CLASS III COST ANALYSIS UNITED STATES ENVIRONMENTAL PROTECTION AGENCY OFFICE OF DRINKING WATER APRIL 30, 1980 ------- CLASS III COST ANALYSIS This document presents a discussion of the costs which will be incurred by industry and State governments by implementing the Class III program requirements of the Underground Injection Control program. The discussion also responds to comments received as a result of the proposed regulations, and, for simplicity, is presented in a format which parallels the report "Analysis of Costs - Underground Injection Control Regulations, Class I and Class III Wells," Temple, Barker and Sloane, Inc., May 1979. Other supporting information is contained in "Development of Procedures for Subclassification of Class III Injection Wells," Geraghty and Miller, Inc., April 1980. Costs to Operators The TBS report contained an inventory of Class III well sites under the UIC program; this inventory is updated in the G&M report and is summarized in Table 1 and Figure 1. This revision to the inventory alters the: operator costs presented by TBS because most costs were calculated on a well site basis. The following sections discuss the cost impact of the inventory update and revisions made to the regulations as the result of public comment. Geothermal Wells There are 6 sites containing 25 wells located in California and Oregon; it is anticipated that there will be 50 wells in operation by 1985. Current industry practice involves casing and cementing, and operation in conformance to Department of Energy regulations. The UIC program will not alter the operation of the wells, but the operators will have to shew initial mechanical integrity of wells as part of their UIC permit application and will have to report operating data to the UIC regulating agency quarterly. Preparing the application for a UIC permit is estimated to require one work-month (at $1700/work month) per site to reformat existing information including cementing records for each well. Operators will submit quarterly reports to UIC regulating agencies with a time requirement of 1 day per report. The time required would be 6 sites x 4 reports/year x 5 years = 120 days. The estimated labor cost is $75/ work day. ------- /("*"'- , _..*, / '. NOfUrl DAKOTA '^'. / • Afll^nTT".'"-' — . J 4 i iNEWMr^X"™1*—'-r'-L. . i -.f /" 'Ja^ oQ cP 1 —"" EXPLANATION WELL SYMBOLS^ O Uranium Sltt VTA Uranium B.ll In Sllu Combuilion Q • Oil Shalt Q Tar Sand* Figure 1. Principal Locations of Class III Injection Well Sites. ------- Table 1 ESTIMATED AND PROJECTED NUMBER OF CLASS III SPECIAL PROCESS INJECTION WELLS AND SITES Sulfur Mining (Frasch Process) Solution Mining of Salt Sites Wells (Projected) 1979/1980 1979/1980 1985 8-10 80 500 a/ 1,000 b/ 500 - 600 1,100 In-situ Leaching Uranium Copper and other metals c/ 35 6,300 2-3 10-20 18,000 30 - 50 In-situ Combustion c/ Coal Lignite Oil shale Tar sand 30 300 Geothermal Energy 140 + 25 d/ 7,785+ 50 25,500+ a/ Replace 300-500 wells per year. b/ Replace, about 100 wells per year. May include some convertad oil and gas wells. c/ Pilot and experimental studies only. d/ Mostly in California and Oragon. 3 ------- Salt Solution Mining Summary of Costs to Operators (thousands of 1977 dollars) Number of sites Number of wells One time costs 80 1,000 Permitting Testing Remedial action Monitoring wells subtotal $ 204 519 1 , 500 3,000 Recurring Costs Monitoring $180 Reporting 165 $5,223 subtotal Total $345 $5,568 Solution Mining of Potash Solution mining cf potash is conducted at one site with 1 extraction and 17 injection veils in Moan, Utah. Initial permitting will require approximately $30,000 of consultant services. No initial mechanical integrity testing will be required. Quarterly reporting requirements will force the hiring of an additional employee at an annual cost of $20,000. Operator costs cf compliance are summarized below. Solution Monitoring of Potash Summary of Cost to Operators (thousands of 1977 dollars) Number of sites Number of wells One time costs Permitting $30 Testing 0 subtotal $30 1 17 Recurring Costs Monitoring $ 0 Reporting 100 subtotal $100 Total $130 ------- Class III Summary Costs to Operators (Thousands of 1977 dollars) One Geothermal Uells Permitting Testing Subtotal Total In-Situ Gasification Permitting Testing Subtotal Total In-Situ Uranium Leaching Permitting Testing Subtotal Total In-Situ Copper Leaching Permitting Testing Monitoring wells Subtotal Total Frasch Sulfur Mining Permitting Testing Subtotal Total Salt Solution Mining Permitting Testing Remedial action Monitoring wells Subtotal Total Potash Permitting Testing Subtotal time $ $ $ $ $ $ $ $ $ $ $ 1, 3, $5, $ $ costs 10 0 10 10 0 10 60 0 60 31 0 300 331 34 0 34 204 519 500 000 223 30 0 30 Monitoring Reporting Monitoring Reporting Monitoring Reporting Monitoring Reporting Monitoring Reporting Monitoring Reporting Monitoring Reporting Total Totals $5,698 Grand Total, Cost to operators Recurring Costs $ 0 9 $ 9 $ 0 1^ $ 11 $ 0 53_ $ 53 $ 18 9 $ 0 15 $ 15 $180 165 $345 $ 0 100 $100 $560 $ 19 21 $ 113 $ 358 $ 49 $5,568 $ 130 $6,258 ------- Class III State Program Costs State governments will incur certain costs in developing, implementing and operating the UIC program. One time costs for program development, and program hearings, and recurring costs for enforcement and annual report preparation are unchanged in the ana.lysis; for details on their development see Chapter III of the TBS report. Permit application handling and hearing costs are related to the number and type of permits handled. The following table summarizes the time requirements for permitting and hearings: Class III Wells State Program Time Requirement Assumption Practice Total Number Work days/site - Proportion cf permits of sites for permitting requiring hearing Geothermal 6 5-10 0 In-Situ Gasification 7 10-20 0 In-Situ-Uranium Leaching 35 20-40 50 In-Situ-Copper Leaching 3 20-40 50 Frasch Sulfur Mining 10 30-40 25 Salt Solution Mining 80 10-30 15 Potash Solution Mining l_ 10-30 0 142 Using the information above, the following is the cost to state government. One-Time State Work Year Estimates Program Element Work-year required Program Development 2.8 Program Hearing 0.9 Permitting 20.7 Permit Hearing 3.0 27.4 State personnel will be required to review the quarterly reports which are submitted by the operators. It is estimated that 7 work hours per report will be required for this review. Recurring costs are summarized in the following table. P.ecurring Work Year Estimate.s Program Elements Work-years required Quarterly reports 2.2 Enforcement 6.3 Annual Report 1.0 Annual Total 9.5 work years/year ------- State personnel costs are estimated to be $22,500 per 220 day work yezr plus 15% for overhead. Total State costs are summarized below. Total State Program Costs (thousands of 1977 dollars) Onetime Costs Program Development $ 72 Program Hearings 23 Permitting 536 Permit Hearings 78 Subtotal $709 Recurring Costs Quarterly Reports $ 285 Enforcement 815 Annual Reports 130 Subtotal $1,230 Total $1,939 ------- |