Core Energy, LLC (Board decision, December 19, 2007)

Plain-English summary

Robert and Joan LeBlanc petitioned for review of EPA Region 5's permit authorizing Core Energy, LLC to convert a test well in Otsego County, Michigan, into a Class V carbon-dioxide injection well. They raised concerns about liability for damage and about property rights beneath neighboring land. The Environmental Appeals Board denied review because the liability issue was not raised during the public-comment period and the petitioners did not show that the Region's response on property rights was clearly erroneous or otherwise warranted review. The order did not alter the permit.

Decision snapshot

• Cited authorities: 42 U.S.C. § 300h; 40 C.F.R. §§ 124.13, 124.19(a), 144.6, 144.35, 144.51, and 147.115; 40 C.F.R. § 1.25(e)(1).
• Outcome: The petition for review was denied.
• Key point: The Board limited review to issues preserved during the permitting process and within the UIC program's scope.

Full text (EPA EAB public release)

              BEFORE THE ENVIRONMENTAL APPEALS
         UNITEDSTATESENVIRONMENTAI,PROTECTIO
                       WASHINGTON,D.C.                                      $Ic r g :,,

In re:

CoreEnergy,LLC UIC AppealNo. 07-02

PermitNo. MI-137-5X25-0001

                            ORDERDENYING REVIEW

                                  I. INTRODUCTION

     On September21,2O07,Mr.RobertB. LeBlanc,on behalfof himself andhis wife, Joan

S. LeBlanc ("Petitioners"), filed a petition for review from U.S. EPA Region 5' s ("the Region")

decisionto issuean UndergroundInlectron Control ("UlC") pennit to Core Energy, LLC ("Core

Energy"). Letter from Robert B. LeBlanc, to the Clerk ofthe EnvironmentalAppeals Board

(Sept. 14.2007) (hereinafterreferredto as "the Petition" or "Petition for Review").r The permit,

tssuedpursuantto the SafeDrinking Water Act ('SDWA'),42 U.S.C. $$ 300h to 300h-8, and

EPA's implementing regulationsat 40 C.F.R. parts 124, 144, and 146-48,authorizesthe

conversionof an existing test wel'l in OtsegoCounty, Michigan, to a ClassV injection well? for

the permanentstorage,or "sequestration,"of carbondioxide ("CO, "). ,lee Fact Sheetfor

UndergroundInjection Control (UIC) ProgramPermit MI-I37-5X25-0001 at 1; Responseto

' Although tbe Petition for Review is dated
September14,2007, documentsare not
considered"filed" with the Board until they arereceived. The Board receivedthe Petition for Review in this matter on September2l , 2007. '?The UIC program's implementingregulations
estabtisha classificationsystemfor injection
wells dependingon the materialbeing injectedinto the well. See40 C.F.R.Q 144.6. ClassV wells irtcludewells using experimentaltechnologies. Seeid. | 144.81.

Petition for Review ("Region's Response")at 3.r Petitionersraisetwo argumentsin supportof

review by this Board. First, the Petitron expressesconcem about who might be liable for any

damagesthat might result lrom operal.ion
of the injectionwell. Petitionlor Review at l-2-

Second,althoughnot entirely clear from the Petition, it appearsPetitionersare arguing that the

permit violated property rights ofadjacent landownersunderwhose land the injection wiil occur

and that a permit shouid not have been issuedabsentproof that the permitteeactually owned all

subsurfacerights on this lartd. Id. at l-3.

   For the reasonsset forth below, the Petition for Review is denied in its entirety.




                                     II. BACKGROUND

A. StatutoryandRegulatoryFramework

   Theregulationsgoverningunderground
                                    injectionwellsarefoundin 40 C.F.R.part 144to

149.4The standards
containedthereinwerepromulgated
pursuantto PartC of the SDWA,42

U.S.C.$$ 300h-300h-8,
whichdirectsthe Administratorto promulgate
regulationsfor state

underground
injectionconholprogramsfor theprotectionof underground
sourcesof drinking

water("USDWs").542 U.S.C.$ 300h(a).Theprotectionsesrablished
by the SDWA andirs

'As theRegionstatesin its Response, ofCO, is oneofseveralpossible
sequestration
mechanisms proposedfor stabilizinglevelsof greenhouse
gasesin theatmosphere
andthereby
mitigatingclimatechange.Region'sResponse at 4.
aThepurposeandscopeof40 C.F.R.parls
144through149areasfollows: part 144
(minimumrequirements for the UIC program);part 145(procedures
for approving,revising,and
withdrawingstateprograms);pafi 146([JIC programcriteriaandstandards); parI147(applicable UIC programsfor states,territories,andpossessions);part 148(hazardouswasteinjection restrictions);andpart 149(solesourceaquifers) 5Specifically,the SDWA requiresthe Administratorto promulgate
regulationsestablishing
(contrnued...)

                                            2

implementing regulationsfocus exclusively on groundwaterthat is or may be a soutceof

drinking water.6

   The UIC permitting processhas been describedas narrow in its focus. SeeIn re Envtl.

Disposal Sys.,Inc. ("EDS"),12 E.A.D. 254,266 (EAB 2005);1nre Am. Soda,LLP,9E.A.D.

280,286 (EAB 2000). As the Board has made clear on prior occasions,review of UIC permit

decisionsextendsonly to the boundariesof the UIC permitting program itself, with its SWDA-

directed focus on the protectionof USDWs, and no farther. EDS, I}E.A.D. a|266; Am. Soda,9

E.A.D. at 286 ("the SDWA * * + and the UIC regulations* * + establishthe only criteria that

EPA may use in deciding whether to grant or deny an application for a UIC permit, and in

establishingthe conditionsunder which deepwell injection is authorized.")(quoting In re

Envotech,I.P.,6 E.A.D. 260,264 (EAB 1996));,tnre NE Hub Partners,L.P.,7 E.A.D. 56l, 567

(EAB. 1998)("protection ofinterests outsideof the UIC program [is] beyond our authority to

5(...continued)
"minimum requirementsfor effectiveprogramsto preventundergroundinjection which endangers
drinkingwatersources."SDWA $ 1421(bX1),42 U.S.C.A.$ 300h(bxl). Theterm
USDW is definedas:

   [A]n aquiferor itsportion:
   (a)(l) Whichsuppliesanypublicwatersystem;or
   (2) Whichcontainsa sufficientquantityof grciundwaterto supplya publicwater
   supply;and
   (i) Cunentlysuppliesdrinkingwaterfor humanconsumption;   or
   (ii) Containsfewerthan10,000mg/l total dissolvedsolids;and
   (b) Whichis not anexemptaquifer.

40 c.F.R.$ 144.3.
oEPA administers theUIC programin statesthatarenot yet authorizedto administertheir own UIC programs. See40 C.F.R.$ 144.1(e).EPA remainsthepermittingauthorityof the UIC programin theStateof Michigan.Seeid.ar$ l47.ll5t.

review in the context of [a UIC] case"),review deniedsub nom. Penn Fuel Gas,Inc, v. U.S.

EPA, 185 F.3d 862 (3d,Ct.1999); In re Brine Disposal lFell, 4 E.A.D. 736, 742 (EAB 1993)

("It has't * * repeatedlybeenheld that parties objecting to a federally issuedUIC permit must

basetheir objectionson the criteria set forth in the [SDWA] and its implementingregulations.').

Thus, the Board is only authorizedto review IJIC permit conditions to the extentthat they affect

a well's compliancewith the SDWA and applicableUIC regulations. Accordingly, where

petitionersraise concemsoutsidethe scopeof the UIC program,the Board will deny review.

See,e.g.,NE Hub,7 E.A.D. at 567;In re FederatedOil & Gas,68.A.D.722,725-26 (EAB

t997.

B. FactualandProceduralBackground.

     In April of2007, CoreEnergy,Inc. submittedan applicationseekinga UIC permitfor the

conversionof anexistingtestwell in OtsegoCounty,Michiganto a ClassV injectionwell for

the sequestration
of COr. Thewell at issuewouldbe usedto conductresearchon thebehaviorof

COt injectedinto deepsalinerock formations.SeeExecutiveSummary,CoreEnergyPermit

Application(AppendixI to Region'sResponse).CoreEnergyestimates
thattheinjectionphase

of this projectwill likely last60 to 90 daysandresultin the injectionofup to 10,000metrictons

of CO2.Id. TheRegionissueda draftpermiton July 71,2007,andinitiateda publiccomment

periodduringwhichMr. LeBlancsubmittedcomments.See"Written comments,
Objections,

andRequestfor PublicHearingasto PublicNoticeDated:Jnly23,2007for proposed

underground
injectionfor MI-137-5X25-0001
for theCharlton# 4-30well in OtsegoCounty,

Michigan"(Aug. 14,2007)("Petitioners'Comments").

   On August 23,2007, after respondingto Petitioners' Commentsand determiningthat the

draft permit complied with the SDWA and the applicableregulations,the Region issueda final

permit. As statedabove,the Board receivedthe Petition for Review on September21, 20O7, in

which Petitionersraiseconcemsregardingliability for any damagesarising out of the permitting

activity as well as the property rights of adjacentland owners. Petition for Review at 1-3. The

Region iiled its Responseon November 1, 2007. On November 6, 2007, Petitionersfiled a reply

to the Region's Response.SeeThe LeBlancs' Objectionsto Region 5' s ResponseDated

10/31/07 ("Petitioners' Reply') (Nov. 6, 2007).

                                   I1I. DISCUSSION

A. Standardof Review

   Underthe 40 C.F.R.part 124rulesthatgovemthis permitproceeding,
                                                                the Boardwill not

grantreviewunlessit appearsfrom thepetitionthatthepermitis basedon a clearlyerroneous

findingof fact or conclusionof law, or involvesan exerciseofdiscretionthatwarrantsBoard

review.40 C.F.R.Q 124.19(a);
EDS,I2E.A.D. at263;Am.Soda,9 E.A.D.at 286. TheBoard's

analysisof UIC permitsis guidedby thepreambleto theparl 124rules,which statesthatthe

Board'spowerofreview "shouldonly be sparinglyexercised"andthatmostpermitconditions

shouldbe finally determined
at theRegionallevel. 45 Fed.Reg.33,290,33,472
(May 19,

1980);EDS, 12E.A.D. at 263-64;In re PunaGeothermalVenture,gE.A.D. 243,246(F,AB

2000). On appealto theBoard,thepetitionerbearstheburdenof demonstrating
thatreviewis

warranted.40 C.F.R.$ 124.I9(a);
Am.Soda,9E.A.D.at 286;NE Hub,? E.A.D.at 567.

   In addition, in order to preservean issuefor appeal,the regulationsrequire any petitioner

who believesthat a permit condition is inappropriateto demonstratethat it or any other

commenterraised"all reasonablyascetainableissuesand * * + all reasonablyavailable

argumentssupporting [petitioner's] position" during the commentperiod on the draft permit. 40

C.F.R.$$ 124.13,.19(a);InreBP CherryPoint, 12E.A.D.209,216(EAB2005);Inre Encogen

CogenerationFacility, S E.A.D.244,249 (EAB 1999). Thepurpose of such a provision is to

"ensurethat the Region has an opportunity to addresspotential problems with the dralt permit

before the permit becomesfinai, therebypromoting the longstandingpolicy that most pemit

decisionsshould be decidedat the Regional level, and to provide predictability and finality to the

permitting process." Inre New England Plating Ca.,9 E.A.D. 726,732 (EAB 2007);In re

Sutter Power Planl, 8 E.A.D. 680, 687 (EAB 1999) . The burden of demonstratingthat an issue

has been raisedduring the commentperiod restswith the petitioner, and "it is not incumbent

upon the Board to scour the record to determinewhether an issuewas properly raisedbelow."

Encogen,S E.A.D. at 250 n.10.

   Finally, in order to obtain review by the Board, a petitioner must demonshatewhy the

Region's responseto corffnents on the dra{t permit were clearly erroneousor otherwisewatrant

review. A petitioner may not simply repeatobjectionsmade during the commentperiod but

"must demonstratewhy the [permit issuer's]responseto theseobjections(the [permit issuer's]

basis for its decision) is clearly enoneousor otherwisewarrantsreview." In re NewmontNev.

Energt Inv., LLC,12E.A.D. 429,4'12(EAB 2005)(quoting1n re SteelDynamics,Inc.,9 E.A.D.

740,744 (EAB 200r )).

   With theseconsiderationsas background,we will now proceedto analyzethe issuesand

argumentson appeal.

B. Liability for Damages

   The Petitionersexpressconcem regardingthe allegedabsenceof a clear policy

addressingpotential liability for any damagesthal might result l}om the permitted activity.

Petition for Review at l. According to the Petitioners,"[t]he key issueappearsto be the matter

ofliability (i.e., no adequatepolicy existsdefining the roles and financial responsibilitiesofthe

rndustryand govemment.)." Id. TheRegion arguesthat this issuewas not raisedduring the

comment period on the draft permit and thus was not preserved for review. We agree.

   Upon review of the comments submitted during the comment period,T we find no

referenceto the issueof liability for potential damagesresulting from operationof the injection

well. Rather,the only issuesPetitionersraisedduring the commentperiod concemedthe

property rights of adjacent landowners. ,SeePetitioners' Comments at 4-5. Although, in their

Reply to the Region's Response,Petitionersassertthat the issuewas raised,they fail to cite to

any portion of the comments addressing this issue. The only citation provided is to the second

pageof Petitioners' commentsin which Petitionerssuggestedthat the permit presentssafetyand

7 Other than the permitteein this matter,Petitioners
were the only parlies to submit comments
on the draft permit. SeeRegion's Responseat 4. In its comments,Petitionerssought a public hearingin this matter. Under 40 C.F.R. $ 124.12,a public hearing shall be held if the Region determinesthat there is a significant degreeofpublic interestin the draft permit. In this instance, the Region determinedthat there was not a significant degreeofpublic interestand thereforedeclined to hold a public hearing. SeeLetter from Lisa Perenchio,Region 5, to Robert B..and Joan S. LeBlanc, respondingto public comments(Aug. 23, 2007). Petitionershave not appealedthe Region's determinationin this regard,nor do we seeanything erroneousin this determination.

storageissues"among other things." Petitioners' Reply at 2 (citing Petitioners' Commentsat 2).

This was insufficient to put the Region on notice of the issuenow presented.sBecausethe issue

of liability was reasonablyascefiainablebut was not raisedduring the commentperiod on the

draft permit, this issuewas not preservedfor review with the Board.e SeeIn re Shell Wshorq

lnc.,OCSAppealNos.0T-01
&07-02,slip op.at52-53(EABSept.14,2007),13E.A.D._;

In re BP CherryPoint,12 E.A.D. 209,218-20(EAB 2005).

" As theBoardhasemphasized, petitionersmustraiseissueswith a reasonable
degreeof
specificityandclarityduringthe commentperiodin orderfor the issueto be considered
by the
Boardonappeal.In rc NewEnglandPlating,gE.A.D.126,132(EAB20Ol);Inre Steel Dynamics, Inc.,9 E.A.D.165,230-31(EAB 2000);12re MauiElec.Co.,8E.A.D.1,9(EAB 1998).TheBoardhasoftendeniedreviewof issuesraisedon appealthatwerenot raisedwith therequisitespecificityduringthepublic commentperiod. See,e.g.,NewEnglandPlating,9 E.A.D.at 132-35;Maui,8 E.A.D.aI9-12;In re Fla. Pulp& PaperAss'n,6E.A.D.49,54-55 (EAB 1995). eTherequirement that anissuemusthavebeenraisedduringthepubliccommentperiodin orderto presewe it for reviewis not an arbitraryhurdleplacedin thepathofpotential petitioners.SeeIn re City of Marlborough,12E.A.D.235,244n.13(EAB 20O5);BPCherry Point, 12E.A.D.209,219(EAB 2005). Rather,therequirement servesan importantfunction relatedto the efliciencyandintegrityofthe overalladministrative permittingscheme. Marlborough,12E.A.D. at 244n.l3 . The intentof therule is to ensurethatthepermitting authorityhrst hasthe opportunityto addresspermitobjections,andto give somefinality to the permittingprocess.Id.; In re SutterPowerPlanl, 8 8.A.D.680, 687 (EAB 1999). As wehave explained,"[t]he effective,efficientandpredictableadministration of thepermittingprocess demands thatthepermitissuerbe giventhe opportunityto addresspotentialproblemswith draft permitsbeforetheybecomeltna|." In re TeckCominco,1l E.A.D. 457,481(EAB 2004) (quoting1zre Encogencogeneration Facility,8 E.A.D.244,250(EAB 1999). "In this manner, thepermitissuercanmaketimelyandappropriateadjustments to thepermitdetermination,or, if no adjustments aremade,thepermitissuercanincludean explanation ofwhy noneare necessary."In re EssexCounty(N.J.)Res.RecoveryFacility,5 E.A.D. 218,224(EAB 1994).

C. Property Rightsof Adjacent Landowners

   Petitionersnext arguethat the permit potentially violates the rights o[ adjacentproperty

owners. In pa icular, Petitionersarguethat property owners should be protectedfrom "sub-

surfacetrespasses"resulting from operationofthe injection well. Petition for Review at 2-3.

   ln responseto commentson this issue,the Region stated,in part:

   The I-IIC program doesnot have authority to determinesurlace,mineral, or
   storagerights when issuing permit decisions. Issuesrelating to property
   ownershipor lesseerights are legal issuesbetweenthe permitteeand property
   owners. Under federalUIC regulation, a permitteeis not required to demonstrate
   ownershipor legal accessto all properties,only that the operationof the well will
   not allow contaminantsinto a USDW. Issuanceof a permit neither confersthe
   right to trespassnor conveysproperty rights ofany sort or any exclusive
   privilege; nor doesit authorizeany injury to personsor property, any invasion of
   other private rights, or any infringement of Stateor local law or regulations. This
   is the casewith respectto all classesof wells, including thosewhich inject CO,
   for permanent sequestration in an underground formation.

Response
to Commentsat | .

   BecausePetitionershave failed to demonstratewhy the Region's responsein this regard

was ciearly erroneousor otherwisewarrantsreview, review is deniedon this isslue.Shell

Offshore,slip op. at 64, 13E.A.D. _;Inre NewmontNev.EnergyInv., L.L.C.,128.A.D.429,

472 (EAB 2005).

   We recognizethat Petitionersare not representedby legal counseland, as in previous

cases,we have thereforeendeavoredto construetheir objectionsliberally so as to identify the

substanceof their arguments.E.g., In re SutterPower Plant, S E.A.D. 680, 687 (EAB 1999)

(citing cases). However, "[w]hile the Board doesnot expect or demandthat I pro se I petitions

will necessarilyconform to exacting and technicalpleadingrequirements,a petitioner must

neverthelesscomply with the minimal pleading standardsand articulatesornesupportablereason

why the [permil issuer]erredin its permitdeoisionin orderfor t)"re
petitioner'sconcemsto be

meaningfullyaddressed
by thc Board." EDS, 12 E.A.D. at 292 r't.26(quotingIn re Beckmun

Prod. Servs.,5E.A.D. 10, 19 (EAB 1994)). Petitionershavefailed in this regard.

                                                         IV. CONCLUSION

        For the forgoingrcasons,thePetitionfor Reviewis herebydenied.'u

        Soordered.rr




         I,                 J
         r.
                                             "tt t ./

n^.^,l. /. ' - ,; \r
LJiTLErj- I \, r,.','r

                                                        ENVIRONMENTALAPPEALSBOARD



                                                        By:
                                                                   KathieA. Stein
                                                              EnvironmentalAppealsJudge




r0In their Reply, Petitionersassertthat the Region has failed to enforce40 C.F.R.

$$ 144.35(b)-(c) and 144.51(g),both ofwhich indicatethat the issuanceof UIC permit doesnot createany property rights. However, as this issuewas not mentionedin the Petition for Review, it was not preservedfor review with the Board. SeeIn re Knauf Fiber Glass,GmbH, 8 E.A.D. 121,126n.9 (EAB 1999)(new issuesraisedin reply briefs areequivalento late-filedappeals and must be deniedas unlimely). For the Board to considernew issuesraisedin reply briefs would effectively permit a petitioner to amendan otherwiseinadequatepetition. SeeIn re Dominion EnergyBraytctnPoint,LLC,NPDES AppealNo. 07-01,slip op.at 42 (EAB Sept.27, 2007),13 E.A.D. ,
' ' The three-memberpanel deciding this
matter is comprisedof EnvironmentalAppeals
JudgesEdwardE. Reich,KathieA. Ste.in,and Anna L. Wolgast. See4OC.F.R.$ 1.25(e)(1).

                                                                10


                          CERTIFICATE OF SERVICE

   I herebycertify that copiesof the forgoing Order Denying Review in the matter of Core

Energy,LLC, UIC Appeal No. 07-02, were scnt to the lollowing personsin the manner indicated:

By CeaifiedMail
Retun ReceiptRequested:

                               RobertB. LeBlanc
                               9300IslandDrive
                               GrosseIle, MI 48138

By PouchMail:
ErikH. Olson
Asst.RegionalCounsel
U.S.EPARegion5
77 WestJacksonBlvd.
Chicago,Illinois60604

Dated:DEC19 2002