Late last month, EPA released a Notice of Data Availability and Request for Comment related to its 2008 proposed regulatory framework for underground injection and storage of carbon dioxide.  The Notice discusses three DOE-sponsored Regional Carbon Sequestration Partnership projects, reviews the results of recent studies evaluating the potential impacts of geological storage to groundwater integrity and proposes a waiver process that would provide regulators with more flexibility in setting the minimum injection depth for carbon sequestration projects.  The 12-page notice is an important opportunity for stakeholders seeking to supplement the administrative record or position themselves for post-promulgation litigation.  Issues addressed in the Notice include:

• EPA May Widen the Scope of the Rule. The agency received comments regarding the need to consider environmental and regulatory issues outside the scope of the Safe Drinking Water Act (SDWA) and “is currently evaluating the need for a more comprehensive regulatory framework.” EPA has indicated that any effort to expand the rulemaking beyond its SDWA authority will involve an additional notice and comment opportunity, structured within the current regulatory development schedule.

• EPA Considers Granting Local Siting Authorities More Discretion.  EPA is proposing to modify the July 2008 proposed rule, which restricts Class VI Injection Wells (the new class for carbon sequestration projects) to below the lowermost geological formation containing an underground source of drinking water.  The proposed modification would allow project applicants to seek a waiver of the injection depth restriction by demonstrating that a shallower depth would not pose contamination risks.  The state regulatory officials with primary permitting responsibility would make the final waiver determination.

• Update from DOE’s National Energy Technology Laboratory (NETL).  NETL is developing or operating approximately 30 geological sequestration projects to develop working geological sequestration approaches and to identify “the most suitable technologies, regulations and infrastructure needs for carbon capture sequestration and storage.”  The Notice provides examples from several of these projects.

• Update from DOE’s Lawrence Berkeley National Laboratory (LBNL).  LBNL is studying the potential risk to underground drinking water sources from improperly-sited geological sequestration projects.  Areas of study include the potential for changes in ground water quality as a result of CO₂ leakage, the risk that CO₂ will mobilize trace elements and the potential basin-scale hydrological impacts that large-volume underground injection and resulting pressure changes may have on aquifers. 

• CO₂ Transport Modeling will play Critical Role.  EPA researchers see a need for improved CO₂ sequestration modeling tools that can characterize CO₂ transport properties across a large range of temperatures and pressures and couple multiphase flow, reactive transport and geomechanical processes. 

The notice offers several insights into EPA’s ongoing rulemaking process.  First, the likely driver for EPA’s decision to reopen the comment period in this proceeding was EPA’s decision to propose an injection-depth waiver mechanism.  Without the additional notice and comment, a final rule that included a waiver option would have been vulnerable on judicial review.  Second, EPA’s lengthy discussion of the waiver proposal, combined with the mixed results of its ongoing LBNL research into the impacts of carbon sequestration on drinking water quality and basin integrity, illustrates EPA’ difficult balancing act in developing uniform nationwide CCS standards.  While deeper CO₂ sequestration depths may offer greater protection to some local underground drinking water sources, establishing a rigid depth requirement could prevent the adoption of any carbon sequestration project in regions of the country that lack the requisite hydrogeological characteristics to meet the standard.  If CCS is going to be one of the pillars of EPA’s climate change mitigation strategy, EPA will need to find ways to balance the goals of climate policy, energy policy and water policy.  Third, EPA finally acknowledged that it may need to expand the legal basis of its carbon sequestration rulemaking program beyond the SWDA.  If EPA intends to propose any such expansion within the current rulemaking schedule, it must act quickly. 

EPA will hold a public hearing on the Notice of Data Availability on September 17, 2009 in Chicago, Illinois.  Written comments on the Notice are due to EPA by October 15, 2009.  For stakeholders with an interest in shaping federal policy on carbon capture and sequestration, this open comment period provides an important opportunity to supplement the record that EPA (and the courts) will rely upon in the future. 

For further information about this topic, please contact Akin Gump.