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.Letter ID: 0192

Commenter: Jeff W. Sheets Organization: ConocoPhillips

Letter ID: 0192 Comment ID: 23886 Letter Lines: 60 to 64

Comment Code: 1000 1. General and Administrative Comments

Comment: In addition to the Multi-Stakeholde r Discussion Group mentioned above, ConocoPhillips has formulated our specific perspective on EPA rulemaking working with organizations including the American Petroleum Institute, the CO2 Capture and Storage (CCS) Contact Group (VanVoor hees/Bryan Cave). We support the consensus of these groups, taken in th eir entirety. Our co mpany's comments

Individual Response: EPA acknowledges the comment. Pleas e see the remainder of EPA's responses to this comment, American Petroleu m Institute’s comment, and CCS’s comment for

further details. For additional information on EP A's final regulatory a pproach, please see the final rule and preamble as we ll as the rulemaking docket.

Letter ID: 0192 Comment ID: 23887 Letter Lines: 72 to 86

Comment Code: 1210 1.1.1 Comments about the proposed rule

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

Comment Code: 1420 1.2.1.1 Support the GS rulemaking

Comment: Protection of U.S. Drinking Water (USDW) sources is paramount and a central requirement of the Safe Drinking Water Act and ConocoPhillip s wholeheartedly supports high standards for protection of current and potential future USDWs. We believe that maintaining focus on several key principles can ensure rulemaking that is protective and flexible to allo w site specific considerations while maintaining cost-effective operations. We applaud EPA's work to that end. We support most concepts, elements and deta ils in the proposed requirements, and provide our comments to reinforce and amplif y a few issues which we believe flow from the following important key principles:

o All UIC well classes have requirements fully designed to protect USDW's.

o The oil and gas industry's experience w ith CO2 injection fo r enhanced oil recovery (EOR) provides a track record of USDW protection that can enhance EPA's rulemaking.

Individual Response: EPA believes that the creation of a new injection well class (VI) under the existing UIC Program is necessary to enable the use 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 fram ework for regulating injection

1of CO2 for GS and adds that the GS regulati on 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 potenti al presence of impurities in captured CO2, and its mobility within subsurface geologic formations.

EPA recognizes that the oil and gas industry has decades of e xperience injecting CO2 for the purpose of ER, and that sites used for ER may be suitable for GS and may be among the first GS

sites. Some of the research that informs the fi nal GS rule was conducted at ER sites. EPA also recognizes that a by-product of ER activities is that a ce rtain percentage of the CO2 is trapped in the receiving formation.

Letter ID: 0192 Comment ID: 23888 Letter Lines: 88 to 91

Comment Code: 3100 2.1 Proposed Geologic Siting Requirements (40 CFR 146.83)

Comment: o Appropriate site selection supported by rigorous characterization provides the strongest foundation for protec tion of USDWs. It is important that a diversity of geologic containment systems be used for sequestration, and that site selection requirements do not unnecessarily exclude potential storage sites.

Individual Response: EPA agrees that site characterization is an important aspect of ensuring USDW protection, and clarifies that the final rule does not preclude injection into any formations or types of injection sites provided that the we lls meet the final GS rule requirements. The purpose of the GS regulation is to ensure that injection of CO2 for GS is conducted in a manner that is protective of USDWs. This includes appropr iate site characterizati on and identification of geologic formations that are amenable to inject ion of potentially large volumes of CO2 for longterm storage. The regulation provide s flexibility to owners or operato rs to select appropriate sites and target formations (under §146.82), well cons truction specifics (unde r §146.86), and injection procedures provided the owner or operator can de monstrate that the injection and storage will not endanger USDWs and that minimum requirements for the site are met.

Letter ID: 0192 Comment ID: 23889 Letter Lines: 93 to 96

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

Comment: o Performance standards should focus on containment while allowing for flexibility as more is learned about CCS. An approach which is overly prescriptive reduces learning, risks delaying the use of newer/better

alternatives in the future, a nd can add unnecessary costs.

Individual Response: The Agency believes that the Class VI requirements balance site-specific flexibility with USDW protection. Rather than setting performance or technology-based standards for GS projects, EPA is adopting a flex ible approach, where operators of GS projects would develop and implement site-specific plans for delineating the AoR, testing and monitoring the site, performing corrective actio n, and post-injection site care . EPA believes that the plans—

2which would be reviewed and approved by the Director and periodical ly updated throughout the life of the project—promote an ongoing dialogue between the operato r and the Director that will encourage use of the most appropriate t echnologies for a particular project.

Letter ID: 0192 Comment ID: 23890 Letter Lines: 98 to 101

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

Comment: o Area/field Permitting- Many CCS sites wi ll be multi-well sites, with the possibility, as in EOR applications, fo r hundreds of wells. It is recommended that an area/field permitting approval be implemented to simplify the process and allow for well-by-well flexibility in requirements where that makes sense.

Individual Response: EPA disagrees that area permits are appropriate for GS wells. The Agency believes that individual injection well permits are essential to ensure that every GS well is constructed, operated, monitored, plugged, and closed in a manner that is protective of

USDWs.

EPA believes that the efficiencies and administ rative benefits offered by area permits can be achieved through well executed plans required for GS wells. EPA envisions that planned additional GS wells should be discussed as pa rt of the ongoing dialog between the owner or operator and the Director. For example, EPA expects the AoR plan to consider anticipated future

wells so that the Director is able to consider all anticipated injecti on and resultant pressure changes in evaluating the plan and setting pe rmit conditions. Similarly testing and monitoring plans should account for future injection wells to ensure that ground water monitoring or CO2 plume and pressure front tracki ng are planned appropriately.

Through this iterative planning process, the owner or operator and Director can identify ways to streamline future submittals, including permit applications for future wells in the same field. For example, the parties could identify common, stat ic components of the project that could be incorporated into future permit applications a nd facilitate submittal of data by the owner or operator and review and approval by the Director.

EPA also believes that requiring separate permit applications for each well will ensure that the public has an opportunity to provide input on each well in the field as it is constructed or brought online. In addition, where wells are re-permitted as GS wells (e.g., in ER projects, which may typically operate under Class II area permits), EPA believes that the unique nature of GS

necessitates individual review of each well to en sure the re-permitted wells were engineered and constructed to achieve the goals of §§146.86(b) and 147.87(a) and ensure protection of USDWs from endangerment.

EPA disagrees that many GS sites would have the hundreds of wells that are typical of some Class II ER projects. EPA believe s that newer technologies, such as horizontal well injection will likely reduce the number of wells in GS projects.

3Letter ID: 0192 Comment ID: 23891 Letter Lines: 103 to 180

Comment Code: 1240 1.1.1.3 Suggested changes/ed its to rule language

Comment Code: 2046 1.5.2.3 Continuing to classify CO2 in jection for EOR/EGR as Class II/ dividing line between Class II and Class VI (seeking comment)

Comment: Enhanced recovery of oil or natural gas and geologic sequestration of CO2

EPA's Proposal would continue to regula te and permit inject ion of CO2 for EOR/EGR (enhanced gas recovery) purposes as Class II injection "as long as any production is occurring." EPA has asked for comment on the merits of this approach "since owners or operators of so me Class II EOR/EGR wells may wish to use wells for the purposes of production and GS prior to the field being completely depleted." 73 Fed. Reg. at 43502. We support the Mu lti-Stakeholder

consensus recommendation that the rules be clarified to provide more certainty about the applicability of Class II requirements where GS of C02 occurs in

connection with EOR/EGR activ ities. Specifically, the UI C rules should provide a "bright line" definition as to the a pplicable class of wells where C02 injections for EOR/EGR production and fo r GS occur in tandem. We strongly support the recommendation for the following language to accomplish that objective:

§ 144.6, 144.80 and 146.5, and Classificati on of injection wells. Injection wells are classified as follows:

***

(b) Class II. Wells which inject fluids:

(1) Which are brought to the surface in connection with conventional oil or natural gas production and may be co mmingled with waste waters from gas plants which are an integral part of production operations, unless

those waters are classified as a hazardous waste at the time of injection.

(2) For enhanced recovery of oil or natural gas;

(3) For storage of hydrocarbons which ar e liquid at standard temperature and pressure;

(4) For enhanced recovery of o il or natural gas where geologic sequestration is occurring during or in connection with enhanced recovery of oil or natural gas pr ovided (i) there is reasonable expectation of more than insignifi cant future produc tion volumes or

rates as a result of carbon dioxide injection and (ii) operating

4pressures are no higher than reasonably necessary to produce such

volumes or rates;

* * *

(f) Class VI. Wells injecting a car bon dioxide stream for geologic sequestration except those wells descri bed in subsection (b)(4) of this

section or otherwise excl uded from this Class.

The Multi-Stakeholder group has agreed that wells in classification (b)(4) should remain in Class II and be subject to the current requirements of Class II. We have also agreed that the wells used for GS in oil and gas reservoirs that do not meet the criteria of (b)(4 ) should be subject to additional requirements. We have tentatively defined such wells as wells used "for geologic sequestration in oil and gas formations a nd where the criteria of paragraph (b) (4) are not met" But we have not yet re ached consensus on defining what specific requirements should apply to these wells. We are committed to working toward agreement on those requirements (probabl y within a Class II context) and submitting the results of that effort to EPA by February 28, 2009 for your

consideration.

ConocoPhillips further recommends that Cl ass VI be used for wells designed "exclusively for geologic sequestration of carbon dioxide." Th is clarifies and broadens Class II to include former pr oducing oil and gas wells, EOR wells, EOR with simultaneous storage, and EOR fields transitioning to/from storage, such that all oil and gas fields storing CO2 are Class II, whethe r producing or not. This approach removes uncertainty for fields which may have become storage fields, but return to production as economic conditions change, or cease production for some time as part of e nhancing recovery, a nd possibly other scenarios. This approach ac knowledges the track record of CO2 injection for EOR and the significant knowledge base in o il and gas fields. Thus, Class VI requirements would acknowledge the greate r uncertainties inherent in often deeper saline storage, newer field de velopments, and possibly less defined closure structures. This approach al so may safely accelerate CCS projects utilizing well known oil and gas forma tions, public acceptance may be more likely and regulatory authorities/ oil a nd gas agencies are in place to begin CCS projects. We support API's recommenda tion to add a Class II (b)(S), "For geologic sequestration in o il and gas formations and where the criteria of paragraph (b)(4) are not met".

Individual Response: EPA did not make the suggested change . The Agency disagrees that wells injecting CO2 for the primary purpose of long te rm storage should be regulated under Class II requirements.

Based on its evaluation of all public comment s and input on the proposed rule and NODA and Request for Comment EPA has made many revisions to the GS Rule. See the final rule and

5preamble for further discussion on EPA's final appr oach to transitioning from Class II to Class

VI.

EPA is developing guidance on transitioning perm its from Class II to Class VI. The guidance will assist Directors in determining whether an injection project should be transitioned from Class II where the primary purpose is oil and gas production to Class VI where the primary purpose is long-term storage of large volumes of CO2. The gu idance describes the recommended methods the Director may use to evaluate change s in risk to USDWs from projects, and how the Director may determine whether a project should be regulated within th e Class II or Class VI UIC program. This guidance will be available on EPA’s website at http://water.epa.gov/type/groundwat er/uic/wells_sequest ration.cfm. For more information, please

see the discussion on transition of Class II well s in the preamble to the final GS rule.

Letter ID: 0192 Comment ID: 23892 Letter Lines: 182 to 214

Comment Code: 1240 1.1.1.3 Suggested changes/ed its to rule language

Comment Code: 4110 2.4.1.1 Injection pressure limitations

Comment: Injection Pressure Limitations

We are concerned about three aspects of proposed 146.88(a), governing injection pressure limitations. First, it "restricts" fractures in the injection zone "except during stimulation" rather than focusing on maintaining the integrity of the confining zone, which is the suggeste d focus for protecting USDWs. Second, it misses an opportunity to refer specifically to th e full range of potential geomechanical failure modes potentially posed by operations at a particular site. Third, the type of geomechanical ri sk that is addressed (initiation or propagation of fractures), is dealt with in a potentially arbitrary fashion (the 90% of fracture pressure limit), which may not be appropriate in all cases.

The MSDG's recommended language addr esses these concerns by focusing on maintaining the integrity of the confining zone and including tensile failure and shear failure as appropriate to ev aluate for potential transmissivity concerns. It calls for additional geomechanical studies of tensile failure and shear failure only "where appropriate" b ecause there will be locations where experience or existing information will pr ovide sufficient evidence to avoid the need for additional studies. The need for conducting additional tests and for determining which tests would be accep table is left to the Director's discretion. Recommended language:

The owner or operator must comply w ith a maximum injection pressure limit approved by the Director and speci fied in the permit. In approving a maximum injection pressure limit, the Director shall consider the results of well tests and, where appr opriate, geomechanical or other

studies that assess the risks of tens ile failure and shear failure. The Director shall approve limits that , with a reasona ble degree of

6certainty, will avoid initiation or pr opagation of fractures in the confining zone or cause otherwise n on-transmissive faults transecting the confiding zone to become tran smissive. In no case may injection pressure cause movement of injectio n or formation fluids in a manner prohibited by 40 CFR Part 144.12(a).

Individual Response: EPA notes that because determination of the injection pressure limit is based on the fracture pressure of the injection zo ne, the limit is site-sp ecific and not arbitrary. EPA emphasizes that injection pressure limits ar e important to protect against fracturing of the confining zone, and that the requ irement at §146.88(a) that the pressure in th e injection zone not exceed 90 percent of the fracture pressure provides a margin of safety in the well operation and protects USDWs from endangerment. If the Dire ctor determines, based on a review of the information collected as part of site characterization, th at a lower injection pr essure limitation is appropriate, the Director has the authority to set a lower limit in the operating permit than the

limit established in the rule.

EPA notes that during the site characterization pr ocess, owners or operators must submit data about the geology of the site, as specified at §146.82(a), includ ing data on known or suspected faults and fractures and geomechanical informati on on fractures, stress, du ctility, rock strength, and in situ fluid pressures w ithin the confining zone. The Di rector will use these data to determine appropriate limits on injection.

In response to the concern about reopening of faults at lower pressures than 90 percent of fracture pressure, EPA believes that the requireme nt for the owner or operator to submit data on known or suspected faults and fractures and inform ation on the seismic history of the site will inform the determination of an appropriate pressu re limitation in the permit. Any sites with the potential for reopening or reactivation of faults or unacceptable seismic risk that could otherwise interfere with containment will not be permitted as GS sites.

EPA is developing guidance on site characterization for GS projects to assist owners or operators in meeting the requirements of §146.82 and to assist directors in evaluating permit applications. The guidance will describe recommended approach es for characterizing the regional geology and hydrogeology of a proposed site and performing the necessary geochemical, geomechanical, and geophysical analyses of the injection and confin ing zone. EPA is also developing guidance for primacy agencies that will include recommended a pproaches for evaluating owner or operatorsubmitted data in setting permit conditions. The gu idance will be available on EPA's web site, at http://water.epa.gov/type/groundwater /uic/wells_sequestration.cfm.

Letter ID: 0192 Comment ID: 23893 Letter Lines: 216 to 229

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

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

USDW

Comment: Lowermost USDW:

7EPA's proposal restricts injection to form ations beneath the lowermost USDW and gives the Director the discretion to require identification of additional confining zones. ConocoPhill ips recommends focus on perfor mance standards rather than depth or confining zone redundancy - injection should be allowed into any injection zone which has ge ologic and mechanical isolat ion sufficient to prevent fluid movement which could endanger any US DW. In some site situations injection zones can be safely above US DW's with adherence to we ll construction standards and other requirements. There may be hi gh potential geologic sites above USDWs which need not be excluded for storage. Identification of redundant confining zones may be confusing and unduly reduce the number of sites d eemed appropriate for CCS. This is particularly true si nce the definition of confining zone

includes "formation or set of formations."

Individual Response: EPA clarifies that secondary confini ng zones are not required for all GS sites. Rather, secondary confini ng zones are required when the Di rector determines that these zones are needed to maximize the protection of USDWs from endangerment. EPA retains the requirement to identify additional containment/confining zones, if required by the Director, as proposed (e.g., §146.83(b)). EPA believes that, in some situations, the presence of additional confining and containment zones above the pr imary (i.e., lowermost) confining zone can improve USDW protection. These layers could fu rther impede vertical fluid movement and allow for pressure dissipation, and also provide additional sites for monitoring, mitigation, and

remediation. EPA also believes that a site-s pecific demonstration regarding the need for additional confining zones affords the flexibility the commenter seeks.

EPA adds that the final GS rule contains a prov ision (at 146.95) for owners or operators to apply for waivers from the requirement that injection be below the lowermost USDW. EPA believes this waiver provision will reduce potential limita tions on the re-permitting of Class II wells as Class VI wells, provided they meet the requi rements at 146.95 while still protecting USDWs from endangerment.

The final GS rule at §146.95 establishes a proc ess by which owners or operators can seek a waiver of the Class VI injection depth requir ements for injection into non-USDW formations above and/or between USDWs. The waiver approach requires the submissi on of extensive, sitespecific information (in conjuncti on with the permit application s ubmission) to demonstrate that injection of CO2 into a non-USDW that is above or between USDWs can be done in a manner that is protective of USDWs. The requirements are designed to ensure that the owner or operator, the Director, and the Regional Administrator consid er, on a site specific basis, the implications, benefits, and challenges associated with GS and ensuring water availability and USDW protection. For additional information on the waiv er approach, please see the final rule and preamble, as well as EPA's responses to comments on the Notice of Da ta Availability and Request for Comment.

Letter ID: 0192 Comment ID: 23894 Letter Lines: 231 to 241

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

8146.86)

Comment: Well Standards:

Some well standards, as written in the pr oposed rule, seem to build from Class I Hazardous requirements, which is a level of rigor not necessary for protection of USDWs in all C02 injecti on sites. Given oil and gas industry experience with

Class II wells, the non-hazardous nature of CO2, and benefits of considering many types of sites, geological formati ons, and confining c onfigurations, we

recommend increased consideration for Cl ass II influence in Class VI well standards. Given that all UIC injection well classes are designed to protect USDWs, ConocoPhillips supports API reco mmendations, and believe the following are particularly important:

Individual Response: EPA disagrees that the well standard s provided in the GS rule are too rigorous for all Class VI wells. Although the requirements are based on the existing regulatory framework for deep wells, includi ng Class I wells, EPA believes that GS is sufficiently different from other injection operations to warrant the tailored requirements fo r Class VI wells at §146.86. The well construction requirements ar e necessary to protect USDWs from endangerment.

Furthermore, EPA clarifies that the requirement s for Class VI wells ar e not necessarily more stringent than those for Class I hazardous waste injection wells, rather they are different. For example, Class I hazardous well owner or operato rs are subject to requirements that are not applicable to Class VI wells, su ch as no migration petitions.

Letter ID: 0192 Comment ID: 23895 Letter Lines: 243 to 255

Comment Code: 4500 2.5 Proposed Mechanical Integrity Testing (MIT) Requirements (40 CFR 146.89)

Comment: - The Mechanical Integrity Testing (MIT ) requirements: In addition to daily monitoring of pressure, API recommends that:

At least once per year, the owner or operator must confirm the absence of significant fluid movement under pa ragraph (a)(2) of this section using a method acceptable to the Director (e.g. including diagnostic surveys such as oxygen-activation lo gging or temperature or noise logs).

Revised text supports a performance- based approach and allows the development and use of new technologi es as they become available. Subsection (3) was deleted because it requires the tubing to be pulled at significant cost and risk of uncontrolled releases.

Individual Response: EPA believes that the MITs descri bed in §146.89(c) of the rule (an

9approved tracer log or temperatur e or noise logs) are effective me thods to demonstrate external MI, provide an important early warning of potenti al problems in the injection well system, and represent standard techniques that have been used successfully by the drilling industry and for the UIC Program for decades. The Agency notes th at the regulations do provide flexibility at §146.89(e) to allow the Director to approve the us e of alternative MIT methods, which can allow the use of any new technologies that become available.

In addition, EPA is using an adaptive approach to regulating GS. The Ag ency plans to collect and review data every six years on GS 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.

EPA agrees that the casing inspection log is not an appropriate test to detect fluid movement behind the casing, but clarifies th at it can be used to determ ine the presence or absence of corrosion of the long-string casing, a nd is required if the Director determines that it is necessary based on site-specific information. EPA has revi sed the final GS rule to require that the frequency of the casing inspection log must be specified in the approve d testing and monitoring plan. See §146.89(d).

Letter ID: 0192 Comment ID: 23896 Letter Lines: 257 to 261

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

Comment: - Automatic shut-in is ap propriate, but we recommend not pursuing the proposed requirement for downhole shut off devices . Down hole shut off valves are designed for offshore or other site-sp ecific risks and should be added on a site-specific basis when warranted. In many cases, surface shut-in is adequate and sufficiently protective.

Individual Response: After evaluating the risks and benefi ts of down-hole shut-off systems and considering additional research, EPA will not re quire automatic down-hole shut-off devices for onshore Class VI wells since it is not necessary in all cases to ensure protection of USDWs from endangerment. Instead, the final rule, at §146.88(e)(2 ), requires that owne rs or operators of

onshore Class VI wells install automatic surface shut-off devices. The rule affords Director's

discretion to mandate automatic down-hole shut -off devices in onshore situations that may warrant their use. The rule requ ires, at §146.88(e)(3), that owners or operators of offshore wells

within State territorial waters install automatic down-hole shut-off systems. EPA believes that these requirements at §146.88(e) ensure that proper precautions are taken to prevent subsurface fluid movement and ensure protection of USDWs.

The GS rule, at §146.88(e)(3), requ ires the installation of down- hole shut-off devices for Class VI wells located in the offshore submerged lands within the jurisdiction of a State UIC program. The Agency believes that the unique constructio n and operational conditions for offshore Class VI wells, including isolation from shorelines and the need to c onstruct wells through the water column and the subsurface, may delay response time in the event of well difficulties. These

10conditions merit requiring automatic down-hole shut-off devices for offshore wells in the submerged lands of a State.

While EPA acknowledges that the likelihood of damage to onshore f acilities is lower than that

for off-shore facilities, down-hole shut-off valv es are still commonly used in onshore facilities such as acid gas injection wells and high pressu re, high-temperature wells. While valve failure is a concern, EPA believes that technology has advanced sufficiently to make valve failure a rare occurrence and to appropriately hand le such failure if it occurs. Fo r example, wireline retrievable devices can allow repair or replacement of da maged devices without necessitating pulling the tubing.

EPA believes that requiring the in stallation of automatic surfa ce shut-off devices for onshore wells (and affording Director's discretion to requir e down-hole devices where necessary) and

automatic down-hole shut-off devices for offsho re wells in submerged lands within the jurisdiction of a State ensures that proper pre cautions are taken to prevent subsurface fluid movement and ensure pr otection of USDWs.

Letter ID: 0192 Comment ID: 23897 Letter Lines: 263 to 279

Comment Code: 4600 2.6 Proposed Plume and Pressure Front Monitoring Requirements (40 CFR 146.90)

Comment: Monitoring

ConocoPhillips supports EPA's proposed rule s to prepare, maintain, and comply with a testing and monitoring plan, includi ng chemical analysis of CO2 streams and allowing for fit-for-purpose monitoring. We recommend some changes as

described in detail in API's submittal. API's recommendations emphasize careful

site selection and characterization, whic h create the strongest protection for USDWs while still handling well construction and monitoring with the most cost effective protective measures. Specific monitoring requirements detailed in API's recommendation maintain appropriate rigor to protect USDWs while allowing for site specific details. EPA's flexib ility around operator developed plans is appropriate, and API acknowledges the dire ctors discretion and ability to add prescriptive requirements as appropriate for specific s ites. The recommendations provide balance, since to o many prescriptive elements in the requirements

themselves, would run the risk of be coming too broadly applied and add unnecessary cost. Preserving the environm ental benefits of CCS relies on managing cost-effective protective solutions.

Individual Response: EPA agrees and believes that flexib ility is important in developing and implementing a monitoring plan that is appropriat ely tailored for a specif ic GS site. The purpose of the requirement at §146.90 to develop site-speci fic testing and monitoring plans is to ensure that the monitoring performed at a site is appr opriate for site operat ional conditions and the geologic setting. EPA believes that th is is the best approach for a ddressing potential risks at GS sites. These flexible provisions in the monitoring requirements for Class VI wells enable the

11owner or operator to tailor monitoring program s to the specific need s of each project in consultation with the Director. Please also see EPA's response to API's comment.

Letter ID: 0192 Comment ID: 23898 Letter Lines: 281 to 290

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

Comment: Financial Assurance

This requirement intends to project and cover the cost of closure and postclosure site care plans. There is acknowle dgment of three important elements 1) flexible methods and instruments, 2) preserving the availability of selfinsurance mechanisms, and 3) release of fi nancial assurance at closure. Exposure after closure would be a concern to investors and would not provide mechanisms / financial instruments to recognize that risks diminish after monitoring, postinjection site care, and closure. Agai n, it seems inappropriate that this requirement exceeds requirements for Class I hazardous wells.

Individual Response: EPA agrees that it is appropriate to al low a flexible approach for financial responsibility as long as USDWs ar e being protected. Owners or opera tors have the flexibility to choose from a variety of financial instruments to meet their financial re sponsibility obligations and may use one or multiple financial respons ibility instruments for well plugging and PISC (§146.85(a)(6)). However EPA will not allow for a separate financial responsibility demonstration for well plugging and PISC (i.e., a demonstration submitted prior to well plugging and the beginning of the post-injec tion site care period rather than with the permit application). A demonstration of financial responsibility for all ph ases of the GS project will be required prior to

the issuance of a Class VI permit (§146.85(a)(5)(i)).

EPA will retain the use of self-insurance as an instrument for financial responsibility for Class VI wells. EPA is developing guidance that describe s the types of financial instruments owners or operators can use to meet financial responsibilit y requirements for Class VI wells. The financial responsibility guidance will include considerations for Directors regarding how to evaluate the appropriateness of a specific financial responsibi lity instrument for a specific project. This guidance is available on EPA's website at http://water.epa.gov/type/groundwat er/uic/wells_se questration.cfm.

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 opera tor experiences financial difficu lties. EPA disagrees that the requirements equate GS wells with Class I hazardous waste wells; rather, the financial responsibility requirements for Class VI wells are tailored to the unique nature of the long term

GS of CO2.

Once an owner or operator has met all regulator y requirements under Part 146 for Class VI wells and the Director has approved site closure pursuant to requirements at §146.93, the owner or

12operator will generally no longer be subject to enforcement for regulatory noncompliance. Furthermore, the financial instrument required under §146.85 will be releas ed if it has not been

used. However, even if a site closure is a pproved under §146.93, an owner or operator may be held liable for regulatory noncompliance (inc luding violation of 40 CFR 144.12) in certain circumstances. For example, an owner or operator ma y be held liable even af ter site closure if the Director relied on erroneous information provide d by the owner or operator when approving site

closure.

Additionally, an owner or operator may always be subject to any action the Administrator deems necessary to protect the health of persons under §1431 of the SD WA after site closure if there is unanticipated migration towards or into a US DW that causes or threatens imminent and substantial endangerment to public health. The action may include issuing administrative orders or commencing a civil action for appropriate relief.

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 re sponsibilities are transferred to that new owner and operator, includ ing all potential liabilities a ssociated with meeting the requirements of that permit.

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

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

§§ 7401-7671; CERCLA, 42 U.S.C. § 9601-9675; and RCRA, 42 U.S.C. § 6901-6992. EPA does not have authority to transfer SDWA or other legal liability for Class VI wells to the State or federal government or a third-party fund. See the final rule preamble for further discussion of EPA's final approach.

Letter ID: 0192 Comment ID: 23899 Letter Lines: 292 to 293

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

Comment: RCRA- CO2 should only be considered to be RCRA hazardous if combined with a

RCRA

listed hazardous stream.

Individual Response: EPA received many comments regardi ng the applicability of the RCRA regulations and statute to CO2 st reams that are geologically seque stered under the final Class VI UIC well requirements. As a result, EPA has deci ded to initiate a sepa rate proposed rulemaking specifically to examine the issue of RCRA appl icability to CO2 streams being geologically sequestered, including the possible option of a conditional exemption from the RCRA requirements for CO2 GS in Class VI wells. EPA will consider these comments as part of its development of that proposal. The Agency will consider issues pa rticular to RCRA in the context 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

13the final GS rule, which adds ne w regulations for Class VI wells under the Safe Drinking Water Act (SDWA), is not making any ch anges to the RCRA regulations.

Letter ID: 0192 Comment ID: 23900 Letter Lines: 295 to 299

Comment Code: 1640 1.3.4 CERCLA issues (seeking comment)

Comment: CERCLA- CO2 injection under UIC permits will meet EPA's requirements and area

of review along with all permitting requirem ents; which will ensure appropriate injection and handling. We are very concer ned that by raising this issue, EPA opens broad concern and uncertainty whic h could seriously jeopardize progress on

CCS.

Individual Response: CO2 itself is not listed as a hazardous substance under CERCLA; however, the CO2 stream may contain a listed hazardous substance (such as mercury) or may

mobilize substances in the subsurface that could react with ground water to produce listed hazardous substances (such as sulf uric acid). Whether such subs tances may result in CERCLA liability from a sequestration f acility depends entirely on the composition of the specific CO2

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

Furthermore, EPA is promulgating the GS rule un der the authority of th e SDWA. To the extent the commenter is seeking interpretations of CE RCLA and its related pr ovisions, such as the definition of a federally permitted release, such interpretations are beyond the scope of this rulemaking.

EPA agrees that proper site characterization a nd operation of a GS project is important for protecting USDWs from endangerment. The UIC pr ogram Director also has authority under the SDWA to address potential compliance issues (e.g., potential releases that may endanger USDWs) resulting from injection violations in the unlikely even t that a remedial response is necessary. Although EPA anticipates that the need fo r 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 an d that owners or operators demonstrate that financial resources are set aside to imp lement the plans if necessary, per §146.85.

EPA adds that promoting the use of GS is outsi de the scope of the GS rule. Rather, the purpose of the GS regulation is to ensu re that, where deployed, GS is c onducted in a manner that protects USDWs from endangerment.

Letter ID: 0192 Comment ID: 23901 Letter Lines: 301 to 309

14Comment Code: 5240 2.8.2.2 Post injection timeframe (seeking comment)

Comment: Closure Standard

ConocoPhillips believes there are three pr oblems with the closure standard in proposed section 146.93(b). First, the pr esumption that monitoring should continue for 50 years is unnecessary and potentially counterproductive. A straight performance standard is preferab le to this or any other fixed time period because it provides a clearer standa rd and an incentive to maximize the understanding of site and proj ect performance and as such is more protective of USDWs. Second, the proposal requires de monstration that the CO2 plume has

Individual Response: The post-injection site care require ments in the final GS rule, §146.93(b), incorporate a combination of a 50-year default po st-injection site care ti meframe, in conjunction with a performance standard, for Class VI wells . The GS rule offers owners or operators flexibility regarding the duration of the PISC timeframe by: (1) allowing the Director discretion to shorten or lengthen the PISC timeframe during the post-injecti on period based on site-specific data, pursuant to requirements at §146.93(b); or (2) affording the Director discretion to allow a Class VI well owner or operator to demons trate, during the permitting process based on

substantial data, that an alternative PISC tim eframe may be appropria te if it ensures nonendangerment of USDWs pursuant to requirements at §146.93(c).

EPA believes however, that to ensure USDW protection from enda ngerment, a default timeframe for post-injection site care will be necessary in al l but a limited number of cases. This default 50 year post-injection site care ti meframe represents a reasonable and protective monitoring period

based on a review of research studies, industr y reports, and existing environmental programs, and evaluation of public comments.

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

substantial data exists to demonstrate that an alternative timeframe would be protective of USDWs, or based on data collected during the PISC period, is appropriate to address the range of sites where GS is anticipated to occur, to ac commodate site-specific circumstances and various geologic conditions, and addre sses commenters’ concerns, wh ile ensuring USDW protection. Both approaches will utilize si te-specific data, and be based on pressure monitoring and USDW impacts. EPA expects that the Director will c onsider the types of information the commenter describes in determining whether the plume a nd pressure front no longer pose a risk of endangerment to USDWs and post-injection si te care monitoring may be discontinued.

EPA is developing guidance to assist owners or operators in evaluating well plugging, postinjection site care, and site closure requirements of §146.92 and §146.93. Additionally, the guidance will assist Directors in evaluating propo sed well plugging plans a nd post-injection site care and site closure plans under §146.92 a nd §146.93. The guidance describes recommended approaches for how an owner or operator coul d plug injection and m onitoring wells; perform post-injection monitoring; demonstrate the appropriateness of an alternative post-injection site care time frame; demonstrate non endangerment; a nd perform site closure activities. This

15guidance will be available at http://water.epa.gov/t ype/groundwater/uic/wells_sequestration.cfm.

EPA adds that the purpose of the GS rule is not to incentivize the use of GS; rather, the purpose

of the GS rule is to ensure that, where GS is deployed, it is conducted in a manner that protects USDWs from endangerment.

Letter ID: 0192 Comment ID: 23902 Letter Lines: 309 to 315

Comment Code: 5220 2.8.2.1 Post-injection monitoring activities

Comment: USDWs. Second, the proposal requires de monstration that the CO2 plume has

"stabilized", which is undefined. Cessation of plume movement is not necessarily essential, and may not be applicable, to show that a project poses no threat of endangerment to USDWs-plumes that are still moving may, nonetheless, be in geological settings which ensure that they remain contained. Instead, it is more protective to show that the plume is not expected to encounter a leakage pathway. Third, the required demonstrati on that "no additiona l monitoring is

Individual Response: EPA acknowledges that many site-sp ecific factors will influence the determination of when the CO2 plume and pressu re front no longer pose a risk of endangerment

to USDWs. It is for this reason that EPA believe s that Directors, in c onsultation with operators, will be in the best position to determine whethe r additional post-injection site care is needed. EPA expects this decision to be made based on re levant site data and in consultation with all potentially impacted parties.

EPA agrees that a complete cessa tion of plume movement may not occur at some sites for long time periods due to density differences, natura l formation flow grad ients and diffusion. EPA

clarifies that under the fi nal rule, a complete cessation of plum e movement is not required, only a demonstration that the plume and pressure front no longer pose a risk of endangerment to

USDWs is.

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

Letter ID: 0192 Comment ID: 23903 Letter Lines: 315 to 318

Comment Code: 5220 2.8.2.1 Post-injection monitoring activities

Comment: pathway. Third, the required demonstrati on that "no additiona l monitoring is

16needed" does not provide guidance regarding how an operator is to show that no additional monitoring is needed. The pr oposal below provides specific guidance on what the operator must show.

Individual Response: As described above, EPA acknowledges that many site-specific factors will influence the determination of when the CO2 plume and pressure front no longer pose a risk of endangerment to USDWs. It is for this reason that EPA believes that Directors, in consultation with operators, will be in the best position to determine whether additional post-injection site care is needed. EPA expects this decision to be made based on relevant site data and in consultation with all potentia lly impacted parties.

EPA agrees that a complete cessa tion of plume movement may not occur at some sites for long time periods due to density differences, natura l formation flow grad ients and diffusion. EPA

clarifies that under the fi nal rule, a complete cessation of plum e movement is not required, only a demonstration that the plume and pressure front no longer pose a risk of endangerment to

USDWs is.

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

Letter ID: 0192 Comment ID: 23904 Letter Lines: 320 to 344

Comment Code: 1240 1.1.1.3 Suggested changes/ed its to rule language

Comment Code: 5200 2.8.2 Post injection site care (seeking comment) (40 CFR 146.93)

Comment: We recommend the standard in the propos ed alternative language for section 146.93(b) below because it sets forth detail ed criteria, all of which must be

satisfied, to demonstrate that the site doe s not pose an endangerment to USDWs. The specific criteria listed in our propos al will serve to pr ovide the Director with the requisite information to make the appropriate determination. The advantage of this approach is that it establishes clear criteria that an operator must demonstrate before obtaini ng site closure based upon particular

site characteristics and is, therefore, reasonably applicable to any storage site as opposed to a standard based up on a fixed duration. Furthermore, it is more stringent than a purely discretiona ry approach because it establishes specific criteria that must be presented be fore site closure may be granted. We believe this language, which is an extens ion of work done by the World Resources

Institute and the Ground Water Protection C ouncil, avoids the noted shortcomings and provides stronger protection for USDWs.

17146.93 (b) The owner or operator shall monitor the site following the cessation of injection.

(1) The owner or operator shall con tinue to conduct monitoring as specified in the Director-approved po st-injection site care and site closure plan, until closure is aut horized pursuant to 146.93(b)(3).

(2) The owner or operator can re quest and demonstrate to the

satisfaction of the Director that th e post-injection site care and site closure plan should be revised to reduce the frequency of monitoring.

Individual Response: EPA disagrees with the suggested edits, but believes that the provisions of the final GS rule at §146.93(b) address the comm enter’s suggestions. Spec ifically, the owner or operator must monitor the site until it can be demonstrated that the CO2 plume and pressure front no longer pose a risk of endangerment to USDW s and that monitoring must continue until the owner or operator demonstrates, based on mon itoring and other site-specific data, that no additional monitoring is needed to ensure th at the GS project does not pose a risk of endangerment to USDWs, as required at §146.93(b )(3). See the final rule and preamble for further discussion on EPA's final approach.

Letter ID: 0192 Comment ID: 23905 Letter Lines: 346 to 364

Comment Code: 1240 1.1.1.3 Suggested changes/ed its to rule language

Comment Code: 5280 2.8.2.4 USDW non-endangerment demonstrations

Comment: (3) Prior to authorization for site cl osure, the owner or operator must

demonstrate to the Director, based on monitoring, othe r site-specific data, and modeling that is reasonably consistent with site performance, that no additional monitoring is needed to assure that the geologic sequestration project does not a nd is not expected to pose an endangerment to USDWs. The Director shall approve closure if the owner or operator demonstrates, based on th e current understa nding of the site, including monitoring data and/ or modeling, all of the following: (i) the estimated magnitude and extent of the project footprint (CO2 plume and the area of elevated pressu re) ; (ii) the estimated location of the detectable CO2 plume; (iii) th at there is no significant leakage of either CO2 or displaced formation fluids that is endangering USDWs; (iv) that the injected or displaced fluids are not expected to migrate in the future in a manner that encounters a potential leakage pathway into a USDW; (v) that the injection we lls at the site completed into or through the injection zone or confin ing zone are plugged and abandoned in accordance with these requirements; and (vi) any remaining project monitoring wells at the site are be ing managed by a person and in a manner acceptable to the Director.

18Individual Response: EPA disagrees that the rule should specify the criteria for setting the monitoring timeframe. Instead, EPA believes that such determinations are site-specific and should be described in a project specific post-injection site care and site cl osure plan. EPA also believes that periodic reviews and updates, wh ere necessary, to the plan are important to ensuring that the site continues to be managed effectively and to determine whether shortening the monitoring timeframe is appropri ate. The post-injection site care requirements in the final GS rule offer owners or operators flexibility rega rding the duration of the PISC timeframe by: (1) allowing the Director discretion to shorten or lengthen the PI SC timeframe during the postinjection period based on site-specific data , pursuant to requirements at §146.93(b); or (2) affording the Director discretion to allow a Cl ass VI well owner or operator to demonstrate, during the permitting process based on substantial da ta, that an alternative PISC timeframe may be appropriate if it ensures non-endangermen t of USDWs pursuant to requirements at §146.93(c). EPA believes that a default post-injection site car e timeframe of 50 years, with flexibility to adjust the timeframe for a limited number of GS projects during the permitting process where

substantial data exists to demonstrate that an alternative timeframe would be protective of USDWs, or based on data collected during the PISC period, is appropriate to address the range of sites where GS is anticipated to occur, to ac commodate site-specific circumstances and various geologic conditions, and addre sses commenters’ concerns, wh ile ensuring USDW protection. Both approaches will utilize si te-specific data, and be based on pressure monitoring and USDW impacts. EPA is developing guidance to assist owners or operators in evaluating well plugging, postinjection site care, and site closure requirements of §146.92 and §146.93. Additionally, the guidance will assist Directors in evaluating propo sed well plugging plans a nd post-injection site care and site closure plans under §146.92 a nd §146.93. The guidance describes recommended approaches for how an owner or operator coul d plug injection and m onitoring wells; perform post-injection monitoring; demonstrate the appropriateness of an alternative post-injection site care time frame; demonstrate non endangerment; and perform site closure activities. The guidance will be available at http://water.epa.gov/t ype/groundwater/uic/wells_sequestration.cfm.

Letter ID: 0192 Comment ID: 23906 Letter Lines: 366 to 389

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

Comment: Need for adequate implementation resources

Although not directly addre ssed in the EPA proposal, th e need for adequate resources to implement the regulatory progr am for geologic sequestration at both

the federal and state levels is a major consideration a nd one that EPA should be addressing both internally and in its di scussions with Congress. The annual national budget for the UIC program (approximately $11 million) has remained static for many years, while UIC agencies have been asked to take on additional responsibilities. Furthermore, inflation of salaries and other expenses has eroded the buying power of the unchangi ng UIC budget. If state and regional agencies are asked to take on the additio nal workload of CO2 injection, while

1920 ensuring careful scientific review as we ll as an expeditious processing time, they will require additional trai ned staff and other resources.

If the nation is serious about reduc ing atmospheric CO2 through underground injection, significant additional resources wi ll need to be made available to hire new permitting staff and field inspect ors. Those new staff, along with the existing cadre of UIC staff and managers, must be trained in subjects that will enable them to make prudent permitting, management, and oversight decisions. As momentum grows to begin sequestering CO 2 underground, EPA and states will need to develop additional regulatory requiremen ts and prepare to review applications and make permitting decisions. Failure to provide sufficient resources will likely create permitting backlogs, resulti ng in a bottleneck in the overall geologic sequestration effort.

Individual Response: EPA acknowledges that there may be technical and administrative challenges including resource concerns , and will work closely with the states to assist them in resolving funding issues or acquiri ng the resources, personnel, and training needed to address the unique technical challenges associated with GS.

EPA will also incorporate Class VI wells into the UIC Program's grant allocation process. The

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