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.
 

 

December 24, 2008 

 

Via Email 

Water Docket 

Environmental Protection Agency 

Mailcode: 2822T 

1200 Pennsylvania Avenue, N.W. 

Washington, D.C. 20460 

 

RE: Comments on Proposed Safe Drinking Water Act Regulations 

regarding the Underground Injection Control Program for 

Carbon Dioxide Geological Sequestration Wells; 

 Docket ID No. EPA-HQ-OW-2008-0390-0001 

Dear Environmental Protection Agency, 

Thank you for the opportunity to review the proposed regulations concerning 

the Underground Injection Control (“UIC”) Program for carbon dioxide 

(“CO2”) geological sequestration wells. Please accept the following comments 

submitted on behalf of the Sierra Club including chapters, groups and its 

members throughout the nation. 

INTRODUCTORY STATEMENT 

We agree with EPA that CCS could play an important role in allowing deep 

greenhouse gas emission reductions from electric generation and industrial 

facilities. In order to achieve the cuts necessary to avoid the worst 

consequences of climate change, CCS must be integrated within a larger 

climate policy that includes legislation limiting greenhouse gas emissions, 

investment in efficiency improvements and renewable energy sources such as 

solar, wind, biomass and geothermal.1

 

1 IPCC Special Report on Carbon Dioxide Capture and Storage, 2005 (hereinafter “IPCC 

CCS”) Section 1.1, 1.3. 
CCS must be deployed on a very large-scale to enable deep cuts in worldwide 

greenhouse gases. To deploy this nascent technology in a short timeframe, it 

must be managed very proficiently from the start to minimize ecological, 

human health, and financial risks. Any CCS regulatory regime must 

establish clear incentives for responsible site selection, appropriate 

monitoring, safe and environmentally sound operation, and financially 

responsible site closure. 

Overall, the proposed rule makes good strides at addressing some of the key 

issues for geological sequestration. However, there are several areas that 

need improvement as we discuss below. First we briefly provide background 

on the infancy of large-scale CCS deployment, technical complexities, and the 

import of rapid development of CCS to tackle the global warming crisis 

CCS is an Emerging Technology and Many Hurdles Remain 

 

CCS is an evolving technology and many uncertainties remain. CCS employs 

a combination of known and emerging technologies and processes.2 Known 

storage technologies generally rely on experience injecting CO2 into depleted 

oil fields for enhanced oil recovery (“EOR”). Emerging CO2 storage 

approaches include the injection of CO2 into deep saline geological formations 

and a variety of other geologies, and are needed on a much larger scale than 

is the practice for EOR. 

Burning fossil fuel to generate electricity is the largest single source of CO2 

emissions, and therefore the CCS system’s major contribution to climate 

change mitigation would come from deployment in the electricity sector and 

most importantly, on coal-fired electricity plants.3 However, there are 

currently no coal power plants with CCS in operation or under construction. 

In the US, there is one small 1.7 MW project currently testing capture (but 

not sequestration) using pulverized coal. One project under construction will 

capture and store a small percent of the existing power plant emissions.4

Since there is considerable lack of experience with CCS, there are also 

significant gaps in knowledge. The rule must reflect these uncertainties, and 

be flexible enough to adapt to new information produced by the first major 

demonstration projects. The IPCC Special Report on Carbon Capture and 

Storage devoted a section of their report to the current gaps in knowledge 

 

2

 “The technical maturity of specific CCS system components varies greatly. Some technologies are 

extensively deployed in mature markets, primarily in oil and gas industry, while others are still in the 

research, development or demonstration phase.” IPCC CCS Technical Summary p. 19. See also Table TS.1 

(charting maturity of CCS system components). 

3 IPCC CCS Summary for PolicyMakers at 11.

4 http://sequestration.mit.edu/tools/projects/aep_alstom_mountaineer.html (last visited December 15, 2008). 

2
regarding CCS. The relevant gaps include (from IPCC CCS section 5.10, p. 

264): 

• need for more development and agreement on assessment 

methodologies. 

• capacity estimates. 

• kinetics of geochemical trapping and the long-term impact of CO2 on 

reservoir fluids and rocks. 

• the fundamental processes of CO2 adsorption and CH4 desorption on 

coal during storage operations. 

• risks of leakage from abandoned wells caused by material and cement 

degradation. 

• reliable coupled hydrogeological-geochemical-geomechanical 

simulation models to predict long-term storage performance 

accurately. 

• experience with mitigating and remediating a leakage event. 

• requirements for decommissioning a storage project. 

Additionally, the IPCC reports that large-scale demonstration of CO2 capture 

is needed, “a better understanding of long-term storage, migration and 

leakage processes,” and “an enhanced ability to monitor and verify the 

behaviour [sic] of geologically stored CO2.”5 The IPCC, a collaboration of the 

foremost experts in CCS-related fields from across the globe, then concluded 

that “[t]he implementation of more pilot and demonstration storage projects 

in a range of geological, geographical and economic settings would be 

important to improve our understanding of these issues.”6

CCS Must be Deployed Quickly on a Very Large Scale 

Scientists agree that in order to avoid the worst consequences of climate 

change, the United States must cut greenhouse gas emissions at least 80 

percent below 2000 levels by 2050.7 The scale of CCS projects necessary in 

the electricity sector to achieve this objective is enormous. To store the two 

billion tons of CO2 emissions from annual fossil fuel electrical generation in 

 

5

 IPCC CCS Technical Summary 48. 

6 Id. 

7 Luers, A.L. et al. 2007, How to Avoid Dangerous Climate Change: A target for U.S. 

emissions reductions. Union of Concerned Scientists, online at 

http://www.ucsusa.org/assets/documents/global_warming/emissions-target-report.pdf

3
the U.S. will require at least two hundred CCS projects, each 10 times larger 

than the largest sequestration projects currently in operation.8 Worldwide, 

an estimated 6,000 of these projects would be needed.9 Currently, only four 

large-scale commercial carbon sequestration projects exist worldwide.10

There is no time to waste to achieve this Herculean task. To have any 

meaningful role in curbing greenhouse gas emissions, CCS projects must 

proceed quickly while cognizant that there is no room for missteps. A team of 

international experts recently explained that “a single major accident, 

resulting from inadequate regulatory oversight, anywhere in the world, could 

seriously endanger the future viability of GS [geologic sequestration].”11 

There is broad agreement that CCS should proceed by undertaking a few 

large demonstration projects in the U.S. the next few years, which must be 

carefully selected and monitored to learn from performance to incorporate 

into the next generation.12 The EPA’s proposed rule should enable selection 

of the lowest-risk, best overall sites for these initial projects, and be adaptive 

to the changes that will occur after knowledge is gleaned from those projects. 

CCS Permitting Requires Specialized Technical Expertise 

 

Permitting a Class VI well involves many complicated technical issues across 

a range of disciplines. Site selection alone involves characterization of 

geology, hydrogeology, geochemistry and geomechamics.13 Well construction, 

interpreting monitoring data, and proper site closure are a few other highly 

technical areas. EPA’s proposed rule recognizes these complexities by 

requiring submission of numerous types of data with a permit application 

and continuous monitoring and reporting. But the rule does not provide for 

technical analysis of this information. It entrusts evaluation of this data to 

the state administrator or to the EPA in non-delegated states. 

A Few Critical Changes Are Needed in the Proposed Rule 

 

8

 Benson, S, 2004. Carbon Dioxide Capture and Storage in Underground Geologic Formations, Lawrence 

Berkeley National Laboratory, p. 15, available at http://www.pewclimate.org/docUploads/10-

50_Benson.pdf (last visited Nov. 25, 2008). 9

 International Energy Agency, Near-term Opportunities for Carbon Dioxide Capture and Storage, Global 

Assessments Workshop in Support of the G8 Plan of Action, June 2007 at p. 7 

10 The offshore Sleipner natural gas project in Norway, Snohvit in the North Sea, the InSalah natural gas 

project in Algeria, and the Weyburn Enhanced Oil Recovery project in Canada. IPCC CCS Technical 

Summary at 19; Wilson, E., Morgan, M. et al., Regulating the Geological Sequestration of CO2, 

Environmental Science & Technology, Apr. 15, 2008, at p. 4. 

11 Wilson, E., Morgan, M. et al., Regulating the Geological Sequestration of CO2, Environmental Science 

& Technology, Apr. 15, 2008, at p. 5. 

12 IPCC CCS Technical Summary 48 ; Wilson, E., Morgan, M. et al., Regulating the Geological 

Sequestration of CO2, Environmental Science & Technology, Apr. 15, 2008, at p. 4; Union of Concerned 

Scientists, Coal Power in a Warming World, Oct. 2008, p. 19-21. 13 IPCC CCS 5.4.1.1, Table 5.3. 

4
 

EPA must be applauded for taking a critical step toward climate change goals 

by proposing the first rule to regulate carbon injection and storage. However, 

the proposed rule does not fully reflect the current emerging state of CCS 

technology. EPA recognizes the rule must strengthen science, technology, 

and institutions in order to support a strategy to address climate change.14 

The suggestions outlined below would do just that: 

• EPA – advised by experts and regional stakeholders – and not 

individual states, should make permitting decisions on CCS projects, 

at least for the first few years. 

• Permits should be issued in stages, to be adaptive to advances in 

knowledge, science and regulation, not for the operating life of the well. 

• Initial Class VI wells should only be permitted in oil and gas reservoirs 

and deep saline formations until other formations are further studied. 

The rule also lacks opportunities for public participation, ignores the very 

important question of liability, and requires a few definition tweaks. Finally, 

CCS is not exclusively a groundwater issue, and regulating CCS with the 

proposed rule under SDWA is insufficient to address other risks. CCS should 

be regulated through a comprehensive statutory regime. 

 

14 Proposed rule at p. 23. 

5
TABLE OF CONTENTS 

I. A Comprehensive Statutory and Regulatory Scheme for CCS 

is Required. .......................................................................................................... 7

II. The EPA should create a liability scheme for the CCS program............. 7

III. The EPA Should Revise the Regulations to Provide for Adequate 

Financial Assurance for Long-Term Stewardship ...................................... 9

A. Financial Assurance Under the Proposed SDWA Rule ................. 9

B. Financial Assurance Mechanisms .................................................... 10

C. Sierra Club’s Recommendation for Adequate Financial 

Assurance Under the Proposed Rule................................................ 13

D. Accurate Cost Estimates are Necessary for Adequate Financial 

Assurance ............................................................................................... 14

E. Congress Should Create a Trust Fund to Cover Closure, PostClosure, and Remediation Costs for Cases When a Financial 

Assurance Mechanism Fails. ............................................................. 16

IV. The EPA Should Administer the CCS Program with the Help of a 

Specially Formed CCS Technical Advisory Committee........................... 16

V. The EPA Should Issue Class VI Staged Permits, Rather Than Permits 

for the Operating Life of the Well................................................................. 19

VI. Class VI Wells Should Be Permitted Only in Oil and Gas Reservoirs 

and Deep Saline Formations.......................................................................... 20

VII. The Rule Should Specify That an Intrusion Into a USDW is Not a 

“Federally Permitted Release” Under CERCLA. ...................................... 21

VIII. The Definition of the Area of Review Should Include Monitoring and 

Modeling. ............................................................................................................ 21

IX. Additional Well Identification Methods that do not rely on the Public 

Record Should be Required in Certain Provisions.................................... 22

IX. Opportunities for Public Participation in the Proposed Rule are Not 

Sufficient. ........................................................................................................... 23 

6
I. A Comprehensive Statutory and Regulatory Scheme for CCS is 

Required. 

It is critical that a CCS regulatory structure be comprehensive. Given the 

myriad of risks associated with CCS, Sierra Club believes that the Safe 

Drinking Water Act is not of sufficient scope and enforceability to handle a 

regulatory field as broad as CCS. Specifically, the Safe Drinking Water Act 

only protects “underground sources of drinking of water” and any CCS 

program raises many potential issues other than groundwater impacts. EPA 

acknowledges in the rule:

[t]he SDWA does not provide authority to develop regulations for all 

areas related to GS. These areas include, but are not limited to, 

capture and transport of CO2; determining property rights (i.e., to 

permit its use for GS and for possible storage credits); transfer of 

liability from one entity to another; and accounting or certification for 

greenhouse gas (“GHG”) reductions. 

73 Fed. Reg. 43,492, 43,495 (July 25, 2008). 

Sierra Club cannot emphasize strongly enough the absolute need that the 

government regulates CCS in a comprehensive and inclusive manner that 

accounts for all potential environmental and health impacts, and the 

universe of issues involved with large-scale CCS implementation such as 

capture, transportation and pipeline standards, interstate boundary issues, 

and liability. Moreover, it is simply not possible for the government to 

adequately regulate such a complex process through piecemeal regulations. A 

comprehensive regime, as opposed to a patchwork of regulations under 

different statutes, would be more adaptive to emergent information on this 

budding program as it becomes available. 

II. The EPA should create a liability scheme for the CCS program. 

There is a long list of potential risks associated with CO2 injection and 

sequestration. Most prominently for purposes of the proposed rule, injected 

CO2 could cause groundwater contamination by leaking into potable aquifers 

or causing saline intrusion.15

When CO2 is injected underground it will naturally migrate through the pore 

space. This natural migration could lead CO2 to travel upward throughout 

the reservoir into undetected or abandoned portions of the reservoir, or into 

 

15 Wilson et al., World Resources Institute Issue Brief, Liability and Financial Responsibility Frameworks 

for Carbon Capture and Sequestration at 3 (Dec. 2007). 

7
portions of the reservoir not owned by the operator, resulting in potential 

liability for subsurface trespass.16 

Surface leakage out of the storage formation through faults and fractures 

may lead to other types of potential liability. It could endanger human health 

by leaking into indoor air and basements.17 Although unlikely, a large 

surface release could pose health risks to humans, in the form of asphyxiation 

or the other effects from prolonged exposure to high concentrations of CO2.18

Such other effects include difficulty breathing, loss of consciousness, and 

death. In addition, CO2 seepage could harm flora and fauna, and could 

potentially ruin nearby ecosystems and agriculture.19 CO2 also could make 

sources of oil and gas unattainable, create pressure changes causing ground 

heave, and even trigger seismic events.20

Given the potential impacts to the environment, public health, and private 

property, the proposed rule’s approach of ignoring liability issues is improper. 

Large-scale CO2 sequestration should not begin until liability is definitively 

determined. EPA should thus revise the regulations and adopt a liability 

scheme that encompasses the “polluters pay” principle. 

The polluters pay principle derives from the fundamental, fair, and logical 

proposition that the party responsible for producing pollution should also be 

responsible for paying for any damage to the natural environment. Utilizing 

the polluters pay principle provides an incentive for owners, operators and 

CO2 generators to use precaution in their operations. Potentially liable 

parties have an incentive to avoid risk and damage, which often manifests in 

parties undertaking additional investment in research and development to 

improve knowledge and technologies. 

The EPA should revise the regulations to impose joint and several liability on 

Class VI well owners and operators and the generator of the injected CO2 for 

contamination of underground sources of drinking water, property damage, 

personal injury or any other injury arising from the injection. In addition, 

the EPA should require that an operator has complete liability coverage from 

a private insurance company before commencing injection. “Pollution legal 

liability insurance” coverage protects the insured party from claims arising 

from unknown conditions or problems, such as property damage or public 

health impacts from CO2 leakage. 

 

16 Id. at 2. 17 Id. at 3; see also IPCC CCS 5.7.7. 18 Id. at 3. 

19 Id. 20 Id. 

8
III. The EPA Should Revise the Regulations to Provide for Adequate 

Financial Assurance for Long-Term Stewardship 

Under the proposed rule, 73 Fed. Reg. 43,492, 43,537 (proposed 40 C.F.R. 

146.85), the owner or operator of an injection well must demonstrate and 

maintain financial responsibility and resources for corrective action, injection 

well plugging, post-injection site care and emergency and remedial response 

in a manner prescribed by the Director. The proposed rule, however, does not 

contain a long-term liability plan; it only gives the Director a general duty to 

ensure financial responsibility of the operator and states that the EPA will 

develop guidance at a later date to recommend types of financial mechanisms 

Directors can use to meet this requirement. Details of a liability scheme for 

CCS should not be left to a future date and should not rely on a corporate 

entity over the long term. 

Effective financial assurance mechanisms are necessary to ensure that 

closure and post-closure site care, such as monitoring, are conducted. When 

an owner or operator becomes insolvent without an adequate financial 

assurance mechanism, significant delays could occur, increasing the 

likelihood of environmental contamination and adverse human health effects. 

Moreover, when these failures occur, federal or state governments (and 

ultimately the general public) would become financially responsible for the 

closure and post-closure site care costs. Consequently, any uncertainties 

about the adequacy of financial assurances need to be minimized. 

 A. Financial Assurance Under the Proposed SDWA Rule 

If an owner or operator declares bankruptcy and the financial assurances are 

inadequate, drinking water sources are at risk and the public shoulders the 

cost of post-closure operations. These risks are unacceptable. EPA needs to 

take action before finalizing this rule and improve the financial assurance 

requirements by prohibiting the use of certain financial mechanisms, 

providing a list of appropriate financial assurance mechanisms, and 

providing guidance on how those approved mechanisms should be structured. 

 

Numerous federal agencies have documented the deficiencies with providing 

the Director with complete discretion to determine whether financial 

assurances are sufficient. In 2003, the United States General Accounting 

Office investigated whether the financial assurance requirements for Class I 

wells were sufficient. The GAO noted that since 1980, when the deep 

injection well program began, only four sites had ceased operation. Two of 

those facilities did not have adequate financial resources to plug and abandon 

the wells, resulting in additional costs to taxpayers. For the two other sites, 

9
the financial assurance mechanism was not tested because other companies 

purchased and continued operating the wells.21 

Uncertainties exist about the adequacy of financial assurance requirements 

in other federal waste disposal programs. For instance, EPA officials and 

EPA’s Office of Inspector General questioned the adequacy of RCRA’s 

financial assurance requirements, which we describe further below.22 

These studies underscore that EPA must take affirmative action in the final 

rule by providing concrete guidance to Directors. EPA should prohibit the 

use of inadequate financial assurance mechanisms, provide a list of accepted 

mechanisms and a list of situations to avoid with the accepted mechanisms. 

 

 B. Financial Assurance Mechanisms 

Financial assurance mechanisms ensure that facilities will have sufficient 

funds to properly close their permitted units and maintain the site for the 

duration of post-closure responsibility. These mechanisms are meant to 

prevent default to federal or state funds in the event that facilities are unable 

or unwilling to cover closure and post-closure costs. EPA has not developed a 

guidance document for financial assurances for the Class VI wells, but there 

is an EPA guidance document on financial assurances for UIC injection.23 

The following is a list of the different mechanisms that EPA recommends for 

UIC injection and the problems associated with each one: 

1. Financial Test – If a facility meets corporate financial test criteria, it 

may satisfy financial assurance obligations solely on the strength of its 

financial condition. For instance, under the current UIC regulations, a 

firm must have a minimum of $10 million in tangible net worth to pass 

the corporate financial test. Net worth is not the only financial test 

requirement. Additional requirements include financial ratios or bond 

ratings. 

Risks: A firm using the financial test to satisfy obligations cannot 

guarantee it will have funds for closure and post-closure activities in 

 

21 United States General Accounting Office, Deep Injection Wells, EPA Needs to Involve Communities 

Earlier and Ensure that Financial Assurance Requirements Are Adequate, Report No. GAO-03-761 (June 

2003). 

22 U.S. Environmental Protection Agency, Office of Inspector General, Continued EPA Leadership Will 

Support State Needs for Information and Guidance on RCRA Financial Assurance, Report No. 2005-P00026 (Sept. 26, 2005); U.S. Environmental Protection Agency, Office of Inspector General, RCRA 

Financial Assurance for Closure and Post-Closure, Report No. 2001-P-007 (March 30, 2001). 23 Victor J Kim, Director of the Office of Drinking Water, U.S. Environmental Protection Agency, 

Guidance for Financial Assurance for Federally-Administered UIC Programs, Underground Injection 

Control Branch Guidance #39 (May 29, 1985). 

10
the event it becomes insolvent. Taxpayers bear the risk of the firm’s 

insolvency. 

2. Corporate Guarantee – A corporate parent, sibling corporation, or firm 

with a substantial business relationship with the facility can meet the 

financial test requirement on its behalf. 

Risks: For the same reasons as the financial test, a firm using the 

corporate guarantee cannot guarantee it will have funds for closure 

and post-closure activities in the event its corporate parent, sibling or 

firm with a substantial business relationship with becomes insolvent. 

Taxpayers bear the risk of the firm’s insolvency. 

3. Trust Fund – Owners and operators are required to deposit money 

according to a phased-in schedule (known as a pay-in period). At the 

end of the pay-in period, the facility should have enough money set 

aside to cover its financial assurance requirements. 

Risks: Risks from trust funds include bank failures and the trust will 

not be fully funded before the facility becomes insolvent. This later risk 

can be mitigated by shortening the pay-in-period. 

4. Letter of Credit – A letter of credit is a credit document issued to an 

owner or operator by a financial institution, covering the costs of 

closure and post-closure. 

Risks: Risks from a letter of credit is that the bank that issued the 

credit becomes insolvent. The letter of credit is no longer in effect 

because, unlike a bank deposit, a letter of credit is not guaranteed by 

the Federal Deposit Insurance Corporation when a bank fails. 

5. Surety Bond – Two types of surety bonds guarantee that closure and 

post-closure obligations will be fulfilled: 

 

Payment Bond – If an owner or operator fails to fulfill closure or 

post-closure requirements, a payment bond funds a standby 

trust fund in the amount equal to the face value of the bond. 

Performance Bond – A performance bond guarantees 

performance of closure and post-closure requirements. A 

performance bond can also be paid into a standby trust fund. 

Risks: The main risk is the surety company becomes insolvent. This 

risk can be mitigated by imposing regulations on surety bonds. For 

11
instance, the U.S. Treasury issues a list of acceptable sureties and 

regulations could require that the surety be on this list. 

6. Insurance – Owner or operator takes out an insurance policy to cover 

the costs of closure and post-closure. The policy must guarantee that 

funds up to the face amount of the policy will be available for payment 

of closure or post-closure care upon the direction of the permitting 

authority. (It should be noted that, to date, insurance is rarely used as 

a financial assurance mechanism for injection wells so it has a less 

developed space in the marketplace.) 

Risks: Insurance presents a number of issues, including (1) policy 

terms and exclusions may be are inconsistent with regulations; (2) 

regulators may have to pursue litigation in order to secure payment; 

and (3) regulators fail to receive cancellation notices or late notices 

even if required by regulations. Since insurance is primarily regulated 

by states, differences in state insurance regulations contribute to the 

complexities in evaluating insurance policies. A standardized 

insurance policy form would mitigate those risks. 

7. Captive Insurance – Captive insurance is insurance issued by a 

wholly-owned subsidiary of the company being insured. 

Risks: Even though the captive may be a legally separate corporation, 

the financial strength of the captive is dependent upon the parent 

corporation. Therefore, the risk of insolvency of a captive insurance 

company and the risk of insolvency of a facility insured by a captive 

are not independent but instead are positively correlated. Since the 

failure of the one is closely tied to the failure of the other, the 

assurance risk is high. 

8. Combinations – Trust funds, letters of credit, surety bonds 

guaranteeing payment, and insurance can be combined for a facility if 

together their value is at least equal to the closure or post-closure 

estimate. Surety bonds guaranteeing performance, financial tests, and 

corporate guarantees cannot be combined. 

EPA’s Office of Inspector General looked at these different financial 

assurance mechanisms, determined the regulatory risk versus facility cost of 

each option with regard to the RCRA program, and ranked the risks and 

costs as the following:24

 

24 U.S. Environmental Protection Agency, Continued EPA Leadership Will Support State Needs for 

Information and Guidance on RCRA Financial Assurance, Report No. 2005-P-00026 (Sept. 26, 2005). 

12
Mechanism Regulatory Risk Cost to Facility 

Letter of Credit Low High 

Trust Fund Low High 

Insurance Medium Medium 

Surety Bond Medium Low Medium High 

Financial Test High Low 

Corporate Guarantee High Low 

Captive Insurance Very High Very Low 

C. Sierra Club’s Recommendation for Adequate Financial 

Assurance Under the Proposed Rule 

There are several actions that the EPA should take in the proposed rule to 

ensure that Class IV owners and operators have adequate financial 

assurance. First, EPA should prohibit the use of certain mechanisms that 

present too great a risk. The strength of third party mechanisms depends 

largely on the independence between risks of financial failure of the facility 

and the third-party providing that mechanism. EPA should thus prohibit 

reliance on captive insurance, financial test, and corporate guarantee. 

Captive insurance is insurance issued by a wholly-owned subsidiary of the 

insured. The financial health of the captive insurance company is closely tied 

to the parent company, so if the company encounters financial difficulties 

there is no guarantee that the captive insurance company would retain the 

necessary resources to fund closure and post-closure. This is counter to the 

basic purpose of an insurance, which distributes risk among different parties. 

The risks associated with this mechanism are too great and EPA should 

prohibit reliance on captive insurance in its regulations. 

The EPA should also revise the regulations to prohibit use of the financial 

test and corporate guarantee. As with captive insurance, there is no 

diversification of risk. If the firm, its parent or sibling corporation becomes 

insolvent, then the taxpayer must cover these costs. Given the current 

financial landscape it is naïve to assume that this mechanism provides 

adequate safeguards to the environment and tax payers. Many firms that 

would have passed the financial or corporate guarantee test (a net worth of 

more than $10 million) have recently collapsed. The reality of the current 

financial crisis, in addition to the fact that these facilities will be operating 

for upwards of 50 years, indicate that the financial test and corporate 

guarantee present too great a risk. 

In addition to prohibiting certain financial assurance mechanisms, EPA 

should revise the regulations to specify that trust funds, letters of credit, 

surety bonds and insurance (not captive insurance) are acceptable 

13
mechanisms. These mechanisms should be selected because they provide a 

medium to low regulatory risk. 

The regulations should specifically define the terms ‘trust funds’, ‘letters of 

credit’, ‘surety bonds’ and ‘insurance’ so that the safety of these mechanisms 

does not become distorted. The regulations should provide this definition 

backstop because states have sometimes approved variations on these 

mechanisms that were fiscally imprudent, as noted in the Office of Inspector 

General report on RCRA financial assurances.25 For instance, the report 

noted that sometimes regulators allowed trust funds to be funded with stock, 

including stock of the regulated company or with real estate.26 In addition, if 

an owner or operator is going to use insurance, it should be required to 

submit a copy of the insurance policy, and not just a certificate of insurance, 

so that the permit reviewer can ensure the policy coverage is sufficient. 

D. Accurate Cost Estimates are Necessary for Adequate Financial 

Assurance 

One of the most critical aspects of ensuring that owners or operators have the 

resources to pay for injection-well plugging and post-injection site care is cost 

estimation. Sound cost estimation requirements ensure that sufficient funds 

are set aside in the financial assurance instrument to properly undertake 

covered activities at any time during the operating life of the facility and 

during post-injection site care period. 

Corporate actors, however, have an inherent incentive to underestimate 

these costs. Owners and operators can save money by underestimating the 

closure and post-closure care costs because the price of the financial 

assurance mechanism is correlated to these closure costs. 

Under the proposed rule, there are no guidelines on how the owner or 

operator should prepare the initial cost estimate. For instance, there is no 

prohibition against the owner or operator preparing its own cost-estimate. In 

addition, the proposed rule hardly has any requirements for when and how 

the cost estimate should be adjusted over time. The proposed rule provides 

that the owner or operator must provide to the Director, at a frequency 

determined by the Director, written updates of adjustments to the cost 

estimate. 73 Fed. Reg. 43,492, 43,537 (proposed 40 C.F.R. § 146.85(b)). In 

addition, the operator must provide a cost estimate adjustment if the Director 

has reason to believe the initial estimate is no longer valid. 73 Fed. Reg. 

 

25 U.S. Environmental Protection Agency, Continued EPA Leadership Will Support State Needs for 

Information and Guidance on RCRA Financial Assurance, Report No. 2005-P-00026 at 11 (Sept. 26, 

2005). 

26 Id. 

14
43,492, 43,537 (proposed 40 C.F.R. § 146.85(d)). This approach has not 

worked for EPA under RCRA, and it will not work for Class VI wells. 

In its review of the RCRA financial assurance mechanisms, EPA’s Office of 

Inspector General spoke with many state administrators regarding the 

difficulty of assessing cost estimates. Many state administrators agreed that 

it was difficult to estimate costs for closure and post-closure activities. As this 

report explained, “the accuracy of each cost estimate review was subject to 

the level of expertise and knowledge of the individual inspectors performing 

the reviews.”27 In addition, regulators noted that it was difficult to challenge 

cost estimates because they did not have the resources to research and look 

up costs in different forms of documentation.28

To address problems with reviewing cost estimates for RCRA post-closure 

activities, EPA provided regulators with two tools – a manual, which 

provided a consistent, accurate, and rapid method for evaluating cost 

estimates, and software, which incorporated the manual’s methodology. 

In light of incentives to underestimate costs and the problems with reviewing 

such estimates under other regulatory programs, EPA should revise its cost 

estimation section to reduce the possibility of undervalued cost estimates and 

ensure adequate money is available for closure and post-closure care. 

Specifically, the final rule should incorporate these revisions: 

o EPA should specifically set out the elements to be included in an initial 

cost estimate. If the information is standardized, agency employees 

will have an easier time evaluating the sufficiency of such estimates. 

o When an owner or operator prepares its own cost estimate, EPA should 

require independent third-party review and cost certification. 

o The final rule should have a standard cost-estimate adjustment 

process. The cost estimate should be adjusted annually to account for 

inflation. In turn, the initial financial assurance mechanism should be 

structured to account for these inflation increases. In addition, the 

Director should be required to assess the adequacy of the cost estimate 

at five year intervals. 

In addition, EPA should also publish a manual that provides permit writers 

with a consistent, accurate and rapid method for evaluating cost estimates 

for closure and post-closure care of Class VI wells, as well as a software 

 

27 U.S. Environmental Protection Agency, Office of Inspector General, RCRA Financial Assurance for 

Closure and Post-Closure, Report No. 2001-P-007 at page 47 (March 30, 2001). 28 Id. 

15
program that incorporates the manual’s methodology, which will save more 

time and prevent errors in assessing the adequacy of cost estimates. 

E. Congress Should Create a Trust Fund to Cover Closure, PostClosure, and Remediation Costs for Cases When a Financial 

Assurance Mechanism Fails. 

Even if EPA revises the regulations to incorporate all of these suggested 

improvements to the financial assurance program, there will undoubtedly be 

instances when a facility becomes insolvent and the financial assurance 

mechanism fails. In addition, there could be instances were the financial 

assurance mechanism does not fail, but is insufficient to cover costs because 

the cost estimate was too low. To ensure that citizens do not have to pick up 

the tab in such situations, Congress should create a fee payment system that 

funds a trust, which would be used to fund these closure, post-closure and 

remediation actions. The trust must be created so that its funds cannot be 

drawn for any other purposes. Congress should assess fees on all owners, 

operators, generators and transporters of the injected CO2. These fees should 

be assessed based on a pricing system that reflects the risk profile of each 

particular injection site, which will also influence selection of the safest sites 

for large scale CCS, especially for the earliest projects. 

IV. EPA Should Administer the CCS Program with the Help of a 

Specially Formed CCS Technical Advisory Committee. 

Under the Safe Drinking Water Act, delegated states can administer their 

own underground injection control (“UIC”) programs once approved by EPA. 

Thirty-three states have primacy to run the UIC program and 7 states have 

authority to administer some UIC permits. 29 In states without primacy and 

on tribal lands, EPA administers the program. 

The proposed CCS rule would give the enormous responsibility of regulating 

CCS at this early stage to state administrators. As provided in the rule: 

“States with primacy must develop a program incorporating all new Federal 

requirements for Class VI wells if they wish to regulate CO2 GS, and all 

programs will be subject to EPA approval. If States do not develop a program 

for Class VI wells, EPA will oversee CO2 GS in those States.” 73 Fed. Reg. 

43,492, 43,530; see 42 U.S.C. § 300h-1(b)(1)(B) (requiring state showing of 

conformity to new requirements). 

 

29 U.S. Environmental Protection Agency. UIC Program Primacy, available at 

http://www.epa.gov/OGWDW/uic/primacy.html

16
Permit decisions require evaluation of many complicated technical issues 

that demand a high level of expertise and there are scores of uncertainties at 

this early stage of CCS development, as explained above in the introduction 

to these comments. There is also cause for concern over the capacity and 

competency of some state regulatory agencies to properly regulate a CCS 

program. State permitting decisions can contradict science and logic and 

produce dangerous results for local health and welfare. The Florida 

Department of Environmental Protection approved the construction and 

operation of a facility designed to inject more than 112 million gallons of 

treated sewage a day, erroneously believing that the subsurface geology 

would prevent the injected sewage from migrating into the overlying Floridan 

Aquifer. Most experts agreed that the injection program should not have been 

permitted, and eventually the injected sewage migrated upward into the 

Floridan Aquifer. Even after evidence of contamination was well-established, 

Florida continued to expand its injection program. 

Federal administration coupled with a technical advisory board would ensure 

the initial implementation of a national CCS program will be based on the 

best science, insulate decisions from profit and political motives, facilitate 

good public perception of CCS and would ensure the long-term integrity of 

the program. The International Risk Governance Council stressed that 

“[a]ssignment of regulatory responsibility to competent and trustworthy 

bodies or agencies will be paramount in assuring the public that the 

technology is deployed with adequate oversight and safeguards.”30 A 

nationally administered program will also enable federal coordination of 

information for this young program, ensure information-sharing to other 

states and developing nations, and help manage regional issues that 

transcend state lines. 

Over the last few years, there has been a global CCS dialogue among a wide 

range of stakeholders– with top scientists, engineers, industry and 

environmental groups working together to contribute to reports and policy 

suggestions. The IPCC is an international scientific body that provides an 

objective source of information. The comprehensiveness of the scientific 

content is achieved through contributions from experts in all regions of the 

world and all relevant disciplines.31 The World Resources Institute, an 

environmental think tank, convened a diverse group of over 80 stakeholders, 

including representatives from academia, business, government, and 

environmental nongovernmental organizations to craft its Guidelines for 

Carbon Dioxide Capture, Transport, and Storage.32 A technical advisory 

 

30 IRGC, Regulation of Carbon Capture and Storage, p. 24, available at 

http://www.irgc.org/IMG/pdf/Policy_Brief_CCS.pdf (last visited December 17, 2008). 31 http://www.ipcc.ch/about/index.htm (last visited Dec. 15, 2008). 32 http://pdf.wri.org/ccs_guidelines.pdf (last visited Dec. 15, 2008). 

17
board would ensure this diversity of opinion and viewpoint is considered, and 

the expertise acquired in this dialogue is reflected, in the initial development 

and implementation of the United States’ CCS program. 

The CCS technical board should include a diverse group of experts in CCSrelated fields with CCS experience, including geology, geophysics, structural 

geology, hydrogeology, and geochemistry. Additionally, the board should 

dedicate a few flexible positions to include members with site-specific 

knowledge at the state, regional, and national levels that will rotate 

depending on project location. Alternatively, for local information, the 

technical board could coordinate with regional advisory boards formed 

pursuant to 40 C.F.R. § 25.7. 

The CCS technical board should have the following responsibilities, among 

other appropriate functions: 

• review technical data and make recommendations for site selection 

and permit terms 

• review monitoring data and make recommendations for permit 

revisions 

• fact checking 

• ensuring coordination among permits 

• accelerating and disseminating best practices 

• make decisions regarding delegation of primacy 

Technical advisory boards are well-respected by the public and 

environmental community and work well in other contexts. The Desert 

Tortoise Recovery Committee is made up of a diverse group of scientific 

experts and serves an advisory role to agency administers to ensure species’ 

recovery plans, revisions, monitoring, effectiveness, etc. meet rigorous 

scientific standards.33 The Independent Scientific Advisory Board serves the 

National Marine Fisheries Service (NOAA Fisheries), Columbia River Indian 

Tribes, and Northwest Power and Conservation Council by providing 

independent scientific advice and recommendations regarding scientific 

issues that relate to the respective agencies' fish and wildlife programs.34

The success or failure of CCS cannot rest on the decisions of state 

administrators like the ones in Florida responsible for the sewage injection 

debacle. “[A] single major accident, resulting from inadequate regulatory 

oversight, anywhere in the world, could seriously endanger the future 

 

33 http://www.fws.gov/nevada/desert_tortoise/dt_sac.html (last visited Dec. 15, 2008). 34 http://www.nwcouncil.org/fw/isab/background.htm and http://www.nwcouncil.org/fw/isab/members.htm

(last visited Dec. 15, 2008). 

18
viability of GS [geologic sequestration].”35 EPA must take responsibility for 

administration of the nation’s CCS program, at least for the first few years 

until the task becomes less extraordinary. Agency officials will need help 

interpreting and understanding the technical data that will accompany 

permit decisions, and it should enlist the help of a diverse group of CCS 

experts on a technical advisory board. 

V. EPA Should Issue Class VI Staged Permits, Rather Than Permits 

for the Operating Life of the Well. 

Selecting an underground CO2 storage site and determining an appropriate 

injection rate necessarily contains uncertainties because underground 

geology is heterogeneous and impossible to map. There is a considerable lack 

of CCS experience and significant gaps in knowledge, including modeling 

storage capacity and plume behavior and monitoring storage performance 

and movement. The rule must reflect these uncertainties, and be flexible 

enough to adapt to the new information that will be learned through the first 

few major demonstration projects. At this early stage, Class VI permits 

should not be granted for the operating life of the well. 

An adaptive management approach (measuring while managing) is a sound, 

well-established method for dealing with scientific uncertainty. Adaptive 

regulatory design permits progressive regulatory action in response to 

improvements in information.36 The adaptive management model envisages 

an initial regulatory approval based on available information (estimations 

and modeling) followed by a period of monitoring and reporting with 

reassessment of the appropriateness of the initial regulatory action and 

adjustment as required in light of new information, and presumably the 

resolution of previously identified uncertainties.37

The Class VI program should implement an adaptive management approach 

that acknowledges the scientific uncertainty regarding large-scale CCS. 

Under the proposed rule, initial Class VI permit limits are based on modeled 

predictions of plume behavior and movement, storage capacity, and suitable 

injection rates for the geologic formation. Under the proposed rules, based on 

these predictions, a Class VI operator receives a permit for the life of the well. 

Operating a CCS well over a period of years, however, provides more 

accurate, site-specific data on the formation’s characteristics and plume 

 

35 Wilson, E., Morgan, M. et al., Regulating the Geological Sequestration of CO2, Environmental Science 

& Technology, Apr. 15, 2008, at p. 5. 

36 Judith Jones, Regulatory Design for Scientific Uncertainty, JOURNAL OF ENVTL. LAW, 19 JENVTLL 347 

(2007). 

37 Id. 

19
behavior. To ensure the most current information is reflected in the permit 

terms, and thereby in well operation, EPA should issue permits in phases. 

As explained in comment VII regarding necessary changes in the AOR 

definition, EPA should also require the operator to submit an annual 

affidavit certifying that the permit terms and accompanying plans 

(monitoring, emergency response, etc.) do not require a change. 

We recommend a three phase permitting system. The first phase will mirror 

the current permitting structure, except that the permit will not be for the 

life of the well, but rather for 5 years. Five years after the initial permit is 

issued, the owner or operator will be required to apply for the second phase. 

The Director would re-evaluate the permit to determine whether, based on 

the most current information, it is appropriate to continue injection at the 

site and, if so, whether the permit terms should be modified. The third and 

final phase of the permit would be 10 years after the second phase permit is 

issued. Again, the Director would re-evaluate the permit to determine 

whether, based on the most current information, it is appropriate to continue 

injection at the site and, if so, whether the permit terms should be modified. 

The Director’s periodic reevaluation would allow advances in regulation and 

science to be incorporated into the permit. 

VI. Class VI Wells Should Be Permitted Only in Oil and Gas Reservoirs 

and Deep Saline Formations. 

 

EPA should not permit injection into unmineable coal seams, basalts, salt 

domes, and shales until further studies are completed and CCS potential in 

these formations is better understood. EPA lacks an adequate scientific basis 

to develop regulations for commercial-scale sequestration projects in these 

formations: “[T]he process of CO2 adsorption to coal has not been proven and 

the chemical reactions of supercritical CO2 within coal formations are not 

well understood.” 73 Fed. Reg. 43,492, 43,503. Sequestration in coal seams is 

“an emerging technology that is in the demonstration phase.” Id. As far as 

basalts, shales and salt domes, EPA has noted that their “technical or 

economic viability as GS sites have not been demonstrated.” Id. 

The IPCC CCS report supports EPA’s conclusions and goes a step further, 

concluding that “basalts appear unlikely to be suitable for CO2 storage”38 

The IPCC agrees that coalbed storage technology “is not well developed and a 

better understanding of injection and storage processes in coals is needed.”39 

Precautionary principles demand that the first Class VI permits are issued 

for injection into geological formations with the greatest degree of scientific 

 

38 IPCC CCS § 5.3.5.1. 

39 IPCC CCS Chapt. 5 Exec. Summary; see also § 5.3.4.

20
certainty, where any damages would be minimal – namely, depleted oil and 

gas reservoirs and deep saline formations. Accordingly, initial Class VI wells 

should not include coal seams, basalts, shales, and salt caverns regardless of 

whether they are above or below the deepest USDW. Continued research is 

appropriate for GS projects in these formations. 

VII. The Rule Should Specify That an Intrusion Into a USDW is Not a 

“Federally Permitted Release” Under CERCLA. 

 

The rule itself, rather than individual permits, should assure that Class VI 

permits do not allow responsible parties to avoid CERCLA liability on 

grounds that a release constitutes a “federally permitted release.” 

EPA notes in the preamble to the proposed rule, 73 Fed. Reg 43504, that 

CERCLA exempts from liability certain “federally permitted releases, 

including releases in compliance in a UIC permit under the Safe Drinking 

Water Act.” EPA further notes that “Class VI requirements and permits will 

need to be carefully structured to ensure that they do not ‘authorize’ 

inappropriate hazardous releases.” EPA should go further and effectively 

prohibit Class VI permit conditions that would make the “federally permitted 

release” defense available should injected fluids or displaced formation fluids 

enter or endanger USDWs. This prohibition should be added to Subpart E – 

Permit Conditions, or to any other appropriate section of the rule. 

VIII. The Definition of the Area of Review Should Include Monitoring 

and Modeling. 

The definition of Area of Review (AOR), Fed. Reg 43536, CFR §146.84, Part 

(a) states that the Area of Review is “based on computational modeling”. It is 

not appropriate for the Area of Review to be based solely on computational 

modeling. Instead, it should be based on computational modeling, monitoring 

and operational data and updated until closure is approved. All references to 

computational modeling in relation to the Area of Review in this section, as 

well as in the definition of Area of Review in §146.81 should be amended as 

appropriate to read “based on computational modeling, monitoring and 

operational data and updated until closure is approved”. 

An update or redefinition of the AOR at a minimum fixed frequency of ten 

years is not sufficient. The operator should be required to submit an annual 

assessment under stating whether they deem a revision of the AOR 

necessary, explaining their reasoning based on site-specific operational and 

other data. The Director should examine and approve or reject this 

submission, requiring a revision of the AOR as needed. The same updating 

procedure should apply to all other plans: monitoring, closure, etc. We believe 

21
that this arrangement encourages honest and truthful reporting of data and 

site performance without placing excessive burdens on redefining the AOR if 

such revision is not needed. It also leaves a clear accountability trail for both 

operator and Director in case of disputes. 

 

IX. Additional Well Identification Methods that do not rely on the Public 

Record Should be Required in Certain Provisions 

The proposed rule at CFR§146.82(b) requires a map to be submitted with the 

permit that shows wells within the area of review, but only information of 

public record is required to be included on this map. CFR§146.82(e) also 

requires a tabulation of all wells within the area of review which penetrate 

the injection or confining zone(s), which includes information on the well’s 

type, construction, date drilled, location, depth, record of plugging and/or 

completion and any additional information that the Director may require. 

Relying on information of public record in (b) is sufficient, but additional 

diligence is needed when it comes to wells that penetrate the injection or 

confining zone in (e). Information of public record is often incomplete and/or 

inaccurate. There are numerous orphaned or abandoned wells that are not 

listed on the public record that could affect the integrity of the confining zone. 

While it is possible to intercept some of these problems during operation, 

there are methods available today to identify wells not listed on the public 

record40, which could identify potentially problematic wells in advance. Such 

a requirement should be included in the rule, and be made more general than 

“tabulation” to allow the Director discretion for other data formats as needed: 

§146.82(e): “A tabulation compilation of all wells within the area 

of review which penetrate the injection or confining zone(s). To 

supplement and/or verify information of public record, operators 

shall use reasonable methods to identify the presence wells 

within the area of review that penetrate the injection or 

confining zone(s). Such data must include a description [...]” 

Additionally, to delineate the Area of Review, CFR§146.84(c)(2) requires 

operators to “...identify all penetrations, including active and abandoned 

wells and underground mines, in the area of review that may penetrate the 

confining zone”. Again, the public record may not be sufficient to provide 

accurate information in all cases. Problematic wells may not be limited to the 

confining zone, as would be the case if confinement were to be breached, or if 

pressure effects caused by the injection caused fluid movement outside the 

defined confining zone. We recommend the following modification: 

 

40 NETL , for example, has developed an electromagnetic system that can be used for aerial or groundbased identification of wells (casings). 

22
“Using methods approved by the Director, identify all 

penetrations, including active and abandoned wells and 

underground mines, in the area of review that may penetrate 

the confining zone or otherwise act as conduits for fluid 

movement inside or outside the confining zone”. 

IX. The Proposed Rule’s Public Participation Opportunities are 

Insufficient. 

Public acceptance of CCS is a major issue. Innumerable reports and 

recommendations from the federal government and top scientists, 

institutions and workgroups stress that the success of a CCS program will 

depend heavily on public acceptance. The National Academy of Sciences 

cautioned “the storage program cannot be successful if a significant fraction 

of the public views it as dangerous or unacceptable. Thus, CCS technologies 

must not only be safe and effective, it must be explainable to the public in 

such as way as to instill confidence that they are in fact safe and effective.”41

The International Risk Governance Council recommends that regulatory 

frameworks must include “effective risk communication to engage and 

educate the public, involve all stakeholders in risk-related decisions, and 

build confidence in the institutions governing CCS.”42 The Clean Air Act 

Advisory Committee’s Advanced Coal Technology Work Group’s January 

2008 report similarly highlighted the need for public outreach.43 The need to 

gain public acceptance will be especially crucial with early projects, which 

supports our earlier recommendation that EPA make these crucial early 

decisions with the help of a technical advisory board. 

EPA should ensure that the proposed rule includes ample public involvement 

at the earliest possible stages to gain public trust and acceptance of its 

decisions. This gives the community time to process the complicated and 

voluminous information involved in a siting decision and contact other 

officials about issues not within EPA’s authority. It also will mitigate some 

controversial issues and potentially avoid litigation and other delays. 

Opportunities for public participation in the proposed rule are not sufficient; 

the following changes are necessary: 

 

41 U.S. GAO Report. CLIMATE CHANGE: Federal Actions will Greatly Affect the Viability of Carbon 

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

Academy of Sciences, Prospective Evaluation). 42 IRGC, Regulation of Carbon Capture and Storage, p. 24, available at 

http://www.irgc.org/IMG/pdf/Policy_Brief_CCS.pdf (last visited December 17, 2008). 43 January 29, 2008 Final Report, available at 

http://www.epa.gov/air/caaac/coaltech/2008_01_final_report.pdf (last visited December 17, 2008). 

23
1. The proposed rule has a 30-day public comment period on a proposed 

Class VI site-specific permit. This is too little too late. Thirty days is 

not sufficient time for the public to identify and raise concerns, and 

given the comment period falls at the end of a long negotiating process 

with the applicant, it is unlikely EPA could meaningfully address 

concerns at that point in the process. The public should be informed as 

soon as the EPA begins working with a permit applicant, and make the 

application materials publicly available and easily accessible. EPA 

and the permit applicant should hold public information sessions in 

the affected community and work to address public concerns 

throughout the process. The formal comment period should be 

extended to at least 90 days because the permit will contain a range of 

complicated issues that will likely require expert consultation. 

2. The proposed rule allows an applicant to use proprietary modeling 

software to submit predictions of plume behavior and movement, 

storage capacity, and injection rates. Use of proprietary software would 

hinder public participation because the public could not test applicant’s 

modeling predictions. To ensure transparency in the application 

process, publicly available modeling programs must be required. 

3. Each stage of the Club’s recommended permit process should 

incorporate application transparency, public hearings and a comment 

period. EPA should maintain a list of interested persons in each 

proposed/completed project and inform this list of every new 

application change, hearing, comment period, annual report, etc. 

These materials should be posted on the internet. 

4. All remediation plans should be subject to notice and public comment. 

Respectfully Submitted, 

__s/Andrea Issod_____________________ 

 SIERRA CLUB 

 Kristin Henry 

Andrea Issod 

Sierra Club Environmental Law Program 

85 Second Street, 2d Floor 

San Francisco, CA 94105-3441 

Phone: (415) 977-5544 

Fax: (415) 977-5793 

kristin.henry@sierraclub.org 

andrea.issod@sierraclub.org

24
Letter ID: 0242 

Commenter: Kristin Henry 

Organization: Sierra Environmental Law Program, Sierra Club 

Letter ID: 0242 Comment ID: 23307 Letter Lines: 42 to 58 

Comment Code: 1280 1.1.2.1 General comments on climate change/ global warming 

Comment: We agree with EPA that CCS could play an important role in allowing deep 

greenhouse gas emission reductions from electric generation and industrial 

facilities. In order to achieve the cuts necessary to avoid the worst 

consequences of climate change, CCS must be integrated within a larger climate 

policy that includes legislation limiting greenhouse gas emissions, investment 

in efficiency improvements and renewable energy sources such as solar, wind, 

biomass and geothermal. [FN1] 

[FN1: 1 IPCC Special Report on Carbon Dioxide Capture and Storage, 2005 

(hereinafter "IPCC CCS") Section 1.1, 1.3.] 

CCS must be deployed on a very large-scale to enable deep cuts in worldwide 

greenhouse gases. To deploy this nascent technology in a short timeframe, it 

must be managed very proficiently from the start to minimize ecological, human 

health, and financial risks. Any CCS regulatory regime must establish clear 

incentives for responsible site selection, appropriate monitoring, safe and 

environmentally sound operation, and financially responsible closure. 

Individual Response: EPA agrees that GS is one technology in a portfolio of options, including 

energy conservation, efficiency improvements, and the use of alternative fuels and renewable 

energy sources, that could be deployed to reduce CO2 emissions. However, the use of and 

investment in these technologies is outside the scope of the Class VI GS rulemaking. The Class 

VI GS requirements are designed to ensure that, where GS is deployed, projects are permitted, 

sited, constructed, operated, and closed in a manner that protects USDWs from endangerment. 

The GS regulation builds upon the long-standing protective framework of the UIC program, 

which has been regulating the injection of billions of gallons of liquids for decades. The Class VI 

GS regulation enhances this existing framework with requirements for Class VI wells that are 

tailored to the unique nature of large scale GS of CO2. These additional protective requirements 

include more extensive geologic testing, detailed computational modeling of the AoR and 

periodic re-evaluations, detailed requirements for monitoring and tracking the CO2 plume and 

pressure front, and extended post-injection monitoring and site care. 

Letter ID: 0242 Comment ID: 23308 Letter Lines: 60 to 64 

Comment Code: 1200 1.1 General comments about the rulemaking 

1
Comment: Overall, the proposed rule makes good strides at addressing some of the key 

issues for geological sequestration. However, there are several areas that need 

improvement as we discuss below. First we briefly provide background on the 

infancy of large-scale CCS deployment, technical complexities, and the import of 

rapid development of CCS to tackle the global warming crisis 

Individual Response: EPA acknowledges the comment. The final rule is based on the most 

recent GS-related data, information, and scientific research available. EPA intends to continue to 

collect data on GS and to incorporate such data as it implements its adaptive approach to GS 

rulemaking to incorporate new research, data, and information about GS. An adaptive approach 

provides Class VI owners or operators the flexibility to use and apply newly developed 

technologies for GS as they become available in the future. Please see the remainder of EPA's 

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

regulatory approach, please see the final rule and preamble as well as the rulemaking docket. 

Letter ID: 0242 Comment ID: 23309 Letter Lines: 66 to 132 

Comment Code: 1510 1.2.2.3 Need for additional study 

Comment: CCS is an Emerging Technology and Many Hurdles Remain 

CCS is an evolving technology and many uncertainties remain. CCS employs a 

combination of known and emerging technologies and processes. [FN2] Known 

storage technologies generally rely on experience injecting CO2 into depleted 

oil fields for enhanced oil recovery ("EOR"). Emerging CO2 storage approaches 

include the injection of CO2 into deep saline geological formations and a 

variety of other geologies, and are needed on a much larger scale than is the 

practice for EOR. 

[FN2: "The technical maturity of specific CCS system components varies greatly. 

Some technologies are extensively deployed in mature markets, primarily in oil 

and gas industry, while others are still in the research, development or 

demonstration phase." IPCC CCS Technical Summary p. 19. See also Table TS.1 

(charting maturity of CCS system components).] 

Burning fossil fuel to generate electricity is the largest single source of CO2 

emissions, and therefore the CCS system’s major contribution to climate change 

mitigation would come from deployment in the electricity sector and most 

importantly, on coal-fired electricity plants. [FN3] However, there are 

currently no coal power plants with CCS in operation or under construction. In 

the US, there is one small 1.7 MW project currently testing capture (but not 

sequestration) using pulverized coal. One project under construction will 

capture and store a small percent of the existing power plant emissions. [FN4] 

[FN3: IPCC CCS Summary for PolicyMakers at 11.] 

[FN4: http://sequestration.mit.edu/tools/projects/aep_alstom_mountaineer.html 

2
(last visited December 15, 2008).] 

Since there is considerable lack of experience with CCS, there are also 

significant gaps in knowledge. The rule must reflect these uncertainties, and be 

flexible enough to adapt to new information produced by the first major 

demonstration projects. The IPCC Special Report on Carbon Capture and Storage 

devoted a section of their report to the current gaps in knowledge regarding 

CCS. The relevant gaps include (from IPCC CCS section 5.10, p. 264): 

• need for more development and agreement on assessment methodologies. 

• capacity estimates. 

• kinetics of geochemical trapping and the long-term impact of CO2 on reservoir 

fluids and rocks. 

• the fundamental processes of CO2 adsorption and CH4 desorption on coal during 

storage operations. 

• risks of leakage from abandoned wells caused by material and cement 

degradation. 

• reliable coupled hydrogeological-geochemical-geomechanical simulation models 

to predict long-term storage performance accurately. 

• experience with mitigating and remediating a leakage event. 

• requirements for decommissioning a storage project. 

Additionally, the IPCC reports that large-scale demonstration of CO2 capture is 

needed, "a better understanding of long-term storage, migration and leakage 

processes," and "an enhanced ability to monitor and verify the behaviour [sic] 

of geologically stored CO2." [FN5] The IPCC, a collaboration of the foremost experts 

in CCS-related fields from across the globe, then concluded that "[t]he 

implementation of more pilot and demonstration storage projects in a range of 

geological, geographical and economic settings would be important to improve our 

understanding of these issues." [FN6] 

[FN5: IPCC CCS Technical Summary 48.] 

[FN6: Id.] 

Individual Response: EPA agrees that continued research in all GS associated fields will be 

integral to development of GS technology, and adds that much of the research on terrestrial and 

geologic sequestration is being conducted by other federal agencies, particularly DOE's Office of 

Science and Technology (www.energy.gov/sciencetech/carbonsequestration.htm). Other federal 

agencies involved in research include the US Department of Agriculture, US Geological Survey, 

3
and others. EPA's Office of Research and Development is also researching issues related to 

global climate change, including geologic and terrestrial sequestration. 

EPA believes that large scale GS can be done safely: the GS regulation builds upon the longstanding protective framework of the UIC program, which has been regulating the injection of 

billions of gallons of fluids for decades. The GS regulation enhances this framework with 

requirements for GS wells that are tailored to address the unique issues associated with largescale GS including large injection volumes, the relative buoyancy of CO2, its corrosivity in the 

presence of water, the potential presence of impurities in captured CO2, and its mobility within 

subsurface geologic formations. These additional protective requirements include more extensive 

geologic testing, detailed computational modeling of the AoR and periodic re-evaluations, 

detailed requirements for monitoring and tracking the CO2 plume and pressure front, and 

extended post-injection monitoring and site care. 

To protect USDWs from endangerment and meet the potentially fast pace of GS deployment, 

EPA is using an adaptive approach to regulating CO2 injection for GS. The Agency plans to, 

every six years, collect and review data on GS projects to determine whether the appropriate 

amount and types of information and appropriate documentation are being collected, and to 

determine if modifications to the requirements are appropriate or necessary. 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. 

Letter ID: 0242 Comment ID: 23310 Letter Lines: 134 to 172 

Comment Code: 1350 1.1.3.3 Comments on the need for GS technology 

Comment: CCS Must be Deployed Quickly on a Very Large Scale 

Scientists agree that in order to avoid the worst consequences of climate 

change, the United States must cut greenhouse gas emissions at least 80 percent 

below 2000 levels by 2050. [FN7] The scale of CCS projects necessary in the 

electricity sector to achieve this objective is enormous. To store the two 

billion tons of CO2 emissions from annual fossil fuel electrical generation in 

the U.S. will require at least two hundred CCS projects, each 10 times larger 

than the largest sequestration projects currently in operation. [FN8] 

Worldwide, an estimated 6,000 of these projects would be needed. [FN9] 

Currently, only four large- scale commercial carbon sequestration projects exist 

worldwide. [FN10] 

[FN7: Luers, A.L. et al. 2007, How to Avoid Dangerous Climate Change: A target 

for U.S. emissions reductions. Union of Concerned Scientists, online at 

http://www.ucsusa.org/assets/documents/global_warming/emissions-targetreport.pdf] 

[FN8: Benson, S, 2004. Carbon Dioxide Capture and Storage in Underground 

Geologic Formations, Lawrence Berkeley National Laboratory, p. 15, available at 

4
http://www.pewclimate.org/docUploads/10-50_Benson.pdf (last visited Nov. 25, 

2008).] 

[FN9: International Energy Agency, Near-term Opportunities for Carbon Dioxide 

Capture and Storage, Global Assessments Workshop in Support of the G8 Plan of 

Action, June 2007 at p. 7] 

[FN10: The offshore Sleipner natural gas project in Norway, Snohvit in the North 

Sea, the InSalah natural gas project in Algeria, and the Weyburn Enhanced Oil 

Recovery project in Canada. IPCC CCS Technical Summary at 19; Wilson, E., 

Morgan, M. et al., Regulating the Geological Sequestration of CO2, Environmental 

Science & Technology, Apr. 15, 2008, at p. 4.] 

There is no time to waste to achieve this Herculean task. To have any meaningful 

role in curbing greenhouse gas emissions, CCS projects must proceed quickly 

while cognizant that there is no room for missteps. A team of international 

experts recently explained that "a single major accident, resulting from 

inadequate regulatory oversight, anywhere in the world, could seriously endanger 

the future viability of GS [geologic sequestration]." [FN11] 

[FN11: Wilson, E., Morgan, M. et al., Regulating the Geological Sequestration 

of CO2, Environmental Science & Technology, Apr. 15, 2008, at p. 5.] 

Individual Response: EPA agrees that GS is one technology in a portfolio of options, including 

energy conservation, efficiency improvements, and the use of alternative fuels and renewable 

energy sources, that could be deployed to reduce CO2 emissions. However, EPA clarifies that 

the Class VI regulation does not promote or encourage the use of GS, but, instead ensure 

protection of USDWs from endangerment where GS technologies are deployed. 

EPA believes that the GS regulation will provide regulatory certainty and oversight that 

operators have requested, and allow for the deployment of this key climate change mitigation 

technology that could be deployed to reduce CO2 emissions. EPA adds that the GS regulation 

builds upon the long-standing protective framework of the UIC Program, which has been 

regulating the injection of billions of gallons of fluids for decades. For additional information on 

EPA’s final regulatory approach, please see the final rule and preamble as well as the rulemaking 

docket. 

Letter ID: 0242 Comment ID: 23311 Letter Lines: 174 to 184 

Comment Code: 1510 1.2.2.3 Need for additional study 

Comment Code: 2400 1.8 Comments on EPA's adaptive rulemaking process 

Comment: There is broad agreement that CCS should proceed by undertaking a few large 

demonstration projects in the U.S. the next few years, which must be carefully 

selected and monitored to learn from performance to incorporate into the next 

generation. [FN12] The EPA’s proposed rule should enable selection of the 

lowest-risk, best overall sites for these initial projects, and be adaptive to 

the changes that will occur after knowledge is gleaned from those projects. 

5
[FN12: IPCC CCS Technical Summary 48 ; Wilson, E., Morgan, M. et al., Regulating 

the Geological Sequestration of CO2, Environmental Science & Technology, Apr. 

15, 2008, at p. 4; Union of Concerned Scientists, Coal Power in a Warming World, 

Oct. 2008, p. 19-21.] 

Individual Response: As described above, EPA agrees that continued research will be integral 

to development of GS technology, and is using an adaptive approach to regulating CO2 injection 

for GS. 

EPA adds that it considered information from laboratory, modeling, and field research as it 

developed the requirements for GS wells. In addition to laboratory studies and modeling research 

that provide relevant information on GS, the Agency is also involved in collecting and analyzing 

GS project data and permit information from a variety of sources. Most notably, EPA has 

evaluated permits and reviewed operational data and information associated with the seven 

regional carbon sequestration partnerships funded by the U.S. Department of Energy and 

coordinated through the National Energy Technology Laboratory (NETL), and several 

international projects. In addition to the information cited in the preamble to the proposed rule, 

EPA published a Notice of Data Availability and Request for Comment (NODA) on August 31, 

2009 (74 FR 44802), in which the Agency described the preliminary results of research at three 

DOE partnership sites (in Escatawpa, Mississippi; the Aneth Field in Paradox Basin, Southeast 

Utah; and the Pump Canyon Site, New Mexico). EPA sought comment on this data and used it to 

inform the final rule. 

Letter ID: 0242 Comment ID: 23312 Letter Lines: 186 to 198 

Comment Code: 3150 2.1.5 Comments on required permit information (40 CFR 146.82) 

Comment: CCS Permitting Requires Specialized Technical Expertise 

Permitting a Class VI well involves many complicated technical issues across a 

range of disciplines. Site selection alone involves characterization of geology, 

hydrogeology, geochemistry and geomechamics. [FN13] Well construction, interpreting 

monitoring data, and proper site closure are a few other highly technical areas. 

EPA’s proposed rule recognizes these complexities by requiring submission of 

numerous types of data with a permit application and continuous monitoring and 

reporting. But the rule does not provide for technical analysis of this 

information. It entrusts evaluation of this data to the state administrator or 

to the EPA in non-delegated states. 

[FN13: IPCC CCS 5.4.1.1, Table 5.3.] 

Individual Response: EPA clarifies that permit information is subject to technical review. 

Permitting authority staff will evaluate the extensive data that owners or operators submit under 

§146.82 to determine the suitability of a potential project site for GS. EPA adds that the staff in 

6
state primacy agencies and EPA regional offices (who will review permit applications in states 

that do not have primacy) have years of experience with the current UIC injection well classes, 

have permitted deep injection wells in the past, and have relevant specialties in geology, 

engineering, and related disciplines. 

EPA is developing guidance on site characterization for GS projects to assist owners or operators 

and Directors in evaluating permit requirements and applications under §146.82. The guidance 

provides recommendations regarding characterizing the regional geology and hydrogeology of a 

proposed GS site as well as performing the necessary geochemical, geomechanical, and 

geophysical analyses of the injection and confining zone. Additionally, EPA expects that this 

guidance will assist permitting authorities in evaluating initial permits for Class VI injection 

wells with technical assistance as needed. The guidance can be found on EPA’s website at 

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

Letter ID: 0242 Comment ID: 23313 Letter Lines: 200 to 207 ; 217 to 217 

Comment Code: 1200 1.1 General comments about the rulemaking 

Comment: A Few Critical Changes Are Needed in the Proposed Rule 

EPA must be applauded for taking a critical step toward climate change goals by 

proposing the first rule to regulate carbon injection and storage. However, the 

proposed rule does not fully reflect the current emerging state of CCS 

technology. EPA recognizes the rule must strengthen science, technology, and 

institutions in order to support a strategy to address climate change. [FN14] 

The suggestions outlined below would do just that: 

[FN14: Proposed rule at p. 23.] 

Individual Response: The final rule is based on the most recent GS-related data, information, 

and scientific research available. EPA intends to continue to collect data on GS and to 

incorporate such data as it implements its adaptive approach to GS rulemaking to incorporate 

new research, data, and information about GS. An adaptive approach provides Class VI owners 

or operators the flexibility to use and apply newly developed technologies for GS as they become 

available in the future. EPA clarifies that the intent of the GS rule is not to promote or encourage 

the use of GS; rather, its purpose is to ensure consistency in permitting underground injection of 

CO2 at GS operations across the United States and provide requirements to prevent 

endangerment of USDWs in anticipation of the eventual use of GS to reduce CO2 emissions. 

Letter ID: 0242 Comment ID: 23314 Letter Lines: 209 to 213 

Comment Code: 3150 2.1.5 Comments on required permit information (40 CFR 146.82) 

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

Comment Code: 5700 2.12 Comments on the proposed duration of Class VI permits (seeking 

7
comment) 

Comment: • EPA - advised by experts and regional stakeholders - and not individual 

states, should make permitting decisions on CCS projects, at least for the first 

few years. 

• Permits should be issued in stages, to be adaptive to advances in knowledge, 

science and regulation, not for the operating life of the well. 

Individual Response: EPA agrees that an adaptive approach to address the availability of new 

information and technology is appropriate. EPA plans to, every six years, collect and review 

project data on early GS projects, including site characterization, operational, monitoring, and 

modeling data, to determine whether the appropriate amount and types of information and 

appropriate documentation are being collected, and to determine if modifications to the 

requirements are appropriate or necessary. 

EPA disagrees that it should be the only entity to issue permits during the first few years after 

promulgation. EPA acknowledges the expertise of existing State, Tribal, and Territorial 

programs that implement the UIC requirements under Section 1422 of the SDWA (Class I, III, 

IV, and V wells) and state oil and gas agencies that have been regulating Class II UIC wells for 

decades under section 1425 of SDWA. These agencies already understand the technical and 

administrative issues involved in construction, operation, injection and permitting as well as, in 

the case of Class II operators issues related to CO2 injection, subsurface operations, and pipeline 

transport. EPA believes that existing programs can adapt this expertise to the new requirements 

for Class VI wells and will be able to develop a primacy application for Class VI wells under 

section 1422 of SDWA. 

Additionally, States can use multiple authorities beyond those afforded under the SDWA 

including surface access and land rights, unitization of fields, pore space ownership, mineral 

rights, site safety and emergency preparedness, and maximization of State oil and gas resource 

exploitation. 

EPA expects that both Headquarters and the Regions will work closely with the states during the 

early permitting process to ensure that flexibility is applied in a manner that ensures a consistent 

level of USDW protection from endangerment. EPA designed flexibility into the regulations to 

ensure that site-specific factors can be accounted for and expects that permit writers will use 

discretion where site-specific factors are important. As part of its adaptive approach, EPA also 

plans to review initial permits (after they are granted) to ensure that USDW protection goals 

have been consistently met across differing geologic situations. If necessary, EPA will reevaluate 

the flexibility granted to states in the rule. As part of its adaptive approach, if EPA finds that 

there is not sufficient consistency in the permits so that USDWs are not being sufficiently 

protected from endangerment, it will consider changes to the permit requirements in the future. 

Regarding the commenter's request that permits be issued in stages, EPA clarifies that the final 

rule maintains the lifetime permit provision and that the permit extends through the postinjection site care period (144.36(a)). However, it also adds a requirement that the Director 

review each Class VI permit at least once every 5 years to determine whether it should be 

8
modified, revoked and reissued, terminated or a minor modification made as provided in 

§§144.39, 144.40, or 144.41. The Director’s review will be informed by the owners’ or 

operators’ iterative reevaluation of the project. Specifically, the final rule includes a requirement 

that the AoR be reevaluated at least every five years, and also requires owners or operators to 

review and update the AoR and corrective action plan, the testing and monitoring plan, and the 

emergency and remedial response plan throughout the life of the project (146.84(e), 146.90(j), 

and 146.94(d)). Owners or operators must review each plan and identify necessary amendments 

or demonstrate to the Director that no amendment is needed. In no case can reviews occur less 

often than once every five years. The iterative process and subsequent plan reevaluations ensure 

that time and resources are committed to the most critical aspects of the permit in preventing 

endangerment to USDWs. 

Letter ID: 0242 Comment ID: 23315 Letter Lines: 214 to 215 

Comment Code: 2100 1.6 Target Geologic Formations for GS 

Comment: • Initial Class VI wells should only be permitted in oil and gas reservoirs and 

deep saline formations until other formations are further studied. 

Individual Response: EPA clarifies that the GS rule does not categorically preclude injection of 

CO2 into any non-USDW formation types, provided owners or operators can demonstrate that 

GS can be performed in a manner that protects USDWs from endangerment. EPA recognizes 

that research on the feasibility of various types of geologic formations is underway, and it 

continues to track the progress of this research. For example, while developing the GS 

regulation, EPA evaluated projects conducted by the seven regional carbon sequestration 

partnerships funded by the U.S. Department of Energy and coordinated through the National 

Energy Technology Laboratory (NETL), as well as several international projects. In addition, 

DOE's RCSPs are conducting numerous pilot projects that inject CO2 into a variety of formation 

types, including saline, basalt, coal seams, and oil and gas reservoirs. 

EPA acknowledges that there may be risks 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 projects, including those that inject into various formation 

types, to determine whether the appropriate amount and types of information and documentation 

are being collected. EPA plans, every six years, to collect and review data on GS projects to 

determine whether the appropriate amount and types of information and appropriate 

documentation are being collected, and to determine if modifications to the requirements are 

appropriate or necessary. 

Letter ID: 0242 Comment ID: 23316 Letter Lines: 219 to 220 

Comment Code: 1200 1.1 General comments about the rulemaking 

Comment: The rule also lacks opportunities for public participation, ignores the very 

9
important question of liability, and requires a few definition tweaks. Finally, 

Individual Response: EPA acknowledges the comment and disagrees that the rule lacks 

opportunities for public participation. GS permitting authorities must follow the existing public 

participation requirements for UIC permits as specified in 40 CFR 25 and 40 CFR Part 124. 

These regulations lay out the procedures for decision making and include requirements such as 

requiring the Director to notify the public regarding the availability of the draft permit and allow 

him or her to request a public hearing on the draft permit. Encouraging public participation 

allows the permitting authority to understand public viewpoints, preferences, and concerns about 

the project, which might help avoid public misperceptions about the nature and safety of GS 

projects and forestall resistance later in the permitting effort. 

Please see the remainder of EPA's responses to this comment for further details. For additional 

information on EPA's final regulatory approach, including the discussion of the public 

participation requirements and long-term liability, please see the final rule and preamble as well 

as the rulemaking docket. 

Letter ID: 0242 Comment ID: 23317 Letter Lines: 220 to 223 ; 268 to 293 

Comment Code: 1500 1.2.2.2.4 Some other agency should regulate GS 

Comment: important question of liability, and requires a few definition tweaks. Finally, 

CCS is not exclusively a groundwater issue, and regulating CCS with the proposed 

rule under SDWA is insufficient to address other risks. CCS should be regulated 

through a comprehensive statutory regime. 

I. A Comprehensive Statutory and Regulatory Scheme for CCS is Required. 

It is critical that a CCS regulatory structure be comprehensive. Given the 

myriad of risks associated with CCS, Sierra Club believes that the Safe Drinking 

Water Act is not of sufficient scope and enforceability to handle a regulatory 

field as broad as CCS. Specifically, the Safe Drinking Water Act only protects 

"underground sources of drinking of water" and any CCS program raises many 

potential issues other than groundwater impacts. EPA acknowledges in the rule: 

[t]he SDWA does not provide authority to develop regulations for all areas 

related to GS. These areas include, but are not limited to, capture and 

transport of CO2; determining property rights (i.e., to permit its use for GS 

and for possible storage credits); transfer of liability from one entity to 

another; and accounting or certification for greenhouse gas ("GHG") reductions. 

73 Fed. Reg. 43,492, 43,495 (July 25, 2008). 

Sierra Club cannot emphasize strongly enough the absolute need that the 

government regulates CCS in a comprehensive and inclusive manner that accounts 

for all potential environmental and health impacts, and the universe of issues 

10
involved with large-scale CCS implementation such as capture, transportation and 

pipeline standards, interstate boundary issues, and liability. Moreover, it is 

simply not possible for the government to adequately regulate such a complex 

process through piecemeal regulations. A comprehensive regime, as opposed to a 

patchwork of regulations under different statutes, would be more adaptive to 

emergent information on this budding program as it becomes available. 

Individual Response: EPA clarifies that the scope of the GS regulation is limited to injection of 

CO2, and that all requirements in the GS rule are designed for the purpose of protecting USDWs 

from endangerment. The SDWA does not provide the UIC Program with the authority to develop 

regulations for all areas related to GS, such as releases to the atmosphere, and therefore 

comments related to such efforts are outside the scope of this rulemaking. 

In developing the final GS rule, the Office of Water coordinated with other Agency program 

offices and across federal agencies (e.g., with the Department of Energy; United States 

Geological Survey; Bureau of Ocean Energy Management, Regulation, and Enforcement, 

formerly the Minerals Management Service; Bureau of Land Management). The Agency 

continues to evaluate areas of potential applicability of other Federal environmental statutes 

including, but not limited to: the Clean Air Act; the Resource Conservation and Recovery Act; 

the Comprehensive Environmental Response, Compensation, and Liability Act; and the Marine 

Protection, Research and Sanctuaries Act to various aspects of GS and CCS. The Agency will 

continue to coordinate on GS and CCS related issues to minimize redundancy and maximize 

efficiencies for owners or operators. For additional information, please see the discussion entitled 

"How Does This Rulemaking Relate to Other Federal Authorities and GS and CCS Activities?" 

in the preamble to the final GS rule. 

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

is necessary to enable deployment of GS as a climate change mitigation technology in a manner 

that protects USDWs from endangerment. EPA agrees that the UIC Program, under the authority 

of the SDWA, provides a strong framework for regulating injection of CO2 for GS and adds that 

the GS regulation tailors the UIC requirements to address the unique issues associated with 

large-scale GS including large injection volumes, the relative buoyancy of CO2, its corrosivity in 

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

within subsurface geologic formations. 

Letter ID: 0242 Comment ID: 23318 Letter Lines: 295 to 351 

Comment Code: 1600 1.3 Risk Associated with CO2 GS 

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

Requirements 

Comment: II. The EPA should create a liability scheme for the CCS program. 

There is a long list of potential risks associated with CO2 injection and 

sequestration. Most prominently for purposes of the proposed rule, injected CO2 

could cause groundwater contamination by leaking into potable aquifers or 

11
causing saline intrusion.[FN15] 

When CO2 is injected underground it will naturally migrate through the pore 

space. This natural migration could lead CO2 to travel upward throughout the 

reservoir into undetected or abandoned portions of the reservoir, or into 

portions of the reservoir not owned by the operator, resulting in potential 

liability for subsurface trespass.[FN16] 

Surface leakage out of the storage formation through faults and fractures may 

lead to other types of potential liability. It could endanger human health by 

leaking into indoor air and basements.[FN17] Although unlikely, a large surface 

release could pose health risks to humans, in the form of asphyxiation or the 

other effects from prolonged exposure to high concentrations of CO2.[FN18] Such 

other effects include difficulty breathing, loss of consciousness, and death. In 

addition, CO2 seepage could harm flora and fauna, and could potentially ruin 

nearby ecosystems and agriculture.[FN19] CO2 also could make sources of oil and gas 

unattainable, create pressure changes causing ground heave, and even trigger 

seismic events.[FN20] 

[FN15: Wilson et al., World Resources Institute Issue Brief, Liability and 

Financial Responsibility Frameworks for Carbon Capture and Sequestration at 3 

(Dec. 2007).] 

[FN16: Id. at 2.] 

[FN17: Id. at 3; see also IPCC CCS 5.7.7.] 

[FN18: Id. at 3.] 

[FN19: Id.] 

[FN20: Id.] 

Given the potential impacts to the environment, public health, and private 

property, the proposed rule’s approach of ignoring liability issues is improper. 

Large-scale CO2 sequestration should not begin until liability is definitively 

determined. EPA should thus revise the regulations and adopt a liability scheme 

that encompasses the "polluters pay" principle. 

The polluters pay principle derives from the fundamental, fair, and logical 

proposition that the party responsible for producing pollution should also be 

responsible for paying for any damage to the natural environment. Utilizing the 

polluters pay principle provides an incentive for owners, operators and CO2 

generators to use precaution in their operations. Potentially liable parties 

have an incentive to avoid risk and damage, which often manifests in parties 

undertaking additional investment in research and development to improve 

knowledge and technologies. 

The EPA should revise the regulations to impose joint and several liability on 

Class VI well owners and operators and the generator of the injected CO2 for 

contamination of underground sources of drinking water, property damage, 

12
personal injury or any other injury arising from the injection. In addition, 

the EPA should require that an operator has complete liability coverage from a 

private insurance company before commencing injection. "Pollution legal 

liability insurance" coverage protects the insured party from claims arising 

from unknown conditions or problems, such as property damage or public health 

impacts from CO2 leakage. 

Individual Response: EPA believes that the GS rule requirements appropriately address the risk 

associated with long-term storage of CO2. EPA agrees that caution is warranted and has, as a 

result, developed a new well class with requirements tailored to address the unique challenges 

posed by GS and potential risks associated long-term injection of CO2. These requirements 

include the tailored AoR delineation process per §146.84, monitoring that is appropriate to GS 

projects per §146.90, and extended post-injection site care per §146.93. Failure to meet these 

requirements would be considered a violation of the permit and would be subject to applicable 

civil, criminal, or administrative penalties under SDWA §1423. 

EPA agrees that owners or operators of Class VI wells must ensure that resources are available to 

prevent endangerment of USDWs from improper plugging, remediation, and management of 

wells. For this reason, the GS rule requires that owners or operators demonstrate and maintain 

financial responsibility for corrective action on wells in the AoR, injection well plugging, postinjection site care and site closure, and emergency and remedial response at GS sites as specified 

in §146.85. EPA clarifies that this demonstration must be made before injection can begin. In the 

event of contamination or other adverse event that endangers a USDW during the life of the 

project, the financial instrument(s), such as insurance, bonds, etc., rather than public monies, 

would cover necessary response actions to remediate the USDW. EPA clarifies that it is the 

owner or operator of the well who will be required to demonstrate financial responsibility, not 

the generator of the CO2, consistent with EPA’s authority under SDWA. Furthermore, EPA 

notes that tort and other remedies will continue to be available after site closure. Other Federal 

environmental statutes, e.g. Clean Air Act, 42 U.S.C. §§7401-7671; CERCLA, 42 U.S.C. §9601-

9675; and RCRA, 42 U.S.C. §6901-6992, potentially apply as well to the risks created by the 

long-term storage of CO2. 

EPA disagrees that the GS rule ignores liability issues but is working within the confines of its 

statutory authority under the SDWA. EPA notes that comments regarding liability for 

contamination of the environment outside of endangerment of USDWs (e.g., CO2 leakage into 

basements, harm to flora and fauna, etc.) are outside of EPA’s authority under the SDWA and 

are therefore outside the scope of this rulemaking. 

Letter ID: 0242 Comment ID: 23319 Letter Lines: 353 to 417 

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

Requirements 

Comment: III. The EPA Should Revise the Regulations to Provide for Adequate Financial 

Assurance for Long-Term Stewardship 

13
Under the proposed rule, 73 Fed. Reg. 43,492, 43,537 (proposed 40 C.F.R. 

146.85), the owner or operator of an injection well must demonstrate and 

maintain financial responsibility and resources for corrective action, injection 

well plugging, post-injection site care and emergency and remedial response in a 

manner prescribed by the Director. The proposed rule, however, does not contain 

a long-term liability plan; it only gives the Director a general duty to ensure 

financial responsibility of the operator and states that the EPA will develop 

guidance at a later date to recommend types of financial mechanisms Directors 

can use to meet this requirement. Details of a liability scheme for CCS should 

not be left to a future date and should not rely on a corporate entity over the 

long term. 

Effective financial assurance mechanisms are necessary to ensure that closure 

and post-closure site care, such as monitoring, are conducted. When an owner or 

operator becomes insolvent without an adequate financial assurance mechanism, 

significant delays could occur, increasing the likelihood of environmental 

contamination and adverse human health effects. Moreover, when these failures 

occur, federal or state governments (and ultimately the general public) would 

become financially responsible for the closure and post-closure site care costs. 

Consequently, any uncertainties about the adequacy of financial assurances need 

to be minimized. 

A. Financial Assurance Under the Proposed SDWA Rule 

If an owner or operator declares bankruptcy and the financial assurances are 

inadequate, drinking water sources are at risk and the public shoulders the cost 

of post-closure operations. These risks are unacceptable. EPA needs to take 

action before finalizing this rule and improve the financial assurance 

requirements by prohibiting the use of certain financial mechanisms, providing a 

list of appropriate financial assurance mechanisms, and providing guidance on 

how those approved mechanisms should be structured. 

Numerous federal agencies have documented the deficiencies with providing the 

Director with complete discretion to determine whether financial assurances are 

sufficient. In 2003, the United States General Accounting Office investigated 

whether the financial assurance requirements for Class I wells were sufficient. 

The GAO noted that since 1980, when the deep injection well program began, only 

four sites had ceased operation. Two of those facilities did not have adequate 

financial resources to plug and abandon the wells, resulting in additional costs 

to taxpayers. For the two other sites, the financial assurance mechanism was not 

tested because other companies purchased and continued operating the wells. 

[FN21] 

[FN21: United States General Accounting Office, Deep Injection Wells, EPA Needs 

to Involve Communities Earlier and Ensure that Financial Assurance Requirements 

Are Adequate, Report No. GAO-03-761 (June 2003).] 

14
Uncertainties exist about the adequacy of financial assurance requirements in 

other federal waste disposal programs. For instance, EPA officials and EPA’s 

Office of Inspector General questioned the adequacy of RCRA’s financial 

assurance requirements, which we describe further below. [FN22] 

[FN22: U.S. Environmental Protection Agency, Office of Inspector General, 

Continued EPA Leadership Will Support State Needs for Information and Guidance 

on RCRA Financial Assurance, Report No. 2005- P-00026 (Sept. 26, 2005); U.S. 

Environmental Protection Agency, Office of Inspector General, RCRA Financial 

Assurance for Closure and Post-Closure, Report No. 2001-P-007 (March 30, 2001).] 

These studies underscore that EPA must take affirmative action in the final rule 

by providing concrete guidance to Directors. EPA should prohibit the use of 

inadequate financial assurance mechanisms, provide a list of accepted mechanisms 

and a list of situations to avoid with the accepted mechanisms. 

Individual Response: EPA agrees that financial responsibility for GS projects is important. The 

goal of financial responsibility is to ensure that financial 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 financial difficulties. EPA believes that minimum 

financial responsibility requirements are necessary to hold well owners or operators accountable 

for the safe operation and site closure of the well while protecting USDWs and avoiding extra 

expense to the public. See the final rule and preamble for further discussion of EPA's approach to 

financial responsibility. 

The Agency has clarified the rule by specifying acceptable financial responsibility instruments in 

the final regulation, at §146.85(a). Additionally, EPA is developing guidance (available on 

EPA's website at http://water.epa.gov/type/groundwater/uic/wells_sequestration.cfm) that 

describes the types of financial instruments that owners or operators may choose to meet 

financial responsibility requirements for Class VI wells. EPA has reviewed OIG and GAO 

perspectives and is considering all comments in the guidance development process, including 

recommendations made by OIG and GAO. 

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

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

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

operator can demonstrate to the Director that the GS project no longer poses an endangerment to 

USDWs. For additional information about the PISC and site closure requirements, see the 

preamble to the final GS rule. 

Once an owner or operator has met all regulatory requirements under Part 146 for Class VI wells 

and the Director has approved site closure under §146.93, the owner or operator will generally 

no longer be subject to enforcement for regulatory noncompliance. The financial instrument 

required under §146.85 will be released if it has not been used. However, even if a site closure is 

15
approved under §146.93, an owner or operator may be held liable for regulatory noncompliance 

(including violation of 40 CFR 144.12) in certain circumstances. For example, an owner or 

operator may be held liable even after site closure was approved if the Director relied on 

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

approving site closure. 

An owner or operator may always be subject to any action the Administrator deems necessary to 

protect the health of persons under §1431 of the SDWA after site closure if there is unanticipated 

migration towards or into a USDW that causes or threatens imminent and substantial 

endangerment to public health. If the owner or operator fails to comply with the order, he or she 

may be subject to a civil penalty for each day in which such violation occurs or failure to comply 

continues. 

The Agency clarifies that Class VI well permits may be transferred to another owner or operator 

pursuant to §144.38 whereby generally all other regulatory responsibilities are transferred to that 

new owner and operator, including all potential liabilities associated with meeting the 

requirements of that permit. 

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

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

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

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

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

EPA's final approach. 

Letter ID: 0242 Comment ID: 23320 Letter Lines: 419 to 546 

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

Comment: B. Financial Assurance Mechanisms 

Financial assurance mechanisms ensure that facilities will have sufficient funds 

to properly close their permitted units and maintain the site for the duration 

of post-closure responsibility. These mechanisms are meant to prevent default to 

federal or state funds in the event that facilities are unable or unwilling to 

cover closure and post-closure costs. EPA has not developed a guidance document 

for financial assurances for the Class VI wells, but there is an EPA guidance 

document on financial assurances for UIC injection. [FN23] 

[FN23: Victor J Kim, Director of the Office of Drinking Water, U.S. 

Environmental Protection Agency, Guidance for Financial Assurance for FederallyAdministered UIC Programs, Underground Injection Control Branch Guidance #39 

(May 29, 1985).] 

The following is a list of the different mechanisms that EPA recommends for UIC 

16
injection and the problems associated with each one: 

1. Financial Test - If a facility meets corporate financial test criteria, it 

may satisfy financial assurance obligations solely on the strength of its 

financial condition. For instance, under the current UIC regulations, a firm 

must have a minimum of $10 million in tangible net worth to pass the corporate 

financial test. Net worth is not the only financial test requirement. Additional 

requirements include financial ratios or bond ratings. 

Risks: A firm using the financial test to satisfy obligations cannot guarantee 

it will have funds for closure and post-closure activities in the event it 

becomes insolvent. Taxpayers bear the risk of the firm’s insolvency. 

2. Corporate Guarantee - A corporate parent, sibling corporation, or firm with a 

substantial business relationship with the facility can meet the financial test 

requirement on its behalf. 

Risks: For the same reasons as the financial test, a firm using the corporate 

guarantee cannot guarantee it will have funds for closure and post-closure 

activities in the event its corporate parent, sibling or firm with a substantial 

business relationship with becomes insolvent. Taxpayers bear the risk of the 

firm’s insolvency. 

3. Trust Fund - Owners and operators are required to deposit money according to 

a phased-in schedule (known as a pay-in period). At the end of the pay-in 

period, the facility should have enough money set aside to cover its financial 

assurance requirements. 

Risks: Risks from trust funds include bank failures and the trust will not be 

fully funded before the facility becomes insolvent. This later risk can be 

mitigated by shortening the pay-in-period. 

4. Letter of Credit - A letter of credit is a credit document issued to an owner 

or operator by a financial institution, covering the costs of closure and postclosure. 

Risks: Risks from a letter of credit is that the bank that issued the credit 

becomes insolvent. The letter of credit is no longer in effect because, unlike a 

bank deposit, a letter of credit is not guaranteed by the Federal Deposit 

Insurance Corporation when a bank fails. 

5. Surety Bond - Two types of surety bonds guarantee that closure and postclosure obligations will be fulfilled: 

Payment Bond - If an owner or operator fails to fulfill closure or post-closure 

requirements, a payment bond funds a standby trust fund in the amount equal to 

17
the face value of the bond. 

Performance Bond - A performance bond guarantees performance of closure and 

post-closure requirements. A performance bond can also be paid into a standby 

trust fund. 

Risks: The main risk is the surety company becomes insolvent. This risk can be 

mitigated by imposing regulations on surety bonds. For instance, the U.S. 

Treasury issues a list of acceptable sureties and regulations could require that 

the surety be on this list. 

6. Insurance - Owner or operator takes out an insurance policy to cover the 

costs of closure and post-closure. The policy must guarantee that funds up to 

the face amount of the policy will be available for payment of closure or postclosure care upon the direction of the permitting authority. (It should be noted 

that, to date, insurance is rarely used as a financial assurance mechanism for 

injection wells so it has a less developed space in the marketplace.) 

Risks: Insurance presents a number of issues, including (1) policy terms and 

exclusions may be are inconsistent with regulations; (2) regulators may have to 

pursue litigation in order to secure payment; and (3) regulators fail to receive 

cancellation notices or late notices even if required by regulations. Since 

insurance is primarily regulated by states, differences in state insurance 

regulations contribute to the complexities in evaluating insurance policies. A 

standardized insurance policy form would mitigate those risks. 

7. Captive Insurance - Captive insurance is insurance issued by a wholly-owned 

subsidiary of the company being insured. 

Risks: Even though the captive may be a legally separate corporation, the 

financial strength of the captive is dependent upon the parent corporation. 

Therefore, the risk of insolvency of a captive insurance company and the risk of 

insolvency of a facility insured by a captive are not independent but instead 

are positively correlated. Since the failure of the one is closely tied to the 

failure of the other, the assurance risk is high. 

8. Combinations - Trust funds, letters of credit, surety bonds guaranteeing 

payment, and insurance can be combined for a facility if together their value is 

at least equal to the closure or post-closure estimate. Surety bonds 

guaranteeing performance, financial tests, and corporate guarantees cannot be 

combined. 

EPA’s Office of Inspector General looked at these different financial assurance 

mechanisms, determined the regulatory risk versus facility cost of each option 

with regard to the RCRA program, and ranked the risks and costs as the 

following: [FN24] 

18
[FN24: U.S. Environmental Protection Agency, Continued EPA Leadership Will 

Support State Needs for Information and Guidance on RCRA Financial Assurance, 

Report No. 2005-P-00026 (Sept. 26, 2005).] 

Mechanism Regulatory Risk Cost to Facility 

Letter of Credit Low High 

Trust Fund Low High 

Insurance Medium Medium 

Surety Bond Medium Low Medium High 

Financial Test High Low 

Corporate Guarantee High Low 

Captive Insurance Very High Very Low 

Individual Response: Under the final GS rule, owners or operators may choose from a variety 

of financial instruments to meet their financial responsibility obligations under the rule, provided 

the Director determines that the operator's proposed financial responsibility demonstration is 

adequate to protect USDWs from endangerment. The ability of the owner or operator to pay for 

each GS activity must be demonstrated, including corrective action on wells in the AoR, 

injection well plugging, PISC and site closure, and emergency and remedial response throughout 

the life of the project. The final GS rule specifies at §146.85(a)(1) the permitted types of 

financial responsibility instruments. 

The Agency clarifies that the trust funds that are addressed as financial responsibility instruments 

in the GS rule are set up by individual owners or operators and are different from a national-level 

trust described by the commenters that would cover large numbers of GS projects. EPA does not 

have authority to set up a national-level trust fund under the SDWA. 

EPA will retain self insurance and corporate guarantee as options for financial responsibility for 

Class VI wells. EPA believes that if properly used, these can be appropriate options for some 

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

otherwise USDWs may not be adequately protected. Owner or operators who choose to selfinsure and use the financial test must be able to demonstrate profitability, with a margin 

sufficient to cover contingencies and unknown obligations, and stability. If the owner or operator 

meets corporate financial test criteria, this is an indication that the owner or operator can 

guarantee its ability to satisfy financial obligations based solely on the strength of the company’s 

financial condition. If an operator or operator is not able to meet the corporate financial test 

criteria may arrange a corporate guarantee by demonstrating that its corporate parent meets the 

financial requirements on its behalf. 

19
EPA also acknowledges the commenters' concern regarding potential insolvency of surety 

companies, but notes that such unpredictable events are outside of the Agency's control or 

authority. However, EPA requires under §146.85 that a Director may only approve instruments 

determined to be sufficient to address endangerment of USDWs and has the discretion to 

disapprove of instruments that they determine are not sufficient. Furthermore, owners or 

operators or their guarantor must notify the Director no later than 10 days after filing for 

bankruptcy. 

Regarding concerns that the surety industry may be reluctant to underwrite bonds for the long 

term, EPA notes that the GS regulation provides flexibility for owners or operators to choose 

from a variety of financial instruments to meet their financial responsibility needs. EPA cannot, 

under the SDWA, require that the surety be included on the U.S. Treasury's list of acceptable 

sureties. However, EPA notes that the preamble to the final rule clarifies the conditions under 

which the Director can disprove instruments that he/she determines may not be sufficient. 

EPA emphasizes that, with comprehensive financial responsibility requirements in place (i.e., to 

cover corrective action on wells in the AoR, injection well plugging, PISC and site closure, and 

emergency and remedial response at GS sites), no taxpayer money should be necessary to 

address endangerment of USDWs throughout the lifetime of the site. 

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

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

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

requirements for GS wells. The financial responsibility guidance will include considerations for 

Directors regarding how to evaluate the appropriateness of a specific financial responsibility 

instrument for a specific project. 

Letter ID: 0242 Comment ID: 23321 Letter Lines: 549 to 601 

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

Requirements 

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

comment) 

Comment: C. Sierra Club’s Recommendation for Adequate Financial Assurance Under the 

Proposed Rule 

There are several actions that the EPA should take in the proposed rule to 

ensure that Class IV owners and operators have adequate financial assurance. 

First, EPA should prohibit the use of certain mechanisms that present too great 

a risk. The strength of third party mechanisms depends largely on the 

independence between risks of financial failure of the facility and the thirdparty providing that mechanism. EPA should thus prohibit reliance on captive 

insurance, financial test, and corporate guarantee. 

20
Captive insurance is insurance issued by a wholly-owned subsidiary of the 

insured. The financial health of the captive insurance company is closely tied 

to the parent company, so if the company encounters financial difficulties there 

is no guarantee that the captive insurance company would retain the necessary 

resources to fund closure and post-closure. This is counter to the basic purpose 

of an insurance, which distributes risk among different parties. The risks 

associated with this mechanism are too great and EPA should prohibit reliance on 

captive insurance in its regulations. 

The EPA should also revise the regulations to prohibit use of the financial test 

and corporate guarantee. As with captive insurance, there is no diversification 

of risk. If the firm, its parent or sibling corporation becomes insolvent, then 

the taxpayer must cover these costs. Given the current financial landscape it is 

naïve to assume that this mechanism provides adequate safeguards to the 

environment and tax payers. Many firms that would have passed the financial or 

corporate guarantee test (a net worth of more than $10 million) have recently 

collapsed. The reality of the current financial crisis, in addition to the fact 

that these facilities will be operating for upwards of 50 years, indicate that 

the financial test and corporate guarantee present too great a risk. 

In addition to prohibiting certain financial assurance mechanisms, EPA should 

revise the regulations to specify that trust funds, letters of credit, surety 

bonds and insurance (not captive insurance) are acceptable mechanisms. These 

mechanisms should be selected because they provide a medium to low regulatory 

risk. 

The regulations should specifically define the terms ‘trust funds’, ‘letters of 

credit’, ‘surety bonds’ and ‘insurance’ so that the safety of these mechanisms 

does not become distorted. The regulations should provide this definition 

backstop because states have sometimes approved variations on these mechanisms 

that were fiscally imprudent, as noted in the Office of Inspector General report 

on RCRA financial assurances. [FN25] For instance, the report noted that 

sometimes regulators allowed trust funds to be funded with stock, including 

stock of the regulated company or with real estate. [FN26] In addition, if an 

owner or operator is going to use insurance, it should be required to submit a 

copy of the insurance policy, and not just a certificate of insurance, so that 

the permit reviewer can ensure the policy coverage is sufficient. 

[FN25: U.S. Environmental Protection Agency, Continued EPA Leadership Will 

Support State Needs for Information and Guidance on RCRA Financial Assurance, 

Report No. 2005- P-00026 at 11 (Sept. 26, 2005).] 

[FN26: Id.] 

Individual Response: EPA has clarified the financial responsibility requirements in the final GS 

rule, and has included at §146.85(a) a list of qualifying financial responsibility instruments, 

including trust funds, surety bonds, letters of credit, insurance, self insurance, escrow accounts, 

21
or any other instrument(s) satisfactory to the Director. 

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

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

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

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

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

requirements, see the preamble to the final GS rule. 

EPA retains the use self-insurance as an option to demonstrate financial responsibility for Class 

VI wells. EPA believes, based on input by commenters, that self-insurance, if properly used, can 

be an appropriate option for certain owners or operators. Self-insurance has been used 

successfully in the past (e.g., under the Class I and RCRA programs). EPA recognizes that there 

are some concerns about the use of self insurance, including those mentioned by the commenters, 

and is developing guidance to assist Directors in evaluating the appropriateness of self-insurance 

in specific circumstances, such as evaluation of owners or operators' demonstrations of financial 

worthiness or evaluation of whether certain owners or operators pose too great a financial risk to 

use self-insurance as a financial responsibility instrument. States have the discretion under the 

rule to prohibit the use of specific financial instruments if they feel they are inadequate. 

EPA will also retain the financial test and the corporate guarantee as options to demonstrate 

financial responsibility for Class VI wells. EPA believes that if properly used, the financial test 

and corporate guarantee can be appropriate options for some owners or operators. EPA 

recognizes that it is important for self-insurers to be credit-worthy; otherwise USDWs may not 

be adequately protected. Since there are some concerns about the use of financial tests and 

corporate guarantees, including those mentioned by the commenter, EPA is developing guidance 

to assist Directors in evaluating the appropriateness of these instruments in specific 

circumstances. 

EPA acknowledges that states may not be authorized under state law to allow for self insurance 

or other financial instruments. Therefore, states may prohibit the use of any financial instruments 

included in the rule, including self insurance, for Class VI wells. See the final rule and preamble 

for further discussion of EPA's final approach to financial responsibility. 

Finally, EPA is developing guidance that describes the types of financial instruments, including 

insurance, which owners or operators can use to meet financial responsibility requirements for 

GS wells and will take the commenter's suggestion into consideration. The guidance will discuss 

the strengths and weaknesses of various instruments. The guidance will be available on EPA's 

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

As described above, EPA has taken commenter’s concerns about long-term liability into account. 

See the final rule preamble for further discussion of EPA’s approach. 

Letter ID: 0242 Comment ID: 23322 Letter Lines: 603 to 673 

22
Comment Code: 5400 2.9 Proposed Financial Responsibility and Long-Term Care 

Requirements 

Comment: D. Accurate Cost Estimates are Necessary for Adequate Financial Assurance 

One of the most critical aspects of ensuring that owners or operators have the 

resources to pay for injection-well plugging and post-injection site care is 

cost estimation. Sound cost estimation requirements ensure that sufficient funds 

are set aside in the financial assurance instrument to properly undertake 

covered activities at any time during the operating life of the facility and 

during post-injection site care period. 

Corporate actors, however, have an inherent incentive to underestimate these 

costs. Owners and operators can save money by underestimating the closure and 

post-closure care costs because the price of the financial assurance mechanism 

is correlated to these closure costs. 

Under the proposed rule, there are no guidelines on how the owner or operator 

should prepare the initial cost estimate. For instance, there is no prohibition 

against the owner or operator preparing its own cost-estimate. In addition, the 

proposed rule hardly has any requirements for when and how the cost estimate 

should be adjusted over time. The proposed rule provides that the owner or 

operator must provide to the Director, at a frequency determined by the 

Director, written updates of adjustments to the cost estimate. 73 Fed. Reg. 

43,492, 43,537 (proposed 40 C.F.R. § 146.85(b)). In addition, the operator must 

provide a cost estimate adjustment if the Director has reason to believe the 

initial estimate is no longer valid. 73 Fed. Reg. 43,492, 43,537 (proposed 40 

C.F.R. § 146.85(d)). This approach has not worked for EPA under RCRA, and it 

will not work for Class VI wells. 

In its review of the RCRA financial assurance mechanisms, EPA’s Office of 

Inspector General spoke with many state administrators regarding the difficulty 

of assessing cost estimates. Many state administrators agreed that it was 

difficult to estimate costs for closure and post-closure activities. As this 

report explained, "the accuracy of each cost estimate review was subject to the 

level of expertise and knowledge of the individual inspectors performing the 

reviews." [FN27] In addition, regulators noted that it was difficult to challenge 

cost estimates because they did not have the resources to research and look up 

costs in different forms of documentation.[FN28] 

[FN27: U.S. Environmental Protection Agency, Office of Inspector General, RCRA 

Financial Assurance for Closure and Post- Closure, Report No. 2001-P-007 at page 

47 (March 30, 2001).] 

[FN28: Id.] 

To address problems with reviewing cost estimates for RCRA post-closure 

23
activities, EPA provided regulators with two tools -- a manual, which provided a 

consistent, accurate, and rapid method for evaluating cost estimates, and 

software, which incorporated the manual’s methodology. 

In light of incentives to underestimate costs and the problems with reviewing 

such estimates under other regulatory programs, EPA should revise its cost 

estimation section to reduce the possibility of undervalued cost estimates and 

ensure adequate money is available for closure and post-closure care. 

Specifically, the final rule should incorporate these revisions: 

-EPA should specifically set out the elements to be included in an initial cost 

estimate. If the information is standardized, agency employees will have an 

easier time evaluating the sufficiency of such estimates. 

-When an owner or operator prepares its own cost estimate, EPA should require 

independent third-party review and cost certification. 

-The final rule should have a standard cost-estimate adjustment process. The 

cost estimate should be adjusted annually to account for inflation. In turn, the 

initial financial assurance mechanism should be structured to account for these 

inflation increases. In addition, the Director should be required to assess the 

adequacy of the cost estimate at five year intervals. 

In addition, EPA should also publish a manual that provides permit writers with 

a consistent, accurate and rapid method for evaluating cost estimates for 

closure and post-closure care of Class VI wells, as well as a software program 

that incorporates the manual’s methodology, which will save more time and 

prevent errors in assessing the adequacy of cost estimates. 

Individual Response: EPA agrees that sound financial responsibility cost estimates are 

important to properly regulating Class VI wells. For this reason, EPA has provided requirements 

for adjusting cost estimates to reflect changes to the project plans. Furthermore, EPA is 

developing guidance on financial responsibility for Class VI wells. The guidance will include a 

discussion on how best to estimate costs, to assist GS 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. The guidance will be available on EPA's 

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

EPA agrees that it is important to periodically update cost estimates that support financial 

responsibility determinations. EPA clarifies that the GS rule, at §146.85(c) requires the owner or 

operator to provide annual updates to the cost estimate to account for any amendments to the 

AoR and corrective action plan, the injection well plugging plan, the PISC and site closure plan, 

and the emergency and remedial response plan. 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 adequate, as specified at §146.85(e). The cost estimation 

methodology guidance will also contain instructions on how to adjust cost estimates for inflation 

24
to help account for the long-term nature of geologic sequestration, as required in the final rule at 

§146.85(c)(2). 

EPA is not requiring independent or third-party review and cost certification of operatorprepared cost estimates. 

Letter ID: 0242 Comment ID: 23323 Letter Lines: 675 to 691 

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

comment) 

Comment: E. Congress Should Create a Trust Fund to Cover Closure, Post-Closure, and 

Remediation Costs for Cases When a Financial Assurance Mechanism Fails. 

Even if EPA revises the regulations to incorporate all of these suggested 

improvements to the financial assurance program, there will undoubtedly be 

instances when a facility becomes insolvent and the financial assurance 

mechanism fails. In addition, there could be instances were the financial 

assurance mechanism does not fail, but is insufficient to cover costs because 

the cost estimate was too low. To ensure that citizens do not have to pick up 

the tab in such situations, Congress should create a fee payment system that 

funds a trust, which would be used to fund these closure, post-closure and 

remediation actions. The trust must be created so that its funds cannot be drawn 

for any other purposes. Congress should assess fees on all owners, operators, 

generators and transporters of the injected CO2. These fees should be assessed 

based on a pricing system that reflects the risk profile of each particular 

injection site, which will also influence selection of the safest sites for 

large scale CCS, especially for the earliest projects. 

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

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

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

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

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

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

funds would not necessarily be available for GS financial responsibility. 

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

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

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

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

cover large numbers of GS projects. 

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

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

rule requires that an owner or operator must conduct monitoring as specified in the Director25
approved PISC and site closure plan following the cessation of injection until the owner or 

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

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

requirements, see the preamble to the final GS rule. 

To prevent incidents in which the cost estimate is too low, the final rule requires frequent 

updating of cost estimates at §146.85(c)(2). The owner or operator must update the cost estimate 

after amendments to the AoR and corrective action plan, well plugging plan, post-injection site 

care and site closure plan, and the emergency and remedial response plan. (The AoR and 

corrective action plan and the emergency and remedial response plan must be updated at least 

every five years.) In addition, the cost estimate must be updated annually for inflation. The rule 

also requires updates when the Director determines the original cost estimate is insufficient. 

Letter ID: 0242 Comment ID: 23324 Letter Lines: 693 to 811 

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

Comment: IV. EPA Should Administer the CCS Program with the Help of a Specially Formed 

CCS Technical Advisory Committee. 

Under the Safe Drinking Water Act, delegated states can administer their own 

underground injection control ("UIC") programs once approved by EPA. Thirtythree states have primacy to run the UIC program and 7 states have authority to 

administer some UIC permits. [FN29] In states without primacy and on tribal lands, 

EPA administers the program. 

[FN29: U.S.Environmental Protection Agency. UIC Program Primacy, available at 

http://www.epa.gov/OGWDW/uic/primacy.html] 

The proposed CCS rule would give the enormous responsibility of regulating CCS 

at this early stage to state administrators. As provided in the rule: "States 

with primacy must develop a program incorporating all new Federal requirements 

for Class VI wells if they wish to regulate CO2 GS, and all programs will be 

subject to EPA approval. If States do not develop a program for Class VI wells, 

EPA will oversee CO2 GS in those States." 73 Fed. Reg. 43,492, 43,530; see 42 

U.S.C. § 300h-1(b)(1)(B) (requiring state showing of conformity to new 

requirements). 

Permit decisions require evaluation of many complicated technical issues that 

demand a high level of expertise and there are scores of uncertainties at this 

early stage of CCS development, as explained above in the introduction to these 

comments. There is also cause for concern over the capacity and competency of 

some state regulatory agencies to properly regulate a CCS program. State 

permitting decisions can contradict science and logic and produce dangerous 

results for local health and welfare. The Florida Department of Environmental 

Protection approved the construction and operation of a facility designed to 

26
inject more than 112 million gallons of treated sewage a day, erroneously 

believing that the subsurface geology would prevent the injected sewage from 

migrating into the overlying Floridan Aquifer. Most experts agreed that the 

injection program should not have been permitted, and eventually the injected 

sewage migrated upward into the Floridan Aquifer. Even after evidence of 

contamination was well-established, Florida continued to expand its injection 

program. 

Federal administration coupled with a technical advisory board would ensure the 

initial implementation of a national CCS program will be based on the best 

science, insulate decisions from profit and political motives, facilitate good 

public perception of CCS and would ensure the long-term integrity of the 

program. The International Risk Governance Council stressed that "[a]ssignment 

of regulatory responsibility to competent and trustworthy bodies or agencies 

will be paramount in assuring the public that the technology is deployed with 

adequate oversight and safeguards." [FN30] A nationally administered program will 

also enable federal coordination of information for this young program, ensure 

information-sharing to other states and developing nations, and help manage 

regional issues that transcend state lines. 

[FN30: IRGC, Regulation of Carbon Capture and Storage, p. 24, available at 

http://www.irgc.org/IMG/pdf/Policy_Brief_CCS.pdf (last visited December 17, 

2008).] 

Over the last few years, there has been a global CCS dialogue among a wide range 

of stakeholders--with top scientists, engineers, industry and environmental 

groups working together to contribute to reports and policy suggestions. The 

IPCC is an international scientific body that provides an objective source of 

information. The comprehensiveness of the scientific content is achieved through 

contributions from experts in all regions of the world and all relevant 

disciplines. [FN31] The World Resources Institute, an environmental think tank, 

convened a diverse group of over 80 stakeholders, including representatives from 

academia, business, government, and environmental nongovernmental organizations 

to craft its Guidelines for Carbon Dioxide Capture, Transport, and Storage. 

[FN32] A technical advisory board would ensure this diversity of opinion and 

viewpoint is considered, and the expertise acquired in this dialogue is 

reflected, in the initial development and implementation of the United States’ 

CCS program. 

[FN31: http://www.ipcc.ch/about/index.htm (last visited Dec. 15, 2008).] 

[FN32: http://pdf.wri.org/ccs_guidelines.pdf (last visited Dec. 15, 2008).] 

The CCS technical board should include a diverse group of experts in CCS-related 

fields with CCS experience, including geology, geophysics, structural geology, 

hydrogeology, and geochemistry. Additionally, the board should dedicate a few 

flexible positions to include members with site-specific knowledge at the state, 

27
regional, and national levels that will rotate depending on project location. 

Alternatively, for local information, the technical board could coordinate with 

regional advisory boards formed pursuant to 40 C.F.R. § 25.7. 

The CCS technical board should have the following responsibilities, among other 

appropriate functions: 

• review technical data and make recommendations for site selection and permit 

terms 

• review monitoring data and make recommendations for permit revisions 

• fact checking 

• ensuring coordination among permits 

• accelerating and disseminating best practices 

• make decisions regarding delegation of primacy 

Technical advisory boards are well-respected by the public and environmental 

community and work well in other contexts. The Desert Tortoise Recovery 

Committee is made up of a diverse group of scientific experts and serves an 

advisory role to agency administers to ensure species’ recovery plans, 

revisions, monitoring, effectiveness, etc. meet rigorous scientific standards. 

[FN33] The Independent Scientific Advisory Board serves the National Marine 

Fisheries Service (NOAA Fisheries), Columbia River Indian Tribes, and Northwest 

Power and Conservation Council by providing independent scientific advice and 

recommendations regarding scientific issues that relate to the respective 

agencies' fish and wildlife programs. [FN34] 

[FN33: http://www.fws.gov/nevada/desert_tortoise/dt_sac.html (last visited Dec. 

15, 2008).] 

[FN34: http://www.nwcouncil.org/fw/isab/background.htm and 

http://www.nwcouncil.org/fw/isab/members.htm (last visited Dec. 15, 2008).] 

The success or failure of CCS cannot rest on the decisions of state 

administrators like the ones in Florida responsible for the sewage injection 

debacle. "'[A] single major accident, resulting from inadequate regulatory 

oversight, anywhere in the world, could seriously endanger the future viability 

of GS [geologic sequestration]." [FN35] EPA must take responsibility for 

administration of the nation’s CCS program, at least for the first few years 

until the task becomes less extraordinary. Agency officials will need help 

interpreting and understanding the technical data that will accompany permit 

decisions, and it should enlist the help of a diverse group of CCS experts on a 

technical advisory board. 

[FN35: Wilson, E., Morgan, M. et al., Regulating the Geological Sequestration of 

CO2, Environmental Science & Technology, Apr. 15, 2008, at p. 5.] 

Individual Response: As described above, EPA disagrees that it should be the only entity to 

28
issue permits during the first few years after promulgation and believes it is contrary to the 

SDWA. 

EPA will consult with the National Drinking Water Advisor Committee, associations and 

organizations, EPA’s Office of Research and Development, and experts; review permits; and 

continue to hold workshops to build expertise and ensure that implementation of the national 

program is based on the best available science. The Agency plans, every six years, to collect and 

review data on GS projects to determine whether the appropriate amount and types of 

information and appropriate documentation are being collected, and to determine if 

modifications to the requirements are appropriate or necessary. 

Regarding unintended consequences related to municipal disposal wells in Florida, EPA clarifies 

that this is outside the scope of this rulemaking and that GS is quite different from the injection 

of wastewater in Florida. An owner or operator seeking to characterize a site similar to one used 

for municipal disposal in Florida for GS (pursuant to the requirements at §146.82) and to identify 

both injection formations and suitable confining units (per §146.83) might not be able to meet 

the requirements and ensure protection of USDWs due to the nature of karst 

formations/geology. In addition, the computational modeling required to delineate the AoR at 

§146.84 for a GS project would likely predict inappropriate buoyant flow in this example and 

eliminate such formations as potential GS sites. 

Letter ID: 0242 Comment ID: 23325 Letter Lines: 813 to 868 

Comment Code: 5700 2.12 Comments on the proposed duration of Class VI permits (seeking 

comment) 

Comment: V. EPA Should Issue Class VI Staged Permits, Rather Than Permits for the 

Operating Life of the Well. 

Selecting an underground CO2 storage site and determining an appropriate 

injection rate necessarily contains uncertainties because underground geology is 

heterogeneous and impossible to map. There is a considerable lack of CCS 

experience and significant gaps in knowledge, including modeling storage 

capacity and plume behavior and monitoring storage performance and movement. The 

rule must reflect these uncertainties, and be flexible enough to adapt to the 

new information that will be learned through the first few major demonstration 

projects. At this early stage, Class VI permits should not be granted for the 

operating life of the well. 

An adaptive management approach (measuring while managing) is a sound, wellestablished method for dealing with scientific uncertainty. Adaptive regulatory 

design permits progressive regulatory action in response to improvements in 

information. [FN36] The adaptive management model envisages an initial regulatory 

approval based on available information (estimations and modeling) followed by a 

period of monitoring and reporting with reassessment of the appropriateness of 

the initial regulatory action and adjustment as required in light of new 

29
information, and presumably the resolution of previously identified 

uncertainties. [FN37] 

[FN36: Judith Jones, Regulatory Design for Scientific Uncertainty, JOURNAL OF 

ENVTL. LAW, 19 JENVTLL 347 (2007).] 

[FN37: Id.] 

The Class VI program should implement an adaptive management approach that 

acknowledges the scientific uncertainty regarding large-scale CCS. Under the 

proposed rule, initial Class VI permit limits are based on modeled predictions 

of plume behavior and movement, storage capacity, and suitable injection rates 

for the geologic formation. Under the proposed rules, based on these 

predictions, a Class VI operator receives a permit for the life of the well. 

Operating a CCS well over a period of years, however, provides more accurate, 

site-specific data on the formation’s characteristics and plume behavior. To 

ensure the most current information is reflected in the permit terms, and 

thereby in well operation, EPA should issue permits in phases. As explained in 

comment VII regarding necessary changes in the AOR definition, EPA should also 

require the operator to submit an annual affidavit certifying that the permit 

terms and accompanying plans (monitoring, emergency response, etc.) do not 

require a change. 

We recommend a three phase permitting system. The first phase will mirror the 

current permitting structure, except that the permit will not be for the life of 

the well, but rather for 5 years. Five years after the initial permit is issued, 

the owner or operator will be required to apply for the second phase. The 

Director would re-evaluate the permit to determine whether, based on the most 

current information, it is appropriate to continue injection at the site and, if 

so, whether the permit terms should be modified. The third and final phase of 

the permit would be 10 years after the second phase permit is issued. Again, the 

Director would re-evaluate the permit to determine whether, based on the most 

current information, it is appropriate to continue injection at the site and, if 

so, whether the permit terms should be modified. The Director’s periodic 

reevaluation would allow advances in regulation and science to be incorporated 

into the permit. 

Individual Response: EPA appreciates the commenter’s approach and believes the final rule 

addresses concerns about adaptability. The final rule maintains the lifetime permit provision and 

clarifies that the permit extends through the post-injection site care period (144.36(a)). It also 

adds a requirement that the Director review each Class VI permit at least once every 5 years to 

determine whether it should be modified, revoked and reissued, terminated or a minor 

modification made as provided in §§144.39, 144.40, or 144.41. The Director’s review will be 

informed by the owners’ or operators’ iterative reevaluation of the project. Specifically, the final 

rule includes a requirement that the AoR be reevaluated at least every five years, and also 

requires owners or operators to review and update the AoR and corrective action plan, the testing 

30
and monitoring plan, and the emergency and remedial response plan throughout the life of the 

project (146.84(e), 146.90(j), and 146.94(d)). Owners or operators must review each plan and 

identify necessary amendments or demonstrate to the Director that no amendment is needed. In 

no case can reviews occur less often than once every five years. The iterative process and 

subsequent plan reevaluations ensure that time and resources are committed to the most critical 

aspects of the permit in preventing endangerment to USDWs. 

EPA believes that the iterative process of developing and executing the various plans required of 

GS well operators in the final rule (e.g., for AoR and corrective action, testing and monitoring, 

injection well plugging, post-injection site care, and emergency and remedial response) is 

tailored to the unique aspects of—and is more appropriate for–GS than establishing a finite 

permit duration (e.g., ten years as suggested by some commenters). EPA believes that its 

approach will allow advances in regulation and science to be incorporated into the permit. 

EPA emphasizes that Director has the authority to revise the permit if project operations change 

or if the Director believes based on monitoring or operational data that the project may endanger 

USDWs. EPA has also added text to 144.39(a)(5) that permit modifications would be required if 

the Director determines that a modification is necessary based on an AoR reevaluation, 

amendments to any of the project plans, or a review of the testing and monitoring results. The 

Director may also choose to require minor permit modifications under 40 CFR 144.41, 

depending on the extent of the plan amendment. All permit modifications, except minor 

modifications under 40 CFR 144.41, require an opportunity for public comment on the portion of 

the permit that is being reopened pursuant to requirements under 40 CFR Part 124. 

The Agency plans to collect and review data on GS projects every six years to determine whether 

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

collected, and to determine if modifications to the requirements are appropriate or necessary. 

Letter ID: 0242 Comment ID: 23326 Letter Lines: 870 to 899 

Comment Code: 2100 1.6 Target Geologic Formations for GS 

Comment: VI. Class VI Wells Should Be Permitted Only in Oil and Gas Reservoirs and Deep 

Saline Formations. 

EPA should not permit injection into unmineable coal seams, basalts, salt domes, 

and shales until further studies are completed and CCS potential in these 

formations is better understood. EPA lacks an adequate scientific basis to 

develop regulations for commercial-scale sequestration projects in these 

formations: "[T]he process of CO2 adsorption to coal has not been proven and the 

chemical reactions of supercritical CO2 within coal formations are not well 

understood." 73 Fed. Reg. 43,492, 43,503. Sequestration in coal seams is "an 

emerging technology that is in the demonstration phase." Id. As far as basalts, 

shales and salt domes, EPA has noted that their "technical or economic viability 

as GS sites have not been demonstrated." Id. 

31
The IPCC CCS report supports EPA’s conclusions and goes a step further, 

concluding that "basalts appear unlikely to be suitable for CO2 storage" [FN38] 

The IPCC agrees that coalbed storage technology "is not well developed and a 

better understanding of injection and storage processes in coals is needed." 

[FN39] 

[FN38: IPCC CCS § 5.3.5.1.] 

[FN39: IPCC CCS Chapt. 5 Exec. Summary; see also § 5.3.4.] 

Precautionary principles demand that the first Class VI permits are issued for 

injection into geological formations with the greatest degree of scientific 

certainty, where any damages would be minimal - namely, depleted oil and gas 

reservoirs and deep saline formations. Accordingly, initial Class VI wells 

should not include coal seams, basalts, shales, and salt caverns regardless of 

whether they are above or below the deepest USDW. Continued research is 

appropriate for GS projects in these formations. 

Individual Response: EPA disagrees with this comment and believes that site-suitability for GS 

is dependent on a number of factors and that many formation types may be suitable for GS. The 

final GS rule does not preclude injection into any formation type provided owners or operators 

can demonstrate that GS can be performed in a manner that protects USDWs from 

endangerment. The Agency acknowledges that GS into basalts, salt domes, shales, limestone 

formations, and fractured karst will likely have limited application, or that owners or operators 

seeking Class VI permits for injection into these formations may not be able to meet the final GS 

requirements by demonstrating protection of USDWs. 

The purpose of the GS rule is to ensure protection of USDWs, and the rule includes requirements 

to ensure that the geologic formations are adequate to receive and confine injected CO2, at 

§146.83. The siting, well construction, operational, and other requirements in the GS rule are 

designed to ensure that injected CO2 remains within the target formation. 

EPA acknowledges that there may be risks associated with GS, particularly regarding GS into 

coal seams and basalts. EPA anticipates that in the short-term, GS into basalts, salt domes, 

shales, limestone formations, and fractured karst will continue to be experimental in nature (i.e., 

if they are to test GS technologies and collect data), and will likely be permitted as Class V 

experimental technology wells and be subject to UIC Program Guidance #83. EPA will continue 

to review data on early GS projects, including those in such formations, to determine whether the 

appropriate amount and types of information and documentation are required and being 

collected. EPA plans, every six years, to collect and review data on GS projects to determine 

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

being collected, and to determine if modifications to the requirements are appropriate or 

necessary. 

Letter ID: 0242 Comment ID: 23327 Letter Lines: 901 to 917 

32
Comment Code: 1640 1.3.4 CERCLA issues (seeking comment) 

Comment: VII. The Rule Should Specify That an Intrusion Into a USDW is Not a "Federally 

Permitted Release" Under CERCLA. 

The rule itself, rather than individual permits, should assure that Class VI 

permits do not allow responsible parties to avoid CERCLA liability on grounds 

that a release constitutes a "federally permitted release." 

EPA notes in the preamble to the proposed rule, 73 Fed. Reg 43504, that CERCLA 

exempts from liability certain "federally permitted releases, including releases 

in compliance in a UIC permit under the Safe Drinking Water Act." EPA further 

notes that "Class VI requirements and permits will need to be carefully 

structured to ensure that they do not ‘authorize’ inappropriate hazardous 

releases." EPA should go further and effectively prohibit Class VI permit 

conditions that would make the "federally permitted release" defense available 

should injected fluids or displaced formation fluids enter or endanger USDWs. 

This prohibition should be added to Subpart E - Permit Conditions, or to any 

other appropriate section of the rule. 

Individual Response: 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). 

Therefore, Class VI requirements and permits will need 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 scope of the Class VI permit. Furthermore, EPA is promulgating 

the GS rule under the authority of the SDWA. To the extent the commenter is seeking 

interpretations of CERCLA and its related provisions, such as the definition of a federally 

permitted release, such interpretations are beyond the scope of this rulemaking. 

The UIC program Director has authority under SDWA §1423 to address potential compliance 

issues (e.g., potential releases that may endanger USDWs) resulting from injection violations in 

the unlikely event that a remedial response is necessary. Although EPA anticipates that the need 

for emergency or remedial actions at GS sites will be rare, the GS rule requires, at §146.94, that 

emergency and remedial response plans be developed and updated to address such events and 

that owners or operators demonstrate that financial resources are set aside to implement the plans 

if necessary, per §146.85. 

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

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

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

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

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

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

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

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

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

33
operator when approving site closure. 

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

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

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

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

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

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

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

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

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

which such violation occurs or failure to comply continues. 

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

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

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

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

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

EPA's final approach. 

Letter ID: 0242 Comment ID: 23328 Letter Lines: 919 to 930 

Comment Code: 3300 2.2.1 Delineating the AoR/Modeling CO2 movement 

Comment: VIII. The Definition of the Area of Review Should Include Monitoring and 

Modeling. 

The definition of Area of Review (AOR), Fed. Reg 43536, CFR §146.84, Part (a) 

states that the Area of Review is "based on computational modeling". It is not 

appropriate for the Area of Review to be based solely on computational modeling. 

Instead, it should be based on computational modeling, monitoring and 

operational data and updated until closure is approved. All references to 

computational modeling in relation to the Area of Review in this section, as 

well as in the definition of Area of Review in §146.81 should be amended as 

appropriate to read "based on computational modeling, monitoring and operational 

data and updated until closure is approved". 

Individual Response: Based on review of all public comments on the AoR definition at 

146.84(a), the Agency has modified it to read as follows: The region surrounding the geologic 

sequestration project where USDWs may be endangered by the injection activity. The area of 

review is delineated using computational modeling that accounts for the physical and chemical 

properties of all phases of the injected CO2 stream and is based on available site 

characterization, monitoring, and operational data. The definition in the proposed rule accounted 

for the varying physical and chemical properties of the CO2 including free-phase and waterdissolved CO2, as the commenter suggests. The definition in the final rule will continue to do so. 

34
EPA is developing guidance on AoR and corrective action at GS Class VI sites to assist owners 

or operators and Directors in evaluating requirements and proposed AoR and corrective action 

plans under 146.84. The guidance describes EPA's recommended approaches for the data to be 

considered in an initial AoR delineation, how to apply computational modeling to delineate the 

AoR, performing corrective action at GS sites, and, when appropriate, completing AoR 

reevaluations. The guidance will be available on EPA's web site, at 

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

EPA clarifies that the initial AoR delineation required under 146.84(c) is performed prior to 

injection, and therefore no monitoring or operational data would yet exist. The AoR delineation 

models will incorporate all available site data and anticipated operating procedures (e.g., 

injection rates and volumes). 

The AoR reevaluation process required at 146.84(e) requires owners or operators to incorporate 

monitoring or operational data and make any needed adjustments to corrective action or 

monitoring at the site. EPA believes that the iterative process of AoR reevaluation is appropriate 

to verify that the CO2 plume and pressure front are moving through the subsurface as predicted, 

verify the accuracy of the delineation model (or identify needed changes), and refine testing and 

monitoring activities to ensure that USDWs are protected from endangerment and that there 

would be adequate warning of potential problems at the site before any endangerment could 

occur. 

Letter ID: 0242 Comment ID: 23329 Letter Lines: 932 to 942 

Comment Code: 3530 2.2.3.1 AoR reevaluation frequency (seeking comment) 

Comment Code: 4750 2.7.5 Comments on the merit of annual reports (seeking comment) 

Comment: An update or redefinition of the AOR at a minimum fixed frequency of ten years 

is not sufficient. The operator should be required to submit an annual 

assessment under stating whether they deem a revision of the AOR necessary, 

explaining their reasoning based on site-specific operational and other data. 

The Director should examine and approve or reject this submission, requiring a 

revision of the AOR as needed. The same updating procedure should apply to all 

other plans: monitoring, closure, etc. We believe that this arrangement 

encourages honest and truthful reporting of data and site performance without 

placing excessive burdens on redefining the AOR if such revision is not needed. 

It also leaves a clear accountability trail for both operator and Director in 

case of disputes. 

Individual Response: EPA agrees with commenters that reevaluations of the AoR every ten 

years may not be sufficient to appropriately model plume and pressure front movement, establish 

conditions for corrective action, and ensure protection of USDWs from endangerment. For these 

reasons, the Agency changed the minimum frequency for the AoR reevaluation at §146.84(e) 

from 10 years to at least every 5 years in the final GS rule. EPA believes that this revised 

frequency addresses commenters' concerns about the inherent uncertainties in modeling CO2 

35
movement, the emerging nature of GS technology, risk-based targeting of monitoring activities, 

and the unique nature of CO2 GS. In addition, the Director has discretion to require more 

frequent AoR reevaluation if he or she has reason to believe, based on site-specific information, 

that a five-year reevaluation schedule is not sufficiently protective of USDWs. 

EPA also agrees that periodic reviews of the other plans based on the AoR reevaluation is 

appropriate. The final GS rule includes provisions that owners or operators review and update 

the AoR and corrective action plan, the testing and monitoring plan, and the emergency and 

remedial response plan throughout the life of the project, as specified in §146.84(c), §146.90(j), 

and §146.94(d). Owners or operators must review each plan and identify necessary amendments 

to the plan or demonstrate to the Director that no amendment is needed. These reviews must be 

performed within one year of an AoR reevaluation, following any significant changes to the 

facility (e.g., the addition of monitoring or injection wells), or when required by the Director. 

EPA agrees that the AoR reevaluations offer a good opportunity to promote a dialogue between 

the owner or operator and the permitting authority. The final GS rule, at §§146.84(c), 146.90(j), 

and 146.94(d), requires owners or operators to review and update the AoR and corrective action 

plan, the testing and monitoring plan, and the emergency and remedial response plan throughout 

the life of the project. Owners or operators must review each plan and identify necessary 

amendments to the plan or demonstrate to the Director that no amendment is needed. These 

reviews must be performed within one year of an AoR reevaluation, following any significant 

changes to the facility (e.g., the addition of monitoring or injection wells), or when required by 

the Director. In no case can reviews occur less often than once every five years. For additional 

information, please see the final rule and the preamble for a discussion of EPA's final approach 

to recordkeeping and reporting. 

Letter ID: 0242 Comment ID: 23330 Letter Lines: 944 to 964 ; 974 to 975 

Comment Code: 3420 2.2.2.1 Scope of the inventory process (e.g., reliance on publicly 

available information, depth of wells) 

Comment: IX. Additional Well Identification Methods that do not rely on the Public Record 

Should be Required in Certain Provisions 

The proposed rule at CFR§146.82(b) requires a map to be submitted with the 

permit that shows wells within the area of review, but only information of 

public record is required to be included on this map. CFR§146.82(e) also 

requires a tabulation of all wells within the area of review which penetrate the 

injection or confining zone(s), which includes information on the well’s type, 

construction, date drilled, location, depth, record of plugging and/or 

completion and any additional information that the Director may require. 

Relying on information of public record in (b) is sufficient, but additional 

diligence is needed when it comes to wells that penetrate the injection or 

confining zone in (e). Information of public record is often incomplete and/or 

inaccurate. There are numerous orphaned or abandoned wells that are not listed 

36
on the public record that could affect the integrity of the confining zone. 

While it is possible to intercept some of these problems during operation, there 

are methods available today to identify wells not listed on the public record 

[FN40], which could identify potentially problematic wells in advance. Such a 

requirement should be included in the rule, and be made more general than 

"tabulation" to allow the Director discretion for other data formats as needed: 

[FN40: NETL , for example, has developed an electromagnetic system that can be 

used for aerial or ground-based identification of wells (casings).] 

Individual Response: EPA acknowledges that public records may not contain data on every 

artificial penetration in the AoR (or all of the data on each well that is required for the 

tabulation), particularly in areas with many older wells. However, EPA notes that the inventory 

and review process for GS wells required at §146.84(c)(2) is similar to what is required of Class 

I and Class II injection well operators, and that the AoR and corrective action process for these 

well types has been successful for many years. 

In response to comments suggesting that areas with extensive oil and gas exploration may be the 

most likely to have older, undocumented wells, EPA notes that states with long histories of 

hydrocarbon production tend to have invested the most resources into their well databases and, 

as a result, have detailed information about location and construction of wells within 

hydrocarbon fields. In addition, older wells, while likely to have the least sophisticated 

construction, also tend to be relatively shallow and would therefore be less likely to penetrate the 

confining zone. 

EPA adds that the Director has the discretion to require the owner or operator to supplement a 

data records search, including requiring ground or airborne surveys for wells, if there is reason to 

believe, based on knowledge of the site or of available data bases, that the incompleteness of 

available information could compromise USDW protection. EPA adds that all corrective action 

must be performed pursuant to the approved AoR and corrective action plan, which affords the 

Director the discretion to require any additional information needed (including information that 

is not publically available) to ensure that all necessary corrective action is performed. 

Letter ID: 0242 Comment ID: 23331 Letter Lines: 966 to 972 

Comment Code: 1240 1.1.1.3 Suggested changes/edits to rule language 

Comment Code: 3420 2.2.2.1 Scope of the inventory process (e.g., reliance on publicly 

available information, depth of wells) 

Comment: [In the paragraph below the text in 

all CAPS denotes added text.] 

§146.82(e): "A tabulation COMPILATION of all wells within the area of review 

which penetrate the injection or confining zone(s). TO SUPPLEMENT AND/OR VERIFY 

INFORMATION OF PUBLIC RECORD, OPERATORS SHALL USE REASONABLE 

METHODS TO IDENTIFY 

37
THE PRESENCE WELLS WITHIN THE AREA OF REVIEW THAT PENETRATE THE 

INJECTION OR 

CONFINING ZONE(S). Such data must include a description [...]" 

Individual Response: EPA is retaining the requirement, which is now found in §146.82(a)(4), as 

proposed. EPA notes that the Director has the discretion in §146.84(c)(2) to require the owner or 

operator to supplement a data records search—including the use of ground, airborne, or 

geophysical (e.g., magnetic) surveys—if there is reason to believe that the incompleteness of 

available information could compromise USDW protection from endangerment. EPA adds that 

all corrective action must be performed pursuant to the approved AoR and corrective action plan, 

which affords the Director the discretion to require any additional information needed (including 

information that is not publically available) to ensure that all necessary corrective action is 

performed. EPA is developing guidance on AoR and corrective action at GS Class VI sites to 

assist owners or operators and Directors in evaluating requirements and proposed AoR and 

corrective action plans under 146.84. The guidance describes EPA's recommended approaches 

for the data to be considered in an initial AoR delineation, how to apply computational modeling 

to delineate the AoR, performing corrective action at GS sites, and, when appropriate, 

completing AoR reevaluations. The guidance will be available on EPA's web site, at 

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

Letter ID: 0242 Comment ID: 23332 Letter Lines: 977 to 984 

Comment Code: 3420 2.2.2.1 Scope of the inventory process (e.g., reliance on publicly 

available information, depth of wells) 

Comment: Additionally, to delineate the Area of Review, CFR§146.84(c)(2) requires 

operators to "...identify all penetrations, including active and abandoned wells 

and underground mines, in the area of review that may penetrate the confining 

zone". Again, the public record may not be sufficient to provide accurate 

information in all cases. Problematic wells may not be limited to the confining 

zone, as would be the case if confinement were to be breached, or if pressure 

effects caused by the injection caused fluid movement outside the defined 

confining zone. We recommend the following modification: 

Individual Response: The requirements at §146.84(c)(2) are designed to afford owners or 

operators flexibility to identify and use appropriate resources to identify artificial penetrations in 

the AoR. EPA notes that the Director has the discretion to require the owner or operator to 

supplement a data records search—including the use of ground, airborne, or geophysical (e.g., 

magnetic) surveys—if there is reason to believe that the incompleteness of available information 

could compromise USDW protection from endangerment. Regarding the concern about 

identifying wells other than those that penetrate the confining zone, EPA adds that the Director 

the discretion to require any additional information needed to ensure that all necessary corrective 

action is performed, including information on wells that are above the confining zone, if sitespecific information indicates such a need to ensure USDW protection. 

38
Letter ID: 0242 Comment ID: 23333 Letter Lines: 986 to 991 

Comment Code: 1240 1.1.1.3 Suggested changes/edits to rule language 

Comment Code: 3420 2.2.2.1 Scope of the inventory process (e.g., reliance on publicly 

available information, depth of wells) 

Comment: [In the paragraph below the text in 

all CAPS denotes added text.] 

"Using methods approved by the Director, identify all penetrations, including 

active and abandoned wells and underground mines, in the area of review that may 

penetrate the confining zone OR OTHERWISE ACT AS CONDUITS FOR FLUID 

MOVEMENT 

INSIDE OR OUTSIDE THE CONFINING ZONE". 

Individual Response: For the reasons described in the response above, EPA is retaining the 

requirement as proposed. 

Letter ID: 0242 Comment ID: 23334 Letter Lines: 993 to 1027 

Comment Code: 1970 1.4.4.6 Need for other consultations 

Comment: IX. The Proposed Rule’s Public Participation Opportunities are Insufficient. 

Public acceptance of CCS is a major issue. Innumerable reports and 

recommendations from the federal government and top scientists, institutions and 

workgroups stress that the success of a CCS program will depend heavily on 

public acceptance. The National Academy of Sciences cautioned "the storage 

program cannot be successful if a significant fraction of the public views it as 

dangerous or unacceptable. Thus, CCS technologies must not only be safe and 

effective, it must be explainable to the public in such as way as to instill 

confidence that they are in fact safe and effective." [FN41] The International 

Risk Governance Council recommends that regulatory frameworks must include 

"effective risk communication to engage and educate the public, involve all 

stakeholders in risk-related decisions, and build confidence in the institutions 

governing CCS." [FN42] The Clean Air Act Advisory Committee’s Advanced Coal 

Technology Work Group’s January 2008 report similarly highlighted the need for 

public outreach. [FN43] The need to gain public acceptance will be especially 

crucial with early projects, which supports our earlier recommendation that EPA 

make these crucial early decisions with the help of a technical advisory board. 

[FN41: U.S. GAO Report. CLIMATE CHANGE: Federal Actions will Greatly Affect the 

Viability of Carbon Capture and Storage As a Key Mitigation Option, GAO-08-1080, 

September 2008 (quoting National Academy of Sciences, Prospective Evaluation).] 

[FN42: IRGC, Regulation of Carbon Capture and Storage, p. 24, available at 

http://www.irgc.org/IMG/pdf/Policy_Brief_CCS.pdf (last visited December 17, 

2008).] 

39
[FN43: January 29, 2008 Final Report, available at 

http://www.epa.gov/air/caaac/coaltech/2008_01_final_report.pdf (last visited 

December 17, 2008).] 

EPA should ensure that the proposed rule includes ample public involvement at 

the earliest possible stages to gain public trust and acceptance of its 

decisions. This gives the community time to process the complicated and 

voluminous information involved in a siting decision and contact other officials 

about issues not within EPA’s authority. It also will mitigate some 

controversial issues and potentially avoid litigation and other delays. 

Individual Response: EPA disagrees that the public participation requirement provided for in 

the rule is insufficient. However, EPA recognizes that the initial phases of site evaluation and 

site selection may begin in advance of permit application submission. The public may become 

aware of these activities and begin to have questions or concerns about the pending project. For 

this reason, outreach and education—which are outside of, but complementary to, the public 

notification process—can help clarify project details and avoid public misperceptions about the 

nature and safety of GS projects. This may also benefit the owner or operator by improving local 

acceptance of the site. 

EPA encourages but does not require operators and permitting agencies to begin involving the 

public by providing information as early in the GS project development process as possible. 

Involving the public in the permitting process is an important aspect of both UIC Program 

requirements and EPA's overall mission. The public will also have the opportunity to submit 

written comments and, in many cases, attend hearings on proposed GS projects during formal 

public comment periods. Although permit application information will not be made available as 

it is submitted to the Director, permitting authorities must follow the public participation 

requirements for UIC permits specified in 40 CFR Part 124 which generally requires that owners 

or operators publish a public notice that includes information about where interested parties can 

obtain copies of the draft permit and application. 

Letter ID: 0242 Comment ID: 23335 Letter Lines: 1029 to 1043 

Comment Code: 5540 2.10.2 Need for additional public participation requirements/ use of new 

information technology (seeking comment) 

Comment: Opportunities for public participation in the proposed rule are not sufficient; 

the following changes are necessary: 

1. The proposed rule has a 30-day public comment period on a proposed Class VI 

site-specific permit. This is too little too late. Thirty days is not 

sufficient time for the public to identify and raise concerns, and given the 

comment period falls at the end of a long negotiating process with the 

applicant, it is unlikely EPA could meaningfully address concerns at that point 

in the process. The public should be informed as soon as the EPA begins working 

40
with a permit applicant, and make the application materials publicly available 

and easily accessible. EPA and the permit applicant should hold public 

information sessions in the affected community and work to address public 

concerns throughout the process. The formal comment period should be extended to 

at least 90 days because the permit will contain a range of complicated issues 

that will likely require expert consultation. 

Individual Response: EPA agrees that that public participation and education are important 

parts of the UIC permitting process. EPA encourages (but does not require) operators and 

permitting agencies to begin involving the public by providing information as early in the GS 

project development process as possible. Involving the public in the permitting process is an 

important aspect of both UIC Program requirements and EPA's overall mission. The public will 

also have the opportunity to submit written comments and, in many cases, attend hearings on 

proposed GS projects during formal public comment periods. Although permit application 

information will not be made available as it is submitted, permitting authorities must follow the 

public participation requirements for UIC permits specified in 40 CFR 124 section §124.10(d) 

which require that owners or operators publish a public notice that includes information about 

where interested parties can obtain copies of the draft permit and application. Generally, see 40 

CFR Part 124. 

Furthermore, the Agency recognizes that the initial phases of site evaluation and site selection 

may begin in advance of permit application submission. The public may become aware of these 

activities and begin to have questions or concerns about the pending project. For this reason, 

outreach and education—which are outside of, but complementary to, the public notification 

process—can help clarify project details and avoid public misperceptions about the nature and 

safety of GS projects. This may also benefit the owner or operator by improving local acceptance 

of the site. 

EPA disagrees that a 90-day comment period should be required for all GS projects. EPA 

believes that the existing public comment period requirements at §124.10, which require a 

minimum 30-day comment period for draft permits, are appropriate for GS projects. The Agency 

does not believe it is appropriate to impose longer time frames if they are unnecessary, but 

supports the Directors' discretion and authority under 40 CFR 124.10 to extend the public 

comment period if he or she determines that such an extension is warranted. Circumstances that 

may affect a Director's determination may include the level of public interest in a GS project, 

specific permit details, or project-specific considerations. 

Letter ID: 0242 Comment ID: 23336 Letter Lines: 1045 to 1050 

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

Comment Code: 5540 2.10.2 Need for additional public participation requirements/ use of new 

information technology (seeking comment) 

Comment: 2. The proposed rule allows an applicant to use proprietary modeling software to 

submit predictions of plume behavior and movement, storage capacity, and 

41
injection rates. Use of proprietary software would hinder public participation 

because the public could not test applicant’s modeling predictions. To ensure 

transparency in the application process, publicly available modeling programs 

must be required. 

Individual Response: EPA expects that permitting authorities would make some information 

about the model available to the public, such as information about the model used and the 

parameters modeled. However, EPA does not expect that members of the public would evaluate 

the AoR delineation models themselves. The models and their inputs will, by necessity, entail an 

extensive amount of technical information that may not be easily understood by the public. EPA 

believes that it is the Director's responsibility, as a steward of public health and the environment, 

to review models, model inputs, and results and to determine whether the model is appropriate 

for predicting the AoR, and to distribute information that may be easily understood by the public 

(e.g., in the form of a fact sheet). 

In response to comments about the need for additional public participation and the use of new 

information technology, EPA shares the commenter’s concern about the need to evaluate the 

inputs and assumptions used, but disagrees that the use of proprietary models should be 

disallowed. EPA intends to allow the use of proprietary models in meeting the requirements for 

the GS regulation, as long as GS well operators using a proprietary model clearly disclose, to the 

Director's satisfaction, the code assumptions, relevant equations, and scientific basis. 

EPA believes that operators should have the flexibility to select models with which they are 

familiar and that are most appropriate to the site conditions and available data types and 

amounts. EPA also recognizes that a standardized model for AoR delineations could be effective 

as long as the model accounts for the expected variations in site conditions, and adds that a state 

or regional UIC Director could select one standard model if it took site-specific variations into 

account. EPA has evaluated technical documents regarding several computational models that 

may be used for GS sites. Based on this review (as documented in the preamble to the proposed 

GS regulation and the background document "Computational Modeling of Underground 

Injection of Carbon Dioxide for Determination of Area-of-Review and Potential Risk to 

Underground Sources of Drinking Water"), EPA believes that several models meet the minimum 

requirements for models in the GS regulation. EPA adds that its Confidential Business 

Information requirements at 40 CFR 144.5 will apply to the use of proprietary models. 

Letter ID: 0242 Comment ID: 23337 Letter Lines: 1052 to 1058 

Comment Code: 5540 2.10.2 Need for additional public participation requirements/ use of new 

information technology (seeking comment) 

Comment: 3. Each stage of the Club’s recommended permit process should incorporate 

application transparency, public hearings and a comment period. EPA should 

maintain a list of interested persons in each proposed/completed project and 

inform this list of every new application change, hearing, comment period, 

annual report, etc. These materials should be posted on the internet. 

42
43

4. All remediation plans should be subject to notice and public comment. 

Individual Response: EPA agrees that informing the public on all aspects of GS projects is 

important. GS permitting authorities must follow the existing public participation requirements 

for UIC permits as specified in 40 CFR Part 124. These regulations lay out the procedures for 

decision making and include requirements such as requiring the Director to notify the public 

regarding the availability of the draft permit and allow him or her to require a public hearing on 

the draft permit. 

The Agency encourages permitting authorities and GS operators to provide the public, including 

residents near the project, with as much project-specific information as possible. This 

information may include, but is not limited to, specific technologies used at the GS injection site, 

potential/new GS projects, and opportunities for public involvement. In addition to requiring 

public notice of all draft permits under §124.10(a)(1)(ii), stakeholders can request that they be 

notified about draft permits. In addition, §124.10(d) requires that the public notice state how 

stakeholders can obtain a copy of the permit application and draft permit. GS operators and 

permitting authorities are also encouraged to make this information available on the Internet. 

Regarding the comment that remediation plans should be included in the public participation 

requirements, EPA notes that emergency and remedial response plans are required under 

§146.94(a) as part of the permit application and copies of the permit application are available 

upon request during the draft permit public comment period. In addition, EPA added text to 

§144.39(a)(5) that permit modifications would be required if the Director determines that a 

modification is necessary based on amendments to any of the project plans, among other 

situations. In such cases, the revised plan would be available for public comment. 

EPA also encourages permitting authorities to notify and involve as many stakeholders as 

possible including drinking water organizations and local water utilities. 40 CFR 

§124.10(c)(1)(x)(A) requires notification "to any unit of local government having jurisdiction 

over the area where the facility is proposed to be located; and (B) to each State agency having 

any authority under State law with respect to the construction or operation of such facility."