EPA Preview of New Carbon Capture and Storage Rules

On July 15, 2008, EPA Administrator Stephen Johnson issued a notice¹ for new regulations addressing storage of carbon dioxide (CO₂). The new rules will soon be posted on the Federal Register for public comment. The rules would establish a new class of injection well to the EPA's Underground Injection Control (UIC) program under the Safe Drinking Water Act (SDWA). The proposed rules may be found at http://www.epa.gov/safewater/uic/pdfs/prefr_uic_co2rule.pdf.

Carbon capture and storage (CCS) is the technology for capturing CO₂ as it is released from coal-fired power plants, oil refineries or other large-scale sources of CO₂ emissions, and then transporting the gas for injection into a suitable underground geologic formation. The best locations are saline formations, depleted oil or gas fields, unmineable coal seams basalt, salt domes or shales. The proposed rules speak only to storage and not the capture and transportation of CO₂. Further, the rules expressly do not address regulation under the Clean Air Act, property rights or liability issues.

While CO₂ has long been injected underground for enhanced oil or gas recovery, long-term gas storage is a relatively new technology with only a handful of commercial operations around the world. In the United States, several experimental CCS projects are being developed with public funding, but the coal, oil and gas industries are actively exploring the potential for extensive commercial implementation. The EPA estimates that CCS could account for 30 percent of CO₂ emissions by 2050.

One potential barrier to widespread CCS installations is regulatory uncertainty, as there are no specific environmental standards or regulatory processes in place. The new EPA rules are an attempt at bringing national uniformity in the regulation of CO₂ storage.

The SDWA authorizes the EPA to adopt regulations to protect underground sources of drinking water (USDWs).² Under this authority, the EPA has established the UIC program for injections of fluids, creating five classes of UIC wells.³ Class I wells are for injection of industrial non-hazardous liquids, municipal wastewater or hazardous waste; these wells penetrate the deepest and have the most stringent requirements. Class II wells are for injection of fluids to enhance oil and gas recovery. Class III covers injection wells in aid of mineral extraction. Class IV wells are exclusively for groundwater remedial action. Class V, for experimental technologies, is where the EPA has slotted the CO₂ storage pilot projects it has evaluated so far.

The proposed rule would create a new Class VI for long-term CO₂ gas storage. Injection of CO₂ for enhanced oil and gas recovery would remain regulated as Class II wells, though the EPA leaves open the possibility of grandfathering certain Class I and II wells as Class VI wells, as the construction requirements are similar. The EPA would also consider conversions of Class V experimental wells to Class VI. The new rules would preclude injection of hazardous waste, and certain CO₂ streams may constitute regulated hazardous waste, so the application for Class VI well permits would require the applicant to characterize the CO₂ as being non-hazardous waste. If the CO₂ stream is deemed hazardous waste, a Class I well permit would be required.

The Class VI well program would build off the previous UIC regulatory experience. The EPA notes that long-term CO₂ storage presents unique technical challenges; CO₂ is buoyant, potentially corrosive and would be distributed over a very large geographic area and held indefinitely. The rule provides mostly performance-based standards tailored to the specific challenges of long-term CO₂ storage, but would leave a certain amount of discretion for permit writers.

The proposed rules would impose the following requirements on permit applicants, which would be required to perform a great deal of pre-application study and analysis:

• Geologic siting. Applications would include maps and cross-sections of nearby USDWs. Data must be presented to show that the injection zone is porous enough to receive CO₂ without fracturing; has sufficient storage capacity to ensure that the injected CO₂ would not migrate to USDWs; is overlain with a low permeability confining system; the geochemical makeup of the injection zone would not cause harmful interactions with CO₂; and other geophysical information.
  
  
• Area of Review (AoR) and corrective action. Because of the potential size of the CO₂ plume and greater pressures, delineation of the Class VI AoR would not be linked to a fixed radius, as it is for other UIC well classes. Rather, delineation would be based on computational modeling. The EPA would accept proprietary modeling, even though evaluation of results would be hampered, if the applicant provides the assumptions and scientific basis of the model. The AoR must be re-evaluated periodically, at least every 10 years, but the re-evaluation may be phased. The application must also identify all wells in the AoR, whether active or abandoned, and conduct corrective action as needed to ensure that no leaks occur. Such corrective action may also be phased. The applicant would be required to submit an AoR and corrective action plan at the time of application.
  
  
• Injection well construction. Well design and construction materials would need to address the specific properties of CO₂, including the potential for corrosivity with existing constituents in the formation.
  
  
• Operations. Injection pressures must be carefully monitored to avoid fractures. Wells would need to be fitted with automatic shut-off valves both at the wellhead and down-hole. Corrosion must also be monitored and controlled. Permittees must implement an approved mechanical integrity testing (MIT) program.
  
  
• Plume and pressure front monitoring. Applications must include a testing and monitoring plan to confirm model predictions on plume limits and pressure fronts. The plan should also address groundwater quality and geochemical changes.
  
  
• Recordkeeping and reporting. Semi-annual reports would be required on the characteristics of injection fluids, injection pressure, flow rate, temperature, volume and annular pressure, results of MITs, groundwater quality, and other monitoring as provided for in the permit. Records must be kept three years post-closure of the CO₂ reservoir.
  
  
• Well plugging, post-injection site care and site closure. The EPA's requirements would not be prescriptive, but performance-based: Applicants must submit a plan to demonstrate that migration of CO₂ from the injection zone would not occur. Under other UIC well classes, post-injection site care would be required for 30 years. However, due to the many unknowns about long-term CO₂ storage, the EPA proposes a 50-year site care default, but the care period may be shorter or longer depending upon data as to the risk. The Class VI permit would extend through the post-injection care period.
  
  
• Financial responsibility and long-term care. The new rules would impose a general duty to have the financial resources to close the site and perform any necessary remediation. The EPA will offer guidance at a later date as to specific recommended mechanisms for making this demonstration. These would likely include trust funds, insurance, surety bonds or a corporate demonstration of financial strength or credit worthiness.
  
  
• Public participation. The EPA would adopt the requirements in 40 CFR Parts 25 and 124. Public notice would be given for pending actions with a 30-day comment period. Internet posting of updates is recommended.

The EPA's proposed rules are helpful in establishing a nationally uniform approach to CO₂ storage siting, but there is much the rules do not address, such as regulation of capture and transportation via pipeline or other means. Questions of compliance with other environmental laws, such as the Clean Air Act, are not covered. Neither do the rules speak to ongoing liability and property right issues. Therefore, the states may be expected to assert regulatory authority if carbon capture and storage is proposed in their jurisdictions. If the CCS implementation becomes widespread, Congress will need to clarify the regulatory landscape.

Footnotes

1 Amendments to 40 CFR Parts 144 and 146, EPA-HQ-OW-2008-0390 FRL __________, RIN 2048-AE98.
2 SDWA § 1421(d)(2), 42 USC § 300h(d)(2).
3 40 CFR Parts 144-148