March 31, Dear Ms. Shreve:

Transcription

1

2

3

4

5 March 31, 2005 Ms. Kathy Shreve Wyoming Department of Environmental Quality NPDES Permit Section 122 W. 25 th Street Herschler Building 4W Cheyenne, WY Subject: Response to Complete but Technically Inadequate Letter, March 8, 2005 Kennedy Oil Company NPDES Discharge Permit Application, Ruby Flying E CBM Operations, WY Powder River Watershed, Johnson County Dear Ms. Shreve: Kennedy Oil Company would like to respond to your letter that lists technical inadequacies, dated March 8, Your letter listed multiple concerns in the Ruby-Flying E CBM Operation permit application, WY Although the permittee provided information related to existing permits in the Flying E Creek drainage, the information provided did not consider applications still in the pre-public notice phase. At this time, the Division will require all permittees to either contain all untreated effluent during dry operating conditions, or to treat discharges to a level that will not impact Powder River water quality. Therefore, the Division has determined that, for the most part, channel infiltration losses are unavailable for consumption of CBM produced water within the Flying E Creek basin. The Division will not at this time entertain proposals that rely on in-channel infiltration to consume losses, or direct discharges of untreated effluent. This proposal contains one outfall that will be discharging untreated effluent directly to Bear Draw. Attached to this letter is a revised water balance, Tables A1 through A8, which accounts for the deletion of Icebox Reservoir and the addition of misters to the remaining ponds. The use of misters eliminates the reliance on channel infiltration loss. Water from the reservoirs will be atomized for enhanced evaporation, and the water will be sprayed over the reservoirs to protect the nearby vegetation, soils, and groundwater. Produced water will be atomized whenever permitted by the weather, including during winter. The atomizers will be placed in the centers of the reservoirs, and no water is expected to reach the ground outside the impounded areas. If water, snow, or ice falls to the land outside the reservoirs, Kennedy will modify the atomizers by changing their locations, water pressures, or nozzles, or by shutting-in the atomizers. The reservoirs will be able to hold 28 wells and 3.15 wells can be contained in Coal Gulch s Federal 5-1 Reservoir, WY , accounting for all thirty one wells associated with this permit. Kennedy has decreased the facility s maximum permitted flow from MGD to MGD; the expected flow per well has been decreased from 50 gpm per well to 27.3 gpm per well, after reevaluating the coal thickness. Infiltration data from Kennedy s nearby Cat Creek facility (WY ) suggest that the average infiltration rate is cfs/mile, based on seven months of monitoring. The data suggest that the infiltration rate is highest during summer and lowest in winter. Based on an infiltration rate of cfs/mile and there being miles of stream channel below Kennedy s outfall, up to 1.3 cfs could be discharge into the channels without the water reaching the Powder River. Kennedy therefore respectfully requests that water be allowed to discharge from the reservoirs in a limited quantity during warm weather. When Kennedy is discharging from the reservoirs, the confluence of Deep Draw and Flying E Creek will monitored; if water reaches this point, discharge from the reservoirs will be stopped. This location is more than 10 miles from the mouth of Flying E Creek. Kennedy will also monitor the channel infiltration rates during discharge to determine if the infiltration rate changes. Kennedy Oil is committed to complying with all effluent limits, self-monitoring and reporting requirements and other conditions of the permit. Kennedy Oil: 2005/03/22, New Option 2 resubmittal, HUC# , Ruby-Flying E CBM Operations, WY , page 1

6 Kennedy Oil March 31, 2005 Ruby Flying E CBM Operations Kennedy Oil appreciates your review and approval at the earliest possible convenience. Sincerely, Tami Henry Kennedy Oil Attachments: Table A1: Reservoir Storage Summary Kennedy Oil Ruby-Flying E CBM Facility Tables A2 through A8: Water Balances for Reservoirs Kennedy Oil: 2005/03/22, New Option 2 resubmittal, HUC# , Ruby-Flying E CBM Operations, WY , page 2

7 Table A1: Reservoir Storage Summary Kennedy Oil - Ruby-Flying E CBM Facility Reservoir Maximum Flow Wells Stored Watershed Outfall Name Legal Location Total Height (ft) Area (ac) Capacity (ac-ft) MGD gpm cfs (# Big George, 27.3 gpm) Area (ac) 10-yr, 24-hr Runoff (ac-ft) 25-yr, 24-hr Runoff (ac-ft) 001, 002 Federal 6-1 T50NR78W6SWSW Federal 7-1 T50NR78W7NESW Federal 8-1 T50NR78W8SWNW Deep Draw #3 T50NR78W8SESW Deep Draw #2 T50NR78W17NWNE State Ruby 16-1 T50NR78W16SWNW Federal 17-1 T50NR78WSESW Totals = Reservoir Infiltration - as determined from 10-month field study in K-Bar field = 29 acre-ft/acre/yr Evaporation (net) - from 45 in. evaporation/yr. and 13.5 in. precipitation/yr. = 1.6 gpm/acre Kennedy well flow rate gpm Kennedy Oil, 2005/ 03/ 31, Ruby-Flying E CBM Operations, New Option 2 resubmittal, HUC# , WY

8 Table A2: Water Balance for Reservoir Federal 6-1 Reservoir: Area at CBM Flow HWL (ac) = 0.52 Capacity at CBM Flow HWL (ac-ft) = 3.6 Wells: Number of Wells = 2.51 Initial Flowrate (gpm) = Time Period Decline Curve (% Production (gpm) Total Flow (gpm) of prev.) April-June ' July-Sept '05 87% Oct-Dec '05 85% Jan-March '06 82% Apr '06-Mar '07 83% Apr '07-Mar '08 50% Apr '08-Mar '09 50% Apr '09-Mar '10 50% Apr '10-Mar '11 50% Apr '11-Mar '12 50% Number of Misters = 1 Rate (gpm) = Water Balance: Maximum Storage (ac-ft) = 3.6 Month CBM Inflow (gallons) CBM Inflow (acre-ft) Pond Evaporation Rate (gpm/acre) Pond Evaporation (gallons) Infiltration 1 (gallons) In Use? Efficiency Evaporation Rate/ Mister (gpm) Pond Mister Evaporation (gallons) Total Losses (gallons) Total Losses (acre-ft) Apr-05 3,006, , ,548 Yes 30% 45 1,971,000 2,401, May-05 3,006, , ,548 Yes 50% 75 3,285,000 3,724, Jun-05 3,006, , ,548 Yes 70% 105 4,599,001 5,045, Jul-05 2,605, , ,548 Yes 80% 120 5,256,001 5,753, Aug-05 2,605, , ,548 Yes 80% 120 5,256,001 5,740, Sep-05 2,605, , ,548 Yes 60% 90 3,942,000 4,388, Oct-05 2,204, , ,548 Yes 50% 75 3,285,000 3,715, Nov-05 2,204, , ,548 Yes 20% 30 1,314,000 1,729, Dec-05 2,204, , ,548 Yes 20% 30 1,314,000 1,727, Jan-06 1,803, , ,548 Yes 20% 30 1,314,000 1,724, Feb-06 1,803, , ,548 Yes 20% 30 1,314,000 1,729, Mar-06 1,803, , ,548 Yes 20% 30 1,314,000 1,736, Apr-06 1,503, , ,548 Yes 30% 45 1,971,000 2,401, May-06 1,503, , ,548 Yes 50% 75 3,285,000 3,724, Jun-06 1,503, , ,548 Yes 70% 105 4,599,001 5,045, Jul-06 1,503, , ,548 Yes 80% 120 5,256,001 5,753, Aug-06 1,503, , ,548 Yes 80% 120 5,256,001 5,740, Sep-06 1,503, , ,548 Yes 60% 90 3,942,000 4,388, Oct-06 1,503, , ,548 Yes 50% 75 3,285,000 3,715, Nov-06 1,503, , ,548 Yes 20% 30 1,314,000 1,729, Dec-06 1,503, , ,548 Yes 20% 30 1,314,000 1,727, Jan-07 1,503, , ,548 Yes 20% 30 1,314,000 1,724, Feb-07 1,503, , ,548 Yes 20% 30 1,314,000 1,729, Mar-07 1,503, , ,548 Yes 20% 30 1,314,000 1,736, Mar-2008* 9,018, ,540 4,914,572 Yes 43% 65 2,825,100 8,077, Mar-2009* 4,509, ,540 4,914,572 Yes 43% 65 2,825,100 8,077, Mar-2010* 2,254, ,540 4,914,572 No 43% 0 0 5,252, Mar-2011* 1,127, ,540 4,914,572 No 43% 0 0 5,252, Mar-2012* ,540 4,914,572 No 43% 0 0 5,252, Reservoir Infiltration - as determined from 10-month field study in K-Bar field = 29 acre-ft/acre/yr * Values in table are for 12 month period Net Inflow (ac-ft) Storage (acre-ft) Kennedy Oil, 2005/ 03/ 31, Ruby-Flying E CBM Operations, New Option 2 resubmittal, HUC# , WY

9 Table A3: Water Balance for Reservoir Federal 7-1 Reservoir: Area at CBM Flow HWL (ac) = 0.24 Capacity at CBM Flow HWL (ac-ft) = 1.8 Wells: Number of Wells = 1.96 Initial Flowrate (gpm) = Time Period Decline Curve (% of prev.) Production (gpm) Total Flow (gpm) April-June ' July-Sept '05 87% Oct-Dec '05 85% Jan-March '06 82% Apr '06-Mar '07 83% Apr '07-Mar '08 50% Apr '08-Mar '09 50% Apr '09-Mar '10 50% Apr '10-Mar '11 50% Apr '11-Mar '12 50% Number of Misters = 1 Rate (gpm) = Water Balance: Maximum Storage (ac-ft) = 1.8 Month CBM Inflow (gallons) CBM Inflow (acre-ft) Pond Evaporation Rate(gpm/acre) Pond Evaporation (gallons) Infiltration 1 (gallons) In Use? Efficiency Evaporation Rate/ Mister (gpm) Pond Mister Evaporation (gallons) Total Losses (gallons) Total Losses (acre-ft) Net Inflow (ac-ft) Storage (acre-ft) Apr-05 2,337, , ,022 Yes 30% 45 1,971,000 2,169, May-05 2,337, , ,022 Yes 50% 75 3,285,000 3,487, Jun-05 2,337, , ,022 Yes 70% 105 4,599,001 4,804, Jul-05 2,026, , ,022 Yes 80% 120 5,256,001 5,485, Aug-05 2,026, , ,022 Yes 80% 120 5,256,001 5,479, Sep-05 2,026, , ,022 Yes 60% 90 3,942,000 4,147, Oct-05 1,714, , ,022 Yes 50% 75 3,285,000 3,483, Nov-05 1,714, , ,022 Yes 20% 30 1,314,000 1,505, Dec-05 1,714, , ,022 Yes 20% 30 1,314,000 1,505, Jan-06 1,402, ,022 Yes 20% 30 1,314,000 1,503, Feb-06 1,402, , ,022 Yes 20% 30 1,314,000 1,505, Mar-06 1,402, , ,022 Yes 20% 30 1,314,000 1,508, Apr-06 1,168, , ,022 Yes 30% 45 1,971,000 2,169, May-06 1,168, , ,022 Yes 50% 75 3,285,000 3,487, Jun-06 1,168, , ,022 Yes 70% 105 4,599,001 4,804, Jul-06 1,168, , ,022 Yes 80% 120 5,256,001 5,485, Aug-06 1,168, , ,022 Yes 80% 120 5,256,001 5,479, Sep-06 1,168, , ,022 Yes 60% 90 3,942,000 4,147, Oct-06 1,168, , ,022 Yes 50% 75 3,285,000 3,483, Nov-06 1,168, , ,022 Yes 20% 30 1,314,000 1,505, Dec-06 1,168, , ,022 Yes 20% 30 1,314,000 1,505, Jan-07 1,168, ,022 Yes 20% 30 1,314,000 1,503, Feb-07 1,168, , ,022 Yes 20% 30 1,314,000 1,505, Mar-07 1,168, , ,022 Yes 20% 30 1,314,000 1,508, Mar-2008* 7,013, ,788 2,268,264 Yes 43% 65 2,825,100 5,249, Mar-2009* 3,506, ,788 2,268,264 Yes 43% 65 2,825,100 5,249, Mar-2010* 1,753, ,788 2,268,264 No 43% 0 0 2,424, Mar-2011* 876, ,788 2,268,264 No 43% 0 0 2,424, Mar-2012* ,788 2,268,264 No 43% 0 0 2,424, Reservoir Infiltration - as determined from 10-month field study in K-Bar field = 29 acre-ft/acre/yr * Values in table are for 12 month period Kennedy Oil, 2005/ 03/ 31, Ruby-Flying E CBM Operations, New Option 2 resubmittal, HUC# , WY

10 Table A4: Water Balance for Reservoir Federal 8-1 Reservoir: Area at CBM Flow HWL (ac) = 0.82 Capacity at CBM Flow HWL (ac-ft) = 5.2 Wells: Number of Wells = 2.95 Initial Flowrate (gpm) = Time Period Decline Curve (% of prev.) Production (gpm) Total Flow (gpm) April-June ' July-Sept '05 87% Oct-Dec '05 85% Jan-March '06 82% Apr '06-Mar '07 83% Apr '07-Mar '08 50% Apr '08-Mar '09 50% Apr '09-Mar '10 50% Apr '10-Mar '11 50% Apr '11-Mar '12 50% Number of Misters = 1 Rate (gpm) = Water Balance: Maximum Storage (ac-ft) = 5.2 Month CBM Inflow (gallons) CBM Inflow (acre-ft) Pond Evaporation Rate (gpm/acre) Pond Evaporation (gallons) Infiltration 1 (gallons) In Use? Efficiency Evaporation Rate/ Mister (gpm) Pond Mister Evaporation (gallons) Total Losses (gallons) Total Losses (acre-ft) Apr-05 3,532, , ,825 Yes 30% 45 1,971,000 2,650, May-05 3,532, , ,825 Yes 50% 75 3,285,000 3,977, Jun-05 3,532, , ,825 Yes 70% 105 4,599,001 5,302, Jul-05 3,061, , ,825 Yes 80% 120 5,256,001 6,039, Aug-05 3,061, , ,825 Yes 80% 120 5,256,001 6,019, Sep-05 3,061, , ,825 Yes 60% 90 3,942,000 4,645, Oct-05 2,590, , ,825 Yes 50% 75 3,285,000 3,964, Nov-05 2,590, , ,825 Yes 20% 30 1,314,000 1,968, Dec-05 2,590, , ,825 Yes 20% 30 1,314,000 1,966, Jan-06 2,119, , ,825 Yes 20% 30 1,314,000 1,961, Feb-06 2,119, , ,825 Yes 20% 30 1,314,000 1,968, Mar-06 2,119, , ,825 Yes 20% 30 1,314,000 1,979, Apr-06 1,766, , ,825 Yes 30% 45 1,971,000 2,650, May-06 1,766, , ,825 Yes 50% 75 3,285,000 3,977, Jun-06 1,766, , ,825 Yes 70% 105 4,599,001 5,302, Jul-06 1,766, , ,825 Yes 80% 120 5,256,001 6,039, Aug-06 1,766, , ,825 Yes 80% 120 5,256,001 6,019, Sep-06 1,766, , ,825 Yes 60% 90 3,942,000 4,645, Oct-06 1,766, , ,825 Yes 50% 75 3,285,000 3,964, Nov-06 1,766, , ,825 Yes 20% 30 1,314,000 1,968, Dec-06 1,766, , ,825 Yes 20% 30 1,314,000 1,966, Jan-07 1,766, , ,825 Yes 20% 30 1,314,000 1,961, Feb-07 1,766, , ,825 Yes 20% 30 1,314,000 1,968, Mar-07 1,766, , ,825 Yes 20% 30 1,314,000 1,979, Mar-2008* 10,598, ,275 7,749,902 Yes 43% 65 2,825,100 11,107, Mar-2009* 5,299, ,275 7,749,902 No 43% 0 0 8,282, Mar-2010* 2,649, ,275 7,749,902 No 43% 0 0 8,282, Mar-2011* 1,324, ,275 7,749,902 No 43% 0 0 8,282, Mar-2012* ,275 7,749,902 No 43% 0 0 8,282, termined from 10-month field study in K-Bar field = 29 acre-ft/acre/yr in table are for 12 month period Net Inflow (ac-ft) Storage (acre-ft) Kennedy Oil, 2005/ 03/ 31, Ruby-Flying E CBM Operations, New Option 2 resubmittal, HUC# , WY

11 Table A5: Water Balance for Reservoir Deep Draw 3 Reservoir: Area at CBM Flow HWL (ac) = 3.00 Capacity at CBM Flow HWL (ac-ft) = 19.4 Wells: Number of Wells = 6.17 Initial Flowrate (gpm) = Time Period Decline Curve Production (gpm) (% of prev.) Total Flow (gpm) April-June ' July-Sept '05 87% Oct-Dec '05 85% Jan-March '06 82% Apr '06-Mar '07 83% Apr '07-Mar '08 50% Apr '08-Mar '09 50% Apr '09-Mar '10 50% Apr '10-Mar '11 50% Apr '11-Mar '12 50% Number of Misters = 1 Rate (gpm) = Water Balance: Maximum Storage (ac-ft) = 19.4 Month CBM Inflow (gallons) CBM Inflow (acre-ft) Pond Pond Evaporation Evaporation Rate (gallons) (gpm/acre) Infiltration 1 (gallons) In Use? Efficiency Evaporation Rate/ Mister (gpm) Pond Mister Evaporation (gallons) Total Losses (gallons) Total Losses (acre-ft) Apr-05 7,372, ,202 2,362,775 Yes 30% 45 1,971,000 4,455, May-05 7,372, ,820 2,362,775 Yes 50% 75 3,285,000 5,818, Jun-05 7,372, ,554 2,362,775 Yes 70% 105 4,599,001 7,173, Jul-05 6,389, ,576 2,362,775 Yes 80% 120 5,256,001 8,123, Aug-05 6,389, ,306 2,362,775 Yes 80% 120 5,256,001 8,051, Sep-05 6,389, ,554 2,362,775 Yes 60% 90 3,942,000 6,516, Oct-05 5,406, ,202 2,362,775 Yes 50% 75 3,285,000 5,769, Nov-05 5,406, ,850 2,362,775 Yes 20% 30 1,314,000 3,709, Dec-05 5,406, ,966 2,362,775 Yes 20% 30 1,314,000 3,701, Jan-06 4,423, ,884 2,362,775 Yes 20% 30 1,314,000 3,684, Feb-06 4,423, ,850 2,362,775 Yes 20% 30 1,314,000 3,709, Mar-06 4,423, ,584 2,362,775 Yes 20% 30 1,314,000 3,750, Apr-06 3,686, ,202 2,362,775 Yes 30% 45 1,971,000 4,455, May-06 3,686, ,820 2,362,775 Yes 50% 75 3,285,000 5,818, Jun-06 3,686, ,554 2,362,775 Yes 70% 105 4,599,001 7,173, Jul-06 3,686, ,576 2,362,775 Yes 80% 120 5,256,001 8,123, Aug-06 3,686, ,306 2,362,775 Yes 80% 120 5,256,001 8,051, Sep-06 3,686, ,554 2,362,775 Yes 60% 90 3,942,000 6,516, Oct-06 3,686, ,202 2,362,775 Yes 50% 75 3,285,000 5,769, Nov-06 3,686, ,850 2,362,775 Yes 20% 30 1,314,000 3,709, Dec-06 3,686, ,966 2,362,775 Yes 20% 30 1,314,000 3,701, Jan-07 3,686, ,884 2,362,775 Yes 20% 30 1,314,000 3,684, Feb-07 3,686, ,850 2,362,775 Yes 20% 30 1,314,000 3,709, Mar-07 3,686, ,584 2,362,775 Yes 20% 30 1,314,000 3,750, Mar-2008* 22,117, ,947,348 28,353,300 Yes 43% 65 2,825,100 33,125, Mar-2009* 11,058, ,947,348 28,353,300 7 months 43% ,300, Mar-2010* 5,529, ,947,348 28,353,300 7 months 43% ,300, Mar-2011* 2,764, ,947,348 28,353,300 7 months 43% ,300, Mar-2012* ,947,348 28,353,300 7 months 43% ,300, Reservoir Infiltration - as determined from 10-month field study in K-Bar field = 29 acre-ft/acre/yr * Values in table are for 12 month period Net Inflow (ac-ft) Storage (acre-ft) Kennedy Oil, 2005/ 03/ 31, Ruby-Flying E CBM Operations, New Option 2 resubmittal, HUC# , WY

12 Table A6: Water Balance for Reservoir Deep Draw #2 Reservoir: Area at CBM Flow HWL (ac) = 2.78 Capacity at CBM Flow HWL (ac-ft) = 11.2 Wells: Number of Wells = 5.41 Initial Flowrate (gpm) = Time Period Decline Curve (% Production (gpm) of prev.) Total Flow (gpm) April-June ' July-Sept. '05 87% Oct-Dec '05 85% Jan-March '06 82% Apr '06-Mar '07 83% Apr '07-Mar '08 50% Apr '08-Mar '09 50% Apr '09-Mar '10 50% Apr '10-Mar '11 50% Apr '11-Mar '12 50% Number of Misters = 1 Rate (gpm) = Water Balance: Maximum Storage (ac-ft) = 11.2 Month CBM Inflow (gallons) CBM Inflow (acre-ft) Pond Evaporation Rate(gpm/acre) Pond Evaporation (gallons) Infiltration 1 (gallons) In Use? Efficiency Evaporation Rate/ Mister (gpm) Pond Mister Evaporation (gallons) Total Losses (gallons) Total Losses (acre-ft) Apr-05 6,468, ,241 2,189,505 Yes 30% 45 1,971,000 4,273, May-05 6,468, ,293 2,189,505 Yes 50% 75 3,285,000 5,632, Jun-05 6,468, ,040 2,189,505 Yes 70% 105 4,599,001 6,984, Jul-05 5,606, ,574 2,189,505 Yes 80% 120 5,256,001 7,913, Aug-05 5,606, ,604 2,189,505 Yes 80% 120 5,256,001 7,846, Sep-05 5,606, ,040 2,189,505 Yes 60% 90 3,942,000 6,327, Oct-05 4,743, ,241 2,189,505 Yes 50% 75 3,285,000 5,587, Nov-05 4,743, ,441 2,189,505 Yes 20% 30 1,314,000 3,533, Dec-05 4,743, ,135 2,189,505 Yes 20% 30 1,314,000 3,526, Jan-06 3,881, ,306 2,189,505 Yes 20% 30 1,314,000 3,510, Feb-06 3,881, ,441 2,189,505 Yes 20% 30 1,314,000 3,533, Mar-06 3,881, ,188 2,189,505 Yes 20% 30 1,314,000 3,571, Apr-06 3,234, ,241 2,189,505 Yes 30% 45 1,971,000 4,273, May-06 3,234, ,293 2,189,505 Yes 50% 75 3,285,000 5,632, Jun-06 3,234, ,040 2,189,505 Yes 70% 105 4,599,001 6,984, Jul-06 3,234, ,574 2,189,505 Yes 80% 120 5,256,001 7,913, Aug-06 3,234, ,604 2,189,505 Yes 80% 120 5,256,001 7,846, Sep-06 3,234, ,040 2,189,505 Yes 60% 90 3,942,000 6,327, Oct-06 3,234, ,241 2,189,505 Yes 50% 75 3,285,000 5,587, Nov-06 3,234, ,441 2,189,505 Yes 20% 30 1,314,000 3,533, Dec-06 3,234, ,135 2,189,505 Yes 20% 30 1,314,000 3,526, Jan-07 3,234, ,306 2,189,505 Yes 20% 30 1,314,000 3,510, Feb-07 3,234, ,441 2,189,505 Yes 20% 30 1,314,000 3,533, Mar-07 3,234, ,188 2,189,505 Yes 20% 30 1,314,000 3,571, Mar-2008* 19,406, ,804,543 26,274,058 No 43% ,078, Mar-2009* 9,703, ,804,543 26,274,058 No 43% ,078, Mar-2010* 4,851, ,804,543 26,274,058 No 43% ,078, Mar-2011* 2,425, ,804,543 26,274,058 No 43% ,078, Mar-2012* ,804,543 26,274,058 No 43% ,078, Reservoir Infiltration - as determined from 10-month field study in K-Bar field = 29 acre-ft/acre/yr * Values in table are for 12 month period Net Inflow (ac-ft) Storage (acre-ft) Kennedy Oil, 2005/ 03/ 31, Ruby-Flying E CBM Operations, New Option 2 resubmittal, HUC# , WY

13 Table A7: Water Balance for Reservoir State Ruby 16-1 Reservoir: Area at CBM Flow HWL (ac) = 3.18 Capacity at CBM Flow HWL (ac-ft) = 17.3 Wells: Number of Wells = 6.26 Initial Flowrate (gpm) = Time Period Decline Curve Production (gpm) (% of prev.) Total Flow (gpm) April-June ' July-Sept '05 87% Oct-Dec '05 85% Jan-March '06 82% Apr '06-Mar '07 83% Apr '07-Mar '08 50% Apr '08-Mar '09 50% Apr '09-Mar '10 50% Apr '10-Mar '11 50% Apr '11-Mar '12 50% Number of Misters = 1 Rate (gpm) = Water Balance: Maximum Storage (ac-ft) = 17.3 Month CBM Inflow (gallons) CBM Inflow (acre-ft) Pond Evaporation Rate (gpm/acre) Pond Evaporation (gallons) Infiltration 1 (gallons) In Use? Efficiency Evaporation Rate/ Mister (gpm) Pond Mister Evaporation (gallons) Total Losses (gallons) Total Losses (acre-ft) Apr-05 7,490, ,534 2,504,542 Yes 30% 45 1,971,000 4,605, May-05 7,490, ,069 2,504,542 Yes 50% 75 3,285,000 5,970, Jun-05 7,490, ,247 2,504,542 Yes 70% 105 4,599,001 7,327, Jul-05 6,492, ,851 2,504,542 Yes 80% 120 5,256,001 8,295, Aug-05 6,492, ,244 2,504,542 Yes 80% 120 5,256,001 8,218, Sep-05 6,492, ,247 2,504,542 Yes 60% 90 3,942,000 6,670, Oct-05 5,493, ,534 2,504,542 Yes 50% 75 3,285,000 5,919, Nov-05 5,493, ,821 2,504,542 Yes 20% 30 1,314,000 3,853, Dec-05 5,493, ,464 2,504,542 Yes 20% 30 1,314,000 3,845, Jan-06 4,494, ,357 2,504,542 Yes 20% 30 1,314,000 3,826, Feb-06 4,494, ,821 2,504,542 Yes 20% 30 1,314,000 3,853, Mar-06 4,494, ,999 2,504,542 Yes 20% 30 1,314,000 3,896, Apr-06 3,745, ,534 2,504,542 Yes 30% 45 1,971,000 4,605, May-06 3,745, ,069 2,504,542 Yes 50% 75 3,285,000 5,970, Jun-06 3,745, ,247 2,504,542 Yes 70% 105 4,599,001 7,327, Jul-06 3,745, ,851 2,504,542 Yes 80% 120 5,256,001 8,295, Aug-06 3,745, ,244 2,504,542 Yes 80% 120 5,256,001 8,218, Sep-06 3,745, ,247 2,504,542 Yes 60% 90 3,942,000 6,670, Oct-06 3,745, ,534 2,504,542 Yes 50% 75 3,285,000 5,919, Nov-06 3,745, ,821 2,504,542 Yes 20% 30 1,314,000 3,853, Dec-06 3,745, ,464 2,504,542 Yes 20% 30 1,314,000 3,845, Jan-07 3,745, ,357 2,504,542 Yes 20% 30 1,314,000 3,826, Feb-07 3,745, ,821 2,504,542 Yes 20% 30 1,314,000 3,853, Mar-07 3,745, ,999 2,504,542 Yes 20% 30 1,314,000 3,896, Mar-2008* 22,472, ,064,189 30,054,498 7 months 43% ,118, Mar-2009* 11,236, ,064,189 30,054,498 7 months 43% ,118, Mar-2010* 5,618, ,064,189 30,054,498 7 months 43% ,118, Mar-2011* 2,809, ,064,189 30,054,498 7 months 43% ,118, Mar-2012* ,064,189 30,054,498 7 months 43% ,118, Reservoir Infiltration - as determined from 10-month field study in K-Bar field = 29 acre-ft/acre/yr * Values in table are for 12 month period Net Inflow (ac-ft) Storage (acre-ft) Kennedy Oil, 2005/ 03/ 31, Ruby-Flying E CBM Operations, New Option 2 resubmittal, HUC# , WY

14 Table A8: Water Balance for Reservoir Federal 17-1 Reservoir: Area at CBM Flow HWL (ac) = 0.87 Capacity at CBM Flow HWL (ac-ft) = 6.0 Wells: Number of Wells = 3.07 Initial Flowrate (gpm) = Time Period Decline Curve (% of prev.) Production (gpm) Total Flow (gpm) April-June ' July-Sept '05 87% Oct-Dec '05 85% Jan-March '06 82% Apr '06-Mar '07 83% Apr '07-Mar '08 50% Apr '08-Mar '09 50% Apr '09-Mar '10 50% Apr '10-Mar '11 50% Apr '11-Mar '12 50% Number of Misters = 1 Rate (gpm) = Water Balance: Maximum Storage (ac-ft) = 6.0 Month CBM Inflow (gallons) CBM Inflow (acre-ft) Pond Evaporation Rate (gpm/acre) Pond Evaporation (gallons) Infiltration 1 (gallons) In Use? Efficiency Evaporation Rate/ Mister (gpm) Pond Mister Evaporation (gallons) Total Losses (gallons) Total Losses (acre-ft) Apr-05 3,670, , ,205 Yes 30% 45 1,971,000 2,691, May-05 3,670, , ,205 Yes 50% 75 3,285,000 4,019, Jun-05 3,670, , ,205 Yes 70% 105 4,599,001 5,345, Jul-05 3,181, , ,205 Yes 80% 120 5,256,001 6,087, Aug-05 3,181, , ,205 Yes 80% 120 5,256,001 6,066, Sep-05 3,181, , ,205 Yes 60% 90 3,942,000 4,688, Oct-05 2,692, , ,205 Yes 50% 75 3,285,000 4,005, Nov-05 2,692, , ,205 Yes 20% 30 1,314,000 2,008, Dec-05 2,692, , ,205 Yes 20% 30 1,314,000 2,006, Jan-06 2,202, , ,205 Yes 20% 30 1,314,000 2,001, Feb-06 2,202, , ,205 Yes 20% 30 1,314,000 2,008, Mar-06 2,202, , ,205 Yes 20% 30 1,314,000 2,020, Apr-06 1,835, , ,205 Yes 30% 45 1,971,000 2,691, May-06 1,835, , ,205 Yes 50% 75 3,285,000 4,019, Jun-06 1,835, , ,205 Yes 70% 105 4,599,001 5,345, Jul-06 1,835, , ,205 Yes 80% 120 5,256,001 6,087, Aug-06 1,835, , ,205 Yes 80% 120 5,256,001 6,066, Sep-06 1,835, , ,205 Yes 60% 90 3,942,000 4,688, Oct-06 1,835, , ,205 Yes 50% 75 3,285,000 4,005, Nov-06 1,835, , ,205 Yes 20% 30 1,314,000 2,008, Dec-06 1,835, , ,205 Yes 20% 30 1,314,000 2,006, Jan-07 1,835, , ,205 Yes 20% 30 1,314,000 2,001, Feb-07 1,835, , ,205 Yes 20% 30 1,314,000 2,008, Mar-07 1,835, , ,205 Yes 20% 30 1,314,000 2,020, Mar-2008* 11,012, ,731 8,222,457 Yes 43% 65 2,825,100 11,612, Mar-2009* 5,506, ,731 8,222,457 7 months 43% 0 0 8,787, Mar-2010* 2,753, ,731 8,222,457 7 months 43% 0 0 8,787, Mar-2011* 1,376, ,731 8,222,457 7 months 43% 0 0 8,787, Mar-2012* ,731 8,222,457 7 months 43% 0 0 8,787, Reservoir Infiltration - as determined from 10-month field study in K-Bar field = 29 acre-ft/acre/yr * Values in table are for 12 month period Net Inflow (ac-ft) Storage (acre-ft) Kennedy Oil, 2005/ 03/ 31, Ruby-Flying E CBM Operations, New Option 2 resubmittal, HUC# , WY

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

68

69

70

71

72

73

74

75

76 Jackie Dice - WDEQ Response 4_18_05 WY doc Page 1 April 22, 2005 Ms. Kathy Shreve Wyoming Department of Environmental Quality NPDES Permit Section 122 W. 25 th Street Herschler Building 4W Cheyenne, WY Subject: Response to Complete but Technically Inadequate Letter, April 18, 2005 Kennedy Oil Company NPDES Discharge Permit Application, Ruby Flying E CBM Operations, WY Powder River Watershed, Johnson County Dear Ms. Shreve: Kennedy Oil (Kennedy) would like to respond to your letter that lists technical inadequacies, dated April 18, The letter s concern was regarding the use of the Icebox Reservoir, which is below discharge points proposed by Lance Oil and Gas: This facility is proposing to utilize containment on a stretch of Bear Draw already proposed for utilization by Lance Oil and Gas. The Lance proposal (WYO052639) has been advertised in public notice with requirements that will allow direct discharge of up to 1.29 MGD of treated effluent in the NENE, Section 18, Township 50 North, Range 78 West, above the "Icebox" reservoir proposed for partial containment of discharges at this facility. As such, it appears that this channel segment, including the Icebox reservoir, is already being utilized for channel and reservoir infiltrative losses. Kennedy could construct a bypass around the "Icebox" reservoir capable of diverting 1.29 MGD (Lance's flow) around the reservoir, thus avoiding comingling, or Kennedy could relocate these outfalls (010,011, and 012) and the associated reservoir to a different portion of Bear Draw above Lance's outfall. Kennedy intends to build a bypass around the Icebox reservoir; it has been designed to divert Lance s flow, 1.29 MGD (2.0 cfs), and runoff from minor storm events past the reservoir. The bypass facility will consist of a triangular ditch around the reservoir. The ditch will flow into a 12 pipe for the water to pass through the embankment. With the addition of the bypass, Kennedy feels the recently submitted water balance is still valid. That application requested a permit flow limit of MGD. Infiltration data from Kennedy s nearby Cat Creek facility (WY ) suggest that the average infiltration rate is cfs/mile, based on seven months of monitoring. The data suggest that the infiltration rate is highest during summer and lowest in winter. Based on an infiltration rate of cfs/mile in the lower reaches of Cat Creek, between Coyer Draw and the mouth of Cat Creek, and there being miles of stream channel below Kennedy s outfall, up to 1.3 cfs could be discharged into the channels without the water reaching the Powder River. Kennedy therefore respectfully requests that water be allowed to discharge from the reservoirs in a limited quantity during warm weather. When Kennedy is discharging from the reservoirs, the confluence of Deep Draw and Flying E Creek will monitored, as well as a flow monitoring point (FMP) immediately above Lance s treatment facility. If CBM flow from Kennedy s operations is observed at either FMP, discharge from the reservoirs will be stopped immediately. The FMPs are listed in the attached Table 1, and they are shown on the revised Map 1. The mouth of Deep Draw is more than 10 miles from the mouth of Flying E Creek. There are a total of 5.56 miles of stream channel between the proposed outfalls and the FMPs; using the observed infiltration rate of cfs/mile, cfs can be discharged from the reservoirs without the CBM water commingling with Lance s treated water, or the water in Flying E Creek. This extra capacity for water disposal was not included in the MGD permit limit to be conservative. Kennedy will also monitor the channel infiltration rates during discharge to determine if the infiltration rate changes. Kennedy Oil: 2005/04/22, New Option 2 resubmittal, HUC# , Ruby-Flying E CBM Operations, WY , page 1

77 Jackie Dice - WDEQ Response 4_18_05 WY doc Page 2 Kennedy Oil April 22, 2005 Ruby Flying E CBM Operations Kennedy Oil is committed to complying with all effluent limits, self-monitoring and reporting requirements and other conditions of the permit. Kennedy Oil appreciates your review and approval at the earliest possible convenience. Sincerely, Tami Henry Kennedy Oil Attachments: Table 1: Outfall Information Map 1: Ruby-Flying E CBM Operations Kennedy Oil: 2005/04/22, New Option 2 resubmittal, HUC# , Ruby-Flying E CBM Operations, WY , page 2

78 Jackie Dice - Table 1- Bear Draw 4_18_05.xls Page 1 Discharge Point #(Outfall) Immediate Receiving Stream Mainstem Distance from outfall to mainstem (stream miles) Q/Q Sec Tnp Rng Latitude Longitude County Reservoir Permit Application Submitted to SEO? SEO Reservoir Permit #** Reservoir Nam 001 UT to Bear Draw Powder River SWSW 6 T50N R78W Johnson Yes 32/6/76S Federal UT to Bear Draw Powder River SWSW 6 T50N R78W Johnson Yes 32/6/76S Federal Bear Draw Powder River NESW 7 T50N R78W Johnson Yes 32/2/76S Federal Bear Draw Powder River SWSE 7 T50N R78W Johnson Yes P6275R Icebox 005 Deep Draw Powder River SWNW 8 T50N R78W Johnson Yes 32/1/77S Federal Deep Draw Powder River SESW 8 T50N R78W Johnson Yes 32/6/75S Deep Draw #3 008 Deep Draw Powder River NWNE 17 T50N R78W Johnson Yes 32/5/75S Deep Draw #2 009 Bear Draw Powder River SENE 17 T50N R78W Johnson Yes 32/4/76S State Ruby Bear Draw Powder River SESW 17 T50N R78W Johnson Yes P6275R Icebox 011 Bear Draw Powder River SWSE 17 T50N R78W Johnson Yes P6275R Icebox 012 UT to Bear Draw Powder River SWSW 17 T50N R78W Johnson Yes 32/5/76S Federal 17-1 * Reservoir applications are being submitted concurrently. ** SEO Reservoir Permit #s will be submitted when they become available Flow Monitoring Points FMP-Bear Bear Draw Powder River NENE 18 T50N R78W Johnson Bear Draw above Lan FMP-Deep Deep Draw Powder River NENW 21 T50N R78W Johnson Deep Draw Water Quality Monitoring Stations TRIB Flying E Creek Powder River 1.06 NWSE 29 T50N R77W Johnson Flying E Creek at Po UPRS Powder River Powder River NA NENE 32 T50N R77W Johnson Powder River above DPRS Powder River Powder River NA SWNW 28 T50N R77W Johnson Powder River below U.T. - Unnamed Tributary

79 Jackie Dice - Table 1- Bear Draw 4_18_05.xls Page 2 TOWNSHIP RANGE SEC. API NUMBER 1/4 1/4 DISCHARGE POINT-001 T50N R78W 6 SW/SW DISCHARGE POINT-002 T50N R78W 6 SW/SW DISCHARGE POINT-003 T50N R78W 7 NE/SW DISCHARGE POINT-004 T50N R78W 7 SW/SE DISCHARGE POINT-005 T50N R78W 8 SW/NW DISCHARGE POINT-006 T50N R78W 8 NW/NE DISCHARGE POINT-007 T50N R78W 8 SE/SW DISCHARGE POINT-008 T50N R78W 17 NW/NE DISCHARGE POINT-009 T50N R78W 17 NW/SW DISCHARGE POINT-010 T50N R78W 17 SE/SW DISCHARGE POINT-011 T50N R78W 17 SW/SE DISCHARGE POINT-012 T50N R78W 17 SW/SW DISCHARGE POINT-013 T50N R78W 18 SE/SW

80 Jackie Dice - Table 1- Bear Draw 4_18_05.xls Page 3 LATITUDE LONGITUDE FORMATION WELL DEPTH RECEIVING STREAM OUTFALL

81 Jackie Dice - Table 1- Bear Draw 4_18_05.xls Page 4 TOWNSHIP RANGE SEC. API NUMBER 1/4 1/4 DISCHARGE POINT-001 T50N R78W 6 SW/SW CW Fed 12-7 T50N R78W SW/NW CW Fed 21-7 T50N R78W NE/NW CW Fed 34-6 T50N R78W SW/SE DISCHARGE POINT-002 T50N R78W 6 SW/SW CW Fed 14-6 T50N R78W SW/SW DISCHARGE POINT-003 T50N R78W 7 NE/SW CW Fed 14-7 T50N R78W SW/SW CW Fed 23-7 T50N R78W NE/SW DISCHARGE POINT-004 T50N R78W 7 SW/SE CW Fed 32-7 T50N R78W SW/NE CW Fed 34-7 T50N R78W SW/SE CW Fed 43-7 T50N R78W NE/SE DISCHARGE POINT-005 T50N R78W 8 SW/NW CW Fed 12-8 T50N R78W SW/NW CW Fed 14-5 T50N R78W SW/SW CW Fed 41-7 T50N R78W NE/NE DISCHARGE POINT-006 T50N R78W 8 NW/NE CW Fed 21-8 T50N R78W NE/NW CW Fed 32-8 T50N R78W SW/NE CW Fed 34-5 T50N R78W SW/SE DISCHARGE POINT-007 T50N R78W 8 SE/SW CW Fed 23-8 T50N R78W NE/SW DISCHARGE POINT-008 T50N R78W 17 NW/NE CW Fed 14-8 T50N R78W SW/SW CW Fed T50N R78W NE/NW CW Fed T50N R78W SW/NE CW Fed T50N R78W NE/SE DISCHARGE POINT-009 T50N R78W 17 NW/SW CW Fed 34-8 T50N R78W SW/SE CW Fed T50N R78W NE/NE CW Fed 43-8 T50N R78W NE/SE DISCHARGE POINT-010 T50N R78W 17 SE/SW CW Fed T50N R78W SW/NW CW Fed T50N R78W NE/SW DISCHARGE POINT-011 T50N R78W 17 SW/SE CW Fed T50N R78W SW/SE DISCHARGE POINT-012 T50N R78W 17 SW/SW CW Fed T50N R78W SW/SW CW Fed T50N R78W SW/SE CW Fed T50N R78W NE/SE DISCHARGE POINT-013 T50N R78W 18 SE/SW CW Fed T50N R78W SW/SW CW Fed T50N R78W NE/SW

82 Jackie Dice - Table 1- Bear Draw 4_18_05.xls Page 5 LATITUDE LONGITUDE FORMATION WELL DEPTH RECEIVING STREAM OUTFALL BIG GEORGE 1,850 FT BIG GEORGE 2,045 FT BIG GEORGE 2,000 FT BIG GEORGE 2,080 FT BIG GEORGE 1,870 FT BIG GEORGE 1,850 FT BIG GEORGE 1,970 FT BIG GEORGE 1,820 FT BIG GEORGE 1,965 FT BIG GEORGE 1,925 FT BIG GEORGE 2,110 FT BIG GEORGE 1,950 FT BIG GEORGE 1,965 FT BIG GEORGE 1,920 FT BIG GEORGE 2,100 FT BIG GEORGE 1,920 FT BIG GEORGE 1,860 FT BIG GEORGE 1,845 FT BIG GEORGE 1,790 FT BIG GEORGE 1,755 FT BIG GEORGE 1,860 FT BIG GEORGE 1,785 FT BIG GEORGE 1,870 FT BIG GEORGE 1,820 FT BIG GEORGE 1,790 FT BIG GEORGE 1,740 FT BIG GEORGE 1,785 FT BIG GEORGE 1,925 FT BIG GEORGE 1,770 FT BIG GEORGE 1,990 FT BIG GEORGE 1,995 FT.

83