810F07001
                  UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                                 WASHINGTON, D.C. 20460
                                      MAR   11  2007

SUBJECT:   Using the Class V Experimental Technology Well Classification for Pilot
              Geologic Sequestratiop Projects^ UIC Program Guidance (UICPG # 83)

FROM:      Cynthia C. DougherrOKrector          '  W (S^ZjA
              Office of Ground Wafe/ and Drinking Water (4601)    A]

              Brian McLean, Direct
              Office of Atmospheric Programs (6201J)
TO:
Water Management Division Directors
Air Division Directors
EPA Regions I to X
Introduction

This Guidance provides information for States and EPA Regions to consider when permitting
pilot1 projects designed to evaluate the technical issues associated with carbon dioxide (CO2)
injection as Class V experimental technology wells.  Permitting such projects as Class V
experimental technology wells  while maintaining the UTC Program's protective safeguards of
underground sources of drinking water (USDWs) and public health  will assist future decision
making and the development of a scientifically sound management framework for commercial-
scale COa injection projects, if needed, in the future. The purpose of this guidance is to assist
UIC Program Directors' in evaluating these applications and setting appropriate Class V
experimental technology well permit conditions for pilot COa injection projects.
Geologic sequestration is the process of capturing CO2from an emission source (e.g., a power
plant), transporting the COa, and injecting it into deep subsurface rock formations.  Available
evidence suggests that, worldwide, there is a likely technical potential storage capacity in
geologic formations of perhaps 2,000 gigatons (Gts or a billion metric tons) of COa (IPCC
Special Report: Carbon Dioxide Capture and Storage, Summary for Policymakers, 2005).  The
potential for this mitigation technology is substantial, and "with appropriate site selection..., a
monitoring program..., a regulatory system, and the appropriate use of remediation methods...,
the local health, safety and environmental risks of geological storage would be comparable to
risks of current activities. . .  ." (IPCC Special Report: Summary for Policymakers, at page 11,
2005).
 1 For the purposes of this Guidance, "pilot projects" include all CO2 injection projects of an experimental nature
 that are designed to assess the efficacy of CO2 injection for the purposes of long-term geologic sequestration (GS)
 that will come on-line in advance of a final decision by EPA on a management strategy for CO2 injection for GS.
 2 "Director" means the Regional Administrator, the State Director or the Tribal Director as the context requires or
 an authorized representative. When there is no approved State or Tribal Program, and there is an EPA-administered
 Program, "Director" means the Regional Administrator. [40 CFR 144.3]
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Planned GS Projects and EPA's Role

Research and development (R&D) on GS over the next several years will involve two phases of
projects. CO2 GS wells constructed and operated as part of either phase may qualify as Class V
"experimental technology" wells provided they meet the definition of that term found at 40 Code
of Federal Regulations (CFR) 146.3 ("a technology which has not been proven feasible under the
conditions in which it is being tested"). While injection of fluids, including CO2 into the
subsurface, e.g., for enhanced oil recovery (EOR) and enhanced gas recovery (EGR), is a long-
standing practice, injection of COa for GS is an experimental application of this existing
technology.

The first phase - the "validation" phase - is slated to begin in the next year or two and will
provide in situ tests of GS technology by injecting low volumes of CC>2. The validation phase
projects include 25 field tests where COi will be injected and its fate and transport will be
monitored. Attachment 2 lists the Regional Partnerships, who have GS projects supported by the
U.S. Department of Energy (DOE).  To get up-to-date information on the progress being made
by the DOE Regional Partnerships, please visit  the web sites referenced in the attachment.

Deployment phase projects (the second phase) would follow, beginning around 2009.  Drawing
on the knowledge gained in the validation phase, these projects will involve higher volumes of
CO2. Full, commercial-scale deployment of GS technology is expected to commence around
2012, following the collection of sufficient data to inform a scientifically-sound management
framework.

EPA anticipates that pilot projects will have a variety of objectives,  including testing the
effectiveness of various well materials and injection practices, assessing the usefulness of
geophysical survey and monitoring techniques,  testing failure scenarios, and/or validating
models of the fate and transport of CO2 in the subsurface. As they review permit applications,
UIC Directors should keep in mind that a primary goal of the pilot projects is to collect data to
support a scientifically-based framework for managing GS projects.  Because the results of pilot
experimental projects would benefit all future COa injection operations, EPA strongly
encourages gathering and sharing of data through the permitting process for pilot projects.

Several topics merit further evaluation through research and demonstration projects. These
include the following topics:

     Potential impacts of CO2 injection on ground water and USDWs;
     Potential impacts of CO2 injection on human health and the environment;
     Integrity of CO2 injection wells and other wells in the area of review;
     Fluid displacement and pressure impacts;
     Remediation technologies;
     Land surface deformation;
     Potential for large-scale CO2 releases;
     Measurement, monitoring, and verification tools applicable to GS of CO2;
     Potential impacts of CO2 injection on geologic media (reservoir and seals); and
     Geochemical and geomechanical effects.

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Research and demonstration projects focused on the above topics will provide useful information
for developing a framework for commercial-scale CO2 injection projects. To further this research
goal, Directors should exercise reasonable and appropriate flexibility in evaluating permit
applications and writing permit conditions that will allow well owners or operators  to achieve
their project objectives.

While flexibility is important, the Safe Drinking Water Act (SDWA) focuses on the protection of
USDWs and public health, and no project should be designed or operated in a way that
endangers USDWs or the health of persons. If the project goal is to test failure scenarios, it is
important that the project incorporate appropriate protections to safeguard USDWs  and public
health (e.g., proper casing and tubing materials, sufficient logging to ensure well integrity, and
adequate monitoring to detect movement of CC>2).  Well owners or operators should specify the
objectives of the project and identify the data to be gathered; they should also demonstrate that
the project meets the non-endangerment standard under the UIC Program (i.e., protection of
USDWs).

An important goal of the pilot projects is to gather, evaluate, and share data on appropriate
technologies and approaches for CO2 injection to ultimately support national goals for addressing
climate change.

Here are some important features of the COa pilot phase:

          Transitional nature of the pilot phase - Over the next several years, EPA
           anticipates pilot CO2 injection projects will be put into operation across the United
           States. This guidance and the Class V experimental technology well permits will
           bridge the gap between pilot and commercial-scale projects. EPA plans to evaluate
           options for permitting commercial-scale projects in the near future. Through this
           guidance, EPA encourages a case-by-case approach to permitting pilot projects to
           facilitate gathering the data needed to support decisions about future requirements for
           commercial-scale operations. On the basis of the data collected, the Agency may
           consider developing regulations tailored specifically for CO2 injection.  Development
           of such regulations would be a transparent and open process, and broad public and
           industry participation would be encouraged.

          Scale of the pilot projects - Initially, we expect the project permit applications to
           request authorization to inject very small volumes of CO2 relative to commercial-
           scale projects.  The relatively small volumes of CO2 injected in these initial pilot
           projects should minimize any potential for adverse effects on USDWs and public
           health due to the movement or leakage of CO2. As  relevant siting, construction, and
           operational data from these smaller pilot projects is gathered and analyzed, EPA
           anticipates that Regional and State Directors will receive applications for larger
3 "Owner or operator" means the owner or operator of any facility or activity subject to regulation under the UIC
Program. [40 CFR 144.3]

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          operations, with the goal of furthering our understanding of how to mitigate any risks
          posed by commercial-scale operations.

         Generation of data - Permitting requirements for commercial-scale CCh injection
          projects will need to be based on sound science.  The goal of the pilot projects is to
          generate data that will enhance our understanding of the fate and movement of, and
          risks associated with, injected CO2. The knowledge and data gained from these pilot
          projects will allow the development of an effective approach to manage injection of
          CO2, if needed, at the commercial scale.

         Communication - EPA encourages well owners or operators to share with the
          Director data collected throughout the siting, construction, and operation of the
          injection wells; operators may request protection of any confidential information that
          is submitted. In turn, Regional Direct Implementation Program Directors are
          expected to, and State Directors are encouraged to, share permit applications and
          other information related to permit issuance with EPA Headquarters.

Because of the complexities involved in successfully and safely achieving the goals of a pilot
project, States and Regions may want to pool their resources and form multidisciplinary teams to
process the pilot applications and collect/analyze the data. These teams could consist of:

             o  Geologists
             o  Reservoir Engineers
             o  Geophysicists
             o  Geochemists
             o  Hydrologists
             o  Statisticians
             o  Remote Sensing  Scientists
             o  Modellers
             o  Atmospheric Scientists
             o  Biologists/Ecologists

Potential Impacts/Risk Associated  with Geologic Sequestration

There may be risks to human health and safety from CCS technology implementation. Direct
exposure to elevated levels of CC>2 can cause both chronic and acute health effects depending on
the concentration and duration of exposure. Additionally, injected CC>2 and any impurities it
may contain have the potential to endanger USDWs or adversely affect human health.
Therefore, the injectate for pilot projects should be characterized prior to permit issuance.
Furthermore, displacement of native fluids and chemical constituents, movement of possibly
hazardous impurities in injected fluids, and potential leaching and mobilization of naturally
occurring metals and minerals in the injection and confining formations associated with CC>2
injection may potentially endanger USDWs, if not properly managed.  It is up to the  Director to
determine, on a  case-by-case basis,  whether endangerment of USDWs could occur as a result of
the proposed injection.  Authorities  should make these determinations based on their knowledge
of the specific geology in their States. In addition, we encourage permitting authorities to seek

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UIC Program expertise, and request additional data on CO2 injection from the owners or
operators where appropriate and available.

Geologic Sequestration Authority Under the Safe Drinking Water Act

The UIC Program under the SDWA regulates injection of fluids, including solids, semi-solids,
liquids, and gases (e.g., CC^) to protect USDWs. The UIC regulations address the siting,
construction, operation, and closure of wells that inject a wide variety of fluids, including those
that are considered commodities or wastes.  The natural gas exemption under the UIC
regulations is not applicable to GS because, while CCh is a naturally occurring gas, the exclusion
applies only to "natural gas as it is commonly defined" (e.g., gaseous hydrocarbons), and "not to
other injections of matter in a gaseous state" (See House of Representatives Report 96-1348,
reprinted in 1980 U.S. Code Congressional and Administrative News 6080).

The UIC Program defines five classes of underground injection wells; at least three of these are
potential classifications for CCh injection:

         Class I wells are deep, technically sophisticated wells that dispose of waste below the
          lowermost USDW.  The UIC regulations define three subcategories of Class I wells
          based on the fluids they inject, including wells used by generators of hazardous waste
          or hazardous waste management facilities, other industrial and municipal disposal
          wells, and radioactive waste disposal wells. Owners or operators of Class I hazardous
          waste disposal wells typically model the behavior of wastes in the subsurface to
          demonstrate long-term storage (i.e., 10,000 years). The large volumes of treated
          wastewater injected via Class I municipal disposal wells may provide some insight
          into the potential challenges presented by the large-scale injection of CO2-

         Class II wells are used by the oil and gas industry for a variety of waste fluid disposal,
          enhanced recovery, and hydrocarbon storage needs.  CCh is currently being injected
          for enhanced oil recovery (EOR) and enhanced gas recovery (EGR).  Class II
          programs' decades of experience with injecting CO2 and knowledge of oil  and gas
          reservoirs are useful to those working on GS efforts.

         Class V experimental technology wells are intended to demonstrate unproven  but
          promising technologies.  EPA's rationale for allowing the use of Class V
          experimental technology wells is to encourage innovation. In other words, under
          EPA's regulations an injection well that is being used to demonstrate a developing
          technology may be subject to more flexible, yet fully protective, technical standards
          than those designed for commercially operating facilities.  The designation as a Class
          V experimental technology well is generally considered only while the technology is
          experimental in nature.  [See Attachment 1: Appropriate Classification and
          Regulatory Treatment of Experimental Technologies (Ground Water Program
          Guidance No. 28); May 31, 1983 for additional information.]

EPA has determined that the Class V experimental technology well subclass provides  the best
mechanism for authorizing pilot GS projects.  This guidance has been developed to assist UIC

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Program Directors in permitting CCh injection wells as Class V experimental technology wells.
Depending on the specific circumstances, for purposes of the pilot projects addressed in this
guidance, permitting CO2 injection into deep saline formations, depleted hydrocarbon reservoirs,
or basalt formations through Class V experimental technology wells may be appropriate. In
addition, depending on the particular facts, CCh injection wells of pilot GS projects that involve
methane-depleted coalbeds, depleting natural CCh formations, and non-commercial gas fields
(due to low BTU or productivity) may be appropriate for permitting as Class V experimental
technology wells.

CO2 injection for EOR or EGR operations is a long-established technology, and these wells may
continue to be permitted as Class II wells, and Class II permitting requirements would apply.
However, if the injection of CO2 through those wells is not associated with the enhanced
recovery of oil or gas, these operations would then be considered for re-permitting as Class V
experimental technology wells. In other words, although CCh injection for EOR and EGR is a
proven technology, CO2 injection for long-term storage is still experimental  and under
development at this time. While there are similarities between CC>2 injection for the purposes of
oil and gas  extraction and for GS, there are important differences as well.  For example, CCh
injection for GS will eventually involve much greater volumes of CC>2, which will be stored for
very long periods of time. Owners or operators should be made aware that Class II EOR and
EGR projects that transition to GS (either as pilot-phase Class V experimental projects or long-
term commercial scale operations) may be subject to siting, well construction, or monitoring
standards that could be different from those specified for a Class II well.

Additionally, wells with dual completions (e.g., where CO2 is injected into one reservoir to
produce oil and into another for GS) could be subject to permitting requirements under both
Class II and Class V.  Coordination will be essential where more than one permitting authority is
involved (e.g., in States where Class II and Class V wells are overseen by different agencies);.
memoranda of agreement (MO As) or memoranda of understanding (MOUs) between the
authorities may be  needed. Proactive communication about dual permitting requirements to
owners or operators is important.

Purpose of this Guidance

This guidance applies  to GS projects that are to be permitted as Class V experimental technology
wells (based on available information from the pilot projects planned by DOE's Regional
Partnerships and other GS projects developed for the purpose of increasing understanding of
issues related to CO2 injection).  It provides suggested guidelines for permitting and operating
near-term pilot GS  projects prior to commercial-scale implementation of GS. This guidance is
intended to address only pilot GS projects (i.e., the limited number of experimental projects
anticipated  to be brought online in advance of commercial-scale operations over the  next several
years). Owners or operators should be made  aware of this, so that they may submit permit
applications in a timely manner that allows them to meet pilot project goals.

Class V experimental technology permitting may be appropriate, as an interim measure, for CO2
GS injection wells of a "pilot" or "demonstration" nature, regardless of the volumes  injected.
EPA's regulations at 40 CFR 146.3 state that, "experimental technology means a technology

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which has not been proven feasible under the conditions in which it is being tested." Such wells,
which are anticipated to come on-line in the near term, will be drilled and operated to test various
technologies and assumptions related to the safe and effective GS of CCh. At some point in the
future, EPA expects that the technology surrounding CCh injection for GS purposes will no
longer be considered "experimental." By that time, EPA would expect to have made a decision
on a management strategy to address CO2 injection for commercial scale GS. Until then, EPA
recommends that States or Regions review applications to construct and operate appropriately
designed and operated "pilot" and "demonstration" CC>2 GS wells to determine whether they
may be permitted as Class V experimental technology wells.

Proper operation of injection wells for GS projects is required under the SDWA to safeguard
USDWs and protect public health. In addition, comprehensive oversight of CO2 injection will
build public confidence in an emerging technology that may ultimately be deployed at a large
scale across the United States. Furthermore, a consistent oversight framework will allow
Directors to permit pilot GS projects in an efficient and consistent manner, thus reducing
unknowns and possible confusion among the pilot-project owners or operators, regulating
entities, and the general public. EPA has begun evaluating and formulating a process for making
decisions about commercial-scale GS projects and such a process may include specific
regulatory options and technical requirements.

This guidance assumes that adequate permitting procedures and enforcement authority are in
place at the State and EPA Regional levels.  Although there are no Federal requirements written
specifically for Class V experimental technology wells, there are applicable requirements for
Class V wells generally (see 40 CFR 144.12,144.24 to 144.27, and 40 CFR 144.79 - .89).
Among other things, Class V well owners or operators, including owners or operators of Class V
experimental technology wells, must submit information to the Director regarding the nature of
their injection operations (40 CFR 144.26).  This Guidance identifies additional information that
the Director may decide to request. UIC Program Directors are encouraged to request additional
information, as needed for writing adequate permits, (40 CFR 144.27)  and to require that the
owner or operator obtain a permit (40 CFR 144.12 (c)). Federal UIC permitting requirements at
40 CFR Parts 144 and 146 should be thoroughly considered and implemented.  Permit issuers
should follow the requirements for public participation (40 CFR Part 124), which are an
important part of promoting public confidence in CC>2 injection and an open decision-making
process.

Guidance for Setting Permit Requirements

Injection wells used for GS pilot projects may be permitted as Class V  experimental technology
wells if all applicable SDWA and UIC permitting requirements are met.  For those pilot GS
projects that inject CCh into depleting oil and gas reservoirs to enhance the recovery of oil or
natural gas, permitting as Class II EOR and EGR wells may be appropriate, as long as oil and gas
are being recovered (40 CFR 144.6(b)(2)).

Any Class V experimental permit issued to a pilot project should remain in effect for as long as
necessary to cover the estimated timetable of the goals of the project. On an as-needed basis,
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Class V GS pilot project permits can be modified to extend the timetables or alter the goals of an
evolving project, as long as State or Federal limits on permit duration are not exceeded.

The sections below present factors that Directors may wish to consider as they evaluate permit
applications.  Because the pilot projects will have a variety of experimental endpoints, the factors
presented are not an exhaustive list, and may not necessarily be relevant to all projects.

Considerations for the Appropriateness of Injection Sites

The appropriateness of injection  sites selected for pilot CC>2 injection will depend on the goals of
the project. Possible experimental goals may include testing the effectiveness of various
geologic formations in receiving or trapping CCh (e.g., short-term and long-term relations
between trapping mechanisms, structural and stratigraphic considerations, and formation impacts
such as solubility and mineralization); failure scenario testing; or testing or validating the
accuracy of models in certain geologic conditions.  In general, to prevent endangerment of
USDWs, an adequate receiving and confining system for a CCh injection site should consist of:

          A receiving zone of sufficient depth,4 areal extent, thickness, porosity, and
          permeability;

          A trapping mechanism that is free of major non-sealing faults;

          A confining system of sufficient regional thickness and competency; and

          A secondary containment system which could include buffer aquifers and/or thick,
          impermeable confining rock layers.

A site that is deemed to be appropriate for pilot COz injection may not necessarily meet future
requirements for commercial-scale operations.  Therefore, owners or operators intending to
eventually expand their pilot projects to commercial-scale operations should understand that
additional UIC requirements may apply to the project after conversion to commercial operation.

Below are factors that EPA recommends Directors consider when assessing the appropriateness
of proposed pilot CCh injection sites:

          Some leakage of 62 from the injection zone may occur, and in fact may be the
          experimental goal of certain research projects that are designed to test monitoring
          methods.  However, in no case should leakage endanger USDWs or the health of
          persons.

          Potential reactions between injected CCh and the rocks and fluids in the injection
          zone may impact injectivity. Permeability may be reduced (by chemical precipitates
          blocking pore throats  or coal swelling) or increased (if matrix minerals dissolve).
4  To be stored above supercritical pressure, CO2 should be injected at least 800 meters (2,625 feet) below the land
surface.

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          Other types of reactions include gas release due to injectate-fluid reactions and
          selective adsorption and desorption reactions of the minerals in a reservoir.

         Pressures needed for injection of supercritical CO2 (i.e., 1,070 psi/ 73.8 bars) may
          impact receiving and confining formations, e.g., they may exceed the fracture
          pressure of some formations.

         Thermal effects (e.g., thermal shock) can affect receiving formations and cement.

         Vertically transmissive geologic features (e.g., faults or fractures), which may
          facilitate the upward movement of CC>2, should be delineated. High-resolution
          surface and borehole geophysics may be useful for these delineations.

         If analytical or numerical models of COi containment or transport are run, testing and
          validation of such models are necessary. (This model testing will provide valuable
          information on the selection of proper time frames for the modeling of commercial-
          scale projects. The modeled time frames may vary to reflect the project goals and
          objectives).

         The presence of underground voids and conduits, whether natural (e.g., karst) or
          artificial (e.g., mines and solution mining operations) may impact the appropriateness
          of a proposed injection site.

Considerations for the Area of Review

Studies to determine the area of review (AoR) and test modeling/monitoring of CO2 movement
can provide valuable data to guide commercial-scale efforts.  Maps and data for the AoR study
should incorporate accurate and reliable data to inform commercial-scale projects regarding
movement of CCh and potential pathways for CO2 in AoRs. While a fixed radius approach to
determining the AoR may be appropriate for smaller pilot projects, it may not be appropriate for
commercial-scale operations.  Furthermore, given that the aim of pilot operations is to inform
future decision-making, projects that test AoR study methods or identify which properties of CCh
injection impact the size of the AoR are encouraged. The items below present aspects of the
AoR that are relevant to CO2 injection:

         It may be appropriate to base the size of the AoR on a zone of endangering pressure
          influence. CCh pressure buildup predictions may require adaptations of the pressure
          buildup equations used for aqueous fluid injection, along with considerations of some
          of the following:
           >  Reservoir transmissibility
           ^  Injection rate
           >  Duration of CC>2 injection
           >  Total injection volume
           >  Boundary conditions (e.g., pinchout or sealing fault)
           >  Pressure-volume-temperature (PVT) behavior
           ^  Injection depth

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           > Relative permeability effects of COa injection into a brine-filled reservoir.

           The maximum pressure buildup predicted at abandoned well locations may affect
           corrective action procedures.

           Given the buoyancy of COa, shallow wells in the buoyant plume area may also act as
           conduits for the upward migration of COa. (All wells and natural conduits within the
           AoR, regardless of depth, are potential conduits for COa release).  The volume of
           COa injected, formation dip, and reservoir mobility can also impact the buoyant
           plume movement. Any data gathering or modeling that can help determine the upper
           limit and lateral extent of COa plume movement in various geologic conditions
           should be encouraged.

           Certain geologic reservoirs that are potentially advantageous for COa injection for
           geologic sequestration, such as depleted oil and gas reservoirs, are likely to be
           penetrated by active and abandoned wells. The Director may not have complete
           information on the location and condition of all abandoned wells. This has
           implications for successful COa GS at a particular site.
            > The corrosive nature of COa may have implications for selecting appropriate
               corrective action procedures.  For example, cement with proven additives may be
               preferred
            ^ Older abandoned wells are likely to be constructed of traditional well materials
               and plugged with mud and cement, and may be susceptible to COa contamination
               or corrosion
            > It may be useful to retain some "typical cement plugs" in a limited number of
               abandoned wells to collect data on cement performance

Considerations for Injection Well Construction

EPA expects that the objective of certain pilot projects may be to test the interactions between
various well materials or cements and COa, and, therefore, wells for these projects should be
constructed in accordance with the project goals.  Construction materials,  casing, and cement
should be appropriate to the geologic environment, the properties of COa, and the anticipated life
of the project.  Owners or operators should describe the project goals, the  planned construction
procedures, and how USDWs will be protected from endangerment in their applications.

It is important that owners or operators be made aware that, if they intend to eventually convert a
well used in a pilot project to a commercial-scale operation, the permit requirements for the
commercial-scale project may be more stringent than those for the pilot project. This may
impact decisions by owners or operators about construction materials or drilling methods.

Additional monitoring may be warranted if there  are concerns or uncertainties about the pilot
project, or where failure scenarios are being tested. Regional Directors are expected to, and State
Directors should, encourage owners and operators to submit any data gathered or lessons learned
about the effectiveness of certain materials or processes that can be of use in the development of
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standards and requirements for commercial-scale projects.  Some of the considerations for well
construction include:

         Requirements for surface and long-string casing, packer, tubing, cement, and other
          construction materials should take into account the properties of CO2 and the
          subsurface formations. Where existing wells are being used, the Director should
          evaluate the adequacy of the existing well materials and cement. It is the owner or
          operator's responsibility to demonstrate that the existing well materials and cement
          are adequate.

         Directors may find owners and operators using new, non-traditional technologies
          (e.g., coil tubing, fiberglass liners, expandable casing, potassium cements, cathodic
          protection, laser drilling, and horizontal and slant injections) for the construction of
          CO2 injection wells.  It is the responsibility of the owner or operator to demonstrate
          how these technologies can ensure the protection of USDWs and public health from
          COi injection activities.

         Non-traditional stimulation methods may be used for CO2 injection projects.
          Depending on the project goals, some fracturing during stimulation may provide
          useful information. The Director should include appropriate permit conditions to
          ensure that fracturing of the confining zone does not endanger USDWs.  It is
          important to note that fracturing may render the site unusable for long-term CC>2
          storage, however. The owner or operator should describe the proposed stimulation
          program, and notify the Director when stimulation will be performed. Detailed
          geophysical and well logs should be maintained, and the Director should be informed
          of the results and be able to access and view any data collected.

Considerations for Injection Well Operation and Monitoring Program

Appropriate operating procedures for pilot projects may depend on the project goals. Owners or
operators should demonstrate how the planned  operating procedures meet the project goals and
how USDWs will be protected. Monitoring parameters (e.g., injection pressure, volume, and
rate) in the permit that help gather the data needed to understand the behavior and potential
leakage of CO2 and impacts of CO2 injection on well materials and receiving formations are
encouraged. Owners or operators should also be encouraged to share any data gathered or
lessons learned during well operation with the Director. Appropriate  emergency procedures
(e.g., automatic shut-offs and contingency plans) should be incorporated into the operating
permits.

The following are considerations relevant to developing operating and monitoring plans for CO2
injection wells:

        CO2 reacts with water to form carbonic acid, which is corrosive. Impurities in the
          CO2 stream may also  be a concern due to their potential impact on well materials or
          potential contamination of USDWs.  Data on the occurrence of various chemical
          compounds in ground water can help identify these effects.

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Operating parameters for CCh injection include:
>  Maintaining records of:
      Average and maximum injection rates and pressures
      Daily and cumulative total injection volumes
>  The nature of the annulus fluid (e.g., its compatibility with 62)
>  The purity of injected CO2 and the presence of any other pollutants (e.g., nitrogen
   oxides, sulfur oxides, and mercury)
>  The temperature of the injected CC>2 (for evaluation of thermal effects on well
   materials and integrity)
>  Limitations on injection pressure based on the fracture pressure, if fracturing is
   prohibited for the pilot project (Due to the reduced static fluid pressures expected
   from CC>2 injection, compensation for pump-induced injection pressures at the
   surface will be needed)

Monitoring of pressure buildup and movement of fluids, both within and outside of
the injection zone, is useful for understanding the movement and impacts of the CO2
plume.

If failure scenarios are being tested, appropriate protective contingencies are
encouraged, such as additional monitoring, or the use of food-grade CO2 (i.e., without
impurities), because the behavior of co-constituents and their impacts are not well
known.

It may be the goal of certain pilot projects to monitor the movement of CC>2 out of the
injection zone to understand the fate and transport of supercritical CC>2, or to compare
actual movement to modeled predictions. The performance of sensitivity analyses to
determine which operating parameters have the greatest effects on injectivity,
containment, and storage capacity might be useful for future commercial-scale project
designs and operations.

The properties of CO2 that differ from liquid injectate may affect mechanical integrity
testing requirements and frequencies. Innovative alternatives (subject to approval by
the Director), and expanded/custom logging suites that may be appropriate  for various
well types, geologic conditions, etc., are encouraged. For example:
>   Noise logs can detect gas flow, and other wireline logs, such as neutron-density
    logs and thermal decay time logs, may be useful in evaluating movement of CO2
    out of the injection zone
>   Temperature logs may detect  temperature changes associated with degassing.
>   Oxygen Activation (OA) logs or other geophysical logging tools may be used to
    assess the movement of fluids behind the pipe due to poor cement bonding or
    cement deterioration and channeling effects
>   Cement evaluation logging, casing inspection logs, and coupon testing for
    corrosion can be used to evaluate well material integrity
                                                                     Page 12

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         Monitoring plans that include collection of baseline ground water quality data will
          facilitate post-injection evaluations of the impacts of the injected CC<2 and other
          constituents.

Considerations for Site Closure

As with other injection operations, CCh injection projects must be closed and abandoned in a
manner that is protective of USDWs (40 CFR 144.12).  If projects are designed to test failure
scenarios, CO2 volumes must be low enough and protective measures must be put in place so
that no endangerment of USDWs will result (40 CFR 144.12). In addition, most pilot projects are
assumed to be small enough (low volumes and/or use of food-grade CCh) that remediation would
not be an issue. However, this should be confirmed by the Director.

For pilot projects, traditional financial assurance requirements for proper abandonment would
generally apply.  However, commercial-scale operations, including those that are converted from
pilot projects, may have additional financial assurance requirements to ensure that issues arising
from the larger CO2 plumes, the unique nature of CCh, and the long storage time frame are
addressed.

Guidance Implementation

This document provides guidance to EPA Regional and State and Tribal Directors exercising
responsibility under the SDWA concerning underground injection wells used for pilot CCh GS
projects.  This document also provides information to the public and those responsible for the
oversight of pilot CO2 injection projects, including Regional Carbon Sequestration Partnerships.
It is designed to provide a timely and consistent framework to assist Regional and State Directors
to permit pilot CC>2 injection wells.  This guidance does not, however, substitute for the SDWA
or EPA's UIC regulations; nor is it a regulation itself. Thus, it cannot change or impose legally
binding requirements on EPA, States, or the regulated community, and may not apply to a
particular situation based upon the circumstances.  The use of non-mandatory words like
"should," "could," "would," "may," "might," "encourage," "expect," and "can," in this guidance
means solely that something is suggested or recommended, and not that it is legally required, or
that the suggestion or recommendation imposes legally binding requirements, or that following
the suggestion or recommendation necessarily creates an expectation of EPA approval.

Collaboration and communication between Headquarters, Regional UIC Program staff, and
Primacy States is critical  to achieving pilot GS project goals. Regional Directors are expected to,
and State Directors are encouraged to, share permit applications and other information related to
permit issuance with EPA Headquarters to assist with the development of a management
framework for commercial-scale GS projects. The purpose of EPA Headquarters' involvement
is to gather relevant and pertinent information for use in making decisions about commercial-
scale CO2 injection projects. Authority to access State UIC Program data is set forth in the
Federal UIC regulations at 40 CFR 145.14(a) and can be used by EPA to request information
from Program Directors.  As with any other data gathering and management effort as part of UIC
Program implementation, appropriate Confidential Business Information procedures must be
followed (40 CFR 145.14(b)).

                                                                               Page 13

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Given the regional differences across the United States and to foster national consistency in
issuing Class V experimental technology well permits for GS pilot projects, DI Program
Directors are encouraged to submit initial permit applications and proposed permits to
Headquarters staff.  Based on the anticipated number of applications, EPA expects that the
submission to Headquarters staff of one permit application and proposed permit per EPA Region
is likely to be sufficient.  State Directors are strongly encouraged to enter into formal
arrangements, such as MOAs, with their Regional Directors to share data related to pilot project
permit applications and issuances.

Directors should make reasonable efforts to witness important field events throughout the life of
the project.  Directors should be notified in advance of drilling or completion activities so they
have the opportunity to witness important events.

Directors who are responsible for traditional Class V shallow wells are encouraged to consult
deep well experts (e.g., Class I or Class II well Directors) to ensure that appropriate standards
and requirements are applied to the pilot CC>2 injection wells. EPA Headquarters can assist in
identifying such experts.

This guidance supplements the guidance: Appropriate Classification and Regulatory Treatment
of Experimental Technologies (Ground Water Program Guidance No. 28);  May 31, 1983.  The
specific guidance in that document continues to apply. (See Attachment 1)

Contact Information for this Guidance

For further information, or questions relating to this guidance, please contact Lee Whitehurst,
EPA Office of Ground Water and Drinking Water, Prevention Branch, at 202-564-3896 or
Whitehnrst.Lee@epa.gov.

Contact information for UIC Program Directors can be found at:
http://www. epa.gov/safewater/uic/states.htTiil
                                                                                Page 14

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                                  Attachment 1

Appropriate Classification and Regulatory Treatment of Experimental Technologies (Ground
                   Water Program Guidance No. 28); May 31, 1983
                                                                         Page 16

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                    UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                                WASHINGTON, D.C. 20460
         MEMORANDUM
         SUBJECT:  Appropriate Classification and Regulatory Treatment
                    f^Experiraental ^Technologies.  Ground-Water Program
                                28
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                             -2-
  Some of these wells would fall into Class V,  according to
EPA's well classification criteria,  even if they were not
experimental. Others fall in Class V solely because of their
experimental status, and would otherwise fall under another
well classification.  With respect to this  latter group, the
regulations do not definitively state whether a technology,
once proven feasible, "reverts" automatically to the class
into which it originally would have  fallen  and is subject to
the technical requirements for that  class,  or whether it is
treated like all the other injection practices explicitly
placed in Class V, i.e., remains in  Class V until, if ever,
appropriate standards are developed.

  In view of the different types of  experimental technologies
that may exist, the Agency has determined,  based on the
reasoning set out below, that the appropriate interpretation
is that some technologies will be considered to revert to
their original class when the technology becomes commercially
feasible, while others will remain in Class V pending any
future regulation.  This interpretation applies only to
types of wells that are in Class V solely because they meet
the general definition of an experimental technology.  A
type of well that meets any other definition of a Class V
well will in all cases remain in that class until future
regulations are developed, notwithstanding  whether it also
meets the general experimental technology definition.

  As mentioned above, a type of injection practice placed
in Class V because it is experimental usually would have
fallen into some other class if it were not experimental.
Some of. these practices, though experimental, are sufficiently
similar or analogous to the other wells contained in that
other class that the standards of that class are still
technologically appropriate to the new practice.  This will
usually be the case when, for example, the new practice  is
not truly a new technology but rather a variation on an
existing technology..

  The justification for treating this type of experimental
well as Class V is that to encourage innovation, a developing
technology arguably should not be burdened by strict technical
standards designed for commercially operating facilities.
This is especially justifiable since the wells are likely  to
be few in number and operate only intermittently, and under
Class V would be bound by the general standard that they not
endanger drinking water.  This justification implies that
the technology be considered Class V only while experimental.
Once the technology proves feasible, the justification  no
longer applies.

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                             -3-
  Consequently, at any time that such injection wells are to
begin commercial operation, EPA will no longer consider this
type of injection to be in Class V.  The injection practice
would "revert" to the class into which it would have fallen
originally had it not been experimental, and therefore would
be subject to the technical requirements of that class.

  Some experimental practices, however, will be "truly new
technologies," so different from the other types of wells in
the class into which they otherwise would have fallen that the
standards of that other class are technologically
inappropriate.  Existing standards might be impossible to
apply, or might fail to address the environmental hazards of
the practice even when fully met.  Some of these technologies
have already been identified by EPA, and have been placed in
Class V not by virtue of the general "experimental technology"
category at issue here, but because they have been explicitly
identified by regulation.  Examples include the technologies
listed in 40 CFR $146,05(e)(16): the in-situ mining of lignite,
coal, tar sands, and oil shale.

  For this type of well, treatment as Class V is justified
not only by the aim of encouraging innovation, but also because
it is undesirable to require compliance with technical
standards that are inappropriate to the new technology.  In
addition, many of these new technologies are closely monitored
by other federal agencies to collect information on and
guard against threats to drinking water.  Where these
additional reasons for treatment as Class V exist, the wells
should remain in Class V not only during the period they are
experimental but even after commercial feasibility is
demonstrated, until EPA determines appropriate treatment.

  This is already the case for those experimental wells
referred to above that have been explicitly placed in Class V
by regulation.  The same treatment should be afforded "truly
new technologies" that EPA may have been unable to anticipate
when promulgating the regulations.  As a result, any
experimental technology for which the standards of the class
into which it would otherwise fall are technologically
inappropriate will continue to be treated as Class V after
it becomes commercially feasible.  EPA may in the future
determine other appropriate treatment for such wells, and
may reclassify the wells at that time.  An example of such a
"truly new technology" is the slurry borehole mining of
phosphate, which ordinarily would fall in Class III but
which the Class III technical requirements do not fit.

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                             -4-

  Of course, all wells, whether in Class V or any other class,
must comply with 40 CFR S144.12, the broad prohibition of any       .
injection that may cause the violation of primary drinking         (
water standards or otherwise adversely affect the health of
persons.  Even "truly new technologies," therefore,  must comply
with this basic standard.  In addition, the long development
period likely to to be associated with a "truly new  technology"
should allow EPA to develop technologically appropriate
regulations for any such type of well, where appropriate, before
substantial commercial production begins.

  EPA will presume that any experimental technology  can be
appropriately regulated under the class into which it otherwise
would have fallen, and will treat the operation as falling
under that class once feasibility is demonstrated, unless
the owner or operator demonstrates to EPA or the state agency
administering an approved state program that the practice
should be treated as a "truly new technology."  EPA does not
intend that treatment as a "truly new technology" be used as.
a vehicle for avoiding compliance with appropriate technical
requirements.  Such treatment will be reserved for cases
where it clearly is technologically infeasible to apply the
technical standards of the class into which it otherwise
would fall, or where those standards clearly fail to provide
protection for drinking water.


IMPLEMENTATION

  Regional offices are instructed to use this guidance in
operating UIC programs where EPA has primary enforcement
responsibility. They are further instructed to make this
guidance available to states working towards primacy and to
advise the State Director that these interpretations represent
EPA policy.


   For further information on this guidance contact:

     Francoise M. Brasier
     U.S. Environmental Protection Agency
     Office of Drinking Water
     401 M Street, SW
     Washington, D.C.  20460
     (202) 382-5560

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                 Attachment 2

Summary Table of U.S. Department of Energy (DOE)
   Geologic Sequestration Regional Partnerships
                                                        Page 22

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        Name and Web site
         Area Covered
               Contact Person(s)
     Big Sky Regional Carbon
    Sequestration Partnership

        w wvv .b i usk yco2. o rsj
  MT, WY, SD, ID, eastern WA,
          eastern OR
Susan Capalbo, Big Sky Principal Investigator, Office
of VP for Research, Creativity and Technology.  406-
994-5619, scapalboiffimontana.cdii

Pamela Tomski, Big Sky Outreach Director, 202-822-
6120 ext. 11. ptomskiffl.jcrols.coni
 Midwest Geological Sequestration
     Consortium-Illinois Basin
      wvvvv. scq Liostrat i on ,org/
     IL, KY, portions of IN
Link to all project staff:
http:/V\vvvw.scqucstration.oru/staff.htm
     Midwest Regional Carbon
     Sequestration Partnership

   htlp://198.87.0.58/dcf'ault.aspx
   MD, MI, OH, PA, WV, and
       portions of IN, KY
David Ball, balld@battcllc.org
 Plains CO2 Reduction Partnership

  www.irndcci'c.oru'pcor/'dctault.asp
 ND, SD, MN, MT, WY, NE, IA,
 MO, WI, & Canadian provinces
    of Alberta, Manitoba, and
         Saskatchewan
Link to all project staff:
http://ww\v.undccrc.org./pcor/contactus.asp
    Southeast Regional Carbon
     Sequestration Partnership

        www.sccarbon.org'
  GA, FL, NC, SC, VA, TN, AL,
 TN, MS, AR, LA, southeast TX
call 770.242.7712, or email sscb&sseb.org
Southwest Regional Partnership for
      Carbon Sequestration

vvww.southwcstcarbonpaitncTship.oru/
NM, OK, KS, CO, UT, portions of
         TX, WY, AZ
Brian McPherson - brianfr/xnmt.cdu
New Mexico Institute of Mining and Technology,
505.835.5834
   West Coast Regional Carbon
    Sequestration Partnership

             .westcarh.org/
 AK, CA, NV, British Columbia,
 and portions of AZ, OR, and WA
Larry Myer, West Coast Regional Carbon
Sequestration Partnership's technical director,
Larry. VI vcrfaicoD.edu.
                                                                                                     Page 23

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