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Home My WebLink AboutAEO 009 r---, ,.--. STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 Re: THE REQUEST OF Marathon OIL COMPANY for an Aquifer Exemption Order for the Sterling Unit 43-9 well, Sec.9, T5N, RI0W, Seward Meridian, Kenai Peninsula. ) Aquifer Exemption Order No.9 ) ) ) ) Sterling Formation Sterling Unit Well 43-9 April 3, 2003 IT APPEARING THAT: 1. Marathon Oil Company ("Marathon") submitted an application, dated October 17, 2002, requesting that the Alaska Oil and Gas Conservation Commission ("Commission") issue an aquifer exemption for aquifers below a depth of 1750 feet for purposes of Class II disposal in the Sterling Unit 43-9 Well. Additional information requested by the Commission was received on January 24, 2003. Notice of opportunity for a public hearing was published in the Anchorage Daily News on February 7,2003 in accordance with 20 AAC 25.540. The Commission did not receive any protest or request for a public hearing. The Commission has jurisdiction in this matter under AS 31.05.030(h), 20 AAC 25.440, and 40 CFR 147, Subpart C - Alaska. The Commission submitted a copy of Marathon's Aquifer Exemption application to the U.S. Environmental Protection Agency, Region 10, ("EPA Region 10") on February 25, 2003, in accordance with Section 14 of the November 22, 1991 Memorandum of Agreement between EP A Region 10 and the Commission. In correspondence dated March 10, the Commission was advised that EP A Region 10 did not object to the proposed aquifer exemption order for the Sterling Unit and that the exemption is considered a minor modification of the Commission's program for the regulation of Class II injection wells under Section 1425 of the Safe Drinking Water Act as defined by Underground Injection Control (VIC) Program Guidance 34 and 40 CFR 145.32. 2. 3. 4. 5. 6. ~ Aquifer Exemption Order, Sterling Unit 43-9 April 3, 2003 ,~ Page 2 of 6 FIND IN GS : 1. Well Location and Facility Description The Sterling Gas Field Unit ("SGFU") is located on the Kenai Peninsula approximately six miles east of the city of Kenai and three miles north of the city of Soldotna. The 3,600-acre SGFU has produced gas from five completions since its discovery in 1961. In addition, a 268 foot deep water well exists in the SGFU to support drilling operations. Current production operations occur only at the Sterling Unit 43-9 Pad, which represents approximately 4.1 acres of the 3600-acre unit, or just over 0.1 percent of the area derIDed by the SGFU. Beginning in October 2000, gas production became intermittent due to the inability of wells to unload and dispose of water. Table 1 summarizes the current status of the SGFU. Table 1. Sterling Gas Field Unit 12/2001 12/200 Current First Final Perforated Perforated Cum 1 Cum Current Rate Well Prod. Prod. Interval Interval Gas Water Status MMCFG Date Date MD SSTVD MMCF MBO PD G SU 32-9 Marc Activ Sterling B-4 Sterling B-4 407 0.13 Active 1.0 h e (5,679' - 5,686') (5,013' 1999 5,019') SU 43-9 Oct. Feb. Sterling B-4 Sterling B-4 2,165 2.75 SI due 0 1966 1998 (5,262' - 5,272') (5,026' to water 5,036') SU 23-15 May Oct. Sterling B-4 Sterling B-4 379 NA Suspend 0 1962 1966 (5,250' - 5,254') (5,028' 5,032') SU 41- April Activ Beluga Beluga 53 0.37 Active 0.2 15S 1999 e (9,440' - (7,678' 10,026') 8,099') SU 41- April April Tyonek Tyonek 145 0.62 SI due 0 15L 1999 2001 (10,942' - (8,828' to water 11,331') 9,164') 2. Geology and Groundwater Hydrology The geologic column on the Kenai Peninsula includes clastic rocks of Quaternary through Tertiary ages that lie unconformably on top of Mesozoic Age basement rocks. Glacial Pleistocene shallow sand and gravel reservoirs serve as underground ,-" Aquifer Exemption Order ~ Sterling Unit 43-9 April 3, 2003 ~ Page 3 of 6 sources of drinking water for much of the Kenai Peninsula and are typically 750 feet thick. These fresh water aquifers are 830 feet thick in the Sterling Unit. The value of this aquifer system has long been recognized and oil and gas exploratory and production wells on the Kenai Peninsula have been cased and cemented across this freshwater zone during drilling operations to avoid any possibility of contamination. Below the freshwater zone lies the Kenai Group that includes a series of reservoir and non-reservoir lacustrine and fluvial-derived rocks. Regionally, hydrocarbons are produced in commercial quantities from 3,000 feet to 12,500 feet subsea in Kenai Group sandstone reservoirs. Specifically in the SGFU, gas is produced from the Sterling, Beluga, and Tyonek Formations within the Kenai Group between 5,000 and 9,200 feet subsea. Mud logs from SGFU wells demonstrate that non-commercial hydrocarbon gas shows are common throughout the three formations. 3. Formation Water Salinity The vintage of the data and the log suite acquired in the Sterling Unit 43-9 Well limit the salinity control to SP calculations and a produced water sample. Fortunately the SP curve in the subject well appears to be of good quality. In evaluating the application, the Commission has calculated salinities using generally more conservative constraints than Marathon. The results are summarized in the graph below. In general the AOGCC estimate will provide a lower bound, but in several spots the two techniques generate equivalent results. These are intervals with blocky responses over more than ten feet and include the water sample interval. Both methods are compatible with instructions on the appropriate methodology to calculate formation water salinities described in EP A guidance document "Survey of Methods to Determine Total Dissolved Solids Concentrations", (KEDA Project No. 30-956). ,~ Aquifer Exemption Order - Sterling Unit 43-9 April 3, 2003 ~ Page 4 of 6 Sterling Unit 43-9: Calculated TDS Concentration (EPA SP Method) vs Measured Depth 18000 12000 - I Legend I TDS Values 18000 ' 14000 AOGCC ~ Marathon 10000 TDS (ppm) 8000 . ------- Water Sample <!J 8000 0 1000 1500 2000 2500 3000 3500 4000 Menured Depth (Ft) 4500 5000 -- KU':>OW"'."""" , ,..., 5262'-5272' MD, 1931 """ TOS ,""""" Noel",""" 4000 2000 Salinity trends discussed here will be taken from the more conservative Commission generated values. The following generalities apply to the Sterling Unit Well No. 43-9 salinities: 1) Drinking water in the area comes from glacial sediments that are roughly 750'+ thick in this vicinity. 2) The 1750'-3750' measured depth (MD) interval contains intervals with relatively high calculated TDS concentrations generally in the 8,000 to 10,000 ppm range. 3) The boundary at 3750'md appears to be sharp and is evident on both sp and resistivity curves. 4) The 3,750'-4100' md interval reservoirs contain water with salinities greater than 3,000 ppm. 5) From 4,100' md. to 5500' md reservoirs with less than 3,000 ppm can be present. 4. Unsuitability of SGFU Kenai Group Sediments as Aquifers Regulation 20 AAC 25.440 (a)(1)(B)"Freshwater Aquifer Exemption" provides that the AOGCC can grant a aquifer exemption regardless of salinity if the aquifer "is situated at a depth or location that makes recovery of water for drinking purposes economically or technologically impractical". The formation waters of less than 3,000 ppm TDS in the vicinity of the Sterling Unit 43-9 well, are situated at uneconomic depths. Aquifers below approximately 1,750 feet in the SGFU are unsuited for use as sources of drinking water for the following reasons. First, the area has plentiful groundwater available from surface to approximately 750 feet depth. Data available on water wells ~ Aquifer Exemption Order :. Sterling Unit 43-9 April 3, 2003 ~, Page 5 of 6 in the vicinity demonstrate that a majority of water wells are only 100 feet deep and the deepest well in the vicinity (T5N, RlOW) is 451 feet. Table 2. Water Well Depth Within Within % mile of the Depth of Within T5N R10W SM, SU 43-9 well location Well in ft. T5N R10W SM Adjacent to (Includes Portions of Section 9c Sections 9 and 10) Average 91 94 N/A Maximum 451 220 268 Minimum 6 21 N/A No. of Wellsb 1,026 111 1 bOnly wells with depths greater than zero were included in the statistics. c Within T5N R10W SM, Sections 3, 4,5,8,9, 10, 15, 16, 17. Second, the groundwater between 1,750 and 4100 feet depth is predominately between 3,000 and 10,000 mgll TDS. Obviously, given the demonstrated abundance of drinkable water at shallower depths, recovery of drinking water with such quality from below 1,750 feet deep is highly impractical due to drilling and desalination costs. Third, mud logs from wells in the SGFU show that hydrocarbon gas, primarily methane, occurs commonly throughout the Kenai Group in this area. Potentially commercial gas shows appear to be limited to below 5000 feet depth but appreciable volumes of gas are present below the Pleistocene gravels. This gas would add considerably to the difficulty in any attempt to recover drinking water from the Kenai Group in the SGFU. 2. CONCLUSIONS: 1. Those portions of freshwater aquifers occurring below approximately 750' in the SGFU vicinity do not currently serve as a source of drinking water. Those portions of freshwater aquifers occurring below 1,750' beneath the Sterling Unit contain salinities and hydrocarbon gases, and are situated at a depth that make recovery of these waters for drinking water purposes economically impractical. Those portions of aquifers occurring below 1,750' MD and within one-quarter mile radius of the Sterling Unit 43-9 well cannot reasonably be expected to serve as underground sources of drinking water. Those portions of aquifers occurring within a one-quarter mile radius and below the measured depth of 1,750 feet in the Sterling Unit 43-9 Well qualify as exempt freshwater aquifers under 20 AAC 25.440(a)(l)(A) and 20 AAC 25.440(a)(1)(B). 3. 4. ~ Aquifer Exemption Order ~ Sterling Unit 43-9 April 3, 2003 ,~ Page 6 of 6 NOW, THEREFORE, IT IS ORDERED THAT the aquifers occurring within a one- quarter mile radius and below the depth of 1,750' MD in the Sterling Unit 43-9 Well are exempt under 20 AAC 25.440. DONE at Anchorage, Alaska, and dated April 3, 2003. ~ Sarah Palin, Ch r Alaska Oil and Gas Conservation ommlsslon ~~ """ Daniel T. Seamount;J('Commissioner Alaska Oil and Gas Conservation Commission R~h, c~ ~ Alaska Oil and Gas Conservation Commission AS 31,05,080 provides that within 20 days after receipt of written notice of the entry of an order, a person affected by it may file with the Commission an application for rehearing, A request for rehearing must be received by 4:30 PM on the 23rd day following the date of the order, or next working day if a holiday or weekend, to be timely filed, The Commission shall grant or refuse the application in whole or in part within 10 days, The Commission can refuse an application by not acting on it within the lO-day period, An affected person has 30 days from the date the Commission refuses the application or mails (or otherwise distributes) an order upon rehearing, both being the final order of the Commission, to appeal the decision to Superior Court, Where a request for rehearing is denied by nonaction of the Commission, the 30-day period for appeal to Superior Court runs from the date on which the request is deemed denied (Le" 10th day after the application for rehearing was filed), '"""'",, -,M""""":""_,1,_,_,,,,,",i",LL,/I" '""""",:',',',; , " , i':{;()~;~;Ç' 'rf~rt~~ Wct~~d ~1{,~,~1ß .,."".,.~~,. ','- ,-, ~ Daniel Donkel 2121 North Bayshore Drive, Ste 1219 Miami, FL 33137 Jim Yancey Seal-rite International 500 Deer Cross Drive Madisonville, LA 70447 Mary Jones XTO Energy, Inc. Cartography 810 Houston Street, Ste 2000 Ft. Worth, TX 76102-6298 Paul Walker Chevron 1301 McKinney, Rm 1750 Hou~on,TX 77010 David McCaleb IHS Energy Group GEPS 5333 Westheimer, Ste 100 Hou~on,TX 77056 T.E. Alford ExxonMobil Exploration Company PO Box 4778 Houston, TX 77210-4778 Chevron USA Alaska Division PO Box 1635 Houston, TX 77251 Shelia McNulty Financial Times PO Box 25089 Houston, TX 77265-5089 James White Intrepid Prod. Co.lAlaskan Crude 4614 Bohill SanAntonio, TX 78217 .~ SD Dept of Env & Natural Resources Oil and Gas Program 2050 West Main, Ste 1 Rapid City, SD 57702 Christine Hansen Interstate Oil & Gas Compact Comm Excutive Director PO Box 53127 Oklahoma City, OK 73152 Gregg Nady Shell E&P Company Onshore Exploration & Development PO Box 576 Houston, TX 77001-0576 G. Scott Pfoff Aurora Gas, LLC 10333 Richmond Ave, Ste 710 Houston, TX 77042 William Holton, Jr. Marathon Oil Company Law Department 5555 San Fecipe St. Houston, TX 77056-2799 Texico Exploration & Production PO Box 36366 Houston, TX 77236 Donna Williams World Oil Statistics Editor PO Box 2608 Hou~on,TX 77252 Shawn Sutherland Unocal Revenue Accounting 14141 Southwest Freeway Sugar Land, TX 77478 Doug Schultze XTO Energy Inc. 3000 North Garfield, Ste 175 Midland, TX 79705 ---, John Katz State of Alaska Alaska Governor's Office 444 North Capitol St., NW, Ste 336 Washington, DC 20001 Alfred James 200 West Douglas, Ste 525 Wichita, KS 67202 Citgo Petroleum Corporation PO Box 3758 Tulsa, OK 74136 Michael Nelson Purvin Gertz, Inc. Library 600 Travis, Ste 2150 Houston, TX 77002 G. Havran Gaffney, Cline & Associations Library 1360 Post Oak Blvd., Ste 2500 Houston, TX 77056 W. Allen Huckabay ConocoPhillips Petroleum Company Offshore West Africa Exploration 600 North Dairy Ashford Houston, TX 77079-1175 Corry Woolington ChevronTexaco Land-Alaska PO Box 36366 Houston, TX 77236 Chevron Chemical Company Library PO Box 2100 Houston, TX 77252-9987 Kelly Valadez Tesoro Refining and Marketing Co. Supply & Distribution 300 Concord Plaza Drive San Antonio, TX 78216 Robert Gravely 7681 South Kit Carson Drive Littleton, CO 80122 George Vaught, Jr. PO Box 13557 Denver, CO 80201-3557 John Levorsen 200 North 3rd Street, #1202 Boise, ID 83702 Samuel Van Vactor Economic Insight Inc. 3004 SW First Ave. Portland, OR 97201 Cammy Taylor 1333 West 11th Ave. Anchorage, AK 99501 Duane Vaagen Fairweather 715 L Street, Ste 7 Anchorage. AK 99501 Tim Ryherd State of Alaska Department of Natural Resources 550 West 7th Ave., Ste 800 Anchorage, AK 99501 Ed Jones Aurora Gas. LLC Vice President 1029 West 3rd Ave., Ste 220 Anchorage, AK 99501 Mark Dalton HDR Alaska 2525 C Street, Ste 305 Anchorage, AK 99503 Mark Hanley Anadarko 3201 C Street, Ste 603 Anchorage, AK 99503 Schlumberger Drilling and Measurements 3940 Arctic Blvd., Ste 300 Anchorage, AK 99503 -~, Jerry Hodgden Hodgden Oil Company 408 18th Street Golden, CO 80401-2433 Kay Munger Munger Oil Information Service, Inc PO Box 45738 Los Angeles, CA 90045-0738 Thor Cutler OW-137 US EPA egion 10 1200 Sixth Ave. Seattle, WA 98101 Richard Mount State of Alaska Department of Revenue 500 West 7th Ave.. Ste 500 Anchorage, AK 99501 Jim Arlington Forest Oil 310 K Street, Ste 700 Anchorage, AK 99501 William VanDyke State of Alaska Department of Natural Resources 550 West 7th Ave., Ste 800 Anchorage, AK 99501 Trustees for Alaska 1026 West 4th Ave., Ste 201 Anchorage, AK 99501-1980 Jack Laasch Natchiq Vice President Government Affairs 3900 C Street, Ste 701 Anchorage, AK 99503 John Harris NI Energy Development Tubular 3301 C Street, Ste 208 Anchorage, AK 99503 Baker Oil Tools 4730 Business Park Blvd., #44 Anchorage, AK 99503 ,-, Richard Neahring NRG Associates President PO Box 1655 Colorado Springs, CO 80901 John F. Bergquist Babson and Sheppard PO Box 8279 Long Beach, CA 90808-0279 Michael Parks Marple's Business Newsletter 117 West Mercer St, Ste 200 Seattle, WA 98119-3960 Julie Houle State of Alaskan DNR Div of Oil & Gas, Resource Eva!. 550 West 7th Ave., Ste 800 Anchorage. AK 99501 Susan Hill State of Alaska. ADEC EH 555 Cordova Street Anchorage, AK 99501 Robert Mintz State of Alaska Department of Law 1031 West 4th Ave., Ste 200 Anchorage, AK 99501 Mark Wadman Halliburton 6900 Arctic Blvd. Anchorage, AK 99502 Rob Crotty C/O CH2M HILL 301 West Nothern Lights Blvd Anchorage, AK 99503 Ciri Land Department PO Box 93330 Anchorage, AK 99503 Judy Brady Alaska Oil & Gas Associates 121 West Fireweed Lane, Ste 207 Anchorage. AK 99503-2035 Arlen Ehm 2420 Foxhall Dr. Anchorage, AK 99504-3342 Rose Ragsdale Rose Ragsdale & Associates 3320 E. 41st Ave Anchorage, AK 99508 Jim Scherr US Minerals Management Service Resource Evaluation 949 East 36th Ave., Ste 308 Anchorage, AK 99508 Chuck O'Donnell Veco Alaska,lnc. 949 East 36th Ave., Ste 500 Anchorage, AK 99508 Barbara Fullmer ConocoPhillips Alaska, Inc. Legal Department A TO 2084 PO Box 100360 Anchorage, AK 99510-0360 Jordan Jacobsen Alyeska Pipeline Service Company Law Department 1835 So. Bragaw Anchorage, AK 99515 Jeanne Dickey BP Exploration (Alaska), Inc. Legal Department PO Box 196612 Anchorage, AK 99518 Bill Bocast PACE Local 8-369 c/o BPX North Slope, Mailstop P-8 PO Box 196612 Anchorage, AK 99519 Sue Miller BP Exploration (Alaska), Inc. PO Box 196612 Anchorage, AK 99519-6612 Bob Shavelson Cook Inlet Keeper PO Box 3269 Homer, AK 99603 ~ Greg Noble Bureau of Land Management Energy and Minerals 6881 Abbott Loop Rd Anchorage, AK 99507 Jill Schneider US Geological Survey 4200 University Dr. Anchorage, AK 99508 Paul L. Craig Trading Bay Energy Corp 5432 East Northern Lights, Ste 610 Anchorage, AK 99508 Gordon Severson 3201 Westmar Cr. Anchorage, AK 99508-4336 Kristen Nelson IHS Energy PO Box 102278 Anchorage, AK 99510-2278 Robert Britch, PE Northern Consulting Group 2454 Telequana Dr. Anchorage, AK 99517 Jack Hakkila PO Box 190083 Anchorage, AK 99519 J. Brock Riddle Marathon Oil Company Land Department PO Box 196168 Anchorage, AK 99519-6168 BP Exploration (Alaska), Inc. Land Manager PO Box 196612 Anchorage, AK 99519-6612 Peter McKay 55441 Chinook Rd Kenai, AK 99611 ,-... Jeff Walker US Minerals Management Service Regional Supervisor 949 East 36th Ave., Ste 308 Anchorage, AK 99508 Richard Prentki US Minerals Management Service 949 East 36th Ave., 3rd Floor Anchorage, AK 99508 Thomas R. Marshall, Jr. 1569 Birchwood Street Anchorage, AK 99508 Jim Ruud ConocoPhillips Alaska, Inc. Land Department PO Box 100360 Anchorage, AK 99510 Perry Markley Alyeska Pipeline Service Company Oil Movements Department 1835 So. Bragaw - MS 575 Anchorage, AK 99515 David Cusato 600 West 76th Ave., #508 Anchorage, AK 99518 Tesoro Alaska Company PO Box 196272 Anchorage, AK 99519 Kevin Tabler Unocal ' PO Box 196247 Anchorage, AK 99519-6247 Dudley Platt D.A. Platt & Associates 9852 Little Diomede Cr. Eagle River, AK 99577 Shannon Donnelly Phillips Alaska, Inc. HEST -Enviromental PO Box 66 Kenai. AK 99611 Kenai Peninsula Borough Economic Development Distr 14896 Kenai Spur Hwy #103A Kenai, AK 99611-7000 James Gibbs PO Box 1597 Soldotna, AK 99669 John Tanigawa Evergreen Well Service Company PO Box 871845 Wasilla, AK 99687 Cliff Burglin PO Box 131 Fairbanks, AK 99707 Williams Thomas Arctic Slope Regional Corporation Land Department PO Box 129 Barrow, AK 99723 Lt Governor Loren Leman State of Alaska PO Box 110015 Juneau. AK 99811-0015 ~ Penny Vadla Box 467 Ninilchik, AK 99639 Claire Caldes US Fish & Wildlife Service Kenai Refuge PO Box 2139 Soldotna, AK 99669 Charles Boddy Usibelli Coal Mine, Inc. 100 Cushman Street, Suite 210 Fairbanks, AK 99701-4659 Harry Bader State of Alaska Department of Natural Resources 3700 Airport Way Fairbanks, AK 99709 North Slope Borough PO Box 69 Barrow, AK 99723 .~ Marc Kovac PACE 8-369, Prudhoe Bay Vice-Chair PO Box 2973 Seward, AK 99664 Kenai National Wildlife Refuge Refuge Manager PO Box 2139 Soldotna, AK 99669-2139 Richard Wagner PO Box 60868 Fairbanks, AK 99706 Bernie Karl K&K Recycling Inc. PO Box 58055 Fairbanks, AK 99711 Kurt Olson State of Alaska Staff to Senator Tom Wagoner State Capitol Rm 427 Juneau, AK 99801 Re: Notice ,---. ^ Subject: Re: Notice Date: 03 Apr 2003 16:05:36 -0900 From: Legal Ads Anchorage Daily News <legalads@adn.com> To: Jody Colombie <jody - colombie@admin.state.ak.us> Hi Jody: Following is the confirmation information on your legal notice. Please let me know if you need anything further. Account Number: STOF 0330 Legal Ad Number: 760133 Publication Date(s): April 4, 2003 Your Reference #: AO-02314041 Total: $219.96 Thank You, Kim Kirby Anchorage Daily News Legal Classified Representative E-Mail: legalads@adn.com Phone: (907) 257-4296 Fax: (907) 279-8170 On Thursday, April 3, 2003, Jody Colombie <jody_colombie@admin.state.ak.us> wrote: > >Please publish in tomorrow paper if possible. > >Thank You. Jody 1 of 1 4/3/20034:05 PM ~ ~ 1M -11... f? }\\ II I;:" fr':;; \ I II U 'C.k ,.j ""..::::::J ill}} ~ ~~~rß~ / ~1,ASIiAOILAND GAS CONSERVATION COMMISSION / March 17, 2003 333 W. 7'" AVENUE, SUITE 100 ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 FAX (907) 276-7542 FRANK H. MURKOWSKI, GOVERNOR Tim Hamlin Ground Water Protection Unit US EPA Region 10 1200 Sixth Avenue, OW-137 Seattle, WA 98101 Dear Mr. Hamlin: The Alaska Oil and Gas Conservation Commission ("Commission") is in receipt of your letter dated March 10, 2003 stating that an aquifer exemption below 1750 MD feet in the Sterling Unit 43-9 well was a minor modification of the Commission's program for the regulation of Class II injection wells under section 1425 of the Safe Drinking Water Act, as defmed by Underground Injection Control (VIe) Program Guidance 34 and 40 CFR 145.32. In correspondence dated February 25, 2003 from Mr. Robert Crandall of this office to Mr. Thor Cutler in the Ground Water Protection Unit the Commission's critique of Marathon's application for aquifer exemption was presented. This document stated that while aquifers with salinities less than 3,000 ppm are present at depth in the 43-9 well, they are "situated at a depth or location that makes recovery of water for drinking purposes economically or technologically impractical". The Commission's analysis of this well did not specifically reference the distribution of gas other than in the currently perforated B-4 gas sand. This may be a minor point but to paraphrase your March 10, 2003 letter you imply that I have concluded that aquifers below 1750' MD in the 43-9 well contain natural gas. I'd like to clarify this point. Sporadic gas shows are present in a number of sands below 1750' MD and the top of the B-4 producing interval in the 43-9 well. This gas while common is not ubiquitous. We appreciate your concurrence and will issue this aquifer exemption using procedures described in 20 AAC 25.440. ~~ Daniel T. Seamount Commissioner RC\DTS\jjc [1At<-.1U-~uu~r¡10N 01: 26 PM FAX NO. .' --'( ,~ ~ ~ /""-. ø;o Q'i~J¡<;, "'S'?, !; "!j \ ~ ~1: ~'" i'1~ P'10,\~(j UNITED S1 A 1ES ENVIRONMENTAL PROT~CTlON AGENCY REGION 10 1200 Sixth Avenue Seattle, WA981 01 R~ply To J\'~\'.n Of: OW-137 Marc:.h 10, 2003 MI'. I )anìe1 Seamount, Commissioner Alaska Oil and Gas C<)nserv~ltion Commission 333 West Sl;'.vcnth Avenue, Suite. 100 Anchorage, Alaska 99501 RlJ: Request for an Aquir(!f Exemption for the Sterling Unit 43-9 well, Sterling G~\R Ii'ie}e] Unit, Kcnai PcnÎJlsula, Alaska - Seward Meridian, TSN, RJO\Y., Section 9. ),~ar Mr. Seamount My staff has reviewed the application by Marathon Oil Compnny for an Aqu¡f~~r Excmption oft110 Sterling FOtl11ation below 5000 fcct mea...ured depth (MD) in the vlcìnily of the Sterling Unit 43-9 Well in the on the Kenai Peninsula l1(~nt. Kenai. Ala.~kà. The Alaska OIl and Gas Conservation Commission (AOGCC) p~rmi(tcd CI~S5 n dispos31 well is located Ín Section 9, T5N, RlOW, KC1Hìi Borough, Ala¡.;k~. The Sterling 43-9 wen wm be used to dispose of Cl;).i;¡:¡ ][ oilfield wasle nuic1s. As you know, nquiCc,r 0,xemplio11s are limited to only those areas related to a ~pcdiic pernÜt and Ü)r the intervals needed for injection. We understand that l]¡n ìnjl~ction will occur ~1t "PPl'oximatcly 1750 to 5000 feet MD. Injection wiJl be íl\lO th~ Sterling Formation below a depth of 1750 feet MD and the injected fluids ;!r~~ 10 rclI1,,¡n below that depth. Your findings ;lnd our review indicate the Sterling Formation in the vicinity of the wen COl1tnillS 11uids with a total dissolved solids (TDS) content of oyer 10,000 to 16,000 to,OOO mg/Jîter ilt depths exceeding 1,750 MD and contains zoncs that range from 16,000 to approximately 2000 mg/liter with gas shows to d~~plh::; of 5000 MD. Th\; appHcunt has supplied ínformation indicating the StC'rling Wdl is locat~d npproximatcly six (6) mi1~,s east of Kenai in the Sterling GtìS Fídd. ] ,026 water wens were located within T5N RlOW and Lhe deepest wdl is 451 fcd. J 11 wàtcrwc.lIs were located within T5N RI0W, Section 9 and tIll':', dœpúst well is 220 fC'ct. You concluù\'~ th:lt Lhose portions of aquifers occurring below 1750 feet MD in 1hc Stcrling 43-9 WeB contain fluIds with TDS less th¡ln 10,000 mgllitc.r. You also conclude thut althcse depths, the aquifers contain natural ga~. Thus. P. 02/03 Q Prtttl9d 011 RKyclCld PatHr ~ /~ ~ $1~:E (ill! ~~~$~~~ / AIIASIi& OIL AND GAS / CONSERVATI ON COMMISSION FRANK H. MURKOWSKI, GOVERNOR February 25, 2003 333 W. 7'" AVENUE, SUITE 100 ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279.1433 FAX (907) 276-7542 Mr. Thor Cutler Ground Water Protection Unit US EP A Region 10 1200 Sixth Avenue, OW-137 Seattle, W A 98101 Dear Mr. Cutler: Attached are applications for an Aquifer Exemption Order and a Disposal Injection Order for the Sterling Unit, Kenai Peninsula. These orders are necessary to convert a watered out Sterling Formation gas producer (Sterling Unit Well No. 43-9) to disposal service. The Sterling Unit was one of the early discoveries on the peninsula and has been producing for over forty years. Gas has been produced from the Sterling, Beluga and Tyonek Formations, through four (4) wells. The cumulative production to date for the field is slightly over three billion cubic feet. The field is one of the smaller to have been produced in this state. Two of the original four wells are either shut-in or suspended due to water production. Currently, Sterling Unit produced water must be trucked for disposal elsewhere. This expensive and difficult method of disposal is a significant drag on the economics of this small field. Approval of an on-site disposal well will allow increased recovery from the unit. The distribution of formation water salinities in the Sterling Unit warrant a few comments. The vintage of the data and the log suites acquired in these wells limit the salinity control in this area to SP calculations and a produced water sample. Fortunately the SP curve in the subject well appears to be of good quality. CJ .-=J LIl CJ I We have calculated salinities using a generally more conservative method than Marathon, the results of this work are attached in the excel workbook titled "EP A SP Method.xls" . 'elow. The primary difference between the Marathon :C is that we relied on zone averages in what appeared Ime) sand intervals over 10 feet thick. The Marathon nt calculations, with the estimates shown below coming 'IT" "". ,n","",- lds. In general our estimate will provide a lower bound, Urü ::~~~"';'-:" miques generate equivalent results. These are intervals /.:-.;....¡¥~'~-. '-""'~~~'1~\. than ten feet and include the water sample interval. (;¿1 '~,;) ~(j)'! thk. k; Kf~~1J. Ú:;~.} " ". <:~..... /:6; "> /'" ,y I if¡ . 02Y~~~9;3. .{~:i,,',;.' '. >.s 9.4~; ..lJ m .-=J .::r- ",LI£, WA 98101 ru LIl .::r CJ 2.30 CJ a a a 1.75 :3,50 l'ì.ÜÜ '. .' ru CJ CJ : -, ,~, ,~ Mr. Thor Cutler February 25, 2003 Page 2 of 3 Kenai Unit 43-9: Calculated TDS Concentration (EPA SP Method) vs Measured Depth 18000 0 1000 1500 2000 2500 5500 6000 I feel the Sterling Unit salinities are accurately represented by these data. Salinity trends discussed here will be taken from the more conservative AOGCC generated values. The following generalities apply to the Sterling Unit Well No. 43-9 salinities: 1) Drinking water in the area comes from glacial sediments that are roughly 750' thick in this vicinity. 2) The 750'-3,750' md. interval contains intervals with TDS minor intervals with concentrations less than 10,000 ppm. 3) The boundary at 3750'md appears to be sharp and is evident on both sp and resistivity curves. 4) Below 4,000' md. intervals with less than 3,000 ppm are present. Our regulation 20 AAC 25.440 Freshwater Aquifer Exemption states that we can grant a aquifer exemption regardless of salinity if the aquifer "is situated at a depth or location that makes recovery of water for drinking purposes economically or technologically impractical". Based on all previous water well drilling experience in this area, this is a case, where formation waters of less than 3,000 ppm TDS are situated at a uneconomic depths. The deepest water well with the township in which SU 43-9 is located is 451 feet. ~, /--...., ~ Mr. Thor Cutler February 25,2003 Page 3 of 3 The conservation implications of the SU 43-9 conversion are not trivial. Usable freshwater resources can be protected and ultimate recovery at the Sterling Unit enhanced by selecting an appropriate depth from which to exempt aquifers. This project could lead to the establishment of criteria to evaluate the economic and technical practicality of deeply buried formations to serve as sources of drinking water. Robert Crandall Sr. Geologist RC:\jjc Enclosure #2 STATE OF ALASKA ADVERTISING ORDER ~ .~ NOTICE TO PUBLISHER '\ ADVERTISING ORDER NO. INVùl,,- ,\/lUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO, - 'BTIFIED AO-O2314029 AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COpy OF ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE F AOGCC R 333 W 7th Ave, Ste 100 0 Anchorage, AK 9950 I M AGENCY CONTACT DATE OF A.O. Jody Colombie PHONE February 4, 2003 PCN ¿ Anchorage Daily News POBox 149001 lu1chorage,AK 99514 (907) 793 -1 ??1 DATES ADVERTISEMENT REQUIRED: February 7, 2003 THE MATERIAL BElWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Type of Advertisement x Legal 0 Display Account #STOF0330 Advertisement to be published was e-mailed 0 Classified DOther'(Specify) SEE A TT ACHED PUBLIC HEARING REF TYPE 1 VEN 2 ARD 3 NUMBER AOGCC, 333 W. 7th Ave., Suite 100 Anchora~e, AK 99501 AMOUNT DATE I I TOTAL OF I ~~~~~~F ALL PAGES$ COMMENTS 02910 4 FIN AMOUNT Sy 03 cc PGM LC ACCT FY NMR DIST LlO 02140100 73540 2 3 4 REQUISmONEO ever ~\~~ /' IDIV~a¿.L'~ 02-902 (Rev- ~/94) Pllhli..h..r/Orioin..1 ('oni...., nPD..rtrnpnt Fi..t'al. nenartrnent- ReceivimJ AQ,FRM .--... .~ Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Sterling Unit Well No. 43-9 Sterling Gas Field Unit Aquifer Exemption Order Kenai Peninsula, Alaska Marathon Oil Company by letter dated October 17, 2002, has applied for an Aquifer Exemption Order for Sterling Unit Well No. 43-9 pursuant to 20 AAC 25.440. The Commission has tentatively set a public hearing on this application for March 11,2003 at 9:00 am at the Alaska Oil and Gas Conservation Commission at 333 West ih Avenue, Suite 100, Anchorage, Alaska 99501. A person may request that the tentatively scheduled hearing be held by filing a written request with the Commission no later than 4:30 pm on February 24,2003. If a request for a hearing is not timely filed, the Commission will consider the issuance of an order without a hearing. To learn if the Commission will hold the public hearing, please call 793-1221. In addition, a person may submit written comments regarding this application to the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. Written comments must be received no later than 4:30 pm on March 10, 2003, except that if the Commission decides to hold a public hearing, written comments must be received no later than 9:00 am on March 11,2003. If you are a person with a disability who may need a special modification in order to comment or to attend the public hearing, please contact Jody Colombie at 793-1221 before February 28,2003. b' ~<~ Cammy echsli Taylor Chair Published Date: February 7, 2003 ADN AO# 02314029 Clarion AO # 02314031 ........., ^ PUBLISHER'S AFFIDAVIT UNITED STATES OF AMERICA, .. r--------~----_._~~-, II Notice of Publlc'Hearlng I I STATE OF ALASKA ' I I Ala,ka Oil and Gas Conservation Commission I I: Re: SterllngUriifWeIrNò.43-9 I I Sterling Gas Field Unit I I Aquifer Exemþtion Order "I I Kenai Peninsula, Alaska \ I I Marathon Oil Company by letter date~'October 17, 2002,1 I:has applied for an Aquifer Exemption Order for Sterling Unit I I' Well No. 43-9puJsuantto 20AAC 25.440. I I, ' The Con:lInission has tentatively set a public hearing on this I I, applicatiol1fqr March 11, 2003 at 9:00 am at the Alaska Oil I t,I,.,.,,'.,~~~eGf, 6,.oC,', Ä,~6~~,',","~,.",'.~~~ ~~~~i~~~, Ö1~t ¡3p,3e::,. ~t~~y,~~~,,~~;. _,ii, ":'th~tîttètèntati~lÿsèñedtiled heariITg-be1Jetd' ~iül'lga'.w~,í I ten request With theCqmmission no later than 4:30 pm on ,I I'February 24, 2003.' , .' "I I If a requÊ$tfor a hearing is not timely filed, the Commission I I' will consider the issuance of an order without a l1earing. To I 1',Iearn if the Commission will hold the public ,hearing, please I Denise Reece I, call1n7:;~~t¡:n1, . a person may submit written comments regard- I .. ing this . application to the Alaska Oil and Gas Conservation I sworn, on oath deposes and says: I Commission at 333 West 7th Avenue, Suite 100, Anchorage, I . h I.Alaska 99501. Written comments must be,received no later I That I am and was at all bmes erelrthan 4:30 pm on March 10,. 2003, except that if the I Supervisor of Legals of the Peninsula Clariolcommission decide~to hold a public hearing, written com- I .. menta must be received no later than 9:00 am on March 11, I circulation and published at Kenai, Alaska, 12003. I that the Aquifer Exemption Order 1I,!m¿~,.~,~~;~~~n", P::~~Pt,.o,Wi;~,,~, i:~~~r,~:~~,~;;;::~~i~,Ph~~~~,11 "il1g¡,.please.contach~öCly.,Colombie at 793.1221 before AO-02314031 'I 'February 28,.2003. " " I a Printed copy of which is hereto annexed wall'ca~mYOeChSIiTaYIOr I ~r I paper one each and every day I PUBLISH: 2/7, 2003 . 3261/2074 I successive and consecutive day L - - - -.':: '":'_~ '":--::--"':' "':'.:':" =.': - - - _.J following dates: February 7, 2003 STATE OF ALASKA " ss: x øJ'/?/.LJ o~ Æ/JL(1 ß~ SUBSCRmED AND SWORN to me before this 17th ~ CÙ!y ð Ç) ~eb~ NOTARY PUBLIC in favor for the State of Alaska. ~My CoIP1Ilission expires 22-Jan-06 2003 Fwd: Legal Notice ,,-... ~ Subject: Fwd: Legal Notice Date: 05 Feb 2003 11 :30:07 -0900 From: Legal Ads <legalads@adn.com> To: <jody - colombie@admin.state.ak.us> Account Number: STOF 0330 Legal Ad Number: 708741 Run Dates: February 7, 2003 Total Amount: $173.43 Hi Jody: The above information if for AO# 02314030. Thank You, Kim -------------------------------------- Date: Tuesday, February 4, 2003 From: Jody Colombie <jody_colombie@admin.state.ak.us> Amy: I am attaching two notices that need to be published on 2-7-03. confirm with e-mail. Please Jody .....~~........~~~....... T'.....~~-'...'~m."~.T..T.......T....~~.... .~.....~'.~_.........~.T..... Name: AEO Sterling 020703.doc , . ~AEO Sterling 020703.docr Type: WINWORD File (applicationlmsword)! lEncoding: base64 ¡ ¡~~ .......'....'.'..'.'..'W-...'..""...""...'....~..........................,.................'...... ........j ! '~~"~~~"~~N;;~: DiO~St~;li~g~626763.doc . '1 ~DIO Sterling 020703.docl Type: WINWORD File (applicationlmsword)! l.. .. ....... .LEn~()din~:~~~64 . ~ADNAd Order form1 Name: ADNAd Order form1.doc Type: WINWORD File (applicationlmsword)1 Encoding: base64 Name: ADNAd Order form2.doc ~ADNAd Order form2.doc Type: WINWORD File (applicationlmsword)! Encoding: base64 . . . begin:vcard n:Colombie¡Jody tel¡fax:907-276-7542 tel¡work:907-793-1221 x-mozilla-html:FALSE adr: ¡ ¡ ¡ ¡ ¡ ¡ version:2.1 email¡internet:jody_colombie@admin.state.ak.us fn:Jody Colombie end:vcard ')"'!'H'A'>. A.A'>. D"K STATE OF ALASKA ADVERTISING ORDER ~ ~, NOTICE TO PUBLISHER ADVERTISING ORDER NO. INVO,,-- ,viUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER Nv,. -.:ERTIFIED AO 02314029 AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COpy OF . ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE F AOGCC R 333 West ih Avenue, Suite 100 0 Anchorage, AK 99501 M AGENCY CONTACT DATE OF A.O. ¿ Anchorage Daily News POBox 149001 Anchorage, AK 99514 Jody Colombie February 4, )003 PHONE PCN (907) 793 -111.1 DATES ADVERTISEMENT REQUIRED: February 7,2003 THE MATERIAL BElWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Account #STOF0330 United states of America AFFIDAVIT OF PUBLICATION REMINDER State of ss INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER. A CERTIFIED COpy OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED WITH THE INVOICE. ATTACH PROOF OF PUBLICATION HERE. division. Before me, the undersigned, a notary public this day personally appeared who, being first duly sworn, according to law, says that he/she is the of Published at in said division and state of and that the advertisement, of which the annexed is a true copy, was published in said publication on the day of 2003, and thereafter for - consecutive days, the last publication appearing on the - day of , 2003, and that the rate charged thereon is not in excess of the rate charged private individuals. Subscribed and sworn to before me This - day of 2003, Notary public for state of My commission expires 02-901 (Rev. 3/94) Page 2 AO.FRM PUBLISHER STATE OF ALASKA ADVERTISING ORDER ,,-....., ,,-., , NOTICE TO PUBLISHER ADVERTISING ORDER NO. INVOICIO MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO,. CERTIFIED AO-.O2314031 AFFIDAVIT OF PUBLICATION (PART2 OF THIS FORM) WITH ATTACHED COpy OF ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE F AOGCC R 333 W 7th Ave, Ste 100 0 Anchorage, AK 99501 M AGENCY CONTACT DATE OF A.O. Jodv Colombie PHONE February 4,2003 PCN ¿ Peninsula Clarion POBox 3009 Kenai AK 99611 (907) 793 -1 ?21 DATES ADVERTISEMENT REQUIRED: February 7,2003 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Advertisement to be published was e-mailed Type of Advertisement x Legal D Display 0 Classified DOther (Specify) SEE ATTACHED PUBLIC HEARING REF TYPE 1 VEN 2 ARD 3 4 NUMBER AOGCC, 333 W. 7th Ave., Suite 100 i\nchorage,AJ( 99501 AMOUNT DATE TOTALOF I ~~~~~SOF ALL PAGES$ COMMENTS 02910 FIN AMOUNT SY 03 cc PGM LC ACCT FY NMR DIST LIe 1 2 3 4 REQUISITIONED BY: 02140100 73540 \\nJI. U' (\~,~ ,j \VISION APõ:I~t ~ 02-902 (Rev. 3/94) Publisher/Original Copies: Department Fiscal, Department, Receiving AO_FRM ".....-. . ~\ Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Sterling Unit Well No. 43-9 Sterling Gas Field Unit Aquifer Exemption Order Kenai Peninsula, Alaska Marathon Oil Company by letter dated October 17, 2002, has applied for an Aquifer Exemption Order for Sterling Unit Well No. 43-9 pursuant to 20 AAC 25.440. The Commission has tentatively set a public hearing on this application for March 11, 2003 at 9:00 am at the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. A person may request that the tentatively scheduled hearing be held by filing a written request with the Commission no later than 4:30 pm on February 24, 2003. If a request for a hearing is not timely filed, the Commission will consider the issuance of an order without a hearing. To learn if the Commission will hold the public hearing, please call 793-1221. In addition, a person may submit written comments regarding this application to the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. Written comments must be received no later than 4:30 pm on March 10, 2003, except that if the Commission decides to hold a public hearing, written comments must be received no later than 9:00 am on March 11,2003. If you are a person with a disability who may need a special modification in order to comment or to attend the public hearing, please contact Jody Colombie at 793-1221 before February 28,2003. /'- (ß~ ~<~ c~echsli Taylor Chair Published Date: February 7,2003 ADN AO# 02314029 Clarion AO # 02314031 ~ ",", Anchorage Daily News Affidavit of Publication 1001 Northway Drive, Anchorage, AK 99508 PRICE OTHER OTHER OTHER OTHER OTHER GRAND AD# DATE PO ACCOUNT PER DAY CHARGES CHARGES #2 CHARGES#3 CHARGES #4 CHARGES #5 TOTAL 708750 02/07/2003 02314029 STOF0330 $173.43 $173.43 $0.00 $0.00 $0.00 $0.00 $0.00 $173.43 STATE OF ALASKA THIRD JUDICIAL DISTRICT That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on the above dates and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals, ,. " ~ ~ ~~ ,'i,'~:::::'.~': ~ ;,,'Notièe QfPÌibliclit~~r¡~g " ~,~ '~', ~ '~i':;;i<~ ~ '" ~ , ~ ~ ~'.:> ~.'!:. ~~"'STATEö.FiÀLÅSkÀ:::"::. ,'.Alaslé:a Oil and GasConservøtion Commissioô; ,'~ ,~~ ".. "',';,~~ Re:Sterlt~\ll).nitweIlNo,43.9~ "", Sterling'Qös Field I)}\H, ' / ' , Aqu n Order, Kenai IO!AI~SkO¡ ,,', ",','" ," Marat, o¡¡ Cdlnponv by Jetter dote!! Oçtòber 17 ;lOO2;'iu;I&'DPplled for an Aquifer Exemption Orâer for Sterling Unit Well NO. 43'9 pursuant to 20 AAC 25,440. ' Kimberly A. Kirby, being first duly sworn on oath deposes and says that she is an advertising representative of the Anchorage Daily News, a daily newspaper. Tlw CPJT1miss March 11.' 2003 at at 333 West 7th A 'quest thanhe te with the ,êommission: ,. ~' ~ ' , , , ' , II a reQllest lor çfh~(ringis not timelY' fIIe,d" theCorTÌmisslon will consider the issuance otoo, ordet\withQu!iI hearing., Tò'I,eQrn if the Commission will hold thep,ublichearlng,'lÓleose'call 793:1221. " Si~ed~,J~ J JI~ Subscribed an~ .;z;me this date' ding this applica' West 7th Avo must be received " , mmiS$io!1decldes bø,r~ceived nO,løter t~olr9j,00', II vo,u,are â person with ( disabilitv who mav need a sPtlclol'modlflcaflon in order to cçuTlmi!nt QUo attend the public hearing, please contact JOIIv Co- lombieøtl793.1221belore'Februarv 28, 2003. i Is/: Cammv Oechsli Tavlor, Chair I Publish: Fe,bru9lV 7, 2003 ~ t ~ Notary Public in and for the State of Alaska. Third Division. Anchorage, Alaska \\\((((l fr~ \\ ~1e.8.0.1':. ,\'a.."": . . . . . .......... 'l \.'Oi:rl. ...." . ""'¿',.. S4!'" 01AR;';';#' ~ ..... .~' r.- ..... . ~ _..- .::. ::: : ðI'ð\~ : ~ - . a-Ug"'J tl.... -::'~..dI,. _...- :ltJ;:: ""~ . -:-. ~~.~OF .' ~J;~. ~ ~ . . ., :p:,,' :J~.I ~ ,\ :I) J JJ jJ))J \" STATE OF ALASKA ADVERTISING ORDER ~ NOTICE TO PUBLISHER ~ ADVERTISING ORDER NO. INVú.- . ,vlUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER Nt-.~";ERTIFIED AO 02314031 AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COpy OF . ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE F AOGCC R 333 West 7th Avenue, Suite 100 0 Anchorage, AK 99501 M AGENCYCONT ACT DATE OF A.D. Jody Colombie Febt1H1ry 4, ?003 PHONE PCN (907) 793 -1 )).1 DATES ADVERTISEMENT REQUIRED: ¿ Peninsula Clarion POBox 3009 KenaiAK 99611 February 7,2003 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: United states of America AFFIDAVIT OF PUBLICATION REMINDER State of ss INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER. A CERTIFIED COpy OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED WITH THE INVOICE. ATTACH PROOF OF PUBLICATION HERE. division. Before me, the undersigned, a notary public this day personally appeared who, being first duly sworn, according to law, says that he/she is the of Published at in said division and state of and that the advertisement, of which the annexed is a true copy, was published in said publication on the day of 2003, and thereafter for - consecutive days, the last publication appearing on the - day of . 2003, and that the rate charged thereon is not in excess of the rate charged private individuals. Subscribed and sworn to before me This - day of 2003, Notary public for state of My commission expires 02-901 (Rev. 3/94) Page 2 AO.FRM . PUBLISHER Daniel Donkel 2121 North Bayshore Drive, Ste 1219 Miami, FL 33137 Christine Hansen Interstate Oil & Gas Compact Comm Excutive Director PO Box 53127 Oklahoma City, OK 73152 Mary Jones XTO Energy, Inc. Cartography 810 Houston Street, Ste 2000 Ft. Worth, TX 76102-6298 Paul Walker Chevron 1301 McKinney, Rm 1750 Houston, TX 77010 David McCaleb IHS Energy Group GEPS 5333 Westheimer, Ste 100 Houston, TX 77056 T.E. Alford Exxon Mobil Exploration Company PO Box 4778 Houston, TX 77210-4778 Chevron USA Alaska Division PO Box 1635 Houston, TX 77251 Shelia McNulty Financial Times PO Box 25089 Houston, TX 77265-5089 James White Intrepid Prod. Co.lAlaskan Crude 4614 Bohill SanAntonio, TX 78217 ~ SD Dept of Env & Natural Resources Oil and Gas Program 2050 West Main, Ste 1 Rapid City, SD 57702 Citgo Petroleum Corporation PO Box 3758 Tulsa, OK 74136 Gregg Nady Shell E&P Company Onshore Exploration & Development PO Box 576 Houston, TX 77001-0576 G. Scott Pfoff Aurora Gas, LLC 10333 Richmond Ave, Ste 710 Houston, TX 77042 William Holton, Jr. Marathon Oil Company Law Department 5555 San Fecipe St. Houston, TX 77056-2799 Corry Woolington ChevronTexaco Land-Alaska PO Box 36366 Houston, TX 77236 Donna Williams World Oil Statistics Editor PO Box 2608 Houston, TX 77252 Shawn Sutherland Unocal Revenue Accounting 14141 Southwest Freeway SugarLand,TX 77478 Doug Schultze XTO Energy Inc. 3000 North Garfield, Ste 175 Midland, TX 79705 ~ John Katz State of Alaska Alaska Governor's Office 444 North Capitol St., NW, Ste 336 Washington, DC 20001 Alfred James 200 West Douglas, Ste 525 Wichita, KS 67202 Conoco Inc. PO Box 1267 Ponca City, OK 74602-1267 Michael Nelson Purvin Gertz, Inc. Library 600 Travis, Ste 2150 Houston, TX 77002 G. Havran Gaffney, Cline & Associations Library 1360 Post Oak Blvd., Ste 2500 Houston, TX 77056 W. Allen Huckabay ConocoPhillips Petroleum Company Offshore West Africa Exploration 600 North Dairy Ashford Houston, TX 77079-1175 Texico Exploration & Production PO Box 36366 Houston, TX 77236 Chevron Chemical Company Library PO Box 2100 Houston, TX 77252-9987 Kelly Valadez Tesoro Refining and Marketing Co. Supply & Distribution 300 Concord Plaza Drive San Antonio, TX 78216 Robert Gravely 7681 South Kit Carson Drive Littleton, CO 80122 George Vaught, Jr. PO Box 13557 Denver, CO 80201-3557 John Levorsen 200 North 3rd Street, #1202 Boise, ID 83702 Samuel Van Vactor Economic Insight Inc. 3004 SW First Ave. Portland, OR 97201 Julie Houle State of Alaskan DNR Div of Oil & Gas, Resource Eva!. 550 West 7th Ave., Ste 800 Anchorage, AK 99501 Jim Arlington Forest Oil 310 K Street, Ste 700 Anchorage, AK 99501 Cammy Taylor 1333 West 11th Ave. Anchorage, AK 99501 Susan Hill State of Alaska, ADEC EH 555 Cordova Street Anchorage, AK 99501 Schlumberger Drilling and Measurements 3940 Arctic Blvd., Ste 300 Anchorage, AK 99503 Rob Crotty C/O CH2M HILL 301 West Nothern Lights Blvd Anchorage, AK 99503 Baker Oil Tools 4730 Business Park Blvd., #44 Anchorage, AK 99503 ~ Jerry Hodgden Hodgden Oil Company 408 18th Street Golden, CO 80401-2433 Kay Munger Munger Oil Information Service, Inc PO Box 45738 Los Angeles, CA 90045-0738 Thor Cutler OW-137 US EPA egion 10 1200 Sixth Ave. Seattle, WA 98101 Robert Mintz State of Alaska Department of Law 1031 West 4th Ave., Ste 200 Anchorage, AK 99501 Tim Ryherd State of Alaska Department of Natural Resources 550 West 7th Ave., Ste 800 Anchorage, AK 99501 Richard Mount State of Alaska Department of Revenue 500 West 7th Ave., Ste 500 Anchorage, AK 99501 Trustees for Alaska 1026 West 4th Ave., Ste 201 Anchorage, AK 99501-1980 Ciri Land Department PO Box 93330 Anchorage, AK 99503 Jack Laasch Natchiq Vice President Government Affairs 3900 C Street, Ste 701 Anchorage, AK 99503 Mark Hanley Anadarko 3201 C Street, Ste 603 Anchorage, AK 99503 ~ Richard Neahring NRG Associates President PO Box 1655 Colorado Springs, CO 80901 John F. Bergquist Babson and Sheppard PO Box 8279 Long Beach, CA 90808-0279 Michael Parks Marple's Business Newsletter 117 West Mercer St, Ste 200 Seattle, WA 98119-3960 Duane Vaagen Fairweather 715 L Street, Ste 7 Anchorage, AK 99501 Williams VanDyke State of Alaska Department of Natural Resources 550 West 7th Ave., Ste 800 Anchorage, AK 99501 Ed Jones Aurora Gas, LLC Vice President 1029 West 3rd Ave., Ste 220 Anchorage, AK 99501 Mark Wedman Halliburton 6900 Arctic Blvd. Anchorage, AK 99502 John Harris NI Energy Development Tubular 3301 C Street, Ste 208 Anchorage, AK 99503 Mark Dalton HDR Alaska 2525 C Street, Ste 305 Anchorage, AK 99503 Judy Brady Alaska Oil & Gas Associates 121 West Fireweed Lane, Ste 207 Anchorage, AK 99503-2035 Arlen Ehm 2420 Foxhall Dr. Anchorage, AK 99504-3342 Thomas R. Marshall, Jr. 1569 Birchwood Street Anchorage, AK 99508 Jill Schneider US Geological Survey 4200 University Dr. Anchorage, AK 99508 Richard Prentki US Minerals Management Service 949 East 36th Ave., 3rd Floor Anchorage, AK 99508 Kristen Nelson IHS Energy PO Box 102278 Anchorage, AK 99510-2278 Robert Britch, PE Northern Consulting Group 2454 Telequana Dr. Anchorage, AK 99517 Tesoro Alaska Company PO Box 196272 Anchorage, AK 99519 Kevin Tabler Unocal PO Box 196247 Anchorage, AK 99519-6247 Dudley Platt DA Platt & Associates 9852 Little Diomede Cr. Eagle River, AK 99577 Shannon Donnelly Phillips Alaska, Inc. HEST -Enviromental PO Box 66 Kenai, AK 99611 ,-..., Greg Noble Bureau of Land Management Energy and Minerals 6881 Abbott Loop Rd Anchorage, AK 99507 Jeff Walker US Minerals Management Service Regional Supervisor 949 East 36th Ave., Ste 308 Anchorage, AK 99508 Jim Scherr US Minerals Management Service Resource Evaluation 949 East 36th Ave., Ste 308 Anchorage, AK 99508 Gordon Severson 3201 Westmar Cr. Anchorage, AK 99508-4336 Jordan Jacobsen Alyeska Pipeline Service Company Law Department 1835 So. Bragaw Anchorage, AK 99515 David Cusato 600 West 76th Ave., #508 Anchorage, AK 99518 Bill Bocast PACE Local 8-369 c/o BPX North Slope, Mailstop P-8 PO Box 196612 Anchorage, AK 99519 BP Exploration (Alaska), Inc. Land Manager PO Box 196612 Anchorage, AK 99519-6612 Bob Shavelson Cook Inlet Keeper PO Box 3269 Homer, AK 99603 Kenai Peninsula Borough Economic Development Distr 14896 Kenai Spur Hwy #103A Kenai, AK 99611-7000 ~ Rose Ragsdale Rose Ragsdale & Associates 3320 E. 41st Ave Anchorage, AK 99508 Paul L. Craig Trading Bay Energy Corp 5432 East Northern Lights, Ste 610 Anchorage, AK 99508 Chuck O'Donnell Veco Alaska,lnc. 949 East 36th Ave., Ste 500 Anchorage, AK 99508 Jim Ruud Phillips Alaska, Inc. Land Department PO Box 100360 Anchorage, AK 99510 Perry Markley Alyeska Pipeline Service Company Oil Movements Department 1835 So. Bragaw - MS 575 Anchorage, AK 99515 Jeanne Dickey BP Exploration (Alaska), Inc. Legal Department PO Box 196612 Anchorage, AK 99518 J. Brock Riddle Marathon Oil Company Land Department PO Box 196168 Anchorage, AK 99519-6168 Sue Miller BP Exploration (Alaska), Inc. PO Box 196612 Anchorage, AK 99519-6612 Peter McKay 55441 Chinook Rd Kenai, AK 99611 Penny Vadla Box 467 Ninilchik, AK 99639 James Gibbs PO Box 1597 Soldotna, AK 99669 John Tanigawa Evergreen Well Service Company PO Box 871845 Wasilla, AK 99687 Cliff Burglin PO Box 131 Fairbanks, AK 99707 North Slope Borough PO Box 69 Barrow, AK 99723 Lt Governor Loren Leman State of Alaska PO Box 110015 Juneau, AK 99811-0015 ~. Claire Caldes US Fish & Wildlife Service Kenai Refuge PO Box 2139 Soldotna, AK 99669 Charles Boddy Usibelli Coal Mine, Inc. 100 Cushman Street, Suite 210 Fairbanks, AK 99701-4659 Harry Bader State of Alaska Department of Natural Resources 3700 Airport Way Fairbanks, AK 99709 Williams Thomas Arctic Slope Regional Corporation Land Department PO Box 129 Barrow, AK 99723 ~ Kenai National Wildlife Refuge Refuge Manager PO Box 2139 Soldotna, AK 99669-2139 Richard Wagner PO Box 60868 Fairbanks, AK 99706 Bernie Karl K&K Recycling Inc. PO Box 58055 Fairbanks, AK 99711 Kurt Olson State of Alaska Staff to Senator Tom Wagoner State Capitol Rm 427 Juneau, AK 99801 Re: legal notices ~ Subject: Re: legal notices Date: Tue, 4 Feb 2003 15:59:15 -0900 From: "Denise Reece" <dreece@peninsulaclarion.com> To: "Jody Colombie" <jody - colombie@admin.state.ak.us> Received your ads and have scheduled them to run on Friday. ----- Original Message ----- From: "Jody Colombie" <jody colombie@admin.state.ak.us> To: <dreece@peninsulaclarion.com> Sent: Tuesday, February 04, 2003 3:11 PM Subject: legal notices > Denise, :> :> Please publish on friday 2-7-03. E-mail confirmation. :> :> Thank you. :> Jody lofl .-.. Thanks, Denise 2/4/2003 4:33 PM #1 ^ ,-." Application for an Aquifer Exemption Order Sterling Gas Field Unit Kenai Peninsula, Alaska October 2002 Submitted by Marathon Oil Company Anchorage, Alaska . , M MARATHON ~ Alaska ~ess Unit r---- Marathon Oil Company P.O. Box 196168 Anchorage, AK 99519-6168 Telephone 907/561-5311 Fax 907/564-6489 October 17, 2002 Mr. Robert P. Crandall Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West ih Avenue, Suite 100 Anchorage, AK 99501-3539 Dear Mr. Crandall: Re: Aquifer Exemption Order Application Sterling Gas Field Unit, Kenai Peninsula, Alaska Township 5 North, Range 10 West, Section 9, SM Pursuant to 20 MC 25.440, Marathon Oil Company (Marathon) submits the enclosed application for an aquifer exemption order for the Sterling Gas Field Unit. ~, The application requests the issuance of an aquifer exemption order that would include the boundaries of the Sterling Gas Field Unit below a depth of 1,750 feet subsea true vertical depth (SSTVD). If you have any questions or require additional information, please contact me at (907)564-6372 or ERWard@MarathonOiLcom. Sincerely, þ1/2.~ Eric R. Ward HES Professional ERW:mjl By Certified Mail Enclosure: Application for an Aquifer Exemption Order cc: Mr. Jim Segura, President, Salamatof Native Association, Inc. R. C. Lanz J. G. Eller E. R. Ward File 580 RI€EIVED OCT 1 7 2002 - 8' Gas Quns. COmmission AncIIItaa8 /~, ~ ,~ ~ TABLE OF CONTENTS Application Application for an Aquifer Exemption Order FiÇlures Figure 1. Cook Inlet Regional Map. Figure 2. Sterling Gas Field Unit with Gas Wells and MOC's Water Well. Figure 3. Stratigraphic Column of the Sterling Gas Field Area; Type Log SU 23-15. Figure 4. Sand 80dy Correlation in the Sterling Formation at the Sterling Gas Field Unit. Figure 5. Cross-Section View of the Sterling Gas Field Unit. Figure 6. Wireline log response in Pleistocene and Sterling Formations. Figure 7. Log Curves and TDS of SU 43-9. ,~ Attachments Attachment 1. Water Analysis Report for Sterling 8-4 Sands Attachment 2. Methodology Used to Determine TDS Concentrations Attachment 3. TDS Histogram for SU 43-9, 8-4 Sand Attachment 4. Spontaneous Potential Digital Data (Compact Disc) Attachment 5A. Hydrologic Survey of Water Wells, Department of Natural Resources, Division of Mining, Land & Water (WELTS) Attachment 58. Topographic Map with Adjacent Sections Indicating Number of WELTS Wells References ,r---, 0:\Sterling\43-9\UIC\2002 Applications\Aquifer Exemption\Contents-AE.doc 10/16/2002 ~ ~ ,~, APPLICATION FOR AN AQUIFER EXEMPTION ORDER STERLING GAS FIELD UNIT OPERATED BY MARATHON OIL COMPANY This application was prepared in accordance with the requirements of Alaska Oil and Gas Conservation Commission (AOGCC) Statute 20 AAC 25.440, FRESHWATER AQUIFER EXEMPTION, effective November 7, 1999. Introduction Marathon Oil Company (Marathon) is applying for an aquifer exemption order to exempt those portions of aquifers underlying the Marathon Sterling Gas Field Unit (T5N, R10W, S9, SM) below 1,750 feet subsea true vertical depth (SSTVD). Sterling Gas Field Unit aquifers below 1,750 feet SSTVD generally contain water with a total dissolved solids (TDS) content that is more than 3,000 mg/I and less than 10,000 mg/l; however, there are some layers that contain water with a TDS content of 3,000 mg/I or less. Marathon will demonstrate that the aquifers below 1,750 feet SSTVD qualify for exemption under 20 AAC 25.440(a), which states: ~ ... the commission will, in its discretion, issue an order designating a freshwater aquifer or portion of it as an exempt freshwater aquifer, if the freshwater aquifer meets the following criteria: (1) it does not currently serve as a source of drinking water, and it cannot now and will not in the future serve as a source of drinking water because (A) it is hydrocarbon-producing or can be demonstrated by the applicant to contain hydrocarbons that, considering their quantity and location, are expected to be commercially producible; (8) it is situated at a depth or location that makes recovery of water for drinking water purposes economically or technologically impractical; or ' (C) it is so contaminated that recovery of water for drinking water purposes is economically or technologically impractical; or (2) the total dissolved solids content of the groundwater is more than 3,000 and less than 10,000 mg/I, and it is not reasonably expected to supply a public water system (AOGCC, 1999). Marathon will also demonstrate that the available sources of drinking water, which occur from surface to approximately 750 feet SSTVD, are readily and economically available and protected , by sufficient confining layers. Sterlin~ Gas Field Unit The Sterling Gas Field Unit (SGFU) is located on the Kenai Peninsula approximately six miles east of the city of Kenai and three miles north of the city of Soldotna (see Figure 1). The 3,600- acre SGFU (see Figure 2) has produced gas from five completions since it's discovery in 1961. In addition, a water well drilled to a depth of 268 feet measured depth (MD) is in the SGFU to support drilling operations. ~ /""'"', Application for an Aquifer EA .Iption Order - Marathon Oil Company ~ Page 2 of 20 ~ Current production operations occur only at the Sterling Unit 43-9 Pad, which represents approximately 4.1 acres of the 3600-acre unit, or just over 0.1 percent of the area defined by the SGFU. Beginning in October 2000, gas production became intermittent due to the inability of wells to unload and dispose of water. Currently, two of the four completions on the 43-9 pad are shut-in due to water production, and current gas production is restricted to below the economic limit for this field. Table 1 summarizes the current status of the SGFU. Table 1. Sterling Gas Field Unit First Final Perforated Perforated 12/2001 12/2001 Current Cum Cum Current Well Prod. Prod. Interval Interval Gas Water Status Rate Date Date MD SSTVD MMCFG MBO MMCFGPD SU 32-9 March Active Sterling B-4 Sterling B-4 407 0.13 Active 1.0 1999 (5,679' - 5,686') (5,013' - 5,019') SU 43-9 Oct. Feb. Sterling B-4 Sterling B-4 2,165 2.75 SI due to 0 1966 1998 (5,262' - 5,272') (5,026' - 5,036') water SU 23-15 May Oct. Sterling B-4 Sterling B-4 379 NA T&A'd 0 1962 1966 (5,250' - 5,254') (5,028' - 5,032') SU 41-15S April Active Beluga Beluga 53 0.37 Active 0.2 1999 (9,440' - 10,026') (7,678' - 8,099') SU 41-15L April April Tyonek Tyonek 145 0.62 SI due to 0 1999 2001 (10,942'-11,331') (8,828' - 9,164') water ~ To have economic production of gas and conservation of resources, disposal of up to 1,000 barrels of produced water per day is necessary. As such, it is the desire of Marathon to exempt aquifers below 1,750 feet SSTVD from produced water injection/disposal restrictions. GeoloQic Review The geologic column (see Figure 3) on the Kenai Peninsula includes clastic rocks from the Quaternary through Tertiary which lie unconformably on top of Mesozoic basement rocks. Shallow sand and gravel reservoirs that serve as the fresh drinking water aquifers for the Kenai Peninsula are regionally described to be as thick as 750 feet (Glass, 1996). Locally, the SGFU consists of approximately 830 feet of equivalent sand and gravel reservoirs. The oil and gas industry has long recognized this valuable aquifer system and has cased and cemented this freshwater zone during drilling operations to avoid any possibility of contamination. ~ Below the Quaternary freshwater zone lies the Kenai Group which includes a variety of reservoir and non-reservoir lacustrine and fluvial-derived rocks. Regionally, hydrocarbons are produced in commercial quantities from 3,000 feet to 12,500 feet SSTVD in Kenai Group sandstone reservoirs. Specifically in the SGFU on the Kenai Peninsula gas is produced from the Sterling, Beluga, and Tyonek Formations between 5,000 and 9,200 feet SSTVD. Figure 4 is a northwest to southeast cross section through SGFU wells Sterling Unit (SU) 32-9, SU 43-9 and SU 23-15. Well to well correlation of the Sterling Formation sands shows that they are fairly continuous across the SGFU and vertically contained by impermeable coal and clay layers. Commercial gas production in the Sterling Formation is limited to the B-4 sand which occurs at approximately 5,000 feet SSTVD. 0:\Sterling\43-9\UIC\2002 Applications\Aquifer Exemption\Aquifer Exemption Application.doc 10/16/2002 r-' Application for an Aquifer Ex ,ption Order - Marathon Oil Company ~\ Page 3 of 20 ~ Groundwater HvdroloQV (20 AAC 25.440(a)(1 )(8» In the SGFU, aquifers below 1,750 feet SSTVD are situated at depths that make recovery of water for drinking water purposes economically impractical based on available data from the Alaska Department of Natural Resources, Division of Mining, Land and Water, Well Log Tracking System (WELTS). WELTS data show that drinking water is readily and economically available much shallower than 1,750 SSTVD (ADNR, n.d.). Data presented in Table 2 provide information on water well depth based on information from the WELTS database as of March 20, 2002. The information suggests that groundwater in the area of the SGFU is typically available within 100 feet from surface with well depths ranging from 6 feet to 451 feet measured depth (MD) within T5N, R10W, SM. Table 2. Water Well Deptha Within Within % mile of the 8U Depth of Well Within T5N R10W 8M, 43.9 well location in ft. T5N R10W 8M Adjacent to (Includes Portions of Section gc Sections 9 and 10) Average 91 94 N/A Maximum 451 220 N/A Minimum 6 21 N/A No. of Wellsb 1,026 111 Od ~ aAdditional documentation is located in Attachment 5. Data are current as of March 20, 2002. bOnly wells with depths greater than zero were included in the statistics. c Within T5N R10W SM, Sections 3, 4,5,8,9,10,15,16,17. dNo section information was available in WELTS for one well within Section 10 (Key No. 22335). Also, Marathon has a temporary water use permit (TWUP A98-25) for a water well associated with drilling activity that is located within y.. mile of the SU 43-9 well location. The WELTS data provide groundwater information from surface to 451 feet. In order to characterize groundwater conditions deeper than 451 feet, well log data was used from a well within the SGFU. The Union Oil Company of California, Sterling Unit #23-15 well (1961) in Sec. 15, T5N, R10W, SM acquired wireline logs through the groundwater table and documented the freshwater zone to be from the surface to approximately 750 feet SSTVD. Figure 5 shows the wireline log responses associated with this zone. Spontaneous Potential (SP) and Deep Resistivity (ILD) curves are used to estimate the base of the freshwater aquifer in this well. The marked change from low SP deflection and high resistivity to high SP deflection and lower resistivity is a good indication of changing connate water salinity from fresh to brackish. The change from fresh to brackish water cannot be determined from WELTS data only. The WELTS data presented in Table 2 show that economically obtainable drinking water is readily available within the upper half of the unconsolidated Quaternary sediments, which occur from surface to 750 feet SSTVD based on specific log data from the Sterling Unit #23-15 well. ~ 0:\Sterling\43-9\UIC\2002 ApplicationslAquifer ExemptionlAquifer Exemption Application.doc 10/16/2002 ,r---. Application for an Aquifer E>.. .ption Order - Marathon Oil Company ~. Page 4 of 20 .~ Formation Water Salinitv (20 AAC 25.440(a)(2» Evaluation of water resistivity and subsequent estimation of total dissolved solids (TDS) was accomplished via the Spontaneous Potential (SP) Method as outlined in EPA document "Survey of Methods to Determine Total Dissolved Solids Concentrations" (US EPA, 1989). Attachment 2 provides additional information on the SP Method. Data for the SP Method was obtained from the SU 43-9 well from 1,050 to 5,900 feet SSTVD. The SP Method demonstrates that TDS in SU 43-9 is predominately more than 3,000 and less than 10,000 mgll from 1,050 to 3,960 feet SSTVD. From 3,960 to 5,340 feet SSTVD, the TDS is predominately 3,000 mg/I or less (see Figure 7). The reliability of the SP Method for determining TDS is verified by comparing an actual water sample. A water analysis from the SU 43-9 8-4 sand reported a TDS value of 1,931 mg/I (Attachment 1). Using the SP Method in the 8-4 sand in the water leg below the perforated interval yields a TDS value of 1,946 mg/I (Attachment 3). Therefore the SP method accurately predicted the measured value of TDS in the 8-4 Sand to within one percent (Attachment 2). There are approximately seven sand formations with TDS less than 3,000 mgll based on the SP Method. These sands are located from 4,200 to 5,578 feet MD with TDS ranging from 1,765 to 2,518 mg/I TDS (see Figure 7). Evidence of Hvdrocarbons (20 AAC 25.440(a)(1 )(A) and (Cn ~ Commercially producing hydrocarbons in the SGFU, as per 20 MC 25.440(a)(1 )(A), exist in the Sterling B-4 sand (5,013' - 5,036' SSTVD), Beluga (7,678' - 8,099' SSTVD), and Tyonek (8,828' - 9,164' SSTVD). Impractical and Uneconomical for DrinkinQ Water Purposes (20 AAC 25.440(a)(1)(Bn Aquifers below 1,750 feet SSTVD are exemptible via the uneconomic criteria for the following reasons. First, the area has plentiful groundwater available from surface to approximately 750 feet SSTVD. WELTS data demonstrate that a majority of water wells only penetrate the first 100 feet and the deepest well in the region (T5N, R10W) is only 451 feet (ADNR, n.d.). Second, the water below 1,750 feet SSTVD is predominately between 3,000 and 10,000 mg/I TDS making recovery of drinking water highly impractical. Typical water well completion technology provides no adequate means of isolating intervals above the drinking water interval. Finally, the cost to drill a drinking water well below 1,750 feet SSTVD would be at least four times the cost of a conventional well drilled to 400 feet. The cost to drill to 4,200 feet MD, where waters with less than 3,000 mg/I TDS exist, would easily exceed ten times the cost of a conventional well. Confinin~ Lavers Within the Sterling Formation, shale with occasional coal bound each sand layer. Figure 5 illustrates that laterally the sands and shale are persistent from SU 32-9 to SU 43-9. The shale layers are often in excess of 10 feet thick and provide good hydraulic isolation of the sands both above and below the potential injection intervals. Given these circumstances it is highly unlikely that vertical migration of any injected waste fluids would occur. ~ 0:\Sterling\43-9\UIC\2002 Applications\Aquifer Exemption\Aquifer Exemption Application.doc 10/16/2002 i------ ~ ('. ~. Application for an Aquifer E^ ,ption Order - Marathon Oil Company ~. Page 5 of 20 More importantly, confinement of injected fluids from the Pleistocene freshwater aquifer is assured in that a thick (>1,000') clay and silt layer occurs directly above the Sterling Formation proposed injection interval. Figure 6 shows log responses and a general lithologic description for the Pleistocene, Sterling confinement interval, Sterling reservoir interval and Beluga Formation. Distinct sonic travel time gradients are apparent for each interval suggesting unique lithologic components affecting the log response. In the case of the Sterling confinement layer, well cuttings of samples in this interval (see Figure 5) are described as clay and silt which are impermeable lithologies and effective against the possible vertical migration of fluids into the freshwater aquifer. Log data is sufficient to observe this containment interval in wells SU 43-9 and SU 23-15. Summary The future economic development of the remaining Sterling Gas Field Unit reserves requires injection/disposal of produced water into aquifers that require an aquifer exemption order. Marathon has acquired and reviewed available public and proprietary data and concludes that aquifers below 1,750 feet SSTVD would provide suitable zones for produced water disposal without endangering drinking water sources. According to the AOGCC statutes, aquifers below 1,750 feet SSTVD qualify for exemption because: (1) They do not currently serve as a source of drinking water, and cannot now and will not in the future serve as a source of drinking water because (A) Hydrocarbon production occurs from 5,013 to 9,164 feet SSTVD. (B) Aquifers below 1,750 feet SSTVD are situated at depths that make recovery of water for drinking water purposes economically or technologically impractical. Readily available sources of drinking water are typically found at less than 100 feet in the local area. Aquifers that contain water with a TDS content less than 3,000 mgll are located between 3,960 and 5,340 feet SSTVD, depths that are both uneconomic and impractical for obtaining drinking water. (2) The total dissolved solids content of the groundwater below 1,750 feet SSTVD is typically more than 3,000 and less than 10,000 mgll, and it is not reasonably expected to supply a public water system. O:\Sterling\43-9\UIC\2002 Applications\Aquifer Exemption\Aquifer Exemption Application.doc 10/16/2002 ~ .-- ~. Application for an Aquifer Exemption Order - Marathon Oil Company Page 6 of 20 ,~ MIles 30 I 0 10 20 I GRI~1 /" ~-J'\ PIONEER UNIT . Susitna i .! ~ ~j Figure 1. Cook Inlet Regional Map (ADNR, 1999). r-" -., ,~ Application for an Aquifer Exemption Order - Marathon au Company Page 7 of 20 MaIathon Acreage ,~, Status of Wells SU 32-9: Producing SU 43-9: Shut-in SU 41-15S: Active SU 41-15l: Shut-in SU 23-15: Temp,Abandonment 0 I 1/2 I MILE ~ 33 34 T6N. R10W5 36 6 5 4 ,.:r...... 3 2 , "", I I 8: 9 ¡ 10 , , '..., Watll'WeII "": L~~_43.g i T ~su 41:15 : """ : , ." "'\' : 1( t". 15 17' , '" L.. ~!'15 : 711" -GO32' ~...........: 13 7 11 12 18 14 ~19 20 22 23 24 T5N . R10W ~ 30 29 28 27 26 25 Ý 31 32 33 34 35 36 ~ {ana; R;YAr~ MARATHON Oil COMPANY ALASKA REGION STERLING GAS FIELD WATER INJECTION STERUNG B4 COOK INLET, ALASKA Figure 2. Sterling Gas Field Unit with Gas Wells and MaC's Water well. o:\9teñngW3001C\2OO2 ~ , "'""" ,~ ,--., Application for an Aquifer Exemption Order - Marathon Oil Company Page 8 of 20 Quaternary Spontaneous. Potential - ~ ~ cd /"" .~ ~ ~ (l) ~ ~. U' 0 - 830' Pleistocene sand, silt, gravels; unconfined fresh water aquifer source Well SU 23-15 Resistivity § .,...., ... ê 0 ¡:.¡.. 830' - 6300' Miocene sand, silt, clay, coal; thick, high porosity and permeability, fluvial gas reservoirs; confined brackish aquifer source; preferred injection interval (-2000' - -5300' SSTVD) OJ:) 0 .,...., ........ ~ ... í/l s ¡:.¡.. ro OJ:) ;:j ........ () ~ 6300' - 8000' Miocene sand, silt, clay, coal; thin, discontinuous, low porosity and permeability, fluvial gas reservoirs § .,...., ... ê 0 ¡:.¡.. 8000' - 14000' Miocene/Oligocene sand, silt, clay, coal; thin to thick, continuous, low porosity and permeability, fluvial gas reservoirs ~ () ~ ~ E-- The entire Hemlock, West Foreland and Mesozoic Formations have not been penetrated in the Sterling Unit. Figure 3. Stratigraphic Column of the Sterling Gas Field Area; Type Log SU 23-15. /'-. ~ ~ Application for an Aquifer Exemption Order - Marathon Oil Company SU 32-9 ~'U SU 43-9 ~:~ .~. IWIII .1l1li l r" wdØ .. . r---, -1000' -2000' -3000' -4000' -5000' 0' Page 9 of 20 Surface - 750' SSTVD Quaternary fi'esh-water aquifer 750'- 6300' SSTVD Miocene Sterling Formation potentially gas-bearing reservoirs Sterling Formation B-4 gas-productive sandstone reservoir in Sterling Unit Figure 4. Sand Body Correlation in the Sterling Formation at the Sterling Gas Field Unit. ~f. r r, ~. Application for an Aquifer Exemption Order - Marathon Oil Company ~ -1)- ,.,,0:. . [!;~'! ¡:.~ ~~' ¡~¡ ~ >-. .... i~~+~.. ' "fOOD':, 5000. . Page 11 of 20 ~ (j 0 .....:¡ 0 ::I:: E-- - .....:¡ Fresh water aquifer :1 I-< ~ ~ .~ 1:: ~Q) 5 s:: t.;:: s:: 0 U ; - Injection interval '8' ~ Sonic travel time vs. depth shows distinct compaction trends in each major lithologic unit. A distinct clay confinement layer exists between the fresh water aquifer and proposed injection interval. Figure 6. Wireline log response in Pleistocene and Sterling Formations :--'" /- Application for an Aqui-, :xemption Order - Marathon Oil Compan! "\ Page 16 of 20 "'" Attachment 3 TDS Histogram for SU 43-9, 8-4 Sand Frequency Histogram pf WORKPSG.TDSSPNORM2 Well: STERLlNG43-9 5272.0 - 5360.0 FEET Filter: ~ 0.08 - 0.07 - 0.06 - 0.05 - 0.04 - 0.03 - 0.02 - 0.01 -" 0.00 a a a ro n 0 n a a t') a a (() a a m a a N a 0 L() Statistics: ~ Possible values Missing values Minimum value Maximum value Range Mean Geometric Mean Harmonic Mean 177 0 340.94632 2666.59985 2325.65353 1946.24712 1889.58817 1803.17447 Variance Standard Deviation Skewness - Kurtosis Median Mode 172170.39523 414.93421 -0.72407 4.03092 1982.00000 1995.00000 a a N a a '<t N a a "- N 1.0 - 0.9 - 0.8 - 0.7 - 0.6 - 0.5 -0.4 - 0.3 - 0.2 - 0.1 0.0 0 0 0 t') ~'. ~ Application for an Aquifer Exel11ption Order - Marathon Oil Company Page 20 of 20 ~ REFERENCES Alaska Department of Natural Resources, Division of Mining, Land and Water, n.d., Alaska Hydrologic Survey, Well Loq Tracking System, <http://info.dec.state.ak.us/welts/>(March 20, 2002) Alaska Department of Natural Resources, Division of Oil and Gas, 1999, Cook Inlet Areawide 1999 Oil and Gas Lease Sale, Final Findinq of the Director, <http://www.dog.dnr.state.ak. us/oil/prod ucts/publications/cookinlet/cia 1999 _finaLfind ing/ci99 _fbiC cover.gif> (February 1, 2002) Alaska Oil and Gas Conservation Commission, 1999, Requlations, Alaska Administrative Code, "20 MC 25.440," <http://www.state.ak.us/local/akpages/ADMIN/ oqc/art599.htm#440> (November 7, 2001). Glass, Roy L., 1996, Ground-Water Conditions and Quality in the Western Part of Kenai Peninsula, South central Alaska, Open File Report 96-466, United States Geological Survey, Anchorage, AK, Schlumberger, 1987, Oilfield Services, Schlumberger Log Interpretation Principles/ Applications. ,r-" United States Environmental Protection Agency, 1989, Survey of Methods to Determine Total Dissolved Solids Concentrations, Underground Injection Control Program, EPA LOE Contract No. 68-03-3416, Work Assignment No. 1-0-13, Washington, D.C. United States Environmental Protection Agency, 1998, Code of Federal Requlations, "40 CFR 144-148," Office of the Federal Register National Archives and Records Administration, Washington, D.C., pp. 614-833. ~ I O:\Sterling\43-9\UIC\2002 Applications\Aquifer Exemption\References.doc 10/16/2002