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.TRI-STATE GENERATION AND TRANSMISSION ASSOCIATION, INC.

HEADQUARTERS: P.O. BOX 33695 DENVER, COLORADO 80233-0695 303-452-6111

December 22, 2008

Water Docket

Environmental Protection Agency

Mailcode: 2822T

1200 Pennsylvania Ave., NW Washington, DC 20460

RE: Docket No. EPA-HQ-OW-2008-0390

73 Fed. Reg. 43492 (July 25, 2008)

Comments on Federal Requirements Under the Underground Injection Control Program

for Carbon Dioxide Geologic Sequestration Wells; Proposed Rule

Tri-State Generation and Transmission Association, Inc. (Tri-State) transmits this letter

to provide comment aboutthe Environmental Protection Agency's (EPA) proposed requirements

under the Underground Injection Control (UIC) program for carbon dioxide (C02) geologic sequestration. Tri-State is a not-far-profit, wholesale electric power supply cooperative providing power to 44 member distribution systems serving customers throughout a 250,000 square-mile territory in Colorado, Nebraska, New Mexico, and Wyoming. Tri-State provides electricity to members based on a diverse mix of generation sources including coal, natural gas, hydroelectric, and wind power.

Tri-State is a member of the National Rural Electric Cooperative Association
(NRECA) and the Utilities Solid Waste Activities Group (USWAG). Tri-State incorporates here by reference NRECA's and USWAG's written comments and the oral testimony provided by

USW AG at EPA's October 2, 2008 public hearing in Denver. Tri-State uses this opportunity to

reiterate the following concerns.

A. Tri-State acknowledges EPA's efforts to use a "performance-based" approach and to

build flexibility mechanisms into the rule. In general, Tri-State agrees 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 (far example,

clarification of requirements for financial assurance mechanisms) must be developed in

accordance with Office of Management and Budget's Good Guidance Practices Bulletin,

which directs that notice and comment be provided on "economically significant" guidance documents. EPA should not issue guidance that is effectively implemented as regulations.

NUCLA STATION

P.O. BOX 698

NUCLA, CO 81424·0698

970·864·7316 ESCALANTE STATION

P.O. BOX 577

PREWITT, NM 87045

505·876·2271 CRAIG STATION

P.O. BOX 1307

CRAIG, CO 81626·1307

970·824·4411 A Touchstone EnerglCooperative /I"'IIA," ••**'~W"'1** ANWater Docket

December 22, 2008
Page 2

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

concems, 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, Tri-State believes it is also appropriate to allow states to obtain primacy for only Class VI wells if a particular state so chooses. Such class-specific primacy is consistent with the statutory authorization behind the UIC Program, and as

EP A 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.

C. EPA should view CO 2 as a resource, not a waste. CO 2 has a commercial value for

enhanced oil recovery operators. A number of commercial operations exist solely for the

extraction and sale of natural CO 2

. Moreover, anthropogenic CO 2 may have a
commercial value for traders in carbon emissions reduction credits, once the CO 2 is captured and stored. While the reason for capturing the CO 2 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 CO 2 injections for enhanced oil recovery operations do

so under a resource management framework. Surface Transportation Boards, which are responsible for the economic regulation of CO 2 interstate pipelines, also view C02 as a commodity. Characterization as a waste would have a chilling effect on the development

of carbon capture and storage projects.

D, It is counterproductive at this stage in the development of a CO 2 geologic sequestration regulatory regime to categorically preclude any potentially feasible injection formations

as possible long-term storage sites. EPA recognizes that the commercial deployment of

CO 2 geologic sequestration activities will result in the production of large volumes of

CO 2 for which owners or operators will have to locate new and environmentally protective inj ection 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 underground sources of drinking water (USDW). Tri-State supports altemative approaches that would allow injection between

and/or above the lowermost USDW, increasing capacity for CO 2 geologic sequestration,

as long as it can be demonstrated that injection will be protective ofUSDWs and meet

other applicable conditions for Class VI C02 geologic sequestration wells. The final rule

should not contain a blanket prohibition on injection of CO 2 into coal seams or into other

formations such as basalts, salt domes, or shales. The final rule must be flexible enough

to accommodate developments in information and technology related to carbon
sequestration.

A Touchstone EnerglCooperativeWater Docket

December 22, 2008
Page 3

EP A requests comment on whether the Final Rule should require, or allow the Director to require at his/her discretion, the identification and characterization of additional confining and containment zones above the primary (i.e., lowennost) confining zone that

could further impede vertical fluid movement and allow for pressure dissipation in

effect, a "secondary containment" requirement. Tri-State 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 discretion to require

this additional protection in a Class VI pennit. While additional containment zones
above the confining zone could impede vertical fluid movement, there is no basis for requiring these additional zones if it was already demonstrated that the original confining

zone is protective ofUSDWs.

E. The General Accounting Office (GAO) issued in September 2008 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). GAO cites a National
Academy of Sciences report emphasizing that a large-scale CO 2 UIC program cannot be

successful "if a significant fraction of the public views it as dangerous or unacceptable"
and, therefore, CO 2 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."

As the GAO report cautions, EPA must resolve key policy and legal uncertainties

- including the interaction of the Resource Conservation and Recovery Act (RCRA) and

the Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA) with Class VI injection activities and the specter oflong-ternl post-injection
liability

- to alleviate financial concerns of potential Class VI well owners or operators,

and to encourage investment in the development and operation of Class VI CO 2 inj ection

wells. Tri-State recognizes that Congressional action may be needed to clear these

hurdles standing in the way of commercial deployment of full-scale geologic sequestration projects.

In discussing the potential applicability of RCRA's hazardous waste rules to Class VI

C02 injection activities, EPA prematurely assumes that the CO 2 is being "discarded" and

thus is a solid waste under RCRA. Currently, CO 2 is a valuable commodity that is used

in a variety of manufacturing processes and it is too early for EPA to summarily conclude

- especially given technological advancements that will likely be made in the coming

years

- that CO 2 materials managed in Class VI wells will be permanently discarded.

Tri-State believes that EPA should specifically exempt CO 2 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 pennitting process. To the extent there is any possibility that C02 injection operations

A Touchstone Energy0Cooperative 3Water Docket

December 22, 2008 Page 4

could be subject to RCRA controls, EPA should exempt such activities from RCRA's

corrective action program under the well-established "contingent management" concept, particularly given that the UIC permit will ensure that the injected material is not mismanaged.

EP A should take steps in the final rule to minimize the potential for CERCLA liability attaching to owners of operators of Class VI injection wells by issuing permits that take

full advantage of CERCLA's "federally permitted release" exemption.

F. The final rule must not make the application process overly burdensome or unrealistic by requiring detailed information that may not be available at the time of the initial application. Instead, the final rule should allow for submission of updated information regarding a CO 2 geologic sequestration well, and its Area of Review as that information

becomes available.

G. Given the similarities between Class VI wells (as envisioned by the proposed rule) and

the existing requirements for Class I, II, and V wells under the UIC program, the final

rule should allow grandfathering of construction and operating requirements for existing

wells seeking to become Class VI wells, provided that it is demonstrated that such carrying-over of requirements will be protective ofUSDWs.

H. Regardless of EP A'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 finns for assuming certain categories of the risks associated with a geologic sequestration 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 likely will not

write policies for this stage of the geologic sequestration project. Government is urging geologic sequestration for protection of the public welfare. 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.

Tri-State appreciates the work EPA has done studying possible approaches to geologic sequestration site stewardship. Tri-State sees some promise in parts of the general

framework of the first model listed in the study for federal management of geologic sequestration 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 geologic sequestration. 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

A Touchstone EnergiCooperative 4Water Docket

December 22, 2008
Page 5

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 geologic sequestration that incorporates private insurance, pooled industry insurance and a government backstop.

I. 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 geologic sequestration facility owner or operator to maintain financial

assurance instruments, liability 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 potential long-term liability is a significant

deterrent to development of carbon capture and storage.

Thank you for the opportunity to comment on this important potential rulemaking. Please

contact me if you have questions or would like more information.

Sincerely, 

# !l{I4j

Barbara A. Walz

Vice President

Environmental

BAW:AB:pvt

bee: Mac McLennan

Mike McInnes Andy Berger

Lee Boughey Gigi Dennis

Tim Driver
Barry Ingold

Dana Stephens

Jim Van Someren

Heidi Wagner

File: P3-3.l(9)

A Touchstone Energy"Cooperative 5Letter ID: 0216

Commenter: Barbara Walz Organization: Tri-State Generation and Transmission Association, Inc.

Letter ID: 0216 Comment ID: 22965 Letter Lines: 45 to 51

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

Comment: A. Tri-State acknowledges EPA's efforts to use a "performance-based" approach and to build flexibility mechanisms into the rule. In general, Tri-State agrees that these methods will help create a re gulatory framework that can evolve as information and technological advancemen ts are gained in the field of carbon capture and sequestration. It is import ant, however, that any directorial discretion be clearly defined and limite d; this can be achieved while still maintaining a rule that is flexible an d avoids unnecessary prohibitions. In

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

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

Letter ID: 0216 Comment ID: 22966 Letter Lines: 51 to 57

Comment Code: 1435 1.2.1.3 EPA should develop guidance

Comment: maintaining a rule that is flexible an d avoids unnecessary prohibitions. In addition, guidance on any aspect of the fina l rule (far exampl e, clarification of requirements for financial assurance mechanisms) must be developed in accordance with Office of Management a nd Budget's Good Guidance Practices Bulletin, which directs that notice and comment be provided on "economically significant" guidance documents. EPA should not issue guidance that is effectively implemented as regulations.

Individual Response: To promote consistency while providi ng the Director with an appropriate level of discretion, EPA is developi ng guidances for states and tribes that describe the process of applying for and receiving primacy for GS Cla ss VI wells under Section 1422 of SDWA, as well

as the technical and administrative issues associ ated with developing GS regulations that are the equivalent of minimum federal criteria and requirements. These are available on EPA’s website at http://water.epa.gov/type/ground water/uic/wells_sequestration.cfm.

EPA intends to take OMB’s Good Guidance Manual in to consideration as gui dance is developed.

OMB’s Good Guidance Manual esta blishes policies and procedures for the development,

1issuance, and use of significant guidance docum ents by Executive Branch departments and agencies.

Letter ID: 0216 Comment ID: 22967 Letter Lines: 59 to 68

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

Comment: B. State regulators have familiarity w ith local environmental, geologic, and financial concerns, and in many cases have pre-existing relati onships with the regulated community that will facilitate implementation of a new and complex regulatory program. For these reasons, Tri- State believes it is also appropriate to allow states to obtain primacy for only Class VI wells if a particular state so chooses. 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.

Individual Response: EPA agrees that states should be al lowed to obtain primacy for Class VI wells independently of other well classes, and wi ll allow independent primacy for Class VI wells under §145.1(i) of the final GS rule. In the past , EPA has not accepted UIC primacy applications

for individual well classes unde r Section 1422 of SDWA. In other words, if a State wanted primacy for Class I wells, the State would also ne ed to accept responsibilit y for Class III, IV, and V wells. This policy has been in place since the initiation of the UIC Program in the early 1980s and was intended to encourage states to take full responsibility fo r UIC programs, avoid duplication of efforts, and provide for administrative efficiencies.

However, given the potential for CCS (encom passing capture, transportation, and geologic sequestration) to be an important part of a na tional 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 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.

The Agency believes that it is important for stat es to use their unique e fficiencies to promote adoption of this burgeoning and important tec hnology, while assuring that USDWs are protected from endangerment through the UIC regulatory framework. EPA believe s that, due to the importance of implementing an effective, comprehensive, and seamless CCS program, States should be provided the flexibility to obtain primacy for Class VI only.

EPA also believes that allowing states to apply only for Class VI primacy will shorten the

2primacy 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 recognizes that some states have already begun legislative e fforts that are wider in scope

than the Federal GS rule and believes that allo wing Class VI primacy (i ndependent of other well classes) may encourage states to take responsibility for implemen tation of a more comprehensive approach to managing CCS proj ects (e.g., capture, transportation, and geologic sequestration).

Letter ID: 0216 Comment ID: 22968 Letter Lines: 70 to 81

Comment Code: 1480 1.2.2.2.2 CO2 is not a pollutant

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

Comment: C. EPA should view CO2 as a resource, not a waste. CO2 has a commercial value for enhanced oil recovery 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 r eason 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 enhanced oil recovery operations do so under a resource management framework. Surface Transportation Boards, wh ich are responsible for the economic regulation of CO2 interstate pipeline s, also view CO2 as a commodity. Characterization as a waste would have a chilling effect on the development of carbon capture and storage projects.

Individual Response: EPA clarifies that the GS rule does not address the status of CO2 as either a pollutant, waste, or a commod ity. In addition, whether or not a fluid could be sold on the market as a commodity does not override EPA's authority under the SDWA to protect USDWs from endangerment. EPA stresses th at the focus of the GS rule is to ensure that, where GS is deployed, it is conducted in a ma nner that protects USDWs.

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 mate rial or substance which flows or moves, whether in a semisolid, liquid, slud ge, gas or other form or state, and it includes liquids, gases,

3and semisolids (i.e., slurries) in jected into the subsurface.

Under §146.82(a)(7), owners or operators of GS wells must characterize their CO2 stream as part of their permit application. If the injectate is de termined to meet the definition of a hazardous waste under RCRA, and as defined in 40 CFR Part 261, the stringent UIC Class I hazardous waste requirements for injection of hazardous waste apply. Thus, injection of corrosive CO2 into Class VI wells is prohibited. In addition, owners or operators must peri odically monitor their injectate throughout injecti on operations under §146.90(a).

Letter ID: 0216 Comment ID: 22969 Letter Lines: 83 to 92

Comment Code: 2100 1.6 Target Geologic Formations for GS

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

Comment: D. It is counterproductive at this stage in the deve lopment of a CO2 geologic sequestration regulatory regime to ca tegorically preclude any potentially feasible injection formations as pos sible long-term storage sites. EPA recognizes that the commercial deploy ment of CO2 geologic sequestration

activities will result in the production of large vol umes of CO2 for which owners or operators will have to loca te new and environmentally protective injection zones. Therefore, it makes s ound policy sense for EPA to encourage the identification and utilization of as many pr otective zones as possible, with the prerequisite that any inje ction site be protective of underground sources of drinking water (USDW). Tri-State supports a lternative approaches that would allow

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

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

Letter ID: 0216 Comment ID: 22970 Letter Lines: 92 to 96

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

USDW

Comment: drinking water (USDW). Tri-State supports a lternative approaches that would allow injection between and/or above the lo wermost USDW, increasing capacity for

4CO2 geologic sequestration, as long as it can be demonstrated that injection will be protective of USDWs and meet other a pplicable conditions for Class VI CO2 geologic sequestration wells. The final rule should not contain a blanket

Individual Response: EPA acknowledges that there are lim ited circumstances where injection above the lowermost USDW can be performe d in a manner that protects USDWs from endangerment, as long as appropriate protections are in place. The final GS rule at §146.95 establishes a process by which owne rs or operators can seek a waiv er of the Class VI injection depth requirements for injecti on into non-USDW formations above and/or between USDWs. It establishes: 1) requirements spec ifying information that owners or operators must submit, and Directors must consider, in consultation with PW SS Directors; 2) procedures for public notice of a waiver application and for Director-Regiona l Administrator communicat ion; 3) the waiver issuance process; and, 4) additiona l requirements that apply to owne rs or operators of Class VI wells granted a waiver of the in jection depth requirements to en sure 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 owne rs or operators who undertak e CO2 injection for GS. The Agency believes this approach: 1) responds to co ncerns about local and re gional geologic storage capacity limitations imposed by th e proposed injection depth require ments; 2) allows for a more site-specific assessment of injection depth for GS projects; 3) accommodates injection into different formation types; 4) a llows for injection of CO2 for GS into non-USDWs above and/or between USDWs when appropriate and where it can be demonstrated that USDWs will be protected; and 5) responds to concerns about the use of aqui fer exemptions for GS. Finally, EPA’s approach to addressing injection depth va riability through a waiver process responds to concerns about future drinking wa ter resource availability and the need to ensure that high quality water remains available in sufficient qua ntities to supply drinking water needs. For additional information on the waiver approach, pleas e 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: 0216 Comment ID: 22971 Letter Lines: 96 to 100

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

Comment: geologic sequestration wells. The final rule should not contain a blanket prohibition on injection of CO2 into coal seams or into other formations such as basalts, salt domes, or shales. The fi nal rule must be flexible enough to accommodate developments in information and technology related to carbon sequestration.

Individual Response: EPA clarifies that the GS rule does not preclude injection into any nonUSDWs formations, provided the site-suitability requirements in the GS rule are met. EPA acknowledges that there may be ri sks associated with GS into certain formation types. For this reason, the Agency is using an adaptive approach to regulate GS injection. EPA will collect and review project data on early GS pr ojects, including those that inject into various formation types, to determine whether the appropriate amount a nd types of information and documentation are

5being collected. EPA plans, every six years, to collect and review da ta on GS projects to determine whether the appropriate amount a nd types of information and appropriate documentation are being collected, and to determ ine if modifications to the requirements are appropriate or necessary.

Letter ID: 0216 Comment ID: 22972 Letter Lines: 102 to 113

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

Comment: EPA requests comment on whether the Fina l Rule should require, or allow the Director to require at his/her discretion, the identification and

characterization of additiona l 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. Tri-State opposes the inclus ion of this secondary containment requirement, and believes that it will onl y be in the most unusual situations

where the circumstances warrant the Dir ector exercising disc retion to require this additional protection in a Class VI permit. While additional containment zones above the confining zone could impede vertical fluid movement, there is no basis for requiring these additional zones if it was already de monstrated that the original confining zone is protective of USDWs.

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

EPA retains the requirement to identify additi onal containment/confining zones, if required by the Director, as proposed (§146.83(b)). EPA acknowle dges 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 containm ent 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, an d also provide additional sites for monitoring, mitigation, and remediation. The Agency's deci sion is supported by commenters representing states, water associations, and an electric utilit y who assert that these requirements promote a flexible, risk-based, site-specific approach to ch aracterizing 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: 0216 Comment ID: 22973 Letter Lines: 115 to 123

6Comment Code: 1680 1.3.8 Don't overstate ris k, don't stigmatize CO2

Comment: E. The General Accounting Office (GAO) issued in September 2008 a report entitled Climate Change Federal Actions Will Greatly Affect the Viability of Carbon Capture and Storage As a Ke y Mitigation Option (GAO-08-1080). GAO cites a National Academy of Scienc es report emphasizing that a large-scale CO2 UIC program cannot be successful "if a signi ficant fraction of the public views it as dangerous or unacceptable" and, theref ore, 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."

Individual Response: EPA recognizes that injecting large volumes of CO2 for GS poses unique challenges that, if not properly managed, could endanger drinking water s ources and have other adverse impacts. However, with proper site sele ction, the final, tailored, Class VI requirements address the large volumes of CO2 injected, its bu oyancy, potential corrosivity in the presence of water, and potential impurities in the CO2 st ream. In addition, the tailored permitting, siting, construction, operation, monitoring, and post-injection site care re quirements in the GS rule are intended to prevent leakage from inj ection formations and protect USDWs.

EPA does not agree that the tailored requirements will create a negative public perception of GS. The Agency believes that a demonstration to th e 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.

Letter ID: 0216 Comment ID: 22974 Letter Lines: 125 to 133

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

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

Comment: As the GAO report cautions, EPA must reso lve key policy and le gal uncertainties including the interaction of the Resource Conservation and Recovery Act (RCRA) and the Comprehensive Environmental Res ponse, Compensation, and Liability Act (CERCLA) with Class VI in jection activities an d the specter of long-term postinjection liability -to alleviate financia l concerns of potential Class VI well owners or operators, and to encourag e investment in the development and operation of Class VI CO2 injection wells. Tri-State recognizes that Congressional action may be needed to clea r these hurdles standi ng in the way of commercial deployment of full-scale geologic sequestration projects.

Individual Response: EPA agrees that overlapping regula tory schemes are undesirable. EPA received many comments regarding the applicability of the RCRA regulations and statute to CO2 streams that are geologically se questered under the final Class VI UIC well requirements. As a result, EPA has decided to initia te a separate proposed rulemaki ng 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

7VI wells. EPA will consider these comments as pa rt 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 propose d 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.

EPA clarifies that CO2 itself is not listed as a hazardous s ubstance under CERCLA; however, the CO2 stream may contain a listed hazardous s ubstance (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 su ch substances may result in CERCLA liability from a sequestration facility depe nds 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: 0216 Comment ID: 22975 Letter Lines: 135 to 149

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

Comment: In discussing the potential applicability of RCRA's hazardous waste rules to Class VI CO2 injection activities, EPA prem aturely assumes that the CO2 is being

"discarded" and thus is a solid waste unde r RCRA. Currently, CO2 is a valuable commodity that is used in a variety of manufacturing processe s and it is too early for EPA to summarily conclude -especially given technological advancements that will likely be made in the coming years -that CO2 materials managed in Class VI wells will be permanently discarded. Tri-State believes that EPA should specifically exempt CO2 gas streams fr om coverage by RCRA, and develop requirements specifically tailored to this material if necessary to assure further environmental protection bey ond that already provided by the UIC permitting process. To the extent there is any possibility that CO2 injection operations could be subject to RCRA contro ls, EPA should exempt such activities from RCRA's corrective action program under the well-established "contingent management" concept, particularly given th at the UIC permit will ensure that the injected material is not mismanaged. EPA should take steps in the final rule to

Individual Response: EPA received many comments regardi ng the applicability of the RCRA regulations and statute to CO2 st reams that are geologically seque stered under the final Class VI UIC well requirements. As a result, EPA has deci ded to initiate a sepa rate proposed rulemaking specifically to examine the issue of RCRA appl icability 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 pa rticular to RCRA in the context

8of that separate rulemaking, and recommends that the commenter read that proposed rule when it is published. The Agency notes that comment ers who wish to submit comments on the RCRA proposal will need to do so during the comment pe riod for that rule. Finall y, EPA also notes that the final GS rule, which adds ne w regulations for Class VI wells under the Safe Drinking Water Act (SDWA), is not making any ch anges to the RCRA regulations.

Letter ID: 0216 Comment ID: 22976 Letter Lines: 149 to 152

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

Comment: injected material is not mismanaged. EPA should take steps in the final rule to minimize the potential for CERCLA liability attaching to owners of operators of Class VI injection wells by issuing permits that take full advantage of CERCLA's "federally permitted release" exemption.

Individual Response: CERCLA exempts from liability, un der CERCLA section 107, 42 U.S.C. 9607, certain “federally permitted releases” (FPR ) as defined in CERCLA, 42 U.S.C. 9601(10). Therefore, Class VI requirements and permits will n eed to be carefully structured to ensure that they do not “authorize” inappropriate releases, and would need to prevent potential releases from the well which are outside the scop e of the Class VI permit. EPA is promulgating this rule under

the SDWA. To the extent that the commenter is seeking interpretations of CERCLA and its related provisions, such interpretations are outside the scope of this rulemaking.

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

under Part 146 for Class VI wells and the Dire ctor has approved site closure pursuant to requirements at §146.93, the owner or operato r will generally no longer be subject to enforcement for regulatory noncompliance. Furtherm ore, 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 ce rtain circumstances. For example, an owner or operator may be held liable for regulatory noncompliance even afte r site closure was approved if the Director relied on erroneous information (e.g., erroneous modeling data) provid ed by the owner or operator when approving site closure.

Separate from EPA’s authority to enforce regul atory compliance, an owner or operator may be subject to a §1431 response orde r even after proper site cl osure is approved under §146.93. Under §1431 the Administrator may require an ow ner 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 pres ent an imminent and s ubstantial endangerment to the health of persons, and the appropriate Stat e and local authorities ha ve not acted to protect the health of such persons. Th e action may include issuing admi nistrative orders or commencing a civil action for appropriate relief against the ow ner 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 ope rator may remain liable under tort and other

9remedies, or under other federal statutes includi ng, 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 SD WA 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: 0216 Comment ID: 22977 Letter Lines: 154 to 158

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

Comment: F. The final rule must not make the a pplication process ove rly burdensome or unrealistic by requiring detailed informati on that may not be available at the time of the initial applic ation. Instead, the final rule should allow for submission of updated information regardi ng a CO2 geologic seque stration well,

and its Area of Review as that information becomes available.

Individual Response: The final rule permit application pr ocess is not overly burdensome or unrealistic. EPA acknowledges that not all of th e information listed at §146.82 of the proposed regulation will be available at the time the ow ner or operator develops their initial permit application. In response to comments and based on an evaluation of the proposed requirements at §146.82, the Agency revised this subpart so that the final regulation specifies separate requirements for information to be submitted with the permit application and before well construction is approved (at §146.82(a)) and informa tion to be submitted before operation of the well is authorized (at §146.82(c)). EPA belie ves that this revi sion of §146.82 addresses commenters' concerns regarding the timing of in formation to be submitted. Please see the final

rule and the discussion of AoR reevaluations in the preamble for additional information.

Letter ID: 0216 Comment ID: 22978 Letter Lines: 160 to 165

Comment Code: 2060 1.5.3 Comments on grandfathering of existing wells (seeking comment)

Comment: G. Given the similarities between Class VI wells (as envisioned by the proposed rule) and the existing requirements for Class I, II, and V wells under the UIC program, the final rule should allow gr andfathering of construction and operating requirements for existing wells seeking to become Class VI wells, provided that it is demonstrated that such carrying-over of requirements will be protective of USDWs.

Individual Response: EPA agrees that many Class I, Cl ass II, and Class V experimental technology wells are designed and constructed to withstand exposure to CO2. The final GS rule provides for the construction of these wells to be grandfathered per §146.81(c), provided the owner or operator can demonstrate to the Director that the wells were en gineered and constructed to meet the requirements at §146.86(a) and ensure protection of USDWs, in lieu of requirements at §146.86(b) and §146.87(a).

10EPA adds that, following re-permitting as Class VI wells, these projects must be subject to the operational, MIT, monitoring, reporting, plugging, a nd post-injection site ca re and site closure requirements in the final GS rule. See the discus sion of EPA's final regulatory approach in the preamble to the GS rule for additional detail on these requirements.

Letter ID: 0216 Comment ID: 22979 Letter Lines: 167 to 195

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

Comment: H. Regardless of EPA's succe ss in establishing a clear re gulatory 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 fi rms for assuming certain categories of the risks associated with a geologic se questration project. However, these projects are intended to sequester carbon long into the future. This presents a risk category with partic ularly difficult characteristics. Private companies cannot quantify risks for such an open-ende d condition and likely will not write policies for this stage of the geologic sequestration project. Government is urging geologic sequestration for protection of the public welfare. 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.

Tri-State appreciates the work EPA has done studying possible approaches to geologic sequestration site st ewardship. Tri-State sees some promise in parts of the general framework of the first m odel listed in the study for federal management of geologic sequestration liability --The Price-Anderson Act. Specifically, using three tiers for funding the liability regime would seem to be a good starting point for developi ng a similar regime for geologic sequestration. The approach "requires a licen sed nuclear facility to maintain both site-specific liability in surance (Tier 1) and i ndustry-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 fede ral government (Tier 3) provides the licensee with indemnity."

EPA should consider a 3-tier liability scheme for geol ogic sequestration that incorporates private insurance, poole d industry insurance and a government backstop.

Individual Response: Under the final GS rule, once an owne r 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 opera tor will generally no longer be subject to enforcement for regulatory noncompliance. Furtherm ore, 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

11violation of 40 CFR 144.12) in ce rtain circumstances. For example, an owner or operator may be held liable for regulatory noncompliance even afte r site closure was approved if the Director relied on erroneous information (e.g., erroneous modeling data) provid ed by the owner or operator when approving site closure.

Separate from EPA’s authority to enforce regul atory compliance, an owner or operator may be subject to a §1431 response orde r even after proper site cl osure is approved under §146.93. Under §1431 the Administrator may require an ow ner 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 pres ent an imminent and s ubstantial endangerment to the health of persons, and the appropriate Stat e and local authorities ha ve not acted to protect the health of such persons. Th e action may include issuing admi nistrative orders or commencing a civil action for appropriate relief against the ow ner 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 ope rator may remain liable under tort and other remedies, or under other federal statutes includi ng, 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: 0216 Comment ID: 22980 Letter Lines: 197 to 204

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

Comment: I. In considering financial assurance re quirements, EPA and stakeholders should distinguish financial assurance from liab ility. Regardless of the length of time EPA establishes in the final rule for a ge ologic sequestration facility owner or operator to maintain financia l assurance instruments, lia bility may last longer, depending on which statutory provisions ar e applicable, as well as state law. While EPA is limited in its ability to address potential li ability, it should seek to do so, as potential long-term lia bility is a significant deterrent to development of carbon capture and storage.

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

1213 considering legislation that may address the liability issue.

EPA clarifies that the GS regula tion does not promote or encourage the use of GS; rather it is designed to ensure consistency in permitting underground injection of CO2 at GS operations across the United States and pr ovide requirements to prevent endangerment of USDWs in anticipation of the eventual use of GS to reduce CO2 emissions. S ee the final rule preamble for further discussion of EPA's approach.