### 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.

## .

Buddy Garcia, Chairman
Larry R

. Soward, Commissioner
Bryan W

. Shaw, Ph .D

., Commissioner

Mark R

. Vickery, P

.G, Executive Director 

## `i o,3,76

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

Protecting Texas by Reducing and Preventing Pollution

December 19, 2008 

# JAN 0 2 2009

Mr

. Lee Whitehurst
Office of Ground Water and Drinking Water c/o Water Docket

Environmental Protection Agency
Mailcode : 2822T
1200 Pennsylvania Ave

., NW

. Washington, DC 20460

Re : Docket ID No

. EPA-HQ-OW-2008-0390, Underground Injection Control (UIC) Program for Carbon Dioxide (C02) Geologic Sequestration (GS) Wells

Dear Mr

. Whitehurst :

Thank you for the opportunity to provide comments on the proposed federal requirements for C02-GS wells

. The Texas Commission on Environmental Quality (TCEQ) shares the Environmental Protection Agency's (EPA's) strong commitment to protection of drinking water

.

As a result of TCEQ's long partnership with EPA in UIC Program implementation and our state's experience in C02 injection in the Permian Basin of West Texas and in the Gulf Coast Frio Formation, the TCEQ has a large stake in the proposed new Class VI injection well requirements

. Several factors combine to make Texas a prime location for future carbon capture and storage projects : Texas has a huge capacity for storage/sequestration in underground formations throughout the State and Texas is a center for well and pipeline technologies essential for C02-GS projects as a result of our decades of experience in petroleum exploration and production

.

As indicated in the preamble, the proposed Class VI requirements will be applicable to long-term storage (geo-sequestration) of nonhazardous C02 into formations below underground sources of drinking water and which are not productive of oil or gas

. Accordingly, in Texas, injection of C02 with entrained constituents sufficient to exhibit the characteristics of hazardous waste would still require a Class I well permit from TCEQ, injection of COZ into producing formations for enhanced recovery of oil or gas will require a Class II well permit from the Railroad Commission, and experimental injection of C02 (noncommercial scale) will continue to qualify for a TCEQ Class V authorization or permit

.


# DEC 2 2 2008

P .O

. Box 13087 0 Austin, Texas 78711-3087 " 512-239-1000 " Internet address : www .tceq .state .tx .us

. pnnteJ on revde paper -mg co

. -based inkMr

. Lee Whitehurst

Page 2
December 19, 2008

Our most significant concerns from review of the proposed requirements are organized in four
broad programmatic areas :

(1) Appropriate level of regulation ;

(2) Appropriate financial assurance for long post-injection timeframes ;

(3) Flexibility and streamlining in Class VI program primacy considerations ; and,

(4) Resource needs for regulation of the proposed new class of wells

.

More detailed comments on each of these areas of concern are provided as an enclosure to this
letter

. Also, TCEQ staff will be active in further evaluation of the programmatic and technical

content of the proposed rules organized by the Ground Water Protection Council of which TCEQ
is a longstanding member

.

Thank you again for this opportunity for review and comment on the published rules

. We also
wish to express our appreciation of EPA's inclusion of TCEQ as one of four state agencies in the
C02-GS Workgroup for review and comment on the rule drafts prior to publication

.

We look forward to the development of the final rule, possible opportunities for further comment, and continued years of cooperation with EPA in administering the UIC and other
programs for environmental protection

. If you have questions regarding our comments, please
contact Mr

. Ben Knape, Industrial & Hazardous Waste Permits Section, at (512) 239-2334 or bknape@tceq

.state .tx .us

.

1Vlark'R'Vickery, P .G

., Executiv
Texas Commission on Enviro



### Enclosurep

. 3

Areas of Principal Concern Regarding the Proposed C02-GS Requirements

Texas Commission on Environmental Quality

Appropriate Level of Re lation - Recognizing mandates under the Safe Drinking
Water Act (SDWA) for protection of drinking water, there are serious concerns about the overall burdens and resource requirements of the proposed rules

. This concern includes consideration of how such rules may inhibit implementation of carbon capture and storage technology

.

The "tailoring," as described by EPA, of the basic regulations for injection of
nonhazardous industrial waste to the unique characteristics of C02 injection has resulted in proposed requirements that in many aspects exceed the stringency of those for injection of hazardous waste

. This excessive stringency is particularly present in the proposed requirements for iterative computational modeling of the C02 plume and

pressure front, and the model's proposed influence on a project's area of review,
corrective action, monitoring, post-injection site care, closure, and financial assurance

. Many of these concerns have been expressed in the C02-GS Workgroup process by
state and federal staff responsible for regulation of the nation's largest concentration of Class I hazardous waste injection wells

. As an additional consideration, the lack of significant environmental or health risks evident from our state's experience in C02 injection for enhanced recovery of oil and gas under regulation by the Railroad Commission does not provide a supporting basis for the unprecedented stringency of Class VI requirements as proposed by EPA

.



### Some of the more prominent technical concerns relating to the above discussion are as follows :

(a) The proposed requirement that an application for Class VI well permit include baseline geochemical data on subsurface formations including all underground

sources of drinking water (USDWs) in the area of review is unnecessarily burdensome, considering that this could entail sampling of numerous individual sands throughout thousands of feet of geologic section

. USDWs in Texas may extend to depths of 4,000 feet or more, and in some regions of the U

. S

., even deeper

. Baseline determinations for local aquifers in a C02-GS project should focus

on those immediately overlying C02 confining zones, lowest USDWs, and any other USDWs of significance

. 

# (b) Concern exists that the proposed rules would require the operator to have surface

access to large areas of land possibly under separate ownership

. This concern would apply to the proposed requirements for performance of necessary corrective action on unplugged wells, data acquisition such as in seismic surveys, and location and sampling of monitor wells or other monitoring stations

. In TCEQ's experience, adoption of a rule requirement for 3-D seismic surveys over the area of review in permit applications for Class I well waste disposal in engineered salt caverns illustrates this concern

. Permit applicants were not able to obtain permission from surface owners to run these surveys in all areas required by the rules

. Off-site

access needed for compliance with the proposed C02-GS rules may therefore be problematic

.p

. 4

Areas of Principal Concern Regarding the Proposed C02-GS Requirements

Texas Commission on Environmental Quality

(c) Concern exists that the proposed well design and construction requirements for
Class VI wells will be unjustifiably burdensome

. Experience in C02 injection for
enhanced oil and gas recovery indicates that the Class II well casing and cementing requirements are sufficient for protection of underground sources of drinking

water

. A more stringent alternative to the Class II requirements, but a definite improvement over the proposed Class VI requirements in this regard, could be made by adoption of the EPA-approved Class I well casing and cementing standards at Title 30, Texas Administrative Code, Section 331 .62

. This section of
the Texas rules provides clearer and more enforceable standards, with greater emphasis on proactive planning to improve results in cementing of well casings

. TCEQ also advises against requirement of automatic down-hole shut off devices in
well designs

. This position is based on TCEQ's UIC program experience regarding
the expense and time requirements for acquisition of workover rigs and contractor services to make down-hole repairs (well workovers)

. Also, in our program's experience, abrupt activation of shut-off devices may cause damage to the well
tubulars and elements upstream of the well in the C02 conveyance system (pipelines, valves, etc .)

. In response to significant variations in well annulus monitoring data, an expeditious but controlled ramping down of well injection rates is considered to pose less stress on overall mechanical integrity of the well than an abrupt shut off of flow through the well

. Additionally, from TCEQ's experience,

use of such devices in four Class I wells imposed a restriction in the inside
diameter of the injection tubing and compromised ability to perform conventional
mechanical integrity testing

.

(d) Concern exists on the practical implementation of the proposed requirements for monitoring the C02 plume and pressure front

. Noting that the actual monitoring plan would be left to director approval, EPA's cost analysis for a C02-GS project

assumes the presence of three monitor wells

. This would not seem to be sufficient for identification/confirmation of the position of the plume or pressure front, and leads to speculation whether under the proposed rules, the cost of the geosequestration portion of a carbon capture and sequestration project would be a significantly greater part of the overall cost of the project than represented

. In this regard, monitor wells in any reasonable numbers could confirm or rule out the
presence of C02 or its pressure effects at the monitor well location, but would not be expected to identify or confirm the full extent of the plume or pressure front

. Computer modeling informed by monitoring data should however be able to bound the reasonable extent of the plume and pressure front

.

(e) Concern exists regarding the need for (i) a standard (in concentration or saturation)
for defining the edge of a C02 plume, (ii) clear definition of the term "stabilization"

as applied to fate and transport of an injected C02 plume and pressure front, and (iii) a clarified specification of the performance standard for the necessary demonstration to enable termination of the

. iterative process of monitoring/modeling and related corrective action

. If "stabilization" means absence of plume movement or pressure change, it is our understanding from C02-GS research efforts that indefinitely long periods of monitoring, modeling, and corrective action may be required in contrast to the default period of fifty yearsp

. 5

Areas of Principal Concern Regarding the Proposed C02-GS Requirements

Texas Commission on Environmental Quality

cited in the proposed rules and preamble

. A more appropriate basis for demonstrations of protection of underground sources of drinking water (USDW)
would be keyed to the presence of induced pressure conditions in the injection

zone, spatially and temporally

. When and where such pressure conditions are insufficient to cause endangerment of a USDW through leakage pathways such as improperly constructed or plugged wells or transmissive faults, the required USDW protection should be considered to be present

. Accordingly, if the termination of monitoring, modeling, and corrective action is ultimately dependent on making the subject demonstration, it is recommended that the "fifty year" specification be deleted from the rule

. This would conform the requirements for post-injection site

care for Class VI wells more closely to the post-closure care specifications and concepts existing for Class I wells

.

With regard to the appropriate level of regulation, EPA has described the rule development as an adaptive process occurring over a period of years with careful consideration of stakeholder and general public comment, and results of research including experimental C02 injection projects worldwide

. This process includes the possibility of future revision of the final adopted rules in response to accumulating knowledge from project operational experience, research, and increasing public
confidence in capture and sequestration technology

. Concern however remains that overly burdensome regulations may seriously impede the technology in a manner not easily correctable by later rule revisions, especially considering the experience from C02 injection in Class II well enhanced recovery projects indicating no significant environmental or health risks

. EPA should strive to protect drinking water sources as mandated by the SDWA while imposing reasonable and proven controls on carbon sequestration, not onerous burdens without risk-based justification or cost effectiveness

. Reasonable and proven controls will encourage responsible parties to voluntarily implement carbon capture and storage technology

. In short, carbon is not a hazardous material and responsible industries need incentives, rather than unreasonable stringency, to participate in the program

. Otherwise, the United States may not realize the benefits of carbon geosequestration

.

(2) Appropriate Financial Assurance for Long Post-Iniecti on Timeframes -

(a) Although TCEQ recognizes the large potential variation in monitoring, postinjection site care, and closure processes and the uncertainty regarding potential changes in Resource Conservation and Recovery Act (RCRA) financial assurance generated by the Environmental Financial Advisory Board (EFAB) review, we recommend a more specific financial assurance rule framework, perhaps simply requiring consistency with RCRA financial assurance rules as they may be amended

.



### ) Allowing financial assurance for post-injection site care to be provided as late as 180 days before plugging and abandonment (page 134) leaves significant financial risk with the agency or State

. At a minimum, financial assurance should be provided over the period of time that revenue is received prior to plugging and abandonment

.p

. 6

Areas of Principal Concern Regarding the Proposed C02-GS Requirements

Texas Commission on Environmental Quality

(c) Financial assurance mechanisms allowing performance (performance bond) or reimbursement (insurance) may not be appropriate for long-term activities such as post-injection site care

. Both mechanisms would only be collected one year at a time leaving significant risk that the surety or insurer could go out of business in the event that post-injection site care is required for an extended period of time

. Collection under a letter of credit, on the other hand, would provide funding for
the entire period and eliminate future collection risk

.

(d) The preamble and rule are inconsistent in that the preamble indicates that notice of bankruptcy must be provided within 10 days of the event (p

. 128), but the proposed rule specification [40 CFR 146 .85(c)] does not specify a time frame

. As noted above, we recommend more specificity

.

(e) The proposed rules do not set out a time frame by which to reevaluate the postinjection site care, site closure plan and related cost estimates

. Absence of such specific time frames could present additional risk by failing to ensure sufficient financial assurance coverage is maintained during the life of the permit

.

(f) TCEQ agrees with EPA's approach that financial assurance for post-injection site

care may be required for a period less than or greater than fifty years as proposed in 146 .93, depending on a site specific demonstration to the Director

. However,
consistent with TCEQ's comments under Principal Concern 1, TCEQ also
encourages EPA to delete the fifty-year threshold requirement in consideration of EPA's indication that the duration of financial assurance should ultimately be keyed to whatever site-specific time is necessary to meet the post-injection site

care performance standard of demonstration of non-endangerment of USDWs

.

Flexibility and Streamlining in Class VI Program Primacy Considerations - TCEQ

concurs with EPA's assessment that current options for injection of C02 include Class I, Class II, and Class V wells

. Accordingly, under state law, injection of C02 in Texas will be regulated by either the TCEQ or the Railroad Commission (RRC)

. Noting the RRC's responsibility for Class II injection (including C02 injection for enhanced recovery of oil and gas), TCEQ is responsible for Class I and most of Class
V (including experimental injection of C02)

. Class VI as proposed by EPA, under
state law, would appear to be in TCEQ's jurisdiction

. Section 27 .022, Texas Water Code provides : "The commission has jurisdiction over the injection of carbon dioxide produced by a clean coal project, to the extent authorized by federal law, into

a zone that is below

the base of usable quality water and that is not productive of oil,
gas, or geothermal resources"

. However, such jurisdictional lines are subject to change by state legislation

. Flexibility will therefore be needed in federal authorization of the Class VI well program at whichever agency is designated by the
state legislature

. Flexibility in this sense primarily means free from constraints that EPA has traditionally imposed by bundling various well classes into an "all or nothing" condition for program primacy

.

Also, with primary responsibility for carbon geo-sequestration residing with EPA until an application for state primacy is approved, it will be in the mutual interests of EPA and applying states, to make the state primacy process more efficient

. Inp

. 7

Areas of Principal Concern Regarding the Proposed C02-GS Requirements

Texas Commission on Environmental Quality

TCEQ's experience, revisions of UIC program primacy (authorization) which have been relatively limited in scope and complexity have required years for development
and approval

.

Opportunities for streamlining the Class VI primacy process may be achieved by redesigning the review and approval processes coordinated between EPA regions and headquarters

. Also, for consideration by states, the primacy process could be made easier for state and EPA staff, to the extent that federal regulations can be adopted verbatim, minimizing or eliminating the complicated "crosswalk" process for determining rule-for-rule equivalency

. As an additional consideration, the possibility
of optional interim authorization of a state program, or delegation of responsibility by EPA to states undeva memorandum of agreement until primacy is approved, should be explored

.

(4) Resource Needs for Regulation of the Proposed New Class of Wells - As described in the Ground Water Report to the Nation : A Call to Action (Ground Water Protection Council, 2007), the great challenges for the UIC Program are the need to effectively address higher risk Class V wells, and readiness to regulate waste streams from emerging technologies such as carbon capture and storage

. In either case, the principal obstacle is the insufficiency of funding for state UIC programs

. In congressional testimony, GWPC has recommended an increase in annual funding for the national UIC Program to $56 million, nearly a five-fold increase over present appropriations

. While the full scope of resources needed for implementing a Class VI well program

is not presently known, needs will be particularly acute in the following

areas :

Additional Staff - In addition to staff needed for regulation of the existing injection well classes, more qualified persons will be needed to conduct rulemaking for state equivalency with the new federal regulations, develop program procedures, form, and other documents for Class VI, assemble program authorization packages for submittal
to EPA, and conduct permitting, compliance monitoring, and enforcement of Class VI wells

.

Additional Tools (Computer Models for Simulation of Multi-Phase Interactions in Determining Fate and Transport of Injected C02)
- The central role, iterative nature, and unprecedented complexity of computational modeling and monitoring of the injected C02 plume and pressure front in nearly every consideration in a C02-GS project will require additional developmental work and funding to provide the specialized computer models, monitoring instruments, and other tools needed by state and EPA regional staff for regulation of Class VI wells

.

Guidance and Training in Implementation of Class VI Requirements

- In the interest of regulatory flexibility and avoidance of unnecessary constraints in development of the technology through overly prescriptive specification of materials and methods, EPA's proposed rules feature a series of plans that an applicant for a Class VI permit must submit for director approval

. Among the plans required that are unique or require special considerations in application to a Class VI well project are the area of review and corrective action plan, the monitoring plan, and the post-injection site carep

. 8

Areas of Principal Concern Regarding the Proposed C02-GS Requirements

Texas Commission on Environmental Quality

and closure plan

. Under the proposed rules, the adequacy of any such plans would be

a matter of director discretion

. Practically, this would include public participation in

a permitting or permit amendment process

. While it is appropriate that EPA has provided with each requirement of a plan, a list of considerations in evaluating the plan, more specific guidance and training on such plans including the use and evaluation of models and monitoring data will be needed for efficient regulation

. The need for guidance and training will be greatest in the first commercial scale C02-GS projects in the early phase of rule implementation

.

### Letter ID: 0280 Commenter: Mark Vickery Organization: Texas Commission on Environmental Quality

Letter ID: 0280 Comment ID: 24097 Letter Lines: 66 to 77

Comment Code: 1210 1.1.1 Comments about the proposed rule

Comment: Our most significant concerns from revi ew of the proposed requirements are organized in four broad programmatic areas:

(1) Appropriate level of regulation;

(2) Appropriate financial assurance for long post-injection timeframes;

(3) Flexibility and streamlining in Cla ss VI program primacy considerations; and,

(4)Resource needs for regulation of the proposed new class of wells.

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

Letter ID: 0280 Comment ID: 24098 Letter Lines: 101 to 121

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

Comment: (1) Appropriate Level of Regulation -R ecognizing mandates under the Safe Drinking Water Act (SDWA) for protection of drinking water, there are serious
concerns about the overall bu rdens and resource requirements of the proposed
rules. This concern includes consider ation of how such rules may inhibit implementation of carbon captu re and storage technology.

The "tailoring," as described by EPA, of the basic regulations for injection of nonhazardous industrial waste to the unique characteristics of CO2 injection has resulted in proposed requirements that in many aspects exceed the stringency of those for injection of hazardous waste. This excessive stringency is particularly present in the proposed requirements for iterative computational modeling of the CO2 plume and pressure front, and the m odel's proposed influence on a project's area of review, corrective action, mon itoring, post-injecti on site care, closure, and financial assura nce. Many of these concerns have been expressed in the CO2-GS Workgroup process by state and federal staff responsible for regulation of the nation's largest con centration of Class I hazardous waste

1

### injection wells. As an additional cons ideration, the lack of significant
environmental or health risks evident from our state's experience in CO2 injection for enhanced recovery of oil a nd gas under regulation by the Railroad Commission does not provide a supporting basis for the unprecedented stringency of Class VI requirements as proposed by EPA.

Individual Response: EPA disagrees that the Class VI requirements are overly stringent; instead, the GS requirements are tailored to the unique nature of GS, including the large volumes of CO2 injected, its buoyancy and potential corrosivity in the presence of water, and impurities in the CO2 stream. EPA believes these tailored requi rements are more appropriate than Class I or Class II requirements. Please see the remainder of EPA's responses to this comment for further
details. For additional information on EPA's final regulatory approach, pl ease see the final rule and preamble as well as the rulemaking docket.

The Agency believes that the Class VI requirement s balance site-specific flexibility with USDW protection. Rather than setting performance or technology-based st andards 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, tes ting and monitoring the s ite, performing corrective action, and post-injection site car e. EPA believes that the plans— which would be reviewed and approved by the Director and pe riodically updated throughout the life of the project—promote an ongoing dialogue between the operator and the Dire ctor that will encourage use of the most appropriate technologies for a particular project.

Letter ID: 0280 Comment ID: 24099 Letter Lines: 126 to 134

Comment Code: 3140 2.1.4 Comments that the proposed ge ologic data requirements are too stringent

Comment: (a) The proposed requirement that an application for Class VI well permit include baseline geochemical data on subsurface formations including all underground sources of drinking water (U SDWs) in the area of review is unnecessarily burdensome, considering th at this could entail sampling of numerous individual sands throughout thous ands of feet of geologic section. USDWs in Texas may extend to depths of 4,000 feet or more, and in some regions of the U. S., even deeper. Baseline determ inations for local aquifers in a CO2- GS project should focus on those immedi ately overlying CO2 confining zones, lowest USDWs, and any other USDWs of significance.

Individual Response: The Agency believes that the re quirement at §146.82(a)(6) to submit baseline geochemical data on subsurface geologic formations, including all USDWs in the AoR is appropriate and protective of USDWs. EPA believes that this data will support monitoring plan development, inform injectate fate a nd transport model development (e.g., by providing appropriate input parameters), a nd provide information needed to respond to any unexpected and unpermitted leaks outside of the injection zone. Th e baseline geochemical information will allow the owner or operator and permitting authority to evaluate monitoring data and identify any changes in subsurface geochemistry that may indicate fluid movement.

2

### The rule requires geochemical analysis of, at a minimum, the injection zone, confining zone, and all USDWs (§146.82(a)(6)). These geochemical tests ar e necessary to ensure the adequacy of the confining system and to serve as a baseline for future monitoring. The Director has the discretion to require geochemical analysis of additional s ubsurface zones if in the Director's opinion they are necessary for the protection of USDWs from endangerment.

EPA agrees that site characterizati on should be site-specific, particul arly in light of the variety of geologic settings in which GS may be employe d. EPA believes that, while there is a large amount of required information, the owner or operat or is given flexibility in determining what methods are used to demonstrate the suitability of a potential site. EPA envisions an ongoing dialogue between the Director and the owner or operator during the permitting process (as well as throughout the operation of the site).

Regarding concerns about deep USDWs, EPA adds that the final GS rule contains a provision (at §146.95) for owners or operators to apply for waiv ers from the requirement that injection be below the lowermost USDW. EPA believes this waiver provision will reduce potential limitations on the re-permitting of Class II wells as Class VI wells, provided they meet the requirements at §146.95.

Letter ID: 0280 Comment ID: 24100 Letter Lines: 136 to 146

Comment Code: 3200 2.2 Proposed Area of Review and Corrective Action Requirements (40 CFR 146.84)

Comment: (b) Concern exists that the proposed rule s would require the operator to have surface access to large areas of land po ssibly under separate ownership. This concern would apply to the proposed requi rements for performance of necessary corrective action on unplugged wells, data acquisition such as in seismic surveys, and location and sampling of monito r wells or other monitoring stations. In TCEQ's experience, adop tion of a rule requirement for 3-D seismic surveys over the area of review in permit applica tions for Class I well waste disposal in engineered salt caverns illustrates this concern. Permit applicants were not able to obtain permission from surface ow ners to run these surveys in all areas required by the rules. Off-site access need ed for compliance with the proposed CO2-GS rules may therefore be problematic.

Individual Response: EPA clarifies that the purpose of the corrective acti on requirement at 146.84(d) is to ensure that all wells in the AoR th at have the potential to cause the movement of
CO2 or other fluids into or between USDWs recei ve appropriate corrective action. In general, to meet this requirement, the owner or operator will most likely need to obtain the right of access to wells that may require correctiv e action, and demonstrat e they have done this in their proposed AoR and corrective action plan. In the AoR and corrective action plan, th e owner or operator must describe how site access will be guaranteed for future corrective action.

3

### Letter ID: 0280 Comment ID: 24101 Letter Lines: 148 to 157

Comment Code: 3800 2.3 Proposed Injection Well Construction Requirements (40 CFR 146.86)

Comment: (c) Concern exists that the proposed we ll design and construction requirements for Class VI wells will be unjustifiably burdensome. Experience in CO2 injection for enhanced oil and gas recovery indicat es that the Class II well casing and cementing requirements are sufficient for protection of underground sources of drinking water. A more string ent alternative to the Cla ss II requirements, but a definite improvement over the proposed Cl ass VI requirements in this regard, could be made by adoption of the EPA-appr oved Class I well cas ing and cementing standards at Title 30, Texas Administra tive Code, Section 331.62. This section of the Texas rules provides clearer and more enforceable standards, with greater emphasis on proactive planning to improve results in cementing of well casings.

Individual Response: Although the requirements are based on the existing regulatory framework for deep wells, includi ng Class I wells, EPA believes that GS is sufficiently different from other injection operations to warrant the tailored requirements fo r Class VI wells at §146.86.

EPA believes that GS is sufficien tly different from Class II ER ope rations to warrant the tailored construction requirements for Class VI wells at §146.86. For example, the volume of CO2 anticipated to be injected in Class VI wells is significantly greater th an for Class II wells. Reservoir pressure conditions wi ll be different, with Class VI injection operations involving large volumes of CO2 and likely having higher pressures within th eir storage formations than Class II ER projects. Therefore, Class VI GS reservoir pressures will increase more in comparison to Class II ER during the injection phase of th e GS project.

Letter ID: 0280 Comment ID: 24102 Letter Lines: 158 to 170

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

Comment: TCEQ also advises against re quirement of automatic down-ho le shut off devices in well designs. This position is based on TCEQ 's UIC program experience regarding the expense and time requirements for acquisition of wo rkover rigs and
contractor services to make down-hole re pairs (well workovers). Also, in our program's experience, abrupt activation of shut-off devices may cause damage to the well tubulars and elements upstream of the well in the CO2 conveyance system (pipelines, valves, etc.). In response to significant variations in well annulus monitoring data, an expeditious but cont rolled ramping down of well injection rates is considered to pose less stress on overall mechanical integrity of the well than an abrupt shut off of flow th rough the well. Additionally, from TCEQ's experience, use of such devices in four Class I wells imposed a restriction in the inside diameter of the injection t ubing and compromised ability to perform

4

### conventional mechanical integrity testing.

Individual Response: After evaluating the risks and benefi ts of down-hole shut-off systems and considering additional research, EPA will not re quire automatic down-hole shut-off devices for onshore Class VI wells since it is not necessary in all cases to ensure protection of USDWs from endangerment. Instead, the final rule, at §146.88(e)(2 ), requires that owne rs or operators of
onshore Class VI wells install automatic surface shut-off devices. The rule affords Director's
discretion to mandate automatic down-hole shut -off devices in onshore situations that may warrant their use. However, the Agency believ es that offshore Class VI wells present unique construction and operational conditi ons, including isolation from shorelines and the need to construct wells through the water column and the subsurface, which may delay response time in
the event of well difficulties. Th e rule requires, at §146.88(e)(3), that owners or operators of
offshore wells within State territorial waters install automatic down-hole shut-off systems. EPA believes that these requirements at §146.88(e) ensure that proper precautions are taken to prevent
subsurface fluid movement and ensure protection of USDWs.

EPA recognizes that down-hole shut-off devices may make well maintenance and operation more challenging. However, the bu oyant nature of CO2 and the elevated injection pressures
associated with GS increase the likelihood of an uncontrolled flow of CO 2 out of the well. If CO2 does begin to flow back up an injection we ll, it will rapidly cool and expand as it moves
toward the surface and can result in a stream of solid CO2 which can cause damage to the wellhead and other well instrumentation; such damage has been documented in CO2 ER wells (Skinner, 2003; Duncan et al ., 2008). Automatic shut-off devi ces can help prevent such occurrences, and EPA believes affording Director 's discretion to require down-hole devices where necessary ensures that proper precautions ar e taken to prevent subs urface fluid movement and ensure protection of USDWs.

EPA acknowledges that abrupt shut-offs are not th e optimal way to shut down an injection well. These automatic shut-off systems, however, are in tended only to activate when a severe drop in pressure occurs. This is only likely to occur if there has been serious da mage to the wellhead or
other surface features or if th ere has a sudden increase in pressu re in the subsurface (i.e., a well blowout). In such conditions, any potential further damage to the well would be minor in comparison to the consequences of allowing CO2 to escape out of the well. EPA also notes that
activation of the shut-off valve means that dama ge has likely already occurred to the well and any additional damage caused by the shut-off valve is likely to be minimal in comparison to the damage that may be caused by a malfunction.

Letter ID: 0280 Comment ID: 24103 Letter Lines: 172 to 185

Comment Code: 4650 2.6.5 CO2 plume and pressure fr ont tracking (seeking comment)
Comment Code: 6220 3.2.2 Assumptions about the number of monitoring wells (seeking comment)

Comment: (d) Concern exists on the practical impl ementation of the proposed requirements for monitoring the CO2 plume and pressu re front. Noting that the actual monitoring plan would be left to director approval, EPA's cost analysis for a

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### CO2-GS project assumes the presence of th ree monitor wells. This would not seem to be sufficient for identification/confirmation of the position of the plume or pressure front, and leads to speculation whether under the proposed rules, the cost of the geosequestration portion of a carbon capture and sequestration project would be a significantly greater pa rt of the overall cost of the project than represented. In this regard, monitor wells in any reasonable numbers could confirm or rule out the presence of CO2 or its pressure effects at the monitor well location, but would not be expected to identify or confirm the full extent of the plume or pressure front. Computer modeling info rmed by monitoring data
should however be able to bound the reasonabl e extent of the plume and pressure
front.

Individual Response: EPA clarifies that the specifics of monitoring, including the number of monitoring wells, must be described in the site-s pecific testing and monitoring plan, which must be approved by the Director.

EPA recognizes that the number of monitoring wells associated with GS projects will be sitespecific and vary based on many factors, incl uding the local geologic characteristics, the presence of other injection wells, the size of the AoR, and volumes of CO2 injected. The proposed rule Cost Analysis described the number of monitoring wells as a ratio to the number of injection wells; EPA clarifies that the number of injection wells was based on the size of the AoR and the type of project. Therefore, the num ber of monitoring wells was indirectly based on the size of the AoR. Because ER project sites have injection wells that are more clustered than those in saline formations, the AoR and the numbe r of monitoring wells were anticipated to be smaller at an ER project site compared to a saline formation project. EPA retained this assumption regarding the density of injection wells for the final rule analysis, but it changed its assumption on the number of monitoring wells at each site. For the final rule, the Agency assumes one monitoring well above the injecti on zone per two square miles of AoR; for monitoring wells into the injection zone, the Agency assumes one monitoring well per four square miles. EPA assumes monitoring wells into th e injection zone will also be used to sample above the injection zone. The number of monitoring wells assumed for each project type is presented in Exhibit 5.2 of the Cost Analysis.

Because the actual number of monitoring wells that will be necessary for a given project site is uncertain, EPA tested the sensitiv ity of overall cost estimates to the number of monitoring wells by applying a 25 percent decrease and increase in monitoring wells per project type to the original assumptions. This change results in a nnualized incremental rule costs approximately 16 percent less and 16 percent greate r than costs estimated for the primary analysis (as shown in Exhibit 5.26 of the Cost Analysis). For addi tional information on EPA's final regulatory approach, including testing and monitoring requireme nts, please see the final rule and preamble.

EPA is developing guidance on monitoring and testi ng to assist owners/ope rators and Directors in evaluating requirements under §146.90, including developing determining the appropriate number of monitoring wells for a GS site. This guidance will be available on EPA’s website at http://water.epa.gov/type/groundwater /uic/wells_sequestration.cfm.

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### Letter ID: 0280 Comment ID: 24104 Letter Lines: 187 to 207

Comment Code: 1220 1.1.1.1 Terminology and definitions
Comment Code: 5240 2.8.2.2 Post injection timeframe (seeking comment)
Comment Code: 5280 2.8.2.4 USDW non-endangerment demonstrations

Comment: (e) Concern exists regardi ng the need for (i) a standa rd (in concentration or saturation) for defining the edge of a CO 2 plume, (ii) clear definition of the term "stabilization" as applied to fate and transport of an injected CO2 plume and pressure front, and (iii) a clarif ied specification of the performance standard for the necessary demonstration to enable termination of the iterative process of monitoring/modeling and related corrective action. If "stabilization" means absence of plume movement or pressu re change, it is our understanding from
CO2-GS research efforts th at indefinitely long periods of monitoring, modeling, and corrective action may be required in contrast to the default period of fifty years cited in the proposed rules and pr eamble. A more appropriate basis for demonstrations of protection of undergr ound sources of drinki ng water (USDW) would be keyed to the presence of induced pressure conditions in the injection zone, spatially and temporally. When a nd where such pressure conditions are insufficient to cause endangerment of a US DW through leakage pathways such as improperly constructed or plugged wells or transmissible faults, the required USDW protection should be considered to be present. Accordingly, if the termination of monitoring, modeling, and corrective action is ultimately dependent on making the subj ect demonstration, it is recommended that the "fifty year" specification be deleted from the rule. This would conform the requirements for post-injection site care fo r Class VI wells more closely to the post-closure care specifications and con cepts existing for Class I wells.

Individual Response: EPA disagrees that the rule should specify the criteria for setting the monitoring timeframe. Instead, EPA believes that such determinations are site-specific and should be described in a project specific post-injection site care and site cl osure plan. EPA also believes that periodic reviews and updates, wh ere necessary, to the plan are important to ensuring that the site continues to be managed effectively and to determine whether shortening the monitoring timeframe is appropriate.

EPA acknowledges that many site-specific factors will influence the determ ination of when the CO2 plume and pressure front no lo nger pose a risk of endangerment to USDWs. It is for this
reason that EPA believes that individual UIC Direct ors, in consultation with operators, will be in the best position to determine whether additional post-injection site care is needed. EPA expects
this decision to be made based on relevant site data and in consultati on with all potentially impacted parties.

EPA agrees that a complete cessa tion of plume movement may not occur at some sites for long time periods due to density differences, natura l formation flow grad ients and diffusion. EPA clarifies that a complete cessati on of plume movement is not requi red, only a demonstration that the plume and pressure front no longer pos e a risk of endangerment to USDWs.

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### EPA is developing guidance to assist owners or operators in evaluating well plugging, postinjection site care, and site closure requirements of 146.92 and 146.93. Additionally, the guidance will assist Directors in evaluating propo sed well plugging plans a nd post-injection site care and site closure plans under 146.92 a nd 146.93. The guidance describes recommended approaches for how an owner or operator coul d plug injection and m onitoring wells; perform post-injection monitoring; dem onstrate non endangerment; and perf orm site closure activities. The guidance will be available at http://water.epa.gov/type/groundwater /uic/wells_sequestration.cfm.

Letter ID: 0280 Comment ID: 24105 Letter Lines: 209 to 227

Comment Code: 1250 1.1.1.4 Flexibility is needed (p erformance-based standards)
Comment Code: 1480 1.2.2.2.2 CO2 is not a pollutant

Comment: With regard to the appropriate level of regulation, EPA has described the rule development as an adaptive process occurr ing over a period of years with careful consideration of stakeholder and general pub lic comment, and results of research including experimental CO2 injection projects worldwid e. This process includes the possibility of future revision of th e final adopted rules in response to accumulating knowledge from project operational experience, research, and increasing public confidence in captur e and sequestration technology. Concern however remains that overly burdensome re gulations may seriously impede the technology in a manner not easily corre ctable by later rule revisions, especially considering the experience from CO2 injection in Class II well enhanced recovery projects indicating no significant environmental or health
risks. EPA should strive to protect drinking water s ources as mandated by the SDWA while imposing reasonable and prove n controls on carbon sequestration, not
onerous burdens without ri sk-based justification or cost effectiveness. Reasonable and proven controls will encourage responsible parties to voluntarily implement carbon capture and storage tec hnology. In short, carbon is not a hazardous material and responsible indus tries need incentives, rather than unreasonable stringency, to participate in the program. Otherwise, the United States may not realize the benef its of carbon geosequestration.

Individual Response: EPA believes the final GS rule addre sses the commenter’s concern that it protects drinking water sources while impos ing reasonable and prove n controls. The GS rulemaking builds upon decades of knowledge about safe injection practices regulated by the UIC Program (including the oil and gas industry’ s decades of experience injecting CO2 for the purpose of ER). The final GS rule contains new requirements for Class VI wells that are tailored to address the unique nature of full-scale CO2 GS, including the injection volumes anticipated for long-term storage, the buoyant nature of the inje ctate, its corrosivity in the presence of water, and its mobility within subsurface geologic formations.

EPA remains committed to an adaptive approach. The Agency plans to, every six years, collect

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### and review data on GS projects to determin e whether the appropriate amount and types of information and appropriate documentation are being collected, and to determine if modifications to the requirements are appropriate or necessary. An adaptive approach will allow regulatory development to proceed in time to meet the current and future demands for Class VI permits while EPA continues to gather data from pilot projects and other research as it becomes
available.

EPA adds that the intent of the GS rule is not to promote GS. Rather , the purpose of the GS regulation is to assure that, where deployed, GS is conducted in a manner that protects USDWs from endangerment.

Letter ID: 0280 Comment ID: 24106 Letter Lines: 229 to 243

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

Comment: (2) Appropriate Financial Assurance for Long Post-Injection Timeframes

(a) Although TCEQ recognizes the large potential variation in monitoring, postinjection site care, a nd closure processes and the uncertainty regarding potential changes in Resource Conservati on and Recovery Act (RCRA) financial assurance generated by the Environmental Financial Advisory Board (EFAB) review, we recommend a more specific financial assu rance rule framework, perhaps simply requiring consistency with RCRA financia l assurance rules as they may be
amended.

(b) Allowing financial assurance for post- injection site care to be provided as late as 180 days before plugging and ab andonment (page 134) leaves significant financial risk with the agency or Stat e. At a minimum, financial assurance should be provided over the period of time that revenue is received prior to plugging and abandonment.

Individual Response: In response to public comments, EPA has added more specific requirements to the rule. These include a list of permitted financial instruments, timeframes for adjusting cost estimates, requirements for protec tive coverage, steps to take in the event of adverse financial conditions, and others. Howeve r, EPA believes flexibility in the financial responsibility requirements is also appropriate in order to account fo r site specific circumstances. EPA is developing guidance on financial responsibili ty for Class VI wells (available on EPA's website at http://water.epa.gov/t ype/groundwater/uic/wel ls_sequestration.cfm) that will provide information about the appropriateness of various financial instruments.

Owners or operators may choose from a variety of financial instruments to meet their financial responsibility obligations, as li sted in §146.85, provided the Director determines that the owner or operator's proposed financial re sponsibility demonstrat ion is adequate to protect USDWs from endangerment by demonstrating the ability to pay for each activity for which financial responsibility must be de monstrated. EPA plans, every six year s, to collect and review data on

9

### GS projects to determine whether the appropr iate 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 financial re sponsibility for all required activ ities, including plugging and postinjection site care, must be demonstrated at the time of permit appli cation, as required at §146.82(a)(14). To ensure USDW protection, EPA be lieves that adequate financial resources
must be available at the time that CO2 is first injected. The goal of financial responsibility for purposes of this rule is to ensure that fi nancial resources are available to prevent the endangerment of USDWs from improper plugging, remediation, and management of wells in the event that the owner or operator experiences fina ncial difficulties at any time during the life of the GS project. In the final rule, owners or opera tors must demonstrate financial responsibility to
the Director for PISC and other activities for whic h financial responsibility is required, prior to the issuance of a Class VI permit. The Director is required to evaluate th e financial responsibility demonstration annually to confirm that the instrument(s) used rema in adequate. See the final rule and preamble for further discussion of EPA's fi nal approach to financial responsibility.

Letter ID: 0280 Comment ID: 24107 Letter Lines: 245 to 251

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

Comment: (c) Financial assurance mechanisms allo wing performance (performance bond) or reimbursement (insurance) may not be appr opriate for long-term activities such as post-injection site care. Both mechanis ms would only be collected one year at a time leaving significant risk that th e surety or insurer could go out of business in the event that post-injection site care is required for an extended period of time. Collection under a letter of credit, on the other hand, would provide funding for the entire period a nd eliminate future collection risk.

Individual Response: Under the final GS rule owners or op erators may choose from a variety of financial instruments listed in §146.85(a) to meet their financial responsibility needs, provided
the Director determines that the owner or operator's proposed financial responsibility demonstration is adequate to pay for each activ ity for which financial responsibility must be demonstrated, including correctiv e action on wells in the AoR, in jection well plugging, PISC and site closure, and emergency and remedial response. EPA is deve loping guidance to help owners or operators, permitting authorities, and third pa rties choose and evaluate appropriate financial methods, and states may set more specific financial responsibility requirements if they so choose. This guidance will be available on EPA's website at http://water.epa.gov/type/groundwat er/uic/wells_sequest ration.cfm. States have the discretion under the rule to prohibit the use of financ ial instruments they f eel are inadequate.

Letter ID: 0280 Comment ID: 24108 Letter Lines: 253 to 256

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

10

### CFR 146.85)

Comment: (d) The preamble and rule are inconsistent in that the preamble indicates that notice of bankruptcy must be provided within 10 days of the event (p. 128), but the proposed rule specification [40 CFR 146.85(c)] does not specify a time frame. As noted above, we recommend more specificity.

Individual Response: EPA has specified a 10-day timeframe for notifying the Director about
adverse financial conditions such as bankr uptcy in the regulation at §146.85(d)(1).

Letter ID: 0280 Comment ID: 24109 Letter Lines: 258 to 262

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

Comment: (e) The proposed rules do not set out a time frame by which to reevaluate the postinjection site care, site closure plan and related cost estimates. Absence of such specific time frames could presen t additional risk by failing to ensure sufficient financial assurance coverage is maintained during the life of the permit.

Individual Response: EPA agrees that it is important to periodically update cost estimates that support financial responsibility determinations. EPA clarifies th at the GS rule, at §146.85(c) requires the owner or operator to provide annua l updates to the cost es timate to account for any amendments to the AoR and corrective action plan, the injection well pl ugging plan, the PISC and site closure plan, and the emergency and re medial response plan. EPA adds that the well plugging plan and PISC and site closure plan mu st be reviewed prior to plugging and the postinjection site care period, and the AoR and correctiv e action plan must be reviewed at least every 5 years. The final rule also requires the owner or operator to adjust the cost estimate annually for inflation, as specified at §146.85(c)(2 ). EPA adds that the Director can also require the owner or operator to provide an adjustment of the cost estimate if the Director determines that the original demonstration is no longer adequa te, as specified at §146.85(e).

EPA is developing guidance on financial responsibili ty for Class VI wells (available on EPA's website at http://water.epa.gov/type/groundwater /uic/wells_sequestration.cfm). The guidance will include a discussion on how to estimate costs, to assist Class VI well owners or operators, third party insurers or providers of financial instruments, and permitting authorities in developing estimates of the costs associated with various GS activities. These baseline estimates can then be updated annually and kept curren t through input from ongoing dialogue between the owner or operator and the Director. The cost estimation methodol ogy guidance will also contain instructions on how to adjust cost estimates for inflation to help account for the long-term nature of geologic sequestration.

Letter ID: 0280 Comment ID: 24110 Letter Lines: 264 to 271

11

### Comment Code: 5240 2.8.2.2 Post injection timeframe (seeking comment)
Comment Code: 5280 2.8.2.4 USDW non-endangerment demonstrations

Comment: (f) TCEQ agrees with EPA's approach that financial assurance for post-injection site care may be required for a period less than or greater than fifty years as proposed in 146.93, depending on a site specifi c demonstration to the Director. However, consistent with TCEQ's comment s under Principal Concern 1, TCEQ also encourages EPA to delete the fifty-year threshold requirement in consideration
of EPA's indication that the duration of financial assurance should ultimately be keyed to whatever site-s pecific time is necessary to meet the post-injection site care performance standard of demons tration of non-endangerment ofUSDWs.

Individual Response: EPA agrees that financial responsibility must be maintained throughout the post-injection site care timeframe, regardless of its ultimate length. The GS rule requires this,
at 146.85.

EPA also agrees that there will be circumstan ces where it can be demonstrated in less than 50 years that the plume and pressure front no longe r pose a risk of endangerment to USDWs. For this reason, the GS rule offers ow ners or operators flexibility re garding the duration of the PISC timeframe by: (1) allowing the Director discretio n to shorten or lengthen the PISC timeframe during the post-injection period based on site-s pecific data, pursuant to requirements at §146.93(b); or (2) affording the Dire ctor discretion to allow a Cla ss VI well owner or operator to demonstrate, during the permitting process based on substantial data, that an alternative PISC timeframe may be appropriate if it ensu res non-endangerment of USDWs pursuant to requirements at §146.93(c).

EPA believes however, that to ensure USDW protection from enda ngerment, a default timeframe for post-injection site care will be necessary in most cases. The default 50 year post-injection site care timeframe represents a reasonable and prot ective monitoring period based on a review of research studies, industry reports, and existing environmental programs, and evaluation of public

comments.

EPA believes that a default post-injection site car e timeframe of 50 years, with flexibility to adjust the timeframe for a limited number of GS projects during the permitting process where
substantial data exists to demonstrate that an alternative timeframe would be protective of USDWs, or based on data collected during the PISC period, is appropriate to address the range of sites where GS is anticipated to occur, to ac commodate site-specific circumstances and various geologic conditions, and addre sses commenters’ concerns, wh ile ensuring USDW protection. Both approaches will utilize si te-specific data, and be based on pressure monitoring and USDW impacts.

Letter ID: 0280 Comment ID: 24111 Letter Lines: 273 to 290

Comment Code: 1250 1.1.1.4 Flexibility is needed (p erformance-based standards)
Comment Code: 5610 2.11.1 Allowing partial primacy for Class VI wells (seeking comment)

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### Comment: (3) Flexibility and Streamlining in Class VI Program Primacy Considerations - TCEQ concurs with EPA's assessment that current options for injection of CO2 include Class I, ClassII, and ClassV wells . Accordingly, under state law, injection of CO2 in Texas will be regulated by e ither the TCEQ or the Railroad Commission (RRC). Noting the RRC's responsibility fo r Class II injection (including CO2 injection for enhanced recovery of oil a nd gas), TCEQ is responsible for Class I and most of Class V (including experiment al injection of CO2). Class VI as proposed by EPA, under state law, would a ppear to be in TCEQ's jurisdiction. Section 27.022, Texas Water Code provides: "The commission has jurisdiction over the injection of carbon dioxide produced by a clean coal project, to the extent authorized by federal law, into a zone th at is below the base of usable quality water and that is not produc tive of oil, gas, or geothe rmal resources". However, such jurisdictional lines are subjec t to change by state legislation. Flexibility will therefore be needed in federal authorization of the Class VI well program at whichever agency is designated by the stat e legislature. Flexibility in this sense primarily mean s free from constraints that EPA has traditionally imposed by bundling various well classes into an "all or nothing" condition for program primacy.

Individual Response: EPA agrees with commenters that states should be allowed to obtain primacy for Class VI wells independently of other well classes, and will allow independent primacy for Class VI wells under §145.1(i) of th e final GS rule. EPA believes that allowing independent Class VI primacy may encourage states to take res ponsibility for implementation of Class VI regulations and provide for a more co mprehensive approach to managing CCS projects by promoting the integration of GS activities under SDWA in to 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 leve l (but outside UIC author ity) to provide a more comprehensive CCS management approach.

EPA also believes that allowing states to apply only for Class VI primacy will shorten the primacy approval process for states. EPA's willingness to accept independent primacy applications for Class VI wells represents a shift in its longstandi ng policy of discouraging "partial primacy." It is very important to note that this shift in policy allowing for Class VI primacy does not apply to any other well Cl ass under Section 1422. EPA will continue to discourage applications for pa rtial primacy for all other well types under Section 1422.

EPA clarifies that states should be able to obtain primacy for Cla ss VI wells independent of other well classes provided they devel op regulations that are at leas t as stringent as the minimum Federal requirements (e.g., permitting, inspec tion, operation, monitoring, and recordkeeping requirements) provided in the final GS rule. EPA believes that existing programs can adapt their 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 and en sure that their GS programs integrate into national climate change priori ties and protect USDWs from endangerment.

EPA also clarifies that primacy is granted to a state, not to any agency within that state, and

13

### states are free to choose which agency will im plement the Class VI program—for instance, an environmental quality protection agency (non-Cl ass II) or the state's traditional oil and gas regulatory agency (Class II)—as long as the program meets the minimum Federal requirements for Class VI wells as required under section 1422 of SDWA. Some stat es administer their program for all injection well classes through a single agency, whereas other States elect to divide the program between agencies. For example, in most States, the Class II program is run by an oil and gas agency and other well classes are run by a State envir onmental agency (e.g., the Oklahoma Corporation Commission oversees Class II wells in the State, and the Oklahoma Department of Environmental Quality oversees other well classes). Additionally, several States allow their oil and gas agencies to administer their UIC program for specific well classes or subclasses provided they meet all Federal requirements (e.g., the Texas Railroad Commission oversees Class III brine-mining we lls and Class V geothermal well s in Texas). EPA believes that retaining this flexibility for States to identify the appropriate agency to oversee Class VI wells will address commenters’ concerns that States should be afforded the opportunity to determine which agency should oversee Class VI wells, and recognizes the existing e xpertise of both State oil and gas agencies and environmental agencies.

Letter ID: 0280 Comment ID: 24112 Letter Lines: 292 to 307

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

Comment: Also, with primary responsibility for car bon geo-sequestration residing with EPA until an application for state primacy is approved, it will be in the mutual interests of EPA and applying states, to make the state primacy process more efficient. In TCEQ's experience, revisions of UIC program primacy (authorization) which have b een relatively limited in scope and complexity have required years for development and approval.

Opportunities for streamlining the Class VI primacy process may be achieved by redesigning the review and approval pro cesses coordinated be tween EPA regions and headquarters. Also, for considerati on by states, the primacy process could be made easier for state and EPA staff, to the extent that federal regulations can be adopted verbatim, minimizing or el iminating the complicated "crosswalk" process for determining rule-for-rule equivalency. As an additional consideration, the possibili ty of optional interim au thorization of a state program, or delegation of responsibility by EPA to states under a memorandum of agreement until primacy is approved, should be explored.

Individual Response: EPA agrees that opportunities exist to streamline primacy application process. The final GS rule includes new regulatory language at §145.22 and §145.23 to streamline and clarify the process for submission of Class VI primacy applications and address the unique aspect of Class VI in jection operations. For example, EPA is allowing the electronic submission of required primacy application inform ation (e.g., letter from the Governor, program description, Attorney General’s statement, or Memorandum of Agreement). The Agency is also allowing the use of existing reporting form(s ) for Class VI wells, as appropriate.

14

### Additionally, to address the unique nature of Class VI injectio n operations, the final rule at §145.23(f) includes new language describing the requirements for Class VI State Program descriptions. Specifically, §145.23(f)(13) requires States to describe in their primacy applications procedures for notifying any States , Tribes, and Territories of Cla ss VI permit applications where the AoR is predicted to cro ss jurisdictional boundaries and for documenting this consultation. This new requirement addresses comments on the proposed rule and NODA and Request for Comment that Class VI operations are likely to have larger AoRs that may cross jurisdictional boundaries and necessitate trans-boundary coordina tion. Other additions in the final rule at §145.23(f) clarify the requirements for State Pr ogram descriptions, which must include information regarding the schedule, priorities for, and number of permits to be issued in the first two years of program operation. These changes en sure expeditious implementation of nationally consistent Class VI requirements.

EPA is developing guidances for states that describe the process of applying for and receiving primary enforcement responsibility (primacy) for GS Class VI wells under Section 1422 of SDWA, as well as the technical and administrativ e issues on developing GS regulations that are the equivalent of minimum federal criteria and requirements. The guidance will be available at http://water.epa.gov/type/groundwat er/uic/wells_sequestration.cfm. EPA will work closely with States, Tribes, and Territories to ensure time ly approval of Class VI primacy applications.

Letter ID: 0280 Comment ID: 24113 Letter Lines: 309 to 351

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

Comment: (4) Resource Needs for Regulation of the Proposed New Class of Wells-As
described in the Ground Water Report to the Nation: A Call to Action (Ground Water Protection Council, 2007), the great ch allenges for the UIC Program are the need to effectively address higher risk Class V wells, and readiness to regulate waste streams from emerging technologies such as carbon capture and stor age. In either case, the principal obstacle is the in sufficiency of funding for state UIC programs. In congressional testimony, GWPC has recommended an increase in annual funding for the national UIC Program to $56 million, nearly a five-fold increase over present appropriations. While the fu ll scope of resources needed for implementing a Class VI well program is not presently known, needs will be particularly acute in the following areas:

Additional Staff -In addition to staff n eeded for regulation of the existing injection well classes, more qualified persons will be needed to conduct rulemaking for state equivalency with the new federal regulations, develop program procedures, form, and other docum ents for Class VI, assemble program authorization packages for submittal to EPA, and conduct permitting, compliance monitoring, and enforcement of Class VI wells.

15

### 16 Additional Tools (Computer M odels for Simulation of Multi-Phase Interactions in Determining Fate and Transport of Inject ed CO2) -The central role, iterative nature, and unprecedented complexity of co mputational modeling and monitoring of the injected CO2 plume and pressure front in nearly every consideration in a CO2-GS project will require additional de velopmental work and funding to provide the specialized computer models, monitori ng instruments, and other tools needed by state and EPA regional staff for regulation of Class VI wells.

Guidance and Training in Implementation of Class VI Requirements -In the interest of regulatory flexibility and a voidance of unnecessary constraints in development of the technology through ove rly prescriptive specification of materials and methods, EPA's proposed rules feature a series of plans that an applicant for a Class VI permit must s ubmit for director approval. Among the plans required that are unique or requir e special considerations in application to a Class VI well project are the area of review and corrective action plan, the monitoring plan, and the post-injecti on site care and cl osure plan. Under the proposed rules, the adequacy of any su ch plans would be a matter of director discretion. Practically, this would include public participation in a permitting or permit amendment process. While it is appropriate that EPA has provided with each requirement of a plan, a list of considerations in evaluating the plan, more specific guidance and training on such plans including the use and evaluation of models and monitoring data will be needed for efficient regulation. The need for guidance and training will be greatest in the first commercial scale CO2-GS projects in the earl y phase of rule implementation.

Individual Response: EPA acknowledges that there may be technical and administrative challenges including resource concerns , and will work closely with the states to assist them in resolving funding issues or acquiri ng the resources, personnel, and training needed to address the unique technical challenges associated with GS. EPA will coordinate with and assist states, e.g., through guidance and on-line and in-person training, to help them address problematic technical and policy issues.

EPA will also incorporate Class VI wells into the UIC Program's grant allocation process. The
States/Tribes/Territories must also demonstrate th at they have adequate resources to implement the program through matching resources against those allocated by the UIC Program's grant allocation formula. Currently, primacy programs ar e required to meet a minimum of 25 percent matching requirement.

EPA is developing a Class VI program primacy application and implementation manual that describes, for States, the process of applying fo r and receiving primacy for GS Class VI wells under Section 1422 of SDWA. The manual will also prov ide tools designed to assist States with the development of their primacy applicati on and UIC Directors w ith evaluating permit application information. The gui dance will be available at http://water.epa.gov/type/groundwat er/uic/wells_se questration.cfm.