Geologic Sequestration & GHG Reporting Background and Context

1. Geologic Sequestration & GHG Reporting Background and Context October 6, 2009 DRAFT DELIBERATIVE

2. 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 CO2 suppliers • Motor vehicle and engine suppliers (except light duty sector) • Collected under sections CAA 114 and 228

3. 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. MRR Schedule for Monitoring and Reporting

5. 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. 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. 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. Overview of GS-related Comments on CO2 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 CO2 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. Coverage of CCS System in MRR

10. Current Treatment of CO2 Storage in US GHG Inventory • The US follows the 1996 IPCC guidelines, which do not include accounting methods for CO2 injected into the subsurface. • The current US Inventory: • Subtracts all CO2 injected into the subsurface for EOR purposes from the national GHG emission total • Assumes that CO2 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 CO2 capture, transport, injection and geologic storage in U.S. inventory totals. • 2007 Preliminary estimates for injection: • 40 TgCO2e, <1% of total national GHG emissions

11. IPCC 2006 Guidelines • The 2006 Guidelines require estimates of emissions from the capture, transport, injection, and geological storage of CO2 • IPCC guidelines state that subsurface sites are likely to retain >99% of injected CO2if the site is properly selected and if the potential for leakage is assessed. • Methodology is site-by-site

12. Coverage of CCS in the 2006 IPCC Guidelines for National GHG Inventories SDWA CAA

13. 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 CO2

14. 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. Relationship between SDWA/UIC and CAA/GS Reporting • UIC Class VI requirements provide the initial foundation for the safe sequestration of CO2. 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 CO2 sequestered including quantifying any air emissions from GS sites. This rule completes the picture with a reporting component focused on climate.

16. 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