1. Click to edit Master text styles Second level Third level Fourth level Fifth level 1 U.S. Environmental Protection Agency – Climate Change Division 1 U.S. EPA Office of Atmospheric Programs, Climate Change Division Draft - Deliberative - for Internal EPA Discussion Only 2/12/2014 Geologic Sequestration & GHG Reporting Background and Context October 6, 2009 DRAFT DELIBERATIVE

2. Click to edit Master text styles Second level Third level Fourth level Fifth level 2 U.S. Environmental Protection Agency – Climate Change Division 2 U.S. EPA Office of Atmospheric Programs, Climate Change Division Draft - Deliberative - for Internal EPA Discussion Only 2/12/2014 Background on Mandatory GHG Reporting Rule (MRR) Congressional request in FY08 Appropriations Bill for EPA to collect GHG data via reporting rule (12/07) Received Administrator signature on Sept 22, 2009 Collect emissions data from all sectors of economy above appropriate thresholds to inform potential future regulatory action –Covers all six GHGs –25 source categories –5 types of suppliers of fuel and industrial GHG – including CO 2 suppliers –Motor vehicle and engine suppliers (except light duty sector) –Collected under sections CAA 114 and 228

3. Click to edit Master text styles Second level Third level Fourth level Fifth level 3 U.S. Environmental Protection Agency – Climate Change Division 3 U.S. EPA Office of Atmospheric Programs, Climate Change Division Draft - Deliberative - for Internal EPA Discussion Only Electronic Data Reporting System for MRR EPA is establishing a facility-to-EPA electronic reporting system to facilitate collection of data under this rule. – Web based system will guide reporters through data entry, emissions calculations, and submission – Mechanism to submit file directly using standard format (e.g., XML) – Continued stakeholder input during system development Will allow EPA to: – meet reporting schedule requirements of the rule – Approach potential CBI of data consistently across rule – Meet quality assurance and verification requirements of the rule

4. Click to edit Master text styles Second level Third level Fourth level Fifth level 4 U.S. Environmental Protection Agency – Climate Change Division 4 U.S. EPA Office of Atmospheric Programs, Climate Change Division Draft - Deliberative - for Internal EPA Discussion Only MRR Schedule for Monitoring and Reporting 1/1/10 Start collecting data using best available monitoring methods 12/31/10 Complete 2010 data collection 1/30/11 Submit certificate of representation 3/31/11 Submit GHG report for 2010 Ongoing Submit corrected report 45 days after each discovery Ongoing Submit annual reports on 3/31 each year

5. Click to edit Master text styles Second level Third level Fourth level Fifth level 5 U.S. Environmental Protection Agency – Climate Change Division 5 U.S. EPA Office of Atmospheric Programs, Climate Change Division Draft - Deliberative - for Internal EPA Discussion Only Confidential Business Information (CBI) in MRR EPA will protect any information claimed as CBI in accordance with regulations in 40 CFR Part 2, subpart B In general, emissions data collected under CAA sections 114 and 208 cannot be considered CBI EPA will undertake a separate notice and comment process next year on CBI status of data collected.

6. Click to edit Master text styles Second level Third level Fourth level Fifth level 6 U.S. Environmental Protection Agency – Climate Change Division 6 U.S. EPA Office of Atmospheric Programs, Climate Change Division Draft - Deliberative - for Internal EPA Discussion Only What are the MRR Reporting Requirements? Subpart A: General Provisions –Applicability provisions –Schedule –Reporting and recordkeeping requirements common to all reporters –Definitions –Report submission procedures –Other (e.g., calibration procedures, monitoring plan) Subparts C-PP: Source-Specific Requirements –Definition of source category –GHG to report –Calculation methods –Monitoring and QA/QC –Missing data procedures –Reporting and recordkeeping elements unique to each subpart

7. Click to edit Master text styles Second level Third level Fourth level Fifth level 7 U.S. Environmental Protection Agency – Climate Change Division 7 U.S. EPA Office of Atmospheric Programs, Climate Change Division Draft - Deliberative - for Internal EPA Discussion Only MRR Relationship to State and Multi-State Programs Rule does not preempt states from regulating or requiring reporting of GHGs. – EPA rule is a limited action developed in response to a specific request from Congress and is narrower in focus than many existing State programs that are coupled with reduction programs No state delegation Reporting entities will report directly to EPA – To reduce reporting burden, EPA staff is working with the Climate Registry and the Exchange Network on a data exchange standard – EPA is committed to working with state and multi-State programs to provide timely access to verified emissions data, establish mechanisms to share data efficiently, and harmonize data systems to the extent possible

8. Click to edit Master text styles Second level Third level Fourth level Fifth level 8 U.S. Environmental Protection Agency – Climate Change Division 8 U.S. EPA Office of Atmospheric Programs, Climate Change Division Draft - Deliberative - for Internal EPA Discussion Only 2/12/2014 Overview of GS-related Comments on CO 2 Suppliers section of MRR Commenters expressed that: –EPA should not assume that all CO2 supply is emitted EOR is a closed system and does not result in CO 2 emissions (i.e. non-emissive) –EPA should take a uniform rather than piecemeal approach to CCS regulations (rely on, expand, or complement UIC) –Monitoring, accounting, and reporting requirements for air emissions should be developed for GS sites

9. Click to edit Master text styles Second level Third level Fourth level Fifth level 9 U.S. Environmental Protection Agency – Climate Change Division 9 U.S. EPA Office of Atmospheric Programs, Climate Change Division Draft - Deliberative - for Internal EPA Discussion Only 2/12/2014 Coverage of CCS System in MRR WhoThresholdWhere 1. large CO 2 emitters All combustion sources –EGUs have separate Subpart Process emissions from such sources as: –Refineries –Petrochem plants (ethylene and ethylene oxide production) –Iron and steel –Hydrogen production –Cement production –Ammonia production 25,000 for: Iron and steel Hydrogen Non-EGU combustion Others are All in Multiple Subparts under MRR 2. CO 2 capture / supply Production wells (oil and gas sector) Industrial sources with capture Imports and exporters All in 25,000 Subpart PP 3. CO 2 injection TBD New MRR Subpart to be proposed 4. CO 2 geologic sequestration TBD New MRR Subpart to be proposed

10. Click to edit Master text styles Second level Third level Fourth level Fifth level 10 U.S. Environmental Protection Agency – Climate Change Division 10 U.S. EPA Office of Atmospheric Programs, Climate Change Division Draft - Deliberative - for Internal EPA Discussion Only Current Treatment of CO 2 Storage in US GHG Inventory The US follows the 1996 IPCC guidelines, which do not include accounting methods for CO 2 injected into the subsurface. The current US Inventory: –Subtracts all CO 2 injected into the subsurface for EOR purposes from the national GHG emission total –Assumes that CO 2 used in non-EOR industrial and commercial applications (e.g., food processing, chemical production) is emitted during its use. –Does not include emissions estimates from CO 2 capture, transport, injection and geologic storage in U.S. inventory totals. 2007 Preliminary estimates for injection: –40 TgCO 2 e, <1% of total national GHG emissions

11. Click to edit Master text styles Second level Third level Fourth level Fifth level 11 U.S. Environmental Protection Agency – Climate Change Division 11 U.S. EPA Office of Atmospheric Programs, Climate Change Division Draft - Deliberative - for Internal EPA Discussion Only IPCC 2006 Guidelines The 2006 Guidelines require estimates of emissions from the capture, transport, injection, and geological storage of CO 2 –IPCC guidelines state that subsurface sites are likely to retain >99% of injected CO 2 if the site is properly selected and if the potential for leakage is assessed. –Methodology is site-by-site

12. Click to edit Master text styles Second level Third level Fourth level Fifth level 12 U.S. Environmental Protection Agency – Climate Change Division 12 U.S. EPA Office of Atmospheric Programs, Climate Change Division Draft - Deliberative - for Internal EPA Discussion Only Coverage of CCS in the 2006 IPCC Guidelines for National GHG Inventories SDWA CAA

13. Click to edit Master text styles Second level Third level Fourth level Fifth level 13 U.S. Environmental Protection Agency – Climate Change Division 13 U.S. EPA Office of Atmospheric Programs, Climate Change Division Draft - Deliberative - for Internal EPA Discussion Only UIC Program Background The 1974 Safe Drinking Water Act (SDWA; Reauthorized in 1996) Federal regulations for protection of Underground Sources of Drinking Water (USDWs) USDW defined: Any aquifer or portion of an aquifer that contains water that is less than 10,000 PPM total dissolved solids or contains a volume of water such that it is a present, or viable future source for a Public Water Supply System UIC Program regulates underground injection of all fluids – liquid, gas, or slurry Designation as a commodity does not change SDWA applicability Some natural gas (hydrocarbon) storage, oil & gas production, and some hydraulic fracturing fluids exempted Existing UIC program provides a regulatory framework (baseline) for the Geologic Sequestration of CO 2

14. Click to edit Master text styles Second level Third level Fourth level Fifth level 14 U.S. Environmental Protection Agency – Climate Change Division 14 U.S. EPA Office of Atmospheric Programs, Climate Change Division Draft - Deliberative - for Internal EPA Discussion Only UIC Class VI Proposed Rule In July 2008, EPA proposed a rule using Safe Drinking Water Act authorities and Underground Injection Control (UIC) Program –Priority placed on avoiding endangerment of underground sources of drinking water The proposal creates a new well class for injection of CO2 for GS and builds on UIC program elements (e.g. Site Characterization, Area of Review, Well Construction, Well Operation, Site Monitoring, Post- Injection Site Care, etc)

15. Click to edit Master text styles Second level Third level Fourth level Fifth level 15 U.S. Environmental Protection Agency – Climate Change Division 15 U.S. EPA Office of Atmospheric Programs, Climate Change Division Draft - Deliberative - for Internal EPA Discussion Only Relationship between SDWA/UIC and CAA/GS Reporting UIC Class VI requirements provide the initial foundation for the safe sequestration of CO 2. The UIC regulations under SDWA are focused on permitting sites for protection of underground sources of drinking water (USDWs). The MRR GS reporting rule will build on the proposed UIC requirements for Class VI wells with the additional goal of verifying the amount of CO 2 sequestered including quantifying any air emissions from GS sites. This rule completes the picture with a reporting component focused on climate.

16. Click to edit Master text styles Second level Third level Fourth level Fifth level 16 U.S. Environmental Protection Agency – Climate Change Division 16 U.S. EPA Office of Atmospheric Programs, Climate Change Division Draft - Deliberative - for Internal EPA Discussion Only Thank You! For more information on MRR: http://www.epa.gov/climatechange/emissions/ghgrulemaking.html For more information on the UIC Class VI proposal: http://www.epa.gov/ogwdw000/uic/wells_sequestration.html