohibitions on any category of injection site and instead keep all options open; injection 

should be allowed as long as it can be demonstrated that injection will be protective of 

USDWs and meet other applicable conditions for Class VI CO2 GS wells.

NRECA supports alternative approaches that would allow injection between and/or above 

the lowermost USDW, increasing capacity for CO2 GS, as long as Owners or Operators 

of Class VI wells can show that their CO2 GS operations will be protective of USDWs. 

Id. at 43512. This will be particularly important in areas of the country with deep 

USDWs, where an absolute requirement that Class VI wells be constructed beneath the 

lowermost USDW could render the program impractical. Id. NRECA also supports this 

alternative approach in areas where the Director determines – or the Owner or Operator 

can show – that geologic conditions would prevent fluid movement into adjacent 

USDWs. Id. For similar reasons, NRECA opposes an absolute prohibition on use of 

exempt aquifers for Class VI injection; use of exempt aquifers should be permitted where 

the specific aquifer exemption criteria are satisfied. Id.

3. NRECA believes that the Final Rule should not contain a blanket prohibition on 

injection of CO2 into coal seams (whether above or below the lowermost USDW) or into 

other formations such as basalts, salt domes, or shales. 73 Fed. Reg. at 43503. If it can 

be demonstrated that the injection of CO2 into such sites is protective of USDWs, then 

such activities should remain available options under the Class VI UIC program. 

4. On a related subject, EPA requests 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 (i.e., lowermost) confining 

zone that could further impede vertical fluid movement and allow for pressure dissipation 

– in effect, a "secondary containment" requirement. Id. at 43505-06. As a general 

matter, NRECA opposes the inclusion of this secondary containment requirement, and 

believes that it will only be in the most unusual situations where the circumstances 

warrant the Director exercising his discretion and requiring this additional protection in a 

Class VI permit. While it is of course true that additional containment zones above the 

confining zone could impede vertical fluid movement, there is no basis for requiring 

these additional zones if it has already been demonstrated that the original confining is 

protective of USDWs. 

5. State regulators have familiarity with local environmental, geologic, and financial 

concerns, and in many cases have pre-existing relationships with the regulated 

community that will facilitate implementation of a new and complex regulatory program. 
For these reasons, NRECA believes it is appropriate to allow states to obtain primacy for 

the entire UIC program or for only Class VI wells if a particular state so chooses. Id. at 

43523. Such class-specific primacy is consistent with the statutory authorization behind 

the UIC Program, and as EPA predicts, states obtaining primacy for Class VI wells –

regardless of whether they have sought primacy under other aspects of the UIC program 

– may be more likely to develop a comprehensive regulatory program for all aspects of 

carbon capture and storage. Id.; see also 42 U.S.C. § 300h-1 (SDWA § 1422).

6. NRECA urges EPA to issue more definitive direction in the Final Rule regarding the 

regulation of CO2 injection activities that cross state boundaries. This issue is mentioned 

in the Preamble to the Proposal but receives little attention. See 73 Fed. Reg. at 43497. 

Rather, EPA simply observes that “some injection activities may raise cross-state 

boundary issues that are beyond the scope of this rulemaking.” Id. More guidance 

should be given regarding how such cross-state activities should be regulated, including 

making clear in the Final Rule that Owners or Operators of Class VI CO2 GS projects 

will seek a Class VI permit for that operation from the state in which the wellhead is 

located; in other words, a given state is the permitting body for any Class VI CO2 GS 

project with a wellhead in that state. EPA should direct states to consult and coordinate 

with other affected states (i.e., other states to which the underground portion of the well 

may extend and/or those to which there could be a subsurface release or migration of 

injected material) in determining how to avoid duplicative or dueling regulatory systems. 

NRECA urges EPA to play a leadership role and proactively address these issues by 

suggesting procedural guidelines for inter-state regulation and cooperation. 

7. EPA should view CCS as a resource, not a waste. NRECA endorses the view of the 

Interstate Oil and Gas Compact Commission (“IOGCC”) that CO2 should be treated in 

any regulatory regime as a resource and not as a waste. As an initial matter, CO2 has a 

commercial value for EOR operators. A number of commercial operations exist solely

for the extraction and sale of natural CO2. Moreover, anthropogenic CO2 may have a 

commercial value for traders in carbon emissions reduction credits, once the CO2 is 

captured and stored. While the reason for capturing the CO2 may be to prevent it from 

entering the earth’s atmosphere, it nonetheless will have a commercial value when stored. 

Also, states that currently regulate CO2 injections for EOR operations do so under a 

resource management framework. Surface Transportation Boards, which are responsible 

for the economic regulation of CO2 interstate pipelines, also view CO2 as a commodity. 

Characterization as a waste would have a chilling effect on the development of CCS 

projects. 

8. The General Accounting Office (“GAO”) recently issued a report entitled "Climate 

Change – Federal Actions Will Greatly Affect the Viability of Carbon Capture and 

Storage As a Key Mitigation Option" (GAO-08-1080, September 2008) (“GAO Report”). 

GAO cites a National Academy of Sciences ("NAS") report emphasizing that a largescale CO2 UIC program cannot be successful "if a significant fraction of the public views 

it as dangerous or unacceptable" and, therefore, CO2 storage technologies must not only

be safe and effective, they must be presented "to the public and the regulatory community

in such a way as to instill confidence that they are in fact safe and effective.” Id. at 49 
(citing NAS, Prospective Evaluation). This is another reason EPA should not 

characterize CO2 as a waste.

*********

The CCS Alliance has evaluated technical, market, and policy risks associated with CCS 

deployment. On behalf of the CCS Alliance, Andrew Paterson of Econergy International 

interviewed dozens of market participants earlier this year, including project developers, 

utilities, technology vendors, risk managers, and financial providers to assess which risks 

were considered most likely to occur, and which, if they occurred, would be considered 

to have the greatest impact to the project. The CCS Alliance study showed that market

participants identified one of the highest risk factors to be the lack of clarity in EPA 

and state regulations dealing with the technical aspects of injection and with liability.

NRECA believes that the largest and most important aspect of the proposed UIC

regulations will be how GS activities are coordinated with RCRA and CERCLA. 

Currently we believe that this is one of the most difficult hurdles standing in the way of 

commercial deployment of full scale GS projects. One way of dealing with this issue to 

avoid classifying injected CO2 as a waste.

********

9. Anecdotal evidence from pilot scale Carbon Sequestration and Storage projects seem 

to suggest that it is not likely that CO2 removed from the flue gas stream of a coal-fired 

power plant would be classified as a RCRA hazardous waste. NRECA believes that EPA 

should specifically exempt CO2 gas streams from coverage by RCRA and develop 

requirements specifically tailored to this material if necessary to assure further 

environmental protection beyond that already provided by the UIC permitting process. 

RCRA is simply not the right tool to use in this situation. 

In 2002, EPA found that "the existing hazardous waste regulations require the submittal 

of 334 notifications, reports, certifications, demonstrations and plans from generators and 

TSDFs to demonstrate compliance with RCRA Regulations" (See comments of the CCS

Alliance). Reporting requirements are just one example of RCRA's burdens. Others 

include TSD facility requirements generally, waste manifesting, training requirements for 

transporters and handlers, citizen suit provisions, and the fact that hazardous waste 

regulations implicates Superfund liability. And to further expose potential CO2 GS 

facilities to open-ended liabilities, applying RCRA could expose all other waste 

management units at the facility, including units that are in no way related to the injection 

operations, to the full panoply of RCRA's Subtitle C corrective action program. If one 

considers that an injection well could be located at an existing industrial site or power 

plant, it should be very clear how a private party would be reluctant to insure or finance a 

GS project under these conditions.

10. Likewise the specter of regulation under Superfund exposes a GS project to 

potentially unknown and open-ended liabilities. Obtaining a UIC permit and carefully
defining the AoR should go a long way toward protecting the environment. Subjecting 

the project to Superfund, may not significantly increase environmental protection, but it 

would surely increase risks and liabilities for the owner/operator. NRECA believes that 

there may be no other answer than to exempt GS projects from superfund. EPA discusses

the availability of a shield from superfund liability being provided by the "federally

permitted release" exclusion, however in the event of any unforeseen circumstance or 

accident that is not explicitly identified in the permit, such protection would vanish. 

Unfortunately, NRECA doubts that EPA can find a way to design reliable regulatory and 

liability protection to save GS projects from unnecessary involvement with Superfund 

while ensuring that they "do not authorize inappropriate hazardous releases" (ibid at 

43504).

Financial Assurance and Liability

Private risk managers (insurers, sureties, banks, and others), will determine whether to 

provide financial assurance for a project based on a calculation of the severity of risks 

and probability that they will occur over a given time period. The severity and 

probability of risk is defined not just by physical dimensions, such as fractures and leaks, 

but by the regulatory and liability structure that is in place. 

11. EPA should, to the extent practicable, establish a single, clear, and reasonable 

regulatory structure for managing risks and liabilities. Applicability of multiple statutes -

or, as discussed herein, detailed and inappropriately prescriptive command and control 

statutes such as RCRA and CERCLA - give rise to potential risk through additional cost 

and by increasing the possibility of violations. CCS developers will be willing to abide 

by reasonable rules that protect human health and the environment, but they do not want 

to bear enhanced risks resulting from requirements that do not significantly contribute to 

health and environmental protection. Nor do developers and risk managers want to face 

liability via multiple State and federal statutory and common law pathways, with the 

possibility of unnecessarily expensive and contentious remedies. As these goals likely

will require some legislative action, EPA also should educate Congress on the need for 

regulatory and liability regimes with these characteristics.

12. It is clear, however, that regardless of EPA's success in establishing a clear 

regulatory structure for addressing site remediation risks, and site liability risks, at some 

point a government backstop for liability needs to be established. There is a clear role for 

private insurance / risk management firms for assuming certain categories of the risks 

associated with a GS project. However, these projects are intended to sequester carbon 

long into the future. This presents a risk category with particularly difficult 

characteristics. Private companies cannot quantify risks for such an open-ended 

condition and we are told they will not write policies for this stage of the GS project. 

Government is urging GS for protection of the public welfare and in order for it to occur 

on a broad-scale, government will have to be willing to bear some of the low probability, 

long time-frame risks.
13. NRECA appreciates the work EPA has done studying possible approaches to GS site 

stewardship. NRECA sees some promise in parts of the general framework of the first 

model listed in the study for federal management of GS liability -- The Price-Anderson 

Act. Specifically, using three tiers for funding the liability regime would seem to be a 

good starting point for developing a similar regime for GS. The approach "requires a 

licensed nuclear facility to maintain both site-specific liability insurance (Tier 1) and 

industry-pooled liability insurance (Tier 2). In the event that the private claims against a 

licensee exceed the amounts available in both the site-specific, individual insurance and 

the industry-pooled insurance, the federal government (Tier 3) provides the licensee with 

indemnity." EPA should consider a 3-tier liability scheme for GS that incorporates 

private insurance, pooled industry insurance and a government backstop.

14. In considering financial assurance requirements, EPA and stakeholders should 

distinguish financial assurance from liability. Regardless of the length of time EPA 

establishes in the final rule for a GS facility owner or operator to maintain financial 

instruments to pay to clean up potential USDW contamination, liability for such cleanup 

may last longer, depending on which statutory provisions are applicable, as well as state 

law. While EPA is limited in its ability to address potential liability, it should seek to do 

so, as findings of the Risk Study conducted by the CCS Alliance (discussed above) show 

that potential long-term liability is a significant barrier to CCS development.

In considering FA instruments, EPA should allow as broad an array of tools as possible 

including:

§ Trust Funds

§ Insurance

§ Surety Bonds

§ Letters of Credit

§ Corporate Guarantees / Self Insurance

Regarding Self Insurance mechanisms, however, while these should be one of the tools 

on EPA's menu of FA options, many of NRECA's members are small business and may

have a small capitalization compared with some of the other entities that may be 

interested in conducting GS projects. Because of the very make-up of these companies, 

Corporate Guarantees / Self Insurance may not be an option for them.

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

NRECA appreciates the opportunity to comment on these proposed regulations and we 

look forward to working with EPA as the issue develops.
Letter ID: 0163 

Commenter: James Stine 

Organization: National Rural Electric Cooperative Association (NRECA) 

Letter ID: 0163 Comment ID: 21309 Letter Lines: 56 to 58 

Comment Code: 1420 1.2.1.1 Support the GS rulemaking 

Comment Code: 2020 1.5.1 Support Class VI designation 

Comment: NRECA greatly appreciates EPA's work toward developing a regulatory framework 

for underground injection of CO2. EPA's decision to develop regulations under 

the UIC program and to develop a new Class VI for CO2 GS well is appropriate. 

Individual Response: EPA acknowledges the comment and agrees that tailored requirements for 

Class VI wells are necessary to address the unique nature of injecting large volumes of CO2 and 

to ensure that USDWs are protected from endangerment. The Class VI requirements are 

appropriate because of the unique nature and risks of CO2 injection for long-term storage (e.g., 

large injection volumes, long project duration, and reservoir pressure conditions). The GS rule 

contains tailored requirements for the permitting, geologic site characterization, AoR and 

corrective action, well construction, operation, mechanical integrity testing, monitoring, well 

plugging, post-injection site care, and site closure of GS wells that directly address issues unique 

to the nature of large-scale CO2 injection for GS. 

Letter ID: 0163 Comment ID: 21310 Letter Lines: 59 to 63 

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

ownership 

Comment: NRECA also appreciates EPA's recognition that while the new 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 

are highly pertinent to developing a viable GS program and we are glad that EPA 

is willing to discuss these issues as part of this regulatory proposal. 

Individual Response: EPA clarifies that the purpose of the Class VI GS rule is to ensure 

consistency in permitting underground injection of CO2 at GS operations across the United 

States and provide requirements to prevent endangerment of USDWs in anticipation of the 

eventual use of GS to reduce CO2 emissions. EPA recognizes the importance of providing clear, 

flexible, scalable, and appropriate regulations. EPA believes that the Class VI GS regulation will 

provide certainty to industry and the public by providing consistency in requirements across the 

U.S. and transparency about what requirements apply to owners or operators. 

EPA notes that long-term liability is outside of the scope of the GS rulemaking and is not 

addressed in the GS rule. SDWA does not contain any express provisions addressing liability. An 

1
owner or operator will be held liable for any permit violations under SDWA §1423. 

Under the final GS rule, once an owner or operator has met all regulatory requirements under 

Part 146 for Class VI wells and the Director has approved site closure pursuant to requirements 

at §146.93, the owner or operator will generally no longer be subject to enforcement for 

regulatory noncompliance. Furthermore, their financial instrument as required under §146.85 

will be released if it was not used. However, even if a site closure is approved under §146.93, an 

owner or operator may be held liable for regulatory noncompliance (including violation of 40 

CFR 144.12) in certain circumstances. For example, an owner or operator may be held liable for 

regulatory noncompliance even after site closure was approved if the Director relied on 

erroneous information (e.g., erroneous modeling data) provided by the owner or operator when 

approving site closure. 

Separate from EPA’s authority to enforce regulatory compliance, an owner or operator may be 

subject to a §1431 response order even after proper site closure is approved under §146.93. 

Under §1431 the Administrator may require an owner or operator to take necessary response 

measures if he or she receives information that a contaminant is present or is likely to enter a 

public water system or an USDW, which may present an imminent and substantial endangerment 

to the health of persons, and the appropriate State and local authorities have not acted to protect 

the health of such persons. The action may include issuing administrative orders or commencing 

a civil action for appropriate relief against the owner or operator of a Class VI well. If the owner 

or operator fails to comply with the order, they may be subject to a civil penalty for each day in 

which such violation occurs or failure to comply continues. 

Furthermore, after site closure an owner or operator may remain liable under tort and other 

remedies, or under other federal statutes including, but not limited to, Clean Air Act, 42 U.S.C. 

§§ 7401-7671; CERCLA, 42 U.S.C. § 9601-9675; and RCRA, 42 U.S.C. § 6901-6992. EPA 

does not have authority to transfer SDWA or other legal liability for Class VI wells to the State 

or federal government or a third-party fund. See the final rule preamble for further discussion of 

EPA's final approach to financial responsibility for Class VI wells. 

Letter ID: 0163 Comment ID: 21311 Letter Lines: 75 to 89 

Comment Code: 1200 1.1 General comments about the rulemaking 

Comment Code: 5400 2.9 Proposed Financial Responsibility and Long-Term Care 

Requirements 

Comment: SUMMARY 

NRECA applauds the efforts EPA has taken thus far to instill "certainty" and 

"transparency" into the future Class VI CO2 regulatory regime. 73 Fed. Reg. at 

43496. The obvious challenge confronting EPA is to craft a Final Rule for 

commercial CO2 injection activities when large-scale commercial operations are 

only at the nascent stage. In the process of developing regulations for 

activities that will largely be conducted in the future, EPA has had to confront 

many technical uncertainties regarding the establishment and operation of GS 

2
wells. Because many of the technical aspects are unknown, it is also very 

difficult to develop a clear understanding of project risks 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 management 

products, and it will not be possible to obtain the level of financing needed to 

undertake a costly GS operation. 

Individual Response: To address concerns about certainty, EPA has specified acceptable 

financial responsibility instruments and requirements in the final regulation at §146.85. 

Additionally, EPA is developing guidance (available on EPA's website at 

http://water.epa.gov/type/groundwater/uic/wells_sequestration.cfm) that describes the types of 

financial instruments that owners or operators can use to meet financial responsibility 

requirements for GS wells. 

EPA anticipates that the availability of third-party GS financial instruments will grow in 

response to demand for such instruments by GS well owners or operators as deployment of GS 

technology increases in the future. In addition, EPA plans to allow owners or operators to choose 

from a variety of financial instruments to meet their financial responsibility needs, thereby 

allowing owners or operators flexibility. See the final rule and preamble for further discussion of 

EPA's final approach to financial responsibility. EPA is using an adaptive approach to regulating 

GS. 

Letter ID: 0163 Comment ID: 21312 Letter Lines: 91 to 97 

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

Comment: The challenge confronting EPA in this rulemaking is twofold: 1) to establish 

clear, reasonable and environmentally protective regulations to cover a range of 

operations for which the technology will not be commercially deployed for a 

number of years, and 2) to the extent practicable establish a single, clear, 

reasonable and protective liability regime for an activity where the nature of 

the risks are different from many other industrial activities and the full 

extent of possible risks from full scale CCS operations are presently unknown. 

Individual Response: Under the final GS rule, once an owner or operator has met all regulatory 

requirements under Part 146 for Class VI wells and the Director has approved site closure 

pursuant to requirements at §146.93, the owner or operator will generally no longer be subject to 

enforcement for regulatory noncompliance. Furthermore, their financial instrument as required 

under §146.85 will be released if it was not used. However, even if a site closure is approved 

under §146.93, an owner or operator may be held liable for regulatory noncompliance (including 

violation of 40 CFR 144.12) in certain circumstances. For example, an owner or operator may be 

held liable for regulatory noncompliance even after site closure was approved if the Director 

relied on erroneous information (e.g., erroneous modeling data) provided by the owner or 

operator when approving site closure. 

Separate from EPA’s authority to enforce regulatory compliance, an owner or operator may be 

3
subject to a §1431 response order even after proper site closure is approved under §146.93. 

Under §1431 the Administrator may require an owner or operator to take necessary response 

measures if he or she receives information that a contaminant is present or is likely to enter a 

public water system or an USDW, which may present an imminent and substantial endangerment 

to the health of persons, and the appropriate State and local authorities have not acted to protect 

the health of such persons. The action may include issuing administrative orders or commencing 

a civil action for appropriate relief against the owner or operator of a Class VI well. If the owner 

or operator fails to comply with the order, they may be subject to a civil penalty for each day in 

which such violation occurs or failure to comply continues. 

Furthermore, after site closure an owner or operator may remain liable under tort and other 

remedies, or under other federal statutes including, but not limited to, Clean Air Act, 42 U.S.C. 

§§ 7401-7671; CERCLA, 42 U.S.C. § 9601-9675; and RCRA, 42 U.S.C. § 6901-6992. EPA 

does not have authority to transfer SDWA or other legal liability for Class VI wells to the State 

or federal government or a third-party fund. See the final rule preamble for further discussion of 

EPA's final approach. 

Letter ID: 0163 Comment ID: 21313 Letter Lines: 104 to 115 

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

Comment: Principles for new regulations 

§ Because of the difficulty of regulating future activities, we urge 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 regulators alike gain experience with large-scale CO2 

sequestration. 

§ Because information and technology related to carbon sequestration will evolve 

as industry and regulators gain experience with CCS, NRECA urges EPA to resist 

placing 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 flexible approach, where operators of GS projects 

would develop and implement site-specific plans for delineating the AoR, testing and monitoring 

the site, performing corrective action, and post-injection site care. EPA believes that the plans—

which would be reviewed and approved by the Director and periodically updated throughout the 

life of the project—promote an ongoing dialogue between the operator and the Director that will 

encourage use of the most appropriate technologies 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 adaptive approach to regulating GS under the UIC 

Program. Even after finalization of the GS regulation, EPA plans, every six years, to collect and 

4
review project data on GS research projects to determine 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. 

Letter ID: 0163 Comment ID: 21314 Letter Lines: 117 to 120 

Comment Code: 2100 1.6 Target Geologic Formations for GS 

Comment: § EPA should not automatically exclude placement 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 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 preclude 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 Class VI siting, well construction and operation, 

monitoring and testing, and post-injection site care and site closure 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 and meets all of the requirements of the GS 

rule, the project may be permitted as a Class VI well. 

Letter ID: 0163 Comment ID: 21315 Letter Lines: 122 to 125 

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

Comment: § NRECA believes that the states will have the best knowledge of regional 

geology, existing projects, areas in need of special protection, etc. and that 

states should be allowed to assume 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 settings in which GS will be applied. EPA recognizes 

that State, Tribal, Territorial, and DI UIC Program Directors are in the best position to evaluate 

the unique issues related to well depth, geology, and hydrogeology that are posed by a Class VI 

well. Some degree of flexibility is needed for Class VI wells because each decision made will be 

site-specific and conditions will differ from state to state. The GS rule balances the need for 

these site-specific decisions with the need for minimum standards to ensure national consistency. 

The Agency believes that it is important for states to use their unique efficiencies to promote 

adoption of this burgeoning and important technology, 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, 

5
comprehensive, and seamless CCS program, States should be provided the flexibility to obtain 

primacy for Class VI only. 

However, given the potential for CCS (encompassing capture, 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 wells independently 

of other well classes can help foster effective management of CCS. EPA believes that allowing 

independent Class VI primacy may encourage states to take responsibility for implementation of 

Class VI regulations and provide for a more comprehensive approach to managing CCS projects 

by promoting the integration of GS activities under SDWA into a broader framework for 

managing CCS. Furthermore, GS operations involve ancillary activities (e.g., pipeline 

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: 0163 Comment ID: 21316 Letter Lines: 127 to 129 

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

Comment: § EPA should be careful not to stigmatize GS operations and to take positive 

measures to build public acceptance. EPA should avoid characterizing stored CO2 

as a waste. 

Individual Response: EPA does not believe that the tailored requirements will create a negative 

public perception of GS. The Agency believes that a demonstration to the public that GS projects 

are meeting the GS rule's tailored requirements would likely improve confidence in the project 

and help address public questions and concerns. 

EPA adds that the requirements of the GS rule are tailored to the nature of the CO2 itself and 

risks associated with the injection of CO2, and do not address the status of CO2 as either a 

pollutant, commodity, or waste. 

Letter ID: 0163 Comment ID: 21317 Letter Lines: 131 to 138 

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

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment) 

Comment: § EPA must settle the way GS activities will relate to RCRA and CERCLA. RCRA 

is 

simply the wrong tool to use to regulate GS of CO2 and EPA needs to find a way 

to insure that the onerous requirements of CERCLA, (never intended for GS of 

CO2), are not applied to this highly specialized gas storage operation. 

§ Dealing with these last two hazardous waste issues appears to NRECA to be one 

6
of the most difficult hurdles standing in the way of commercial deployment of 

full scale GS projects and we recognize that Congressional action may be needed. 

Individual Response: EPA agrees that any requirements for the CO2 stream should be clearly 

identified. EPA received many comments regarding the applicability of the RCRA regulations 

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 rulemaking 

specifically to examine the issue of RCRA applicability to CO2 streams being geologically 

sequestered, including the possible option of a conditional exemption from the RCRA 

requirements for CO2 GS in Class VI wells. EPA will consider these comments as part of its 

development of that proposal. The Agency will consider issues 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 comment 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 making any changes to the RCRA regulations. 

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 

sulfuric acid). Whether such substances may result in CERCLA liability from a sequestration 

facility 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. 

Letter ID: 0163 Comment ID: 21318 Letter Lines: 140 to 164 

Comment Code: 1000 1. General and Administrative Comments 

Comment Code: 5400 2.9 Proposed Financial Responsibility and Long-Term Care 

Requirements 

Comment: Principles for Managing Liability 

NRECA is a member of the Carbon Capture and Storage Alliance (CCS or the 

Alliance) and this group is planning to submit comments on the proposed UIC 

rules for GS of CO2. 

The CCS Alliance is a coalition of entities, spanning a number of economic 

sectors that share a common interest in removing impediments to investment in 

and development of carbon capture and storage ("CCS"), as well as mitigating the 

potential risks associated with the deployment of this technology. Its purpose 

is to promote development of policy by the states and the federal government to 

appropriately address risks and potential liabilities, thereby enabling the 

7
further development and increased deployment of CCS. The CCS Alliance believes 

these technologies can be developed while protecting underground water 

resources, significantly reducing global and U.S. greenhouse gas ("GHG") 

emissions, and enhancing U.S. energy security. The Alliance’s purpose is to 

consider ways of promoting the development and use of CCS technologies and to 

support efforts by the private sector, states, the federal government, nongovernmental organizations and others, to help ensure that these technologies 

can be developed and widely, efficiently and cost-effectively deployed. 

We support the comments of the Alliance and incorporate them here by reference. 

NRECA is relying on the Alliance and USWAG to provide EPA with specific comments 

on the Financial Assurance and Long Term Liability issues discussed in the 

proposal. We are not experts on these matters, however we do believe that the 

Individual Response: EPA acknowledges the comment. Please see the remainder of EPA's 

responses to this comment for further details. For additional information on EPA's final 

regulatory approach, including financial responsibility for GS wells, please see the final rule and 

preamble as well as the rulemaking docket. 

Letter ID: 0163 Comment ID: 21319 Letter Lines: 164 to 180 

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

Comment: proposal. We are not experts on these matters, however we do believe that the 

following principles for managing risk and liability associated with GS should 

be considered in the Final Rule. 

§ It appears to NRECA that a tiered approach with a government back-stop as used 

in the framework of the Price-Anderson Act for nuclear faculties could be a 

rational way of structuring liability management for GS of CO2. This is 

discussed further below in the comments section. 

§ EPA should consider a broad array of financial mechanisms owners or operators 

can use to meet financial responsibility requirements specified in the 

regulations. 

§ While Self Insurance mechanisms belong on EPA's menu of Financial Assurance 

options, many of NRECA's members are small business and may have a relatively 

small capitalization so Corporate Guarantees or Self Insurance may not be an 

available option for them. 

Individual Response: Under SDWA, EPA has the general authority to set financial 

responsibility requirements for injection well owners or operators to ensure that adequate 

resources are available to protect USDWs throughout the life of the GS project. However, this 

authority does not extend to allowing the Agency to create a financial instrument with EPA as 

the trustee, due to the restrictions of the Miscellaneous Receipts Act (MRA). The MRA requires 

8
that EPA deposit the funds it receives for the use of the Government into the Treasury, therefore 

funds would not necessarily be available for GS financial responsibility. 

Additionally, EPA does not have authority under SDWA to establish a trust fund for purposes of 

financial responsibility for Class VI projects. The Agency clarifies that the trust funds that are 

addressed as financial responsibility instruments on the GS rule are set up by individual owners 

or operators and are different from a national-level trust described by the commenters that would 

cover large numbers of GS projects. 

Owners or operators may choose from a variety of financial instruments to meet their financial 

responsibility obligations under the rule, provided the Director determines that the operator's 

proposed financial responsibility demonstration is adequate to protect USDWs from 

endangerment, which means the ability of the owner or operator to pay for each activity for 

which financial responsibility must be demonstrated, including corrective action on wells in the 

AoR, injection well plugging, PISC and site closure, 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 instruments. See the final rule and preamble 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 

operators. EPA recognizes that it is important for self-insurers to be credit-worthy, otherwise 

USDWs may not be adequately protected. Owner or operators who choose to self-insure and use 

the financial test must be able to demonstrate profitability, with a margin sufficient to cover 

contingencies and unknown obligations, and stability. 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 operator or operator is not able to meet the corporate financial test criteria may arrange a 

corporate guarantee by demonstrating that its corporate parent meets the financial requirements 

on its behalf. 

Under SDWA authority, owners or operators of injection wells must ensure protection of 

USDWs from endangerment and are subject to liability for enforcement under the Act. The final 

rule requires that an owner or operator must conduct monitoring as specified in the Directorapproved PISC and site closure plan following the cessation of injection until the owner or 

operator can demonstrate to the Director that the geologic sequestration project no longer poses 

an endangerment to USDWs. For additional information about the PISC and site closure 

requirements, see the preamble to the final GS rule. 

Letter ID: 0163 Comment ID: 21320 Letter Lines: 182 to 196 

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

Comment: COMMENTS 

1. NRECA acknowledges EPA's efforts to use a "performance-based" approach and to 

9
build flexibility into the Proposal, including the use of directorial discretion 

and the provision for forthcoming guidance to clarify other requirements. In 

general, we agree that these methods will help create a regulatory framework 

that can evolve as information and technological advancements are gained in the 

field of carbon capture and sequestration. It is important, however, that any 

directorial discretion be clearly defined and limited; this can be achieved 

while still maintaining a rule that is flexible and avoids unnecessary 

prohibitions. In addition, guidance on any aspect of the Final Rule (for 

example, clarification of requirements for financial assurance mechanisms) must 

be developed in accordance with OMB’s Good Guidance Practices Bulletin, which 

directs that notice and comment be provided on "economically significant" 

guidance documents. See 72 Fed. Reg. 3432, 3438 (Jan. 25, 2007). 

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 flexible approach, where operators of GS projects 

would develop and implement site-specific plans for delineating the AoR, testing and monitoring 

the site, performing corrective action, and post-injection site care. EPA believes that the plans—

which would be reviewed and approved by the Director and periodically updated throughout the 

life of the project—promote an ongoing dialogue between the operator and the Director that will 

encourage use of the most appropriate technologies for a particular project. 

EPA is developing guidances for States that describe the process of applying for and receiving 

primary enforcement authority (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 requirements. 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. EPA has taken OMB’s Good 

Guidance Manual into consideration as it developed the guidance. OMB’s Good Guidance 

Manual establishes policies and procedures for the development, issuance, and use of significant 

guidance documents by Executive Branch departments and agencies. 

Letter ID: 0163 Comment ID: 21321 Letter Lines: 198 to 210 

Comment Code: 2100 1.6 Target Geologic Formations for GS 

Comment: 2. It is counterproductive at this stage in the development of a CO2 GS 

regulatory regime to categorically preclude any potentially feasible injection 

formations as possible long-term storage sites. EPA recognizes that the 

commercial deployment of CO2 GS activities will result in the production of 

large volumes of CO2 for which Owners or Operators will have to locate new and 

environmentally protective injection zones. Therefore, it makes sound policy 

sense for EPA to encourage the identification and utilization of as many 

protective zones as possible, with the prerequisite that any injection site be 

protective of USDWs. To achieve this result, the Final Rule should avoid 

10
absolute prohibitions on any category of injection site and instead keep all 

options open; injection should be allowed as long as it can be demonstrated that 

injection will be protective of USDWs and meet other applicable conditions for 

Class VI CO2 GS wells. 

Individual Response: As described above, EPA clarifies that the GS rule does not categorically 

preclude injection of CO2 into any non-USDW formation types. 

Letter ID: 0163 Comment ID: 21322 Letter Lines: 212 to 220 

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

USDW 

Comment Code: 4410 2.4.4.3.1 Comments in favor of allowing injection above/between 

USDWs in certain circumstances 

Comment: NRECA supports alternative approaches that would allow injection between and/or 

above the lowermost USDW, increasing capacity for CO2 GS, as long as Owners or 

Operators of Class VI wells can show that their CO2 GS operations will be 

protective of USDWs. Id. at 43512. This will be particularly important in areas 

of the country with deep USDWs, where an absolute requirement that Class VI 

wells be constructed beneath the lowermost USDW could render the program 

impractical. Id. NRECA also supports this alternative approach in areas where 

the Director determines -- or the Owner or Operator can show -- that geologic 

conditions would prevent fluid movement into adjacent USDWs. Id. For similar 

Individual Response: EPA acknowledges that there are limited circumstances where injection 

above the lowermost USDW can be performed 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 owners or operators can seek a waiver of the Class VI injection 

depth requirements for injection into non-USDW formations above and/or between USDWs. It 

establishes: 1) requirements specifying information that owners or operators must submit, and 

Directors must consider, in consultation with PWSS Directors; 2) procedures for public notice of 

a waiver application and for Director-Regional Administrator communication; 3) the waiver 

issuance process; and, 4) additional requirements that apply to owners or operators of Class VI 

wells granted a waiver of the injection depth requirements to ensure USDW protection above and 

below the injection zone. 

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

UIC program Directors and owners or operators who undertake CO2 injection for GS. The 

Agency believes this approach: 1) responds to concerns about local and regional geologic storage 

capacity limitations imposed by the proposed injection depth requirements; 2) allows for a more 

site-specific assessment of injection depth for GS projects; 3) accommodates injection into 

different formation types; 4) allows 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 aquifer exemptions for GS. Finally, 

EPA’s approach to addressing injection depth variability through a waiver process responds to 

11
concerns about future drinking water resource availability and the need to ensure that high 

quality water remains available in sufficient quantities to supply drinking water needs. 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: 0163 Comment ID: 21323 Letter Lines: 221 to 223 

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

circumstances 

Comment: reasons, NRECA opposes an absolute prohibition on use of exempt aquifers for 

Class VI injection; use of exempt aquifers should be permitted where the 

specific aquifer exemption criteria are satisfied. Id. 

Individual Response: EPA recognizes that there are limited circumstances where aquifer 

exemptions for GS may be warranted, and the final GS rule allows for the expansion of the areal 

extent of existing aquifer exemptions for Class II EOR/EGR wells transitioning to Class VI 

injection for 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. 

EPA clarifies that 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 adds that any Class II well owner or operator seeking to inject CO2 for the purpose of GS 

would need to have their well re-permitted as Class VI. The final Class VI regulations require 

that any owner or operator injecting CO2 for the primary purpose of long term storage obtain a 

Class VI permit with some special consideration for the fact that they are transitioning from a 

well not originally designed to meet Class VI requirements. The Director has the authority to 

determine at what point a Class VI permit is required for those projects that are transitioning 

from the primary purpose of EOR to long term storage of CO2. The final regulation provides a 

set of technical factors for the Director to evaluate in making this determination, at §144.19. EPA 

believes that this approach provides sufficient protection of USDWs when there is an increased 

risk to USDWs as compared to traditional Class II operations while allowing for site-specific 

flexibility. See the preamble and final rule for additional information on EPA's approach 

transitioning of Class II wells for GS. 

The Agency clarifies that the aquifer exemption requirements and the injection depth waiver 

requirements serve different purposes. 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, including the requirements at §146.83 for site 

criteria. EPA believes that, in most cases, the injection depth waiver is a more appropriate option 

than aquifer exemptions for Class VI injection, and believes that aquifer exemption expansions 

for GS should be granted in limited circumstances. 

12
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 Data Availability and 

Request for Comment. 

Letter ID: 0163 Comment ID: 21324 Letter Lines: 225 to 230 

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: 3. NRECA believes that the Final Rule should not contain a blanket prohibition 

on injection of CO2 into coal seams (whether above or below the lowermost USDW) 

or into other formations such as basalts, salt domes, or shales. 73 Fed. Reg. at 

43503. If it can be demonstrated that the injection of CO2 into such sites is 

protective of USDWs, then such activities should remain available options under 

the Class VI UIC program. 

Individual Response: The final GS rule does not preclude injection into any non-USDW 

formations, including coal seams, provided the site-suitability requirements in the GS rule are 

met, and owners or operators can demonstrate that GS can be performed in a manner that 

protects USDWs from endangerment. 

EPA acknowledges that there are unknowns regarding GS into formations such as coal seams, 

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 injection. EPA will collect and review 

project data on early GS projects, including those that inject into various formation types, to 

determine whether the appropriate amount and types of information and documentation are being 

collected. 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 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. 

Letter ID: 0163 Comment ID: 21325 Letter Lines: 232 to 244 

Comment Code: 3120 2.1.2 Need to identify additional confining and containment zones 

(seeking comment) 

Comment: 4. On a related subject, EPA requests 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 (i.e., lowermost) confining zone that could further impede vertical 

13
fluid movement and allow for pressure dissipation -- in effect, a "secondary 

containment" requirement. Id. at 43505-06. As a general matter, NRECA opposes 

the inclusion of this secondary containment requirement, and believes that it 

will only be in the most unusual situations where the circumstances warrant the 

Director exercising his discretion and requiring this additional protection in a 

Class VI permit. While it is of course true that additional containment zones 

above the confining zone could impede vertical fluid movement, there is no basis 

for requiring these additional zones if it has already been demonstrated that 

the original confining is protective of USDWs. 

Individual Response: EPA retains the requirement to identify additional containment/confining 

zones, if required by the Director, as proposed (§146.83(b)). EPA acknowledges that such 

additional zones may not be needed in all circumstances, and clarifies that this requirement is at 

the Director's discretion, based on his or her understanding of a particular site. EPA believes that, 

in some situations, the presence of additional confining and containment zones above the 

primary (i.e., lowermost) confining zone can improve USDW protection. These layers could 

further impede vertical fluid movement and allow for pressure dissipation, and also provide 

additional sites for monitoring, mitigation, and remediation. The Agency's decision is supported 

by commenters representing states, water associations, and an electric utility who assert that 

these requirements promote a flexible, risk-based, site-specific approach to characterizing and 

permitting a site for GS projects, and are intended to improve understanding of the project as a 

whole and promote better modeling of the site. 

Letter ID: 0163 Comment ID: 21326 Letter Lines: 246 to 258 

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

Comment Code: 5610 2.11.1 Allowing partial primacy for Class VI wells (seeking comment) 

Comment: 5. State regulators have familiarity with local environmental, geologic, and 

financial concerns, and in many cases have pre-existing relationships with the 

regulated community that will facilitate implementation of a new and complex 

regulatory program. 

For these reasons, NRECA believes it is appropriate to allow states to obtain 

primacy for the entire UIC program or for only Class VI wells if a particular 

state so chooses. Id. at 43523. Such class-specific primacy is consistent with 

the statutory authorization behind the UIC Program, and as EPA predicts, states 

obtaining primacy for Class VI wells -- regardless of whether they have sought 

primacy under other aspects of the UIC program -- may be more likely to develop 

a comprehensive regulatory program for all aspects of carbon capture and 

storage. Id.; see also 42 U.S.C. § 300h-1 (SDWA § 1422). 

Individual Response: EPA acknowledges the expertise of existing State, Tribal, Territorial, and 

DI UIC programs including programs that implement the UIC requirements under Section 1422 

of the SDWA (Class I, III, IV, and V wells) and state oil and gas agencies that have been 

regulating Class II UIC wells for decades under Section 1425 of SDWA. These agencies already 

14
understand the technical and administrative issues involved in construction, operation, injection 

and permitting as well as, in the case of Class II operators issues related to CO2 injection, 

subsurface operations, and pipeline transport. EPA believes that existing programs can adapt this 

expertise to the new requirements for Class VI wells and will be able to develop a primacy 

application for Class VI wells under Section 1422 of SDWA. 

Many of the tools, resources, expertise, and infrastructure currently exist within States to 

effectively and efficiently manage GS projects. Additionally, States can use multiple authorities 

beyond those afforded under the SDWA including surface access and land rights, unitization of 

fields, pore space ownership, mineral rights, site safety and emergency preparedness, and 

maximization of State oil and gas resource exploitation. 

Throughout the GS regulatory development process, EPA has made it a priority to engage States 

and State organizations. EPA works with State co-regulators on regulatory issues related to GS –

including state representation on the GS regulatory development workgroup. The Agency has 

also conducted a series of stakeholder and technical workshops, and public hearings, and EPA 

met with national organizations including the Ground Water Protection Council, the Interstate 

Oil and Gas Compact Commission, and the American Association of State Geologists. EPA 

values coordination with States and State co-regulators and will continue an open dialogue as the 

Agency moves forward in the regulatory development process. 

As described above, EPA plans to allow States to apply for primacy for the Class VI program 

independently of primacy for other well classes. 

Letter ID: 0163 Comment ID: 21327 Letter Lines: 260 to 276 

Comment Code: 1300 1.1.2.3 Comments on other aspects of CCS (capture, transport) 

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

Comment: 6. NRECA urges EPA to issue more definitive direction in the Final Rule 

regarding the regulation of CO2 injection activities that cross state 

boundaries. This issue is mentioned in the Preamble to the Proposal but receives 

little attention. See 73 Fed. Reg. at 43497. Rather, EPA simply observes that 

"some injection activities may raise cross-state boundary issues that are beyond 

the scope of this rulemaking." Id. More guidance should be given regarding how 

such cross-state activities should be regulated, including making clear in the 

Final Rule that Owners or Operators of Class VI CO2 GS projects will seek a 

Class VI permit for that operation from the state in which the wellhead is 

located; in other words, a given state is the permitting body for any Class VI 

CO2 GS project with a wellhead in that state. EPA should direct states to 

consult and coordinate with other affected states (i.e., other states to which 

the underground portion of the well may extend and/or those to which there could 

be a subsurface release or migration of injected material) in determining how to 

avoid duplicative or dueling regulatory systems. NRECA urges EPA to play a 

leadership role and proactively address these issues by suggesting procedural 

15
guidelines for inter-state regulation and cooperation. 

Individual Response: EPA understands that the CO2 plumes for large GS projects may cross 

state, tribal, EPA Regional, or national boundaries. The final GS rule, at §146.82(a)(2), requires 

the owner or operator to identify all State, Tribal, and Territorial boundaries within the AoR. 

Based on this information, the Director must provide written notification to all States, Tribes, 

and Territories to inform them of the permit application §146.82(b) and ensure that they are 

involved in any necessary processes (e.g., development of the emergency and remedial response 

plan (146.94)). The Agency encourages transparency in the permitting process and anticipates 

that State-State/State-Tribal communication on GS permitting will facilitate information sharing 

and encourage safe, protective projects. 

Because some GS projects will require coordination across State and Tribal jurisdictions and 

plans, EPA will work with the appropriate entities to facilitate communication among States and 

Tribes interested in obtaining Primacy during the implementation phase of the GS regulation. 

Such communication may involve other organizations such as the Sierra Club, NDWAC, 

associations, and other experts. However, the responsibility for addressing such subjects 

ultimately rests with the States and Tribes with primacy. 

EPA is developing a series of guidance documents to support the GS rulemaking. These are 

available on EPA’s website at 

http://water.epa.gov/type/groundwater/uic/wells_sequestration.cfm. 

Letter ID: 0163 Comment ID: 21328 Letter Lines: 278 to 291 

Comment Code: 1480 1.2.2.2.2 CO2 is not a pollutant 

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

Comment: 7. EPA should view CCS as a resource, not a waste. NRECA endorses the view of 

the Interstate Oil and Gas Compact Commission ("IOGCC") that CO2 should be 

treated in any regulatory regime as a resource and not as a waste. As an initial 

matter, CO2 has a commercial value for EOR operators. A number of commercial 

operations exist solely for the extraction and sale of natural CO2. Moreover, 

anthropogenic CO2 may have a commercial value for traders in carbon emissions 

reduction credits, once the CO2 is captured and stored. While the reason for 

capturing the CO2 may be to prevent it from entering the earth’s atmosphere, it 

nonetheless will have a commercial value when stored. Also, states that 

currently regulate CO2 injections for EOR operations do so under a resource 

management framework. Surface Transportation Boards, which are responsible for 

the economic regulation of CO2 interstate pipelines, also view CO2 as a 

commodity. Characterization as a waste would have a chilling effect on the 

development of CCS projects. 

Individual Response: EPA clarifies that the requirements of the GS rule are tailored to the 

nature of the CO2 itself and risks associated with the injection of CO2, and do not address the 

status of CO2 as either a pollutant, commodity or waste. In addition, whether or not a fluid could 

16
be sold on the market as a commodity does not override EPA's authority under the SDWA to 

protect USDWs from endangerment. 

Under the SDWA, the injection of any "fluid" is subject to the requirements of the UIC program. 

"Fluid" is defined under 40 CFR 144.3 as any material or substance which flows or moves, 

whether in a semisolid, liquid, sludge, gas or other form or state, and it includes liquids, gases, 

and semisolids (i.e., slurries) injected into the subsurface. 

EPA stresses that the focus of the GS rule is to ensure that, where GS is deployed, it is conducted 

in a manner that protects USDWs. 

Letter ID: 0163 Comment ID: 21329 Letter Lines: 293 to 303 

Comment Code: 1480 1.2.2.2.2 CO2 is not a pollutant 

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

Comment: 8. The General Accounting Office ("GAO") recently issued a report entitled 

"Climate Change -- Federal Actions Will Greatly Affect the Viability of Carbon 

Capture and Storage As a Key Mitigation Option" (GAO-08-1080, September 2008) 

("GAO Report"). GAO cites a National Academy of Sciences ("NAS") report 

emphasizing that a largescale CO2 UIC program cannot be successful "if a 

significant fraction of the public views it as dangerous or unacceptable" and, 

therefore, CO2 storage technologies must not only be safe and effective, they 

must be presented "to the public and the regulatory community in such a way as 

to instill confidence that they are in fact safe and effective." Id. at 49 

(citing NAS, Prospective Evaluation). This is another reason EPA should not 

characterize CO2 as a waste. ********* 

Individual Response: As described above, EPA clarifies that the GS rule does not address the 

status of CO2 as either a pollutant or a commodity or a waste. 

EPA believes that the creation of a new injection well class (VI) under the existing UIC Program 

is necessary to enable 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 injection of CO2 for GS and adds that 

the GS regulation 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 potential presence of impurities in captured CO2, and its mobility 

within subsurface geologic formations. 

Letter ID: 0163 Comment ID: 21330 Letter Lines: 305 to 318 

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

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment) 

17
Comment: The CCS Alliance has evaluated technical, market, and policy risks associated 

with CCS deployment. On behalf of the CCS Alliance, Andrew Paterson of Econergy 

International interviewed dozens of market participants earlier this year, 

including project developers, utilities, technology vendors, risk managers, and 

financial providers to assess which risks were considered most likely to occur, 

and which, if they occurred, would be considered to have the greatest impact to 

the project. The CCS Alliance study showed that market participants identified 

one of the highest risk factors to be the lack of clarity in EPA and state 

regulations dealing with the technical aspects of injection and with liability. 

NRECA believes that the largest and most important aspect of the proposed UIC 

regulations will be how GS activities are coordinated with RCRA and CERCLA. 

Currently we believe that this is one of the most difficult hurdles standing in 

the way of commercial deployment of full scale GS projects. One way of dealing 

with this issue to avoid classifying injected CO2 as a waste. ******** 

Individual Response: EPA agrees that any requirements for the CO2 stream should be clearly 

identified. EPA received many comments regarding the applicability of the RCRA regulations 

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 rulemaking 

specifically to examine the issue of RCRA applicability to CO2 streams being geologically 

sequestered, including the possible option of a conditional exemption from the RCRA 

requirements for CO2 GS in Class VI wells. EPA will consider these comments as part of its 

development of that proposal. The Agency will consider issues 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 comment 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 making any changes to the RCRA regulations. 

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 

sulfuric acid). Whether such substances may result in CERCLA liability from a sequestration 

facility 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. 

Letter ID: 0163 Comment ID: 21331 Letter Lines: 320 to 342 

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

Comment: 9. Anecdotal evidence from pilot scale Carbon Sequestration and Storage projects 

18
seem to suggest that it is not likely that CO2 removed from the flue gas stream 

of a coal-fired power plant would be classified as a RCRA hazardous waste. NRECA 

believes that EPA should specifically exempt CO2 gas streams from coverage by 

RCRA and develop requirements specifically tailored to this material if 

necessary to assure further environmental protection beyond that already 

provided by the UIC permitting process. RCRA is simply not the right tool to use 

in this situation. 

In 2002, EPA found that "the existing hazardous waste regulations require the 

submittal of 334 notifications, reports, certifications, demonstrations and 

plans from generators and TSDFs to demonstrate compliance with RCRA Regulations" 

(See comments of the CCS Alliance). Reporting requirements are just one example 

of RCRA's burdens. Others include TSD facility requirements generally, waste 

manifesting, training requirements for transporters and handlers, citizen suit 

provisions, and the fact that hazardous waste regulations implicates Superfund 

liability. And to further expose potential CO2 GS facilities to open-ended 

liabilities, applying RCRA could expose all other waste management units at the 

facility, including units that are in no way related to the injection 

operations, to the full panoply of RCRA's Subtitle C corrective action program. 

If one considers that an injection well could be located at an existing 

industrial site or power plant, it should be very clear how a private party 

would be reluctant to insure or finance a GS project under these conditions. 

Individual Response: EPA received many comments regarding the applicability of the RCRA 

regulations 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 rulemaking 

specifically to examine the issue of RCRA applicability to CO2 streams being geologically 

sequestered, including the possible option of a conditional exemption from the RCRA 

requirements for CO2 GS in Class VI wells. EPA will consider these comments as part of its 

development of that proposal. The Agency will consider issues 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 comment 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 making any changes to the RCRA regulations. 

Letter ID: 0163 Comment ID: 21332 Letter Lines: 344 to 357 

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment) 

Comment: 10. Likewise the specter of regulation under Superfund exposes a GS project to 

potentially unknown and open-ended liabilities. Obtaining a UIC permit and 

carefully defining the AoR should go a long way toward protecting the 

environment. Subjecting the project to Superfund, may not significantly increase 

environmental protection, but it would surely increase risks and liabilities for 

the owner/operator. NRECA believes that there may be no other answer than to 

19
exempt GS projects from superfund. EPA discusses the availability of a shield 

from superfund liability being provided by the "federally permitted release" 

exclusion, however in the event of any unforeseen circumstance or accident that 

is not explicitly identified in the permit, such protection would vanish. 

Unfortunately, NRECA doubts that EPA can find a way to design reliable 

regulatory and liability protection to save GS projects from unnecessary 

involvement with Superfund while ensuring that they "do not authorize 

inappropriate hazardous releases" (ibid at 43504). 

Individual Response: The Agency thanks the commenter for their detailed comments regarding 

the scope and possible impacts of CERCLA liability on CCS activities, and in particular 

comments related to the CERCLA exemption for federally-permitted releases. EPA notes that 

the GS rule is not promulgated under CERCLA, therefore the applicability of that statute will not 

be determined under the SDWA or the terms of the GS rule, but rather according to the 

CERCLA statute itself and any implementing regulations that may apply. 

EPA agrees that proper site characterization and AoR studies are important for USDW 

protection. In addition, the UIC program Director has authority under SDWA §1423 to address 

potential compliance issues (e.g., potential releases that may endanger USDWs) resulting from 

violations of the Class VI permit in the unlikely event that a remedial response is necessary. 

Although EPA anticipates that the need for emergency or remedial actions at GS sites will be 

rare, the GS rule requires, at §146.94, that emergency and remedial response plans be developed 

and updated to address such events and that owners or operators demonstrate that financial 

resources are set aside to implement the plans if necessary, per §146.85. 

Regarding long term liability, once an owner or operator has met all regulatory requirements 

under Part 146 for Class VI wells and the Director has approved site closure pursuant to 

requirements at §146.93, the owner or operator will generally no longer be subject to 

enforcement for regulatory noncompliance. Furthermore, their financial instrument as required 

under §146.85 will be released if it was not used. However, even if a site closure is approved 

under §146.93, an owner or operator may be held liable for regulatory noncompliance (including 

violation of 40 CFR 144.12) in certain circumstances. For example, an owner or operator may be 

held liable for regulatory noncompliance even after site closure was approved if the Director 

relied on erroneous information (e.g., erroneous modeling data) provided by the owner or 

operator when approving site closure. 

Separate from EPA’s authority to enforce regulatory compliance, an owner or operator may be 

subject to a §1431 response order even after proper site closure is approved under §146.93. 

Under §1431 the Administrator may require an owner or operator to take necessary response 

measures if he or she receives information that a contaminant is present or is likely to enter a 

public water system or an USDW, which may present an imminent and substantial endangerment 

to the health of persons, and the appropriate State and local authorities have not acted to protect 

the health of such persons. The action may include issuing administrative orders or commencing 

a civil action for appropriate relief against the owner or operator of a Class VI well. If the owner 

or operator fails to comply with the order, they may be subject to a civil penalty for each day in 

20
which such violation occurs or failure to comply continues. 

Furthermore, after site closure an owner or operator may remain liable under tort and other 

remedies, or under other federal statutes including, but not limited to, Clean Air Act, 42 U.S.C. 

§§7401-7671; CERCLA, 42 U.S.C. §9601-9675; and RCRA, 42 U.S.C. §6901-6992. EPA does 

not have authority to transfer SDWA or other legal liability for Class VI wells to the State or 

federal government or a third-party fund. See the final rule preamble for further discussion of 

EPA's final approach. 

Letter ID: 0163 Comment ID: 21335 Letter Lines: 359 to 381 

Comment Code: 5400 2.9 Proposed Financial Responsibility and Long-Term Care 

Requirements 

Comment: Financial Assurance and Liability 

Private risk managers (insurers, sureties, banks, and others), will determine 

whether to provide financial assurance for a project based on a calculation of 

the severity of risks and probability that they will occur over a given time 

period. The severity and probability of risk is defined not just by physical 

dimensions, such as fractures and leaks, but by the regulatory and liability 

structure that is in place. 

11. EPA should, to the extent practicable, establish a single, clear, and 

reasonable regulatory structure for managing risks and liabilities. 

Applicability of multiple statutes - or, as discussed herein, detailed and 

inappropriately prescriptive command and control statutes such as RCRA and 

CERCLA - give rise to potential risk through additional cost and by increasing 

the possibility of violations. CCS developers will be willing to abide by 

reasonable rules that protect human health and the environment, but they do not 

want to bear enhanced risks resulting from requirements that do not 

significantly contribute to health and environmental protection. Nor do 

developers and risk managers want to face liability via multiple State and 

federal statutory and common law pathways, with the possibility of unnecessarily 

expensive and contentious remedies. As these goals likely will require some 

legislative action, EPA also should educate Congress on the need for regulatory 

and liability regimes with these characteristics. 

Individual Response: EPA acknowledges the commenter's concerns regarding the applicability 

of multiple statutes to GS projects and the need for a single clear liability regime for owners or 

operators. As a federal agency, EPA is working to create a nationally consistent financial 

responsibility regime within its statutory authority while providing permitting authorities an 

appropriate level of flexibility. EPA is finalizing financial responsibility requirements under the 

SDWA . EPA believes that the general authorities provided under SDWA include the authority 

to set minimum federal requirements for financial responsibility to ensure that financial 

resources are available to protect USDWs throughout the life of the GS project. 

21
Under SDWA authority, owners or operators of injection wells must ensure protection of 

USDWs from endangerment and are subject to liability for enforcement under the Act. The final 

rule requires that an owner or operator must conduct monitoring as specified in the Directorapproved PISC and site closure plan following the cessation of injection until the owner or 

operator can demonstrate to the Director that the geologic sequestration project no longer poses 

an endangerment to USDWs. For additional information about the PISC and site closure 

requirements, see the preamble to the final GS rule. 

Once an owner or operator has met all regulatory requirements under Part 146 for Class VI wells 

and the Director has approved site closure pursuant to requirements at §146.93, the owner or 

operator will generally no longer be subject to enforcement for regulatory noncompliance. 

Furthermore, their financial instrument as required under §146.85 will be released if it was not 

used. However, even if a site closure is approved under §146.93, an owner or operator may be 

held liable for regulatory noncompliance (including violation of 40 CFR 144.12) in certain 

circumstances. For example, an owner or operator may be held liable for regulatory 

noncompliance even after site closure was approved if the Director relied on erroneous 

information (e.g., erroneous modeling data) provided by the owner or operator when approving 

site closure. 

Additionally, an owner or operator may always be subject to any action the Administrator deems 

necessary to protect the health of persons under §1431 of the SDWA after site closure if there is 

unanticipated migration towards or into a USDW that causes or threatens imminent and 

substantial endangerment to public health. The action may include issuing administrative orders 

or commencing a civil action for appropriate relief. If the owner or operator fails to comply with 

the order, they may be subject to a civil penalty for each day in which such violation occurs or 

failure to comply continues. 

The Agency clarifies that Class VI well permits may be transferred to another owner or operator 

pursuant to §144.38 whereby generally all other regulatory responsibilities are transferred to that 

new owner and operator, which includes all potential liabilities associated with meeting the 

requirements of that permit. Please see further clarification on the issue of long term liability in 

the preamble of the final rule. 

Furthermore, after site closure an owner or operator may remain liable under tort and other 

remedies, or under other federal statutes including, but not limited to, Clean Air Act, 42 U.S.C. 

§§ 7401-7671; CERCLA, 42 U.S.C. § 9601-9675; and RCRA, 42 U.S.C. § 6901-6992. EPA 

does not have authority to transfer SDWA or other legal liability for Class VI wells to the State 

or federal government or a third-party fund. See the final rule preamble for further discussion of 

EPA's final approach. 

Letter ID: 0163 Comment ID: 21336 Letter Lines: 383 to 394 

Comment Code: 5400 2.9 Proposed Financial Responsibility and Long-Term Care 

Requirements 

22
Comment: 12. It is clear, however, that regardless of EPA's success in establishing a 

clear regulatory structure for addressing site remediation risks, and site 

liability risks, at some point a government backstop for liability needs to be 

established. There is a clear role for private insurance / risk management firms 

for assuming certain categories of the risks associated with a GS project. 

However, these projects are intended to sequester carbon long into the future. 

This presents a risk category with particularly difficult characteristics. 

Private companies cannot quantify risks for such an open-ended condition and we 

are told they will not write policies for this stage of the GS project. 

Government is urging GS for protection of the public welfare and in order for it 

to occur on a broad-scale, government will have to be willing to bear some of 

the low probability, long time-frame risks. 

Individual Response: EPA notes that SDWA does not contain any provisions addressing 

liability. Under the final GS rule, once an owner or operator has met all regulatory requirements 

under Part 146 for Class VI wells and the Director has approved site closure pursuant to 

requirements at §146.93, the owner or operator will generally no longer be subject to 

enforcement for regulatory noncompliance. Furthermore, their financial instrument as required 

under §146.85 will be released if it was not used. However, even if a site closure is approved 

under §146.93, an owner or operator may be held liable for regulatory noncompliance (including 

violation of 40 CFR 144.12) in certain circumstances. For example, an owner or operator may be 

held liable for regulatory noncompliance even after site closure was approved if the Director 

relied on erroneous information (e.g., erroneous modeling data) provided by the owner or 

operator when approving site closure. 

Separate from EPA’s authority to enforce regulatory compliance, an owner or operator may be 

subject to a §1431 response order even after proper site closure is approved under §146.93. 

Under §1431 the Administrator may require an owner or operator to take necessary response 

measures if he or she receives information that a contaminant is present or is likely to enter a 

public water system or an USDW, which may present an imminent and substantial endangerment 

to the health of persons, and the appropriate State and local authorities have not acted to protect 

the health of such persons. The action may include issuing administrative orders or commencing 

a civil action for appropriate relief against the owner or operator of a Class VI well. If the owner 

or operator fails to comply with the order, they may be subject to a civil penalty for each day in 

which such violation occurs or failure to comply continues. 

Furthermore, after site closure an owner or operator may remain liable under tort and other 

remedies, or under other federal statutes including, but not limited to, Clean Air Act, 42 U.S.C. 

§§ 7401-7671; CERCLA, 42 U.S.C. § 9601-9675; and RCRA, 42 U.S.C. § 6901-6992. EPA 

does not have authority to transfer SDWA or other legal liability for Class VI wells to the State 

or federal government or a third-party fund. See the final rule preamble for further discussion of 

EPA's final approach to financial responsibility for Class VI wells. 

Letter ID: 0163 Comment ID: 21337 Letter Lines: 396 to 430 

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

23
Comment: 13. NRECA appreciates the work EPA has done studying possible approaches to GS 

site stewardship. NRECA sees some promise in parts of the general framework of 

the first model listed in the study for federal management of GS liability -- 

The Price-Anderson Act. Specifically, using three tiers for funding the 

liability regime would seem to be a good starting point for developing a similar 

regime for GS. The approach "requires a licensed nuclear facility to maintain 

both site-specific liability insurance (Tier 1) and industry-pooled liability 

insurance (Tier 2). In the event that the private claims against a licensee 

exceed the amounts available in both the site-specific, individual insurance and 

the industry-pooled insurance, the federal government (Tier 3) provides the 

licensee with indemnity." EPA should consider a 3-tier liability scheme for GS 

that incorporates private insurance, pooled industry insurance and a government 

backstop. 

14. In considering financial assurance requirements, EPA and stakeholders should 

distinguish financial assurance from liability. Regardless of the length of time 

EPA establishes in the final rule for a GS facility owner or operator to 

maintain financial instruments to pay to clean up potential USDW contamination, 

liability for such cleanup may last longer, depending on which statutory 

provisions are applicable, as well as state law. While EPA is limited in its 

ability to address potential liability, it should seek to do so, as findings of 

the Risk Study conducted by the CCS Alliance (discussed above) show that 

potential long-term liability is a significant barrier to CCS development. In 

considering FA instruments, EPA should allow as broad an array of tools as 

possible including: 

§ Trust Funds § Insurance § Surety Bonds § Letters of Credit § Corporate 

Guarantees / Self Insurance 

Regarding Self Insurance mechanisms, however, while these should be one of the 

tools on EPA's menu of FA options, many of NRECA's members are small business 

and may have a small capitalization compared with some of the other entities 

that may be interested in conducting GS projects. Because of the very make-up of 

these companies, Corporate Guarantees / Self Insurance may not be an option for 

them. 

Individual Response: As described above, owners or operators may choose from a variety of 

financial instruments, as listed in §146.85(a), to meet their financial responsibility needs, 

provided the Director determines that the operator's proposed financial responsibility 

demonstration is adequate to pay for each activity for which financial responsibility must be 

demonstrated, including corrective action on wells in the AoR, injection well plugging, PISC and 

site closure, and emergency and remedial response. 

EPA recognizes that there are some concerns about the use of self insurance, including those 

mentioned by the commenter. EPA also recognizes the commenter's concern over the availability 

24
25

of funds to cover the costs of financial responsibility. However, EPA does not have authority 

under SDWA to require insurance companies to set up an insurance "pool" of resources. 

EPA clarifies that the financial instrument the owner or operator provided to meet the 

requirements under §146.85 will be released when the phase of the project for which the 

instrument was required is complete and all financial obligations for that instrument have been 

met, pursuant to §146.85(b)(2) and §146.93.