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.

### C H A M B E R O F 

### C O M M E R C E

O F T H E 

### U N I T E D 

### S T A T E S O F 

### A M E R I C A

W I L L I A M L . K O V A C S

V I C E P R E S I D E N T

E N V I R O N M E N T

, T E C H N O L O G Y &

R E G U L A T O R Y A F F A I R S 1 6 1 5 H S T R E E T

, N . W .

W A S H I N G T O N

, D . C . 2 0 0 6 2 ( 2 0 2 ) 4 6 3

- 5 4 5 7



### December 1 6 , 2008

VIA ELECTRONIC FILING

Water Docket U.S. Environmental Protection Agency

Mailcode: 2822T 1200 Pennsylvania Ave., N.W. Washington, DC 20460

Attn: Docket ID No.: EPA

- HQ

- OW

- 2008

- 0390

Re: Comments on Federal Requirements Under the Underg round Injection Control (UIC) Program for Carbon Dioxide (CO 2 

### ) Geologic Sequestration (GS) Wells

The U.S. Chamber of Commerce, the world’s largest business federation representing more than three million businesses and organizations of every size,

secto r, and region, is pleased to submit these comments on the proposed regulation by the U.S. Environmental Protection Agency (EPA) creating a new category of injection wells under the Safe Drinking Water Act (SDWA) 1 

### for the capture and storage of CO 2 

### .

Intr oduction

M any major scientific bodies have concluded that reducing carbon dioxide, the most significant greenhouse gas, is essential to mitigating the negative effects of climate change. The United States , which relies heavily on coal

- burning power plan ts that emit significant quantities of CO 2 

### , recognizes carbon capture and storage (CCS) as a crucial technology because it will reduce CO 2 

### emissions from these facilities while still allowing for continued increases in electric power demand and output from coal, America’s abundant, inexpensive energy resource.

1 P.L. 93

- 523

### U.S. Chamber of Commerce

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Simply stated, CCS involves separating and capturing CO 2 

### , transporting the

CO 2 

### by truck or pipeline to an underground storage location, and injecting and storing it in underground geologic formati ons. While CCS is just one of many climate change mitigation options

, 2 

### it will be a vital component of any U.S. strategy for addressing climate change given our reliance on coal for almost half of our electricity production. Likewise, CCS could have a su bstantial role in reducing CO 2 

### emissions from developing countries, such as India and China, where CO 2 

### emissions are projected to increase exponentially in connection with their growing energy needs.

As part of the U.S. strategy for addressing climate change and implementing CCS, EPA has proposed a first

- time rule under the S DWA for sequestering CO 2 

### in geologic formations. The proposed rule is based on EPA’s existing regulatory

framework for its U IC Program and proposes a new c ategory of injection well (Class VI) along with several technical criteria for its implementation.

The Chamber strongly supports the development and deployment of carbon capture and sequestration technology , and we applaud EPA for its extensive public outreach, stakeholder dia log, and public workshops on this issue. Nevertheless, i n order to ensure that this proposed rule accomplishes its objective s to promote a CCS regulatory framework and s upport “the development of a key climate change mitigation technology,” the Chamber of fers the following comments on potential legal, economic, regulatory, and technical barriers to CCS deployment that EPA should consider before finalizing this rule.

General and Specific Comments

The Chamber notes that EPA already regulates CO 2 

### i njection for enhanced oil recovery (EOR). E xisting “ Class II ” regulations governing injection of CO 2 

### for EOR have proven successful at protecting underground sources of drinking water (USDW) and the health and safety of the public

. T herefore , as an initi al matter, EPA should

consider whether it is really necessary to create a new class of wells and a new set of regulations for carbon sequestration purposes?

2 Other options include energy efficiency improvements, a switch to less carbon

- intensive fuels, nuclear power, and renewable energy sources.

### U.S. Chamber of Commerce

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Assuming EPA determines that a new class of wells is needed, despite existing

Class II wells and re gulations, the Chamber would also recommend EPA address the following concerns:

1. Statutory L iability

EPA is proposing its rule under the SDWA, which governs the Underground Injection Control program, and provides the statutory authority for geologic

seque stration of CO 2 

### . EPA readily admits , however, that the SDWA is limited; it does not cover the capture or transfer of CO 2 

### , the transfer of liability between entities, nor accounting or certification of greenhouse gas reductions

– only CO 2 

### injection.

But i t is exactly because EPA’s authority under the SDWA is limited that EPA needs to provide greater clarity as to wh at other statutory authorities may become relevant

, which provisions could be triggered, and to delineate, to the extent possible, all potentia l liabilities associated with o wning

, operating , or investing in a Class VI well.

For example, if EPA eventually de termines that CO 2 

### is hazardous

, what are the ramifications under the Resource Conservation and Recovery Act (RCRA) ? 3 

### Presumably, its stringent “cradle to grave” requirements will be imposed on all generators, transporters, and treatment, storage and disposal facilities involved in the CCS project. Or

, in the event of a release, under the Comprehensive Envi ronmental Response, Compensation and Liability Act (CERCLA)? 4 

### The Clean Air Act? 5 

### If CO2 is deemed a “hazardous air pollutant” under Section 112, it will automatically trigger CERCLA liability as it incorporates HAPs in its definition of “hazardous subst ance.” 6



### The Clean Water Act? 7



### The issue becomes even more acute when you consider that EPA has already

declined to address the very basic question of how to classify the CO 2 

### stream if trace amounts of hazardous constituents get in it prior to injection :

Because the types of impurities and their concentrations in the CO2 stream are likely to vary by facility, coal composition, plant operating conditions, and pollution removal technologies,

3 42 U.S.C. §§ 6901 et seq.

4 42 U.S.C. §§ 9601 et seq.

5 42 U.S.C. §§ 7401 et seq.

6 CERCLA, Section 101(14).

7 33 U.S.C. §§ 1251 et seq.

### U.S. Chamber of Commerce

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December 16 , 2008 Page 4 of 7

EPA cannot make a categorical determination as to whether inject ed CO 2 

### is hazardous

under RCRA. 8



### Instead, EPA advocates making determinations about the hazardous classification of injected CO 2 

### on a case

- by

- case basis. In essence, EPA is saying that hazardous constituents could be present in the injected CO 2 

### stream, and if they are,

then it will be treated as hazardous. This approach provides little guidance to industry, particularly facility owners and operators who are required to characterize

their CO 2 

### stream as part of their initial permit application.

Such ov erwhelming regulatory uncertainty will only serve to deter investment in CCS technology and slow the rate at which large

- scale commercial CCS projects are developed. Instead, EPA needs to examine and explain wh ich environmental statutes could be triggered , how t h ey will interact or overlap, and what potential liability exists for industry. EPA should also explore the possibility of creating regulatory exemptions under RCRA, CERCLA, etc., for injected CO2, thereby reducing regulatory hurdles for CCS projec ts. One example of this would be to ensure that final Class VI permits have the broadest possible reach to maximize the protection offered by CERCLA’s “federally permitted release” 9 

### exemption. This would mean including within the scope of the permit for carbon dioxide injection all other CERCLA hazardous constituents likely to be contained in the CO 2 

### stream, thus providing some comfort to owners and operators that they will not be subject to CERCLA liability. When you consider that EPA lacks the authorit y to transfer well ownership between entities, and that owners are therefore liable in perpetuity, the need to craft regulatory exemptions becomes clear.

A final possibility would be to pursue a legislative remedy

– ask Congress to

address the issue

– i n order to give this promising technology a chance to flourish or

fail on its own merits. Similarly, Congress should be encouraged to appropriate money to fund the Energy Policy Act of 2005 and the Energy Independence and Security Act, which together cont ain over 130 new energy technology provisions. Funding these technologies would go a long way toward EPA’s stated goal of addressing climate change.

8 Federal Register , Vol. 73 Fed. Reg. No. 144, pg. 43493 (July 25, 2008)

9 CERCLA, Section 107(j).

### U.S. Chamber of Commerce

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2. Need for Full

- Scale Pilot Projects

Globally, only four full

- scale CCS projects exist, and none of them capture CO 2 

### from a coal

- fired power plant. The International Energy Agency notes that at least 20 large

- scale demonstration projects will need to be in planning by 2010 and in operation by 2020 to have any impact on climate change policy planning

. EPA

s hould ensure that this timetable is considered before implementing its final rule.

The real challenge, however, will be for EPA to create a regulatory framework flexible enough to allow for technologies that may not be commercially available for

many ye ars. That is, EPA must craft its CCS regulations with enough flexibility so that they may be modified to include technologies not yet on the market.

3. CCS May impact Private Property Rights

Recognizing that subsurface land can be privately owned in the U nited States,

the chamber notes that CO 2 

### injection into geologic formations may require permission from all owners of intersect ed subsurface property. While this consideration may be somewhat addressed during the initial siting process, it may still

lead to tensions between large

- scale CCS projects and individual property rights. The issue becomes even more important as investors and industry participants will seek to minimize liability from property trespass claims related to sub

- surface trespass, geolog ical surveying, and deposit monitoring.

Likewise, property rights considerations may impact the availability of liability

insurance for CCS project participants. If insurance companies cannot accurately

calculate the risk of C CS projects , or future potent ial environmental liability for

property trespass, they may decline to offer coverage

.

4. Why Does the Proposed Rule Treat CO 2 

### like a Hazardous Waste?

Carbon dioxide is not a hazardous waste; yet the proposed rules for CO 2 

### storage are, in many ways, far m ore strict than those for underground injection of hazardous wastes under Class I of the UIC program. Many of the construction, mechanical integrity, monitoring and financial assurance provisions for Class VI wells are more comprehensive and more onerous than those for Class I wells.

### U.S. Chamber of Commerce

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The Chamber does not believe that CO 2 

### should be treated more stringently than hazardous waste because it distorts public perception about the safety of carbon capture and storage, and it may make securing financial backing for CCS more

difficult.

a. Distorts Public Perception

By making the proposed rule so strict, the public may unduly perceive CCS as a dangerous activity. Consider that the proposed rule require s a secondary containment

field for CO 2 

### storage

. Such a requi rement is unprecedented both domestically, in the UIC program (including for storage of hazardous wastes in Class I wells ), as well as internationally. 10 

### Singling out carbon capture and storage for this heightened and substantially more rigorous requiremen t would suggest to the public that EPA thinks geologic storage of carbon dioxide is more dangerous than the underground injection of other substances. Since EPA is the agency charged with protecting the environment, the public could be easily swayed by EP A’s apparent apprehension of carbon capture and storage as currently embodied in the proposed regulations. In order to create a regulatory scheme that fosters carbon capture and storage development and deployment, EPA should reconsider how it has characte rized carbon dioxide injection

– both explicitly and implicitly

– in its final regulations.

b. Inhibits Financial Backing

EPA should also consider the effect of these regulations on securing critical financial backing for CCS projects. As with public accep tance, EPA can shape carbon capture and storage as a tool for reducing carbon emissions by the messages that it sends the financial world with its regulations.

Consider that t he proposed regulations contemplate a 50

- year post

- injection site care period

. EPA’s reasoning for proposing this time frame is based on CO 2 

### plume stabilization and protection of USDWs. EPA attempts to ameliorate the harshness of this time frame by stating that the UIC program director can modify it

under certain circumstances. A better approach would be to allow the characteristics of each site determine the appropriate length of time for post

- injection site care. This

10 Countries such as Norway, Canada, and Australia, which have carbon capture and storage projects currently underway

, do not require secondary containment zones, and in fact, those countries regulate CCS using existing petroleum laws.

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would prevent plac ing an unnecessary burden on those owners and operators who can show that their projects pose no threat to underground sources of drinking water in less than 50 years. In fact, the Chamber believes that appropriately sited CCS projects will need substantially less than 50 years, especially since research suggest s that the risk profile of carbon d ioxide injection diminishes dramatically after a decade. Consequently, a lengthy post

- injection care period would only serve to penalize those owners and operators who have taken steps to ensure proper site characterization.

As a result, the 50

- year t

imeframe (if retained in the final rule) could have an inhibiting effect on insurers, investors, owners, and operators hoping to participate or

invest in CCS activities.

5. OMB’s Good Guidance Practices

With respect to EPA’s suggestion that future guidan ce docum ents be issued to clarify requirements for financial responsibility on CO 2 

### injection projects, the

Chamber reiterates that such guidance must be issued in conformance with OMB’s

Good Guidance Practices bulletin.

Conclusion

CCS is not a “silver bullet” but an innovative solution for reducing CO 2 

### emissions to the atmosphere. T he Chamber applauds EPA for seeking out novel and important approaches for addressing climate change, reducing CO2 emissions, and continuing to protect our vital sources of safe drinking water. Nevertheless, the Chamber encourages EPA to address the potentially serious impediments to CCS development and deployment that have been raised in these comments.

The Chamber thanks EPA for drafting th is proposed rule and provi ding the opportunity to comment.

Sincerely,

William L. KovacsLetter ID: 0148

Commenter: William Kovacs Organization: U.S. Chamber of Commerce

Letter ID: 0148 Comment ID: 21748 Letter Lines: 46 to 56

Comment Code: 1330 1.1.3.1 Support use of GS in general

Comment: Simply stated, CCS involves separating and capturing CO2, transporting the CO2 by truck or pipeline to an undergrou nd storage location, and injecting and storing it in underground geologic formati ons. While CCS is just one of many climate change mitigation options,[FN2 Other options include energy efficiency improvements, a switch to less carbon-i ntensive fuels, nuclear power, and renewable energy sources.] it will be a vi tal component of any U.S. strategy for addressing climate change given our reli ance on coal for almost half of our electricity production. Likewise, CCS could have a substantial role in reducing CO2 emissions from developing countries, such as India and China, where CO2 emissions are projected to increase e xponentially in connection with their growing energy needs.

Individual Response: EPA clarifies that the purpose of the UIC GS regulation is to ensure that GS is conducted in a manner that protects USDWs from endangerment. EPA agrees that GS is one technology in a portfolio of options, including energy conservation, efficiency improvements, and the use of alternative fuel s and renewable energy sources, that could be deployed to reduce CO2 emissions. Please see th e 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: 0148 Comment ID: 21749 Letter Lines: 58 to 71

Comment Code: 1330 1.1.3.1 Support use of GS in general

Comment Code: 1410 1.2.1 Comments in support of EPA/rulemaking

Comment: As part of the U.S. strategy for addre ssing climate change and implementing CCS, EPA has proposed a first-time rule under the SDWA for sequestering CO2 in geologic formations. The proposed rule is based on EPA’s existing regulatory framework for its UIC Program and propos es a new category of injection well (Class VI) along with several technica l criteria for its implementation.

The Chamber strongly supports the developm ent and deployment of carbon capture and sequestration technology, and we a pplaud EPA for its extensive public outreach, stakeholder dialog, and public work shops on this issue. Nevertheless, in order to ensure that this proposed rule accomplishes its objectives to promote a CCS regulatory framework and suppor t "the development of a key climate change mitigation technology," the Chambe r offers the following comments on

1potential legal, economic, re gulatory, and technical barr iers to CCS deployment

that EPA should consider befo re finalizing this rule.

Individual Response: EPA agrees that input of and part icipation by a wide spectrum of stakeholders is a vital component of a successful rulemaking. The Agency appreciates the degree of cooperation, participation, and active dialogue between the EPA and stakeholders and will

continue to work with stakeholders a nd experts as it implements the GS rule.

EPA believes that the creation of a new inject ion well class (VI) under th e 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 ag rees that the UIC Program, under the authority of the SDWA, provides a strong fr amework for regulating injection of CO2 for GS and adds that the GS regulation tailors the UIC requirements to address the unique i ssues associated with large-scale GS including large injection volumes, the relative buoya ncy of CO2, its corrosivity in the presence of water, the potential presence of impurities in captured CO2, and its mobility within subsurface geologic formations.

EPA acknowledges that GS falls within the broade r context of CCS and the need for regulatory clarity to ensure that USDWs are protected from endangerment. In develo ping 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 Stat es Geological Survey; Bureau of Ocean Energy Management, Regulation, and Enforcement, formerly the Minerals Management Service; Bureau of Land Management). The Agency continues to eval uate 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 Comprehe nsive Environmental Response, Compensation, and Liability Act; and the Marine Protection, Resear ch 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 entitle d "How Does This Rulemaking Relate to Other Federal

Authorities and GS and CCS Activities?" in the preamble to the final GS rule.

Letter ID: 0148 Comment ID: 21750 Letter Lines: 73 to 84

Comment Code: 2044 1.5.2.2 Oppose Class VI/ Support Class II

Comment: General and Specific Comments

The Chamber notes that EPA already regul ates CO2 injection for enhanced oil recovery (EOR). Existing "Class II" regul ations governing inj ection of CO2 for EOR have proven successful at protecti ng underground sources of drinking water (USDW) and the health and safety of the public. Therefore, as an initial matter, EPA should consider whether it is really necessary to creat e a new class of wells and a new set of regulations for carbon sequestration purposes?

Assuming EPA determines that a new class of wells is neede d, despite existing Class II wells and regulations, the Chamber would also recommend EPA address the

2following concerns:

Individual Response: EPA does not believe that the unique risks posed by long term storage of CO2 for GS can be adequately addressed unde r existing UIC requireme nts to protect USDWs from endangerment, such as those for Class II wells. EPA believes that there are significant differences between how project s are operated, as well as the risks posed by these different injection activities. The new tailo red approach of the GS rule wa s designed to address the general risks deep injection may pose to USDWs and was tailored specifical ly to address the risks posed by long term storage of CO2 (i .e., very large volumes, very long time-periods, and reservoir pressure conditions).

Letter ID: 0148 Comment ID: 21751 Letter Lines: 86 to 95

Comment Code: 1430 1.2.1.2 Support EPA's authority to regulate CO2 injection

Comment: 1. Statutory Liability EPA is proposing its rule under the SDWA, which governs the Underground Injection Control program, and provides the stat utory authority for geologic sequestration of CO2. EPA read ily admits, however, that the SDWA is limited; it does not cover the capture or transfer of CO2, the transfer of liability between entities, nor accounti ng or certification of greenhouse gas reductions -- only CO2 injection. But it is exactly because EPA’s authority

under the SDWA is limited that EPA needs to provide greater clar ity as to what other statutory authorities may become relevant, which provisions could be triggered, and to delineate, to the exte nt possible, all potential liabilities associated with owning, operating, or investing in a Class VI well.

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 th e UIC Program with the authority to develop regulations for all areas related to GS, such as releases to the atmosphere.

EPA acknowledges that GS falls within the broade r context of CCS and the need for regulatory clarity to ensure that USDWs are protected from endangerment. In develo ping 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 Stat es Geological Survey; Bureau of Ocean Energy Management, Regulation, and Enforcement, formerly the Minerals Management Service; Bureau of Land Management). The Agency continues to eval uate 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 Comprehe nsive Environmental Response, Compensation, and Liability Act; and the Marine Protection, Resear ch 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 entitle d "How Does This Rulemaking Relate to Other Federal

Authorities and GS and CCS Activities?" in the preamble to the final GS rule.

3Letter ID: 0148 Comment ID: 21752 Letter Lines: 97 to 107

Comment Code: 1520 1.2.3 Other authorities (e.g., CAA, MPRSA, London Convention)

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

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

Comment: For example, if EPA eventually determines that CO2 is hazardous, what are the

ramifications under the Resource Conserva tion and Recovery Act (RCRA)?[FN3 42 U.S.C. §§ 6901 et seq.] Presumably, its st ringent "cradle to grave" requirements will be imposed on all generators, trans porters, and treatment, storage and disposal facilities involved in the CCS proj ect. Or, in the event of a release, under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)?[FN4 42 U.S.C. §§ 960 1 et seq.] The Clean Air Act? [FN5 42 U.S.C. §§ 7401 et seq.] If CO2 is deemed a "hazar dous air pollutant" under Section 112, it will automatically trigger CERCLA liability as it incorporates HAPs in its definition of "hazardous substance." [FN6 CERCLA, Section 101(14).] The Clean Water Act? [FN7 33 U.S. C. §§ 1251 et seq.]

Individual Response: Under the final GS rule, owners or operators will need to determine

whether the CO2 stream is haza rdous under EPA’s RCRA regulations, and if so, any injection of the hazardous CO2 stream may only occur in a Class I hazardous wa ste injection well. Conversely, Class VI wells cannot be used for th e co-injection of RCRA hazardous wastes (i.e., hazardous wastes that are injected along with the CO2 stream).

EPA received many comments regarding the applicab ility of the RCRA regulations and statute to CO2 streams that are geologically sequestered under the final Cl ass VI UIC well requirements. As a result, EPA has decided to initiate a sepa rate proposed rulemaking specifically to examine the issue of RCRA applicability to CO2 stream s being geologically sequestered, including the possible option of a conditional exemption from the RCRA requirements for CO2 GS in Class VI wells. EPA will consider these comments as pa rt of its development of that proposal. The Agency will consider issues particular to RCRA in the context of that separate rulemaking, and recommends that the commenter read that propose d rule when it is published. The Agency notes

that commenters who wish to submit comments on the RCRA proposal will need to do so during the comment period for that rule. Finally, EPA also notes that the final GS rule, which adds new regulations for Class VI wells under the Safe Drinking Water Act (SDWA), is not making any changes to the RCRA regulations.

CO2 itself is not listed as a hazardous substan ce under CERCLA; however, the CO2 stream may contain a listed hazardous substance (such as mercury) or may mobilize substances in the subsurface that could react with ground water to produce listed hazardous substances (such as sulfuric acid). Whether such substances may result in CERCLA liability from a sequestration facility depends entirely on th e composition of the specific CO2 stream and the environmental media in which it is stored (e.g., soil or gr ound water). CERCLA exempts from liability, under CERCLA section 107, 42 U.S.C. 9607, certain “feder ally permitted releases” (FPR) as defined in CERCLA, 42 U.S.C. 9601(10). Class VI permits will need to be carefully structured to ensure

4that they prevent potential releases from the we ll which are outside the scope of the Class VI permit.

Letter ID: 0148 Comment ID: 21766 Letter Lines: 109 to 125

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

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

Comment: The issue becomes even more acute when you consider that EPA has already declined to address the very basic question of how to cl assify the CO2 stream if

trace amounts of hazardous constituen ts get in it prior to injection:

Because the types of impurities and their concentrations in the CO2 stream are likely to vary by facility, coal com position, plant operating conditions, and pollution removal technologies, EPA cannot make a categorical determination as to whether injected CO2 is hazardous unde r RCRA. [FN8 Federal Register, Vol. 73 Fed. Reg. No. 144, pg. 43493 (July 25, 2008)]

Instead, EPA advocates making determinati ons about the hazardous classification of injected CO2 on a case-by-case basis. In essence, EPA is saying that hazardous constituents could be present in the injected CO2 stream, and if they are, then it will be treated as hazard ous. This approach provides little guidance to industry, particularly faci lity owners and ope rators who are required to characterize their CO2 stream as part of their initial permit application.

Individual Response: EPA agrees that any requirements a pplicable to CO2 injectate should be clearly identified to the public and to th e regulated community. EPA received many comments regarding the applicability of the RCRA regulat ions and statute to CO2 streams that are geologically sequestered under the final Class VI UIC well requirements. As a result, EPA has decided to initiate a separate proposed rulemaki ng specifically to examine the issue of RCRA applicability to CO2 streams be ing geologically sequestered, in cluding the possible option of a conditional exemption from the RCRA requirement s for CO2 GS in Class VI wells. EPA will consider these comments as part of its devel opment of that proposal. The Agency will consider issues particular to RCRA in the context of th at separate rulemaking, and recommends that the commenter read that proposed rule when it is published. The Agency notes that commenters who wish to submit comments on the RCRA proposal will need to do so during the comment period for that rule. Finally, EPA also notes that the fi nal GS rule, which adds new regulations for Class VI wells under the Safe Drinking Water Act (S DWA), is not making any changes to the RCRA regulations. The existing RCRA hazardous wast e characterization regulations apply to evaluations of CO2 streams, and those regul ations define which RCRA solid wastes are regulated as RCRA hazardous wastes – it is not EPA’s position that th e presence of any levels of impurities would necessarily render a CO2 stream a hazardous waste, without reference to those regulations.

5Letter ID: 0148 Comment ID: 21767 Letter Lines: 127 to 142

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

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

Comment: Such overwhelming regulatory uncertainty wi ll only serve to dete r investment in CCS technology and slow the rate at whic h large-scale commercial CCS projects are developed. Instead, EPA needs to exam ine and explain which environmental statutes could be triggered, how they will interact or overlap, and what potential liability exists for industry. EPA should also explore the possibility of creating regulatory exemptions under RCRA, CERCLA, etc., for injected CO2, thereby reducing regulatory hurdles for CCS projects. One example of this would be to ensure that final Class VI permits have the broadest possible reach to maximize the protection offered by CERCLA’s "federally permitted release" [FN9 CERCLA, Section 107(j).] exemption. This would mean including within the scope of the permit for carbon dioxide inje ction all other CERCLA hazardous constituents likely to be contained in the CO2 stream, thus providing some comfort to owners and operators that th ey will not be subject to CERCLA liability. When you consider that EPA l acks the authority to transfer well ownership between entities, and that owners are therefore liable in perpetuity, the need to craft regulatory exemptions becomes clear.

Individual Response: EPA agrees that any requirements for the CO2 stream should be clearly identified. EPA received many comments regardi ng the applicability of the RCRA regulations

and statute to CO2 streams that are geologically sequestered unde r the final Class VI UIC well requirements. As a result, EPA has decided to initiate a separate proposed rulemaking specifically to examine the issue of RCRA appl icability to CO2 streams being geologically sequestered, including the possible option of a conditional exemption from the RCRA requirements for CO2 GS in Class VI wells. EPA will consider these comments as part of its development of that proposal. The Agency will consider issues pa rticular to RCRA in the context of that separate rulemaking, and recommends that the commenter read that proposed rule when it is published. The Agency notes that comment ers who wish to submit comments on the RCRA proposal will need to do so during the comment pe riod for that rule. Finall y, EPA also notes that the final GS rule, which adds ne w regulations for Class VI wells under the Safe Drinking Water Act (SDWA), is not making any changes to the RCRA regulations.

As described above, EPA clarifies that the GS rule requires owner or oper ators of Class VI wells to characterize their injection st ream prior to injec tion, and throughout the ope rational life of the injection facility. If th e CO2 stream is determined to be a hazardous waste, injection may only occur in a Class I hazardous waste injection well.

CO2 itself is not listed as a hazardous substan ce under CERCLA however, the CO2 stream may contain a listed hazardous substance (such as mercury) or may mobilize substances in the subsurface that could react with ground water to produce listed hazardous substances (such as sulfuric acid). Whether such substances may result in CERCLA liability from a sequestration facility depends entirely on th e composition of the specific CO2 stream and the environmental

6media in which it is stored (e.g., soil or gr ound water). CERCLA exempts from liability, under CERCLA section 107, 42 U.S.C. 9607, certain “feder ally permitted releases” (FPR) as defined in CERCLA, 42 U.S.C. 9601(10). Class VI permits will need to be carefully structured to ensure that they prevent potential releases from the we ll which are outside the scope of the Class VI permit.

EPA adds that providing financial incentives for or promoting the use of GS is outside the scope

of the GS rule.

Letter ID: 0148 Comment ID: 21768 Letter Lines: 144 to 150

Comment Code: 1540 1.2.3.2 Climate change legislation

Comment: A final possibility would be to pursue a legislative remedy -- ask Congress to address the issue -- in order to give this promising technology a chance to

flourish or fail on its own merits. Similarl y, Congress should be encouraged to appropriate money to fund the Energy Policy Act of 2005 and the Energy Independence and Security Act, which together contain over 130 new energy technology provisions. Funding these technologies would go a long way toward EPA’s stated goal of addr essing climate change.

Individual Response: EPA acknowledges that GS falls within the broader context of CCS and the need for regulatory clarity to ensure that USDWs are protected from endangerment. In developing the final GS rule, the Office of Water coordinated with other Agency program offices and across federal agencies (e.g., with the Depart ment of Energy; United States Geological Survey; Bureau of Ocean Energy Management, Regulation, and Enforcement, formerly the Minerals Management Service; Bureau of Land Ma nagement). The Agency continues to evaluate areas of potential applicability of other Federa l environmental statutes including, but not limited to: the Clean Air Act; the Resource Conserva tion and Recovery Act; the Comprehensive Environmental Response, Compensation, and Liabili ty Act; and the Marine Protection, Research and Sanctuaries Act to various aspects of GS a nd CCS. The Agency will continue to coordinate

on GS and CCS related issues to minimize redunda ncy and maximize efficiencies for owners or operators. For additional information, please s ee 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.

Regarding the need for a CCS agency to coordi nate across agencies, EPA is coordinating with

and will continue to facilitate communication among federal and state agencies during the implementation phase of the GS regulation.

Letter ID: 0148 Comment ID: 21769 Letter Lines: 152 to 159

Comment Code: 1850 1.4.2 CO2 GS Field Research

Comment: 2. Need for Full-Scale Pilot Projects

7Globally, only four full-scale CCS projects exist, and none of them capture CO2 from a coal-fired power plant. The Intern ational Energy Agency notes that at least 20 large-scale demonstration project s will need to be in planning by 2010 and in operation by 2020 to have any imp act on climate change policy planning.

EPA should ensure that this timetable is considered before implementing its

final rule.

Individual Response: EPA clarifies that controlling the pace of GS deployment is outside of the UIC program's authority under the Safe Drinki ng Water Act and outside the scope of this rulemaking. The UIC requirements are designed to ensure that, where GS is employed, it is done in a manner that protects USDWs from endangerment.

Letter ID: 0148 Comment ID: 21770 Letter Lines: 161 to 165

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

Comment: The real challenge, however, will be fo r EPA to create a regulatory framework flexible enough to allow for technologies that may not be commercially available for many years. That is, EPA must cr aft its CCS regulations with enough flexibility so that they may be modified to include technologi es not yet on the

market.

Individual Response: EPA is using an adaptive appro ach to regulating GS under the UIC Program. Even after finalization of the GS regulat ion, EPA plans, every six years, to collect and review project data on GS research projects to determine whether the appropriate amount and types of information and appropriate documenta tion are being collected, and to determine if modifications to the requirements are appropriate or necessary.

Letter ID: 0148 Comment ID: 21771 Letter Lines: 167 to 181

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

Comment: 3. CCS May impact Private Property Rights

Recognizing that subsurface land can be privately owned in the United States, the chamber notes that CO2 injection in to geologic formations may require permission from all owners of inters ected subsurface property. While this consideration may be somewhat addressed during the initial siting process, it may still lead to tensions between large-scale CCS projects and individual property rights. The issue becomes even mo re important as investors and industry participants will seek to minimize liab ility from property trespass claims related to sub-surface trespass, geologi cal surveying, and deposit monitoring.

8Likewise, property rights considerations may impact the availability of liability insurance for CCS project participants. If insurance companies cannot accurately calculate the risk of CCS projects, or future potential environmental liability for property trespass, they may decline to offer coverage.

Individual Response: EPA clarifies that pore space ownership and surface or subsurface property and mineral rights are outside of the scope of the Class VI GS rulemaking, which focuses on ensuring consistency in permitting underground injection of CO2 at GS operations across the United States and pr ovide requirements to prevent endangerment of USDWs in anticipation of the eventual use of GS to reduce CO2 emissions. EP A clarifies that these issues are under the purview of states a nd any of these issues, as they relate to GS, will need to be addressed though state regulati ons. Please see the final rule and preamble for additional information on financial responsibil ity for Class VI GS projects.

Letter ID: 0148 Comment ID: 21772 Letter Lines: 183 to 194

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

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

Comment: 4. Why Does the Proposed Rule Tr eat CO2 like a Hazardous Waste?

Carbon dioxide is not a hazardous waste; yet the proposed rules for CO2 storage are, in many ways, far more strict th an those for underground injection of hazardous wastes under Class I of the UIC program. Many of the construction, mechanical integrity, monitoring and financ ial assurance provisions for Class VI wells are more comprehensive and more onerous than those for Class I wells.

The Chamber does not believe that CO2 shoul d be treated more stringently than hazardous waste because it distorts public perception about the safety of carbon capture and storage, and it may make s ecuring financial backing for CCS more

difficult.

Individual Response: EPA disagrees that the requirements in the GS rule are too stringent or overstate the risk associated with GS. The require ments for Class VI wells are tailored to address the unique nature of full-scale CO2 GS, includi ng the injection volumes anticipated for longterm storage, the buoyant and viscous nature of th e injectate, and its corro sivity in the presence

of water.

While the Class I requirements formed the basi s of many of the specific requirements for GS wells, EPA clarifies that the GS rule is tailore d to the unique nature of GS. EPA based many of the GS requirements on the Class I regulations be cause, like Class VI wells, Class I wells are typically deep and involve waste streams that, if not properly managed, can harm the well and

lead to contamination.

9Letter ID: 0148 Comment ID: 21773 Letter Lines: 196 to 214

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

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

Comment: a. Distorts Public Perception

By making the proposed rule so strict, the public may unduly perceive CCS as a dangerous activity. Consider that the proposed rule requires a secondary containment field for CO2 storage. Su ch a requirement is unprecedented both domestically, in the UIC program (includi ng for storage of hazardous wastes in Class I wells), as well as internationa lly. [FN10 Countries such as Norway, Canada, and Australia, whic h have carbon capture and st orage projects currently underway, do not require secondary contai nment zones, and in fact, those countries regulate CCS using existing pe troleum laws.] Singling out carbon capture and storage for this heighten ed and substantially more rigorous requirement would suggest to the public that EPA thinks geologic storage of carbon dioxide is more dangerous than the underground injection of other substances. Since EPA is the agency charge d with protecting the environment, the public could be easily swayed by EPA’s appa rent apprehension of carbon capture and storage as currently embodied in th e proposed regulations. In order to create a regulatory scheme that foster s carbon capture and storage development and deployment, EPA should reconsider how it has characteri zed carbon dioxide injection -- both explicitly and implic itly -- in its final regulations.

Individual Response: EPA disagrees that the GS regulation overstates the risk of CO2 injection. EPA recognizes that injecting large volumes of CO2 for GS poses unique challenges that, if not properly managed, could endanger drinking water sources and ha ve other adverse impacts. However, with proper site sele ction, the final, tailored, Class VI requirements address the large volumes of CO2 injected, its buoyancy, potential corrosivity in the presence of water, and potential impurities in the CO2 stream. In addition, EPA expect s the tailored permitting, siting, construction, operation, monitoring, and post-injection site care re quirements in the GS rule to prevent leakage from injection formations and protect USDWs.

EPA also disagrees that the tailored requirements will create a negative public perception of GS. The Agency believes that a demonstration to th e public that GS projects are meeting the GS rule's tailored requirements will likely improve c onfidence in the project and help address public questions and concerns.

Regarding secondary containment, EPA retain s the requirement to identify additional containment/confining zones, if required by the Director, as pr oposed, at §146.83(b). EPA acknowledges that such additional zones may not be needed in all circumstances, and clarifies that this requirement is at the Director's di scretion, based on his or her understa nding of a particular site. EPA believes that, in some situ ations, the presence of additional confining and containment zones above the primary (i.e., lo wermost) confining zone can improve USDW protection. These layers could fu rther impede vertical fluid movement and allow for pressure

10dissipation, and also provide additional sites for monitoring, mitigation, and remediation. The Agency's decision is supported by commenters re presenting states, water associations, and an electric utility who assert that these requirements promote a flex ible, risk-based, site-specific approach to characterizing and permitting a site for GS projec ts, and are intended to improve understanding of the project as a whole and pr omote better modeling of the site. While other countries may not require such additional prot ection, EPA believes that providing the Director this additional discretion is an important elemen t of assuring that GS activities will not endanger

USDWs.

Letter ID: 0148 Comment ID: 21774 Letter Lines: 216 to 221

Comment Code: 5400 2.9 Proposed Financial Respons ibility and Long-Term Care Requirements

Comment: b. Inhibits Financial Backing

EPA should also consider the effect of these regulations on securing critical financial backing for CCS projects. As with public acceptance, EPA can shape carbon capture and storage as a tool for reducing carbon emissions by the messages that it sends the financia l world with its regulations.

Individual Response: 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 owne r or operator experiences financial difficulties. EPA believes that minimum financial responsibi lity requirements are necessary to hold well owners or operators accountable for the safe ope ration and closure of the well and avoid expense and risk to the public. EPA adds that the purpose of the GS rule is not to encourage the use of GS; rather, the purpose of the GS rule is to ensu re that, where GS is deployed, it is conducted in a manner that protects USDWs from endangerment. See the final rule and preamble for further discussion of EPA's final approach to financial responsibility.

EPA anticipates that the availability of thir d-party GS financial instruments will grow in response to demand for such instruments by GS we ll owners or operators as deployment of GS technology increases in the future. In additi on, EPA allows owners or operators under §146.85 (subject to state law) to choose from a variety of financial in struments to demonstrate their financial responsibility needs, thereby allowing owners or oper ators flexibility based on each

individual site.

Letter ID: 0148 Comment ID: 21775 Letter Lines: 223 to 240

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

Comment: Consider that the proposed regulations c ontemplate a 50-year pos t-injection site care period. EPA’s reasoning for proposing th is time frame is based on CO2 plume stabilization and protection of USDWs. EP A attempts to ameliorate the harshness

11of this time frame by stati ng that the UIC program dir ector can modify it under certain circumstances. A better approach w ould be to allow the characteristics of each site determine the appropriate length of time for post-injection site care. This would prevent placing an unn ecessary burden on those owners and operators who can show that their projects pose no threat to underground sources of drinking water in less than 50 years. In fact, the Chamber believes that appropriately sited CCS projects will n eed substantially less than 50 years, especially since research suggests that the risk pr ofile of carbon dioxide injection diminishes dramatically after a decade. Consequently, a lengthy postinjection care period would only serve to penalize those owners and operators who have taken steps to ensure proper site characterization.

As a result, the 50-year timeframe (if reta ined in the final rule) could have an inhibiting effect on insurers, investor s, owners, and operators hoping to participate or invest in CCS activities.

Individual Response: EPA agrees that some owners or operat ors will be able to demonstrate, in less than 50 years, that the pr essure front and plume no longer pose a risk of endangerment to USDWs. However, based on studies, EPA believes that the 50 year default time frame is

warranted in most cases based on additional re view of research studies and reports and evaluation of public comments.

EPA believes that the best way to address a ll possibilities, while en suring USDW protection from endangerment, is to set a 50 year default post-injection site care timeframe, with flexibility to: (1) allow the Director discre tion to shorten or lengthen the PISC timeframe during the PISC period based on site-specific data, pursuant to requirements at §146.93(b); or (2) afford the

Director discretion to allow a Class VI well owner or operator to demonstrate, based on substantial data during the permitting process, that an alternative PISC timeframe may be appropriate if it ensures non-e ndangerment of USDWs pursuan t to requirements at §146.93(c).

EPA does not believe that performing the demons tration before 50 years places an additional burden on these owners or operators . EPA clarifies that all operators will need to make this demonstration prior to the Director authorizing site closure; the di fference is that some operators will be performing the demonstration earlier than others. As indicated by the commenter, ideally this demonstration will be part of an ongoing co mmunication between the owner or operator and the UIC Director. If an owner or operator be lieves that an earlier demonstration will be burdensome, nothing in the GS rule requires them to make the demonstration prior to 50 years.

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

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

12impacts.

Letter ID: 0148 Comment ID: 21776 Letter Lines: 242 to 247

Comment Code: 1435 1.2.1.3 EPA should develop guidance

Comment: 5. OMB’s Good Guidance Practices

With respect to EPA’s suggestion that fu ture guidance documents be issued to clarify requirements for financial responsib ility on CO2 inject ion projects, the Chamber reiterates that such guidance must be issued in conformance with OMB’s

Good Guidance Practices bulletin.

Individual Response: EPA is developing guidance on financia l responsibility for GS wells. The guidance is available on EPA’s website at http://water.epa.gov/type/groundwat er/uic/wells_sequest ration.cfm. EPA intends to take OMB’s

Good Guidance Manual into consideration as fina ncial responsibility guidance is developed.

OMB’s Good Guidance Manual esta blishes policies and procedures for the development, issuance, and use of significant guidance docum ents by Executive Branch departments and agencies.

Letter ID: 0148 Comment ID: 21777 Letter Lines: 249 to 256

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

Comment: Conclusion

CCS is not a "silver bullet" but an innovative solution for reducing CO2 emissions to the atmosphere. The Chamber applauds EPA for seeking out novel and important approaches for addressing clim ate change, reducing CO2 emissions, and continuing to protect our vital sources of safe drinking water. Nevertheless, the Chamber encourages EPA to address th e potentially serious impediments to CCS development and deployment that have been raised in these comments.

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

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