1. EPA’s Proposed Rules for Geo-Sequestration of CO 2 Ben Knape Texas Commission on Environmental Quality

2. Proposed CO 2 -GS Rule Federal Register, July 26, 2008 Geologic sequestration - “long-term containment of a gaseous, liquid or supercritical carbon dioxide stream in subsurface formations. This term does not apply to its capture or transport.” Carbon dioxide stream – “CO 2 that has been captured from an emission source, plus incidental associated substances derived from the source materials and the capture process…”

3. Scope In providing information on EPA’s proposed rules, this presentation does not represent any policy of TCEQ or the State of Texas on CO 2 injection, carbon capture, carbon credits, climate change, global warming, etc. Statutory authority for the proposed rules is limited to the Safe Drinking Water Act (SDWA) for protection of underground sources of drinking water (USDWs)

4. The Proposed CO 2 -GS Rule Does not address releases to the atmosphere, capture and transportation of CO 2, accounting for climate impacts or carbon credits Does not require any facility to capture or inject CO 2 Does not regulate injection of CO 2 for EOR/EGR (this remains under the Class II UIC Program)

5. The Proposed CO 2 -GS Rule Does not regulate experimental injection of CO 2 (this remains under the Class V UIC Program) Does not address CO 2 as a “pollutant” or a “commodity”; neither is relevant to the SDWA mandate to ensure than injection of fluids is protective of USDWs.

6. Classification of Injection Wells Class I – wells used for injection of hazardous and radioactive waste, and for disposal of other industrial or municipal sourced fluids below the lowermost USDWs Class II – inject fluids for EOR/EGR, produced salt water and O&G E&P wastes, and liquid hydrocarbons for underground storage Class III – inject fluids for in situ recovery of minerals

7. Classification of Injection Wells Class IV – inject hazardous or radioactive waste into USDWs (generally prohibited!) Class V – miscellaneous injection wells not included in other well classes (includes experimental technology injection wells) Class VI (proposed) – wells used for geo- sequestration of CO 2 beneath the lowermost formation containing a USDW

8. CO 2 -GS: Present Options Class I injection well permit for injection into formations below USDWs and not productive of O&G Class II injection well permit for injection into productive formations for EOR/EGR Class V injection well authorization or permit for experimental injection of CO 2 (CO 2 with entrained constituents may not be characteristically hazardous under 40 CFR 261)

9. EPA’s CO 2 -GS Rule Workgroup EPA-HQ staff (Office of Ground Water and Drinking Water, Office of Air, and others) EPA regions EPA contractors Four state UIC programs –GWPC’s delegates: Scott Kell, Ohio DNR; Ben Knape, TCEQ –IOGCC’s delegates: Larry Bengal, Arkansas O&G Commission; Nick Tew, Alabama Geologic Survey

10. Acknowledgement of EPA as a Primary Source of Information in Following PowerPoint Slides The following slides have been developed drawing substantially from EPA presentations on the proposed rules provided at a national stakeholder meeting (2/08) and at public hearings for comment on the proposed rule (10/08).

11. CO 2 -GS Rule: An Adaptive Process Spanning several (many?) years, draw from the following activities to inform the rule: –Review literature and track projects worldwide –Present technical workshops –Conduct stakeholder meetings –Consider and address all comments, suggestions –Evaluate results of pilot studies –After adoption of final rule, consider follow-up rule revision based on an increasing body of CO 2 -GS data and experience

12. Path Forward ActivityScheduled Date Administrator’s Signature of Proposed Rule July 26, 2008 Public Comment Period for Proposed Rule July 26– November 24, 2008 Notice of Data Availability (if appropriate) 2009 Final Rule AdoptionLate 2010 – Early 2011

13. Four Regulatory Alternatives (All with performance standard of non-endangerment of drinking water) Alternative 1 – least prescriptive; basically, reliance on performance standard of non-endangerment of drinking water Alternative 2 – more prescriptive than Alternative 1, including standards for siting, construction, operation and monitoring for deep well injection associated with O&G exploration and production Alternative 3 – still more prescriptive; starting from framework of deep well injection of nonhazardous fluids, and adding specifications to tailor requirements to unique considerations of CO 2 -GS Alternative 4 – most prescriptive in specification of tools and methods for siting, AOR delineation, modeling, construction, operation, monitoring, post-closure care; in some aspects, may exceed requirements for deep well injection of hazardous waste

14. Proposed Rules Tailoring Program Elements to Special Considerations of CO 2 -GS GS: Special ConsiderationsUIC Program Elements Large volumesSite characterization BuoyancyArea of review ViscosityWell construction CorrosivityWell operation Phase relationshipsMonitoring Post closure care Public participation

15. The following seven slides take a quick look at the proposed CO 2 -GS requirements by program element. Underlined text indicates proposed additional requirements/concerns beyond existing framework of Class I nonhazardous well requirements. [Bracketed] text indicates existing requirements (Class I nonhaz-type) proposed to be replaced in “tailoring” process for CO 2 -GS requirements.

16. Site Characterization Injection zone below USDWs and adequate to accept fluids Confining zone (system) above injection zone adequate to confine or contain injection zone fluids; director discretion to require identification of additional confining zones Applicant submits information on structure, stratigraphy, seismicity, and baseline geochemistry

17. Area of Review (AoR) Delineate the area around the project that may impacted by injection activity using [fixed radius or calculation] a computational model Identify penetrations and evaluate whether any may allow upward fluid migration Perform corrective action on wells within the AoR as necessary for USDW protection; allow phased corrective action at director’s discretion

18. Well Construction Deep well injection requires multiple protective barriers (2 casing strings, tubing, packer, monitored annulus); wells casings must be cemented to the surface along entire length to prevent movement of fluids into USDWs; casing cement for existing Class I, II, or Class V (experimental) wells converted to Class VI may be approved by director if protective of USDWs. Well materials must be compatible w/ injectate and formation fluids. Well designs must include use of down-hole automatic shut-off devices.

19. Well Testing & Operation May not fracture injection zone; injection pressure not to exceed 90% of injection zone fracture pressure Monitor injected fluid characteristics, injection pressure, flow rate, and volume Monitor and test for mechanical integrity (MI); continuous internal well MITs and annual external MITs

20. Site Monitoring Director discretion to require site-specific monitoring; tracking CO 2 plume and pressure front is required but techniques, frequency, and spatial resolution are not specified Annual monitoring of pressure build up in the injection zone, including performance of pressure fall-off test Surface-air and soil-gas monitoring at director discretion Use monitoring data to inform the computational model of the AoR, the CO 2 plume and pressure front, and ultimate demonstration of USDW protection.

21. Well Closure & Post-Closure Care Close (plug) wells in a manner protecting USDWs; use plugging materials compatible w/ injected CO2 stream. Post-injection site care: monitoring, modeling, and corrective action for default period of 50 years; actual duration depends on demonstration of non-endangerment of USDWs, i.e., by CO 2 plume stabilization and pressure dissipation. Owner/operator must maintain financial assurance to close the injection wells; financial assurance shall additionally cover monitoring, modeling, and corrective action for the period of post-injection site care. Liability stays with owner/operator.

22. Public Participation Notice of pending permit actions by newspaper and mailings; 30-day comment period; opportunity for public meetings In preamble, EPA solicits comments on appropriate outreach methods/technologies and other ways to engage the public early in the permitting process.

23. Authorization of Class VI Wells By permit from EPA until a state UIC Program applies for and receives permitting and enforcement authority from EPA for Class VI injection wells Class VI injection well permits are proposed to be issued for a period up to the operating life of the facility.

24. Comment on Proposed CO 2 -GS Rule: Your Role Comments must be received by EPA on or before November 24, 2008. See Federal Register (July 26, 2008) for proposed rule and preamble including detailed information on submitting comments.

25. Questions or Comments? Contact: Ben Knape I&HW Permits SectionWaste Permits Division Texas Commission on Environmental Quality bknape@tceq.state.tx.us 512-239-6633