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Home My WebLink AboutAEO 011 . . AQUIFER EXEMPTION ORDER # 11 Deep Creek Unit 1. Various Emails 2. August 4, 2004 3. August 6, 2004 10. October 7, 2004 11. October 15, 2004 12. September 30, 2004 13. October 26, 2004 14. October 28, 2004 15. November 18,2004 16. November 19,2004 Unocal's application for an AEO Deep Creek Unit Notice of Hearing, affidavit of mailing and bulk mailing list Ltr from Cook Inlet Keepers re: application AOGCC response to ltr email to Unocal re: continuing the hearing Hearing Sign In Sheet Transcript Unocal answers to questions were posted at the hearing Cook Inlet Keepers comments Ltr to US EP A re: application Transcript Draft Application that was sent to EP A Ltr from AOGCC to Cook Inlet Keeper email to EP Are: timeline EP A Approval Letter 4. August, 2004 5. August 16,2004 6. August 31, 2004 7. September 16, 2004 8. September 16,2004 9. October 5, 2004 AQUIFER EXEMPTION ORDER #11 · e STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 Re: THE REQUEST OF UNION OIL COMP ANY of CALIFORNIA for an Aquifer Exemption Order for portions of the Deep Creek Unit in Township 2 South, Range 13 West, Seward Meridian, Kenai Peninsula. ) Aquifer Exemption Order No. 11 ) ) Sterling and Beluga Formations ) Deep Creek Unit ) ) December 7, 2004 IT APPEARING THAT: 1. Union Oil Company of California ("UNOCAL") submitted an application for aquifer exemption order dated August 4, 2004, for portions of 15 governmental sections within the Deep Creek Unit ("DCU") on the Kenai Peninsula (within Township 2S, Range 13W, Seward Meridian); 2. The Alaska Oil and Gas Conservation Commission ("Commission") published a public hearing notice in the Anchorage Daily News on August 6, 2004, with a tentative hearing date of September 16, 2004; 3. Cook Inlet Keeper, a membership based watershed protection organization, requested a public hearing and a one-week extension of the date to file comments by letter dated August 14, 2004, which request was granted; 4. The September 16, 2004 public hearing was continued to September 30, 2004; 5. At the September 30,2004 hearing, Unocal provided sworn testimony addressing engineering and geologic considerations in support of the DCU aquifer exemption order application; Cook Inlet Keeper provided public comment at the hearing; and following the hearing the record was held open to allow Unocal and Cook Inlet Keeper to provide certain additional information and clarifications requested by the Commission; 6. On October 5, 2004 Unocal amended its request for an aquifer exemption, contracting the proposed aquifer exemption area within Township 2S, Range 13W ofthe Seward Meridian to: A one quarter mile radius around the NNA #1 well in Section 11; All of Section 22 which includes the existing Happy Valley development drillsite and associated wells; The southeast one-quarter of Section 15; and All of Section 21; Aquifer Exemption Order 1. Deep Creek Unit December 7, 2004 e Page 2 7. Cook Inlet Keeper provided technical and process questions by letter dated October 7, 2004, and included as an attachment a letter from the Ninilchik Traditional Council concerning protection of ground water resources in the vicinity ofDCU and depth of drinking water wells; 8. The Commission has jurisdiction in this matter under AS 31.05.030(h), 20 AAC 25.440, and 40 CFR 147, Subpart C - Alaska; 9. The Commission submitted a copy of Unocal's Aquifer Exemption application and related documents to the U.S. Environmental Protection Agency, Region 10, ("EPA Region 10") on October 15, 2004 and a draft of this aquifer exemption order was sent to EP A Region lOon October 26, 2004; 10. In correspondence dated November 19, 2004, EPA Region 10 concurred with the proposed aquifer exemption order for the DCU; and 11. Unocal also submitted a Disposal Injection Order ("DIO") application for converting the near vertical well NNA No.1 to disposal service within the DCU. This application was received October 4, 2004 and public review was initiated October 8, 2004. FINDINGS: 1. Extent of Aquifer Exemption Area.! The Deep Creek Unit ("DCU") is located on the Kenai Peninsula approximately six miles southeast of the city ofNinilchik, Alaska. Development operations are underway to begin regular gas production ftom the Happy Valley drillsite by the end of 2004. There are two plugged and abandoned oil exploratory wells, one shut in gas exploratory well, and ten delineation and production gas wells that have been drilled in the DCU. As noted in the DIO application, the Unocal NNA No.1 well located on a pad approximately two miles north of the Happy Valley gas production pad is proposed for conversion to disposal injection service. Supporting data have been provided in the record for an aquifer exemption covering an area within Township 2S, Range 13W, Seward Meridian, specifically described as: A one quarter mile radius around the NNA #1 well in Section 11; All of Section 22 which includes the existing Happy Valley development drillsite and associated wells; The southeast one-quarter of Section 15; and All of Section 21. 1 All depths noted in this Order are true vertical depth ("TVD") below ground level. Aquifer Exemption Order 1. Deep Creek Unit December 7, 2004 e Page 3 2. Geology and Groundwater Hydrology. The stratigraphic column on the Kenai Peninsula includes clastic rocks of Quaternary through Tertiary age that lie unconformably on top of Mesozoic Age basement rocks. Glacial Pleistocene shallow sand and gravel reservoirs serve as underground sources of drinking water for much of the Kenai Peninsula and are locally over 800 feet thick. Current control from oil and gas wells within the DCU indicates these fresh water aquifers may range to a depth of 1,000 feet in the vicinity of the NNA No.1 and Happy Valley drill sites. Gravel rich deposits with very desirable aquifer properties range to 300 feet deep in this area. The value of this aquifer system has long been recognized and hydrocarbon exploration 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 this freshwater zone lies the Kenai Group that includes the Beluga and Tyonek formations, mainly consisting of a series of reservoir and non-reservoir lacustrine and fluvial-derived rocks. The Beluga Formation is several thousand feet thick and occurs at depths greater than 2,000 feet in the DCU. This formation is comprised of thinly laminated sandstones, siltstones, shales and coals. Individual sandstone beds within the Beluga Formation are generally less than 30 feet thick, resulting in a heterogeneous sequence of rocks with very poor or no vertical connectivity or permeability. In the area considered for aquifer exemption, the top of the Beluga Formation is at a depth of approximately 2,400 feet and marked by locally continuous, 75-foot thick shale. The entire Beluga Formation interval can be expected to act as a confining zone for the underlying Tyonek Formation. 3. Formation Water Salinity. Well logs from two DCU wells provide data for formation water salinity calculations: the Deep Creek No.1 (drilled 1958 within Section 15) and the NNA No.1 (drilled 2001 within Section 11). Formation water salinities calculated by a third party contract petrophysicist working for Unocal used estimation techniques described in EP A guidance document "Survey of Methods to Determine Total Dissolved Solids Concentrations", (KEDA Project No. 30-956). A comparison with a produced water sample from the Tyonek Formation in the Unocal NNA No. 1 well showed good agreement with the log derived values. The results of this work indicate formation water salinities in the DCU are greater than 3,000 ppm and less than 10,000 ppm at depths greater than 1,800 feet. The Commission independently verified Unocal's analysis using data from the NNA No. 1 well, chosen because of its good data quality. The Commission analysis also utilized the EP A methodology. Comparing the results of Unocal and Commission analyses demonstrates good agreement (see graph "Salinity Determinations - NNA No.1; the correlation line in the graph is a second order polynomial fit to the Commission salinity calculations. ) Aquifer Exemption Order 1. Deep Creek Unit December 7, 2004 e Page 4 Salinity Determinations - NNA No.1 4000 500 500 1000 1500 2000 2500 3500 3000 2500 i' Q. Q. ; 2000 :5 ñi tJ) 1500 1000 Measured depth I . AOGCC RWA II UNOCAL RWA -Poly. (AOGCC RWA) I Findings from the Commission's analysis ofDCU salinity data are as follows: a. Drinking water in the area comes largely from glacial sediments in this area. b. Below a depth of approximately 1,000 feet, water salinities increase uniformly to a value of approximately 3,000 ppm at 1,800 feet. c. The transition from consistently low salinities below 1,000 feet to continuously increasing salinities above 1,000 feet indicates a lack of hydraulic connectivity between the two formation water salinity regimes. d. The salinity trend shown in the graph conforms to known stratigraphic conditions in the DCU area, with low salinity formation waters occurring in Glacial Pleistocene and possibly minor portions of the Upper Sterling F ormation sediments. Aquifer Exemption Order 1. Deep Creek Unit December 7, 2004 e Page 5 4. Suitability ofDCU Sediments Below 1.800 feet as Drinking Water Aquifers. Regulation 20 AAC 25.440 (a)(1)(B)"Freshwater Aquifer Exemption" provides that the Commission may 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". Unocal has presented three reasons in support of an aquifer exemption below 1,800 feet. First, the area has plentiful groundwater available from the surface to a depth of approximately 1,000 feet with the most permeable and therefore desirable sediments within 300 feet of the surface. Using the NNA No.1 well as a geographic datum, information about water wells available from the Department of Natural Resources is summarized in the following table: Water Well DeI: th Depth Within 10-miles Within approximately of NNA No.1 2-miles of NNA No.1 Average 88 ft 47 ft Maximum 292 ft 50 ft Minimum Oft 45 ft No. of Wells 87 3* * 3 water wells are slightly more than 2 miles from the NNA No.1. In a post hearing submittal, Mr. Bruce o skolkoff, Environmental Program Director for the Ninilchik Traditional Council, has asserted that some water wells in the vicinity of the DCU exist to a depth of 800 feet. Second, the groundwater below 1,800 feet depth is predominately between 3,000 and 10,000 ppm total dissolved solids. Given the demonstrated abundance of drinkable water at shallow depths, recovery of drinking water with such quality from below 1,800 feet is highly impractical due to drilling and treatment costs. Third, mud logs from wells drilled to date in the DCU show that hydrocarbon gas, primarily methane, occurs in increasing quantities (non-commercial) throughout the Kenai Group below depths of 1,300 feet. The presence of gas below 1,300 feet in the DCU is due to trapping of the gas within the DCU anticlinal structure. This is demonstrated by wells that are high on the structure having greater methane concentrations than those on the flanks of the anticline. CONCLUSIONS: 1. Those portions of freshwater aquifers occurring below approximately 1,000 feet within the DCU do not currently serve as a source of drinking water. All known and foreseeable ground water consumption from the DCU vicinity is consistent with usable ground water resources occurring above 1,000 feet; Aquifer Exemption Order 1. ' Deep Creek Unit December 7, 2004 e Page 6 2. Those portions of freshwater aquifers occurring below 1,800 feet within the DCU contain salinities and hydrocarbon gases, and are situated at depths that make recovery ofthese waters for drinking water purposes economically impractical; 3. Those portions of aquifers occurring below 1,800 feet within the DCU cannot reasonably be expected to serve as underground sources of drinking water; and 4. Those portions of aquifers occurring within a ~ mile radius around the NNA No. 1 wellbore in section 11, the S.E. 1/4 of Section 15, all of Section 21 and all of Section 22 in T2S, R13W, Seward Meridian and below 1,800 feet qualify as exempt freshwater aquifers under 20 AAC 25.440(a)(1)(A), 20 AAC 25.440(a)(1)(B), and 20 AAC 25.440(a)(2). NOW, THEREFORE, IT IS ORDERED THAT the aquifers or portions of aquifers occurring below 1,800 feet TVD in the following areas within T2S, R13W, Seward Meridian, are exempt as provided by 20 AAC 25.440: A one quarter mile radius around the NNA No.1 well in Section 11; All of Section 22 which includes the existing Happy Valley development drillsite and associated wells; The southeast one-quarter of Section 15; and All of Section 21. Note that this Order does not authorize the injection of any fluids within the exemption area; and, the Commission will require the applicant to demonstrate the existence of an adequate confining layer above the zone of proposed injection before authorizing any injection of fluids into the exempt area. 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 (i.e., 10th day after the application for rehearing was filed). DIO 28 and AEO 11 - Edits per commissione.rman e Attached are edited versions of the 2 orders; these should now be ready for signature. Please fax to Gary Eller at 263-7847 after signature. Jim Jim Regg <iim regg(a¿admin.state.ak.us> Petroleum Engineer AOGCC Content-Type: applicationlmsword Content-Encoding: base64 Content-Type: applicationlmsword Content-Encoding: base64 1 of 1 12/7/20043:02 PM Orders e e 10f2 12/7/20044:47 PM Orders e e 20f2 12/7/20044:47 PM Citgo Petroleum Corporation PO Box 3758 Tulsa, OK 74136 Kelly Valadez Tesoro Refining and Marketing Co. Supply & Distribution 300 Concord Plaza Drive San Antonio, TX 78216 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 Mark Wedman Halliburton 6900 Arctic Blvd. Anchorage, AK 99502 Baker Oil Tools 4730 Business Park Blvd., #44 Anchorage, AK 99503 Gordon Severson 3201 Westmar Cr. Anchorage, AK 99508-4336 James Gibbs PO Box 1597 SOldotna, AK 99669 Richard Wagner PO Box 60868 Fairbanks, AK 99706 Williams Thomas Arctic Slope Regional Corporation Land Department PO Box 129 Barrow, AK 99723 e Mary Jones XTO Energy, Inc. Cartography 810 Houston Street, Ste 2000 Ft. Worth, TX 76102-6298 Robert Gravely 7681 South Kit Carson Drive Littleton, CO 80122 Richard Neahring NRG Associates President PO Box 1655 Colorado Springs, CO 80901 Samuel Van Vactor Economic Insight Inc. 3004 SW First Ave. Portland, OR 97201 Schlumberger Drilling and Measurements 2525 Gambell Street #400 Anchorage, AK 99503 Ciri Land Department PO Box 93330 Anchorage, AK 99503 Jack Hakkila PO Box 190083 Anchorage, AK 99519 Kenai National Wildlife Refuge Refuge Manager PO Box 2139 Soldotna, AK 99669-2139 Cliff Burglin PO Box 70131 Fairbanks, AK 99707 North Slope Borough PO Box 69 Barrow, AK 99723 e David McCaleb IHS Energy Group GEPS 5333 Westheimer, Ste 100 Houston, TX 77056 George Vaught, Jr. PO Box 13557 Denver, CO 80201-3557 John Levorsen 200 North 3rd Street, #1202 Boise, 10 83702 Michael Parks Marple's Business Newsletter 117 West Mercer St, Ste 200 Seattle, WA 98119-3960 David Cusato 200 West 34th PMB 411 Anchorage, AK 99503 Jill Schneider US Geological Survey 4200 University Dr. Anchorage, AK 99508 Darwin Waldsmith PO Box 39309 Ninilchick, AK 99639 Penny Vadla 399 West Riverview Avenue Soldotna, AK 99669-7714 Bernie Karl K&K Recycling Inc. PO Box 58055 Fairbanks, AK 99711 ~~'\tvl \~\~þ\ #16 ,sr..~ i ft ~ :D,S ~ ~ ~~ "'l. PRQ'tt-c, UNITEDaTES ENVIRONMENTAL PROTECTION aNCY REGION 10 1200 Sixth Avenue Seattle, WA 981 01 NOV 19 2úU4 Reply To Attn Of: OCE-082 Mr. John K. Norman, Chairman Alaska Oil and Gas Conservation Commission 333 W. 7th Avenue, Suite 100 Anchorage, Alaska 99501-3539 Re: Approval of Union Oil of Cali fomi a's (Unocal's) Aquifer Exemption No. 11, Happy Valley Deep Creek Unit (DCU) in Sections 11,22,15 and 21 ofT2S, R13W, Seward Meridian, below 1800 feet True Vertical Depth (TVD) (includes Lower Sterling, Beluga, and Tyonek) Kenai, Alaska Dear Mr. Norman: The Environmental Protection Agency (EP A) Region 10 - Office of Compliance and Enforcement has received and reviewed a copy of the Alaska Oil and Gas Conservation Commission's (AOGCC) decision on the above-referenced DCU Aquifer Exemption No. 11, dated October 15,2004, along with the Commission's entire record of this case which includes the application, the public notice, and the public hearing transcript. EP A concurs with the applicant's (Unocal) request for aquifer exemption of those portions (specifically Township 2S, Range 13W, Seward Meridian described as 1. a quarter mile radius around NNA #1 well in Section 11,2. all of Section 22,3. the Southeast one-quarter of Section 15, and 4. all of Section 21) of the aquifers below 1,800 TVD and the Beluga and Tyonek formations. EP A finds that the criteria under 40 CFR 146.4 for exemption of aquifers are satisfied. The applicant's request to include the Lower Sterling is also approved. We recommend a rigorous engineering assessment on containment of injection fluids within the injection zone be submitted to and approved by the AOGCC as part of the Disposal Injection Order prior to initiation of any injection/disposal activities. This concludes the approval of the aquifer exemption. If you have any questions regarding this matter, please feel free to contact me or have your staff call Thor Cutler at (206) 553-1673. Sincerely, ~.ti.J¿¿æ; f~ Michael f\. Bussell, Director Office of Compliance and Enforcement cc: Sharmon Stambaugh, ADEC o Prlnlfld on Recycled Paper #15 [Fwd: Re: Proposed Aquifer Exemption for Deen Creek Unit] e e , Subj ect : Date: From: To: Original Message -------- Re: Proposed Aquifer Exemption for Deep Creek Unit Thu, 18 Nov 2004 10:20:33 -0800 CUtler.Thor@epamail.epa.gov James Regg <jim regg@admin.state.ak.us> Deep creek...within a week best guess. Thor CUtler 206-553-1673 fax 206-553-1280 cutler.thor @epa.gov James Regg <jim regg@admin.s tate.ak.li8> To: Thor CUtler/R10/USEPA/US@EPA cc: Subject: Re: Proposed Aquifer Exemption for Deep Creek Unit 11/18/2004 09: 36 AM Thanks, Thor. can you give me an estimate on when you think EPA will respond to the proposed AEO 11 for Deep Creek? Jim Regg AOGCC CUtler.Thor®epamail.epa.gov wrote: I received both aquifer exemptions on the same day. They are in review. I would have to check the record to clarify when these came in. Thor CUtler 206-553-1673 fax 206-553-1280 cutler.thor @epa.gov James Regg ~ <jim regg@admin.s CUtler/R10/USEPA/US@EPA . tate.ak.us> TO': Thor cc: Aquifer Exemption for Deep Creek Unit 11/12/2004 11:25 Subject: Proposed AM Thor - The Alaska Oil and Gas Conservation Commission sent you copies of application, supporting documents, and the proposed Aquifer Exemption Order (AEO #11) for Unocal's Deep Creek Unit by letters dated October 15 and October 26, 2004. I am checking on the status of your review, particularly if you have any questions, and when you expect to make a decision. Thanks. Jim Regg AOGCC (See attached file: jim_regg.vcf) attached file: jim_regg.vcf) lof2 11/ 18/2004 11: 11 AM [Fwd: Re: Proposed Aquifer Exemption for Deeo Creek Unit] e e of Jim Regg <¡im regg(íï?admin.state.akus> Petrol~um Engineer AOGCC Content-Type: appJicatioo/octet-stream Content-Encoding: base64 20f2 11118/200411:11 AM [Fwd: Re: Proposed Aquifer Exemption for D. Creek Unit] tt Subject, Date: From: To, Original Message -------- Re, Proposed Aquifer Exemption for Deep Creek Unit Mon, l5 Nov 2004 06,Ol,54 -0800 Cutler.Thor@epamail.epa.qov James Regg <jim regg@admin.state.ak.us> f/'/l170/; . ß/7-/;/ /2j;g)tJ h ó}/¿ú: /JV Not much of a response from Thor. . . I received both aquifer exemptions on the same day. They are in review. I would have to check the record to clarify when these came in. Thor Cutler 206-553-l673 fax 206-553-l280 cutler.ther @epa.gov James Regg <Jim r~gg~~drniE:.:._f? tate.ak.us> To: Thor Cutler/RlO/USEPA/US@EPA cc: Subject: proposed Aquifer Exemption for Deep Creek Unit ll/l2/2004 ll, 25 AM Thor - The Alaska Oil and Gas Conservation Commission sent you copies of application, supporting documents, and the proposed Aquifer Exemption Order (AEO #ll) for Unocal's Deep Creek Unit by letters dated October l5 and October 26, 2004. I am checking on the status of your review, particularly if you have any questions, and when you expect to make a decision. Thanks. Jim Regg AOGCC (See attached file: jim_regg.vcf) Jim Regg <¡im regg(a)admin.state.akus> Petroleum Engineer AOGCC Content-Type: applicatiæ/octet-;;t Content-Encoding: base64 1 of 1 11/15/200412:10 PM #14 ..~ . -. e ~lT~lTŒ (ID~ ~~~~ e FRANK H. MURKOWSKI, GOVERNOR AI/ASIiA OIL Al'O) GAS CONSERVATION COMMISSION 333 W. 7'" AVENUE, SUITE 100 ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 FAX (907) 276-7542 October 28, 2004 VIA FAX AND MAIL Ms. Lois N. Epstein Cook Inlet Keeper 308 G Street, Suite 219 Anchorage, AK 99501 Dear Ms. Epstein: Thank you for comments offered during the September 30, 2004 public hearing on the application of Union Oil Company of California ("Unocal") for an aquifer exemption order ("AEO") for the Deep Creek Unit ("DCU"), and for your follow-up correspondence dated October 7, 2004. As you know, the Commission agreed to keep the hearing record open for one week to provide Cook Inlet Keeper time to gather and submit specific information in support of the concerns expressed. Included with your October 7 correspondence is a letter from the Nini1chik Traditional Council. After the hearing, the Commission received from Unocal a proposed amended ("contracted") area for the aquifer exemption, which more concisely fits Unocal's intended operations within DCU. Please refer to the attached map for the original and contracted areas proposed to be covered by an aquifer exemption. The points raised in your October 7, 2004, letter that directly pertain to the AEO application will be addressed in the Commission's order on that application. The Commission offers the following responses to the other points raised in your letter: Q: "Since Unocal proposes to inject produced water and drill cuttings below 1800' (which includes depths above the surface casing shoe), shouldn't AOGCC disallow that?" Electronic correspondence with Unocal on May 27, 2004 noted that injection above the surface casing shoe is inconceivable in NNA No.1. The surface casing shoe in this well is at 2,140 feet and no injection will be allowed above the surface casing shoe in this well; to do so would require the perforation of multiple casings and the potential compromise of fluid isolation. Unocal has said there is no intention to inject above the surface casing shoe in NNA No.1. Moreover, granting an aquifer exemption does not authorize an applicant to inject into the subsurface. Injection is authorized only after the Commission has approved a disposal or area injection order ("DIO" or "AIO") and appropriate well-specific permitting actions, and - in the case of proposed injection into an exempt aquifer - after the Environmental Protection Agency has concurred with the AEO. There is no regulatory requirement to submit a DIO application in e e Ms. Lois Epstein Cook Inlet Keeper October 28, 2004 Page 2 of3 conjunction with an aquifer exemption request. The DIO can be submitted separately as has been done in this case. This process has undergone rigorous review by EP A and independent peer review from recognized experts such as the Ground Water Protection Council and has been deemed to provide the necessary protection for underground sources of drinking water. Accordingly, the concern you raise is something that should be addressed, if necessary, in connection with Unocal's application for authorization to inject. Having said that, I can also point out that Unocal's planned injection interval is below 5,400 feet true vertical depth (measured from ground level) - far deeper than the surface casing shoe. For your information, the Commission has in fact received a disposal injection order ("DIO") application requesting authorization for underground injection of oil field wastes generated during oil and gas development of the Deep Creek Unit. Conversion of the Unocal NNA No. 1 well is proposed to allow underground disposal injection in NNA No. 1 in support of DCU development. The DIO application was publicly noticed on October 8, 2004 and is available for public review. A hearing to consider this application is currently scheduled for November 9, 2004 but may be vacated if no requests for hearing are received from the public. Please note that Unocal's letter dated October 1,2004, provided a copy of the DIO application to the Ninilchik Native Association as sole surface owner. Q: " Shouldn't AOGCC require that confinement be discussed in detail in the AEO application, and that any knowledge gaps with respect to confinement geology be filed before this application is approved? " Confinement is a subject that will be evaluated as part of the DIO review, as provided by 20 AAC 25.252. It is not among the criteria applicable to aquifer exemption decisions. Q: " Isn't it incumbent on AOGCC to require Unocal to perform a more complete analysis of nearby well depth data than what's available in the WELTS database? Also, what evidence has been provided that future private or industrial water wells will not be drilled deeper than those wells currently in existence?" This point pertains to the AEO application and will be addressed in the Commission's order on that application. Q: "Cook Inlet Keeper has information that injection of drilling wastes is already occurring at the Deep Creek Unit. Will AOGCC provide information to the public on the volume and composition of these injected wastes?" The annular disposal of drilling waste has been authorized as provided by 20 AAC 25.080. The Commission provided public notice ofUnocal's proposed annular disposal at NNA No. 1 on February 4, 2002. The hearing was vacated after no objection was received regarding the application. Annular disposal is limited to those substances described in 20 AAC 25.080(h). e e Ms. Lois Epstein Cook Inlet Keeper October 28,2004 Page 3 of3 Engineering and geologic reviews of the permit to drill and sundry applications establish the basis for confinement of fluids pumped into the annulus of a well. The receiving zone for annular disposal fluids has been shown to be below 2,150 feet. The Commission has approved a total volume of 175,000 barrels of waste to be disposed into NNA No.1. The calculated radius of influence within the receiving strata for this volume extends less than 350 feet from the NNA No.1 wellbore. Ongoing confinement of fluids pumped down the casing annulus ofNNA No.1 has repeatedly been demonstrated by performance monitoring, testing, and surveys during injection. An operator conducting annular disposal is required by regulation to file with the Commission a Report of Annular Disposal, including information on the volumes and types of drilling wastes disposed of. 20 AAC 25.080(f). In this case, confidentiality is not an issue and these reports are available to the public. Attach. cc: Mr. John Gary Eller, Unocal Faye Sullivan, Unocal S NINILCHIK UNIT "" ,~ -- -. --_. - . _. .. - .:'': ::-: c;;;; -- W' .. v, ,~~~~_ I D I , Po ~ 9 i ij I f ft ~ l: ~ ~ L_«___~____~ ij ? D I- L-.._~~~J DEEP CREEK UNIT -. -- -. -- -- . H -- . - UNOCAL€Ø 0.5 0 Miles -. r~';!',..,;";;;;.,.,."~~,,.,~;¡¡;;;;r"';;¡;";;ó'~~"'~~"'"K~'"'~lj ij ~j iI ;1 J ". Ii Ii 'i ;. £f~~..-....-:""-..~~",,...~~,;--J ¡, ¡ ¡, :1 ;1 . ff II: ~ ,t ¡! , .'is-~~'-;- I: ~"""'''F''''''''''''0DEEP CRK U >r).i -, r""",...,J .~' REVISED AREA OF / ..' , ,-- ,': li'"~8r",;:,q7CJ. . ..- .. ..' AREA OF PROPOSED Þ.OUIFER EXEMPTION :;:".:, ... -- -- -- NIKOLAEVSK UNIT -- .. REVISED AREA OF PROPOSED AQUIFER EXEMPTION DEEP CREEK UNIT WELLS October 1, 2004 UNOCALØj) ,-., K ,~ 9 -; r"\ -LV J. 17 REVISED AREA OF PROPOSED AQUIFER 29 28 27 26 AREA OF PROPOSED AQUIFER EXEMPTION 32 33 34 "'Jc, JJ 5 .q 3 ') ¿. 0.5 0.25 0 . Miles 0.5 REVISED AREA OF PROPOSED AQUIFER EXEMPTION . DEEP CREEK UNIT WELLS October 1, 2004 e e Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, AK 99501-3539 Phone: (907) 279-1433 Fax: (907) 276-7542 Fax Transmission The information contained in this fax is confidential and/or privileged. This fax is intended to be reviewed initially by only the individual named below. If the reader of this transmittal page is not the intended recipient or a representative of the intended recipient, you are hereby notified that any review, dissemination or copying of this fax or the information contained herein is prohibited. If you have received this fax in error, please immediately notify the sender by telephone and return this fax to the sender at the above address. Thank you. To: /J; /1 fP J/ It- Ph::::' )~4J~~{~ ~ , Fax#: Date: Id-;;< t.ó4 (p Subject: Pages (including cover sheet): Message: If you do not receive all the pages or have any problems with this fax, lease call for assistance at 907 793-1223. e e Radius of Influence Calculation NNA#1 Annular Disposal October 22, 2004 J K~1 ID/Z'z!04- Notes 1 NNA#1 is located within the Deep Creek Unit 2 Well has been approved for annular disposal in support of drilling at Happy Valley field 3 Annular Disposal regulatory authority - 20 AAC 25.080 4 Initial application publicly noticed 2/4/02; no comment; hearing vacated 5 Surface casing shoe is at 2,140 ft 6 Regulatory limits (35,000 bbl; 1 year) extended by sundry approvals 302-035 and 303-060 7 Final approval (9/13/04) - NNA#1 annular disposal not to exceed 175,000 bbls of drilling waste 8 Receiving interval shown by temperature survey to be below 2,150 ft; 20 to 70 ft thick per logs 9 Range of porosity values based on analysis from NNA #1 salinity study in support of Deep Creek AEO 10 Coal at 2,180 - 2,185 ft V=(h*p )[(PI)*R]^2 V is volume of fluid pumped (barrels) p is porosity of receiving zone (expressed as decimal) h is thickness of receiving zone (feet) Plis3.1416 5.615 cubic feeUbarrel (cf/bbl) R is radius (ft) Radius of Influence Calculation R=SQRT[V*5.615/«PI)*h*p )] Possible V (bbl) h (ft) R (ft) Receiving Zone p 0.15 244 2200-2235 ft 175,000 0.20 35 211 0.25 189 2200-2235 ft; 0.15 173 2325-2360 ft 175,000 0.20 70 149 0.25 134 0.15 323 2235-2255 ft 175,000 0.20 20 280 0.25 250 2235-2255 ft; 0.15 264 2315-2325 ft 175,000 0.20 30 228 0.25 204 #13 AEO 11 - Deep Creek Unit - e Thor - Today we have sent to you (by DHL) proposed Aquifer Exemption Order No. 11 for selected areas within the Deep Creek Unit (Kenai Peninsula)¡ background information including the application, public hearing documents, and comments received were sent to your last week. This AEO is associated with Unocal's gas development activities at Happy Valley field east of Ninilchik¡ Unocal recently also provided the Commission with a Disposal Injection Order for a well in the Unit. Should you have any questions about AEO No. 11, please contact Bob Crandall at 907-793-1230. Jim Regg AOGCC Jim Regg <jim regg@!admin.state.ak.us> Petroleum Engineer AOGCC 1 of 1 10/26/2004 2:44 PM e e DRAFT (October 26,2004) STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 Re: THE REQUEST OF UNION ) Aquifer Exemption Order No. 11 OIL COMPANY of CALIFORNIA for ) an Aquifer Exemption Order for portions ) Sterling and Beluga Formations of the Deep Creek Unit in Township 2 ) Deep Creek Unit South, Range 13 West, Seward Meridian, ) Kenai Peninsula. ) November -, 2004 IT APPEARING THAT: 1. Union Oil Company of California ("UNOCAL") submitted an application for aquifer exemption order dated August 4, 2004, for portions of 15 governmental sections within the Deep Creek Unit ("DCU") on the Kenai Peninsula (within Township 2S, Range 13W, Seward Meridian). 2. The Alaska Oil and Gas Conservation Commission ("Commission") published a public hearing notice in the Anchorage Daily News on August 6, 2004, with a tentative hearing date of September 16, 2004. 3. Cook Inlet Keeper, a membership based watershed protection organization, requested a public hearing and a one~week extension of the date to file comments by letter dated August 14,2004. The Commission granted that request. 4. The September 16, 2004 public hearing was continued to September 30, 2004. 5. Unocal provided sworn testimony addressing engineering and geologic considerations in support of the DCU aquifer exemption order application at the September 30, 2004 hearing. Cook Inlet Keeper provided public comment at the hearing. The record was held open to allow Unocal and Cook Inlet Keeper to provide certain additional information and clarifications requested by the Commission. 6. Following the hearing Unocal, amended its request for an aquifer exemption on October 5, 2004, to contract the proposed aquifer exemption area within Township 2S, Range 13W of the Seward Meridian to: - A one quarter mile around the NNA # 1 well in Section 11; - All of Section 22 which includes the existing Happy Valley development drillsite and associated wells; Aquifer Exemption Order 1. Deep Creek Unit Nowmber-.2004 e Page 2 The southeast one-quarter of Section 15; and All of Section 21. 7. Cook Inlet Keeper provided technical and process questions by letter dated October 7, 2004, and included as an attachment a letter from the Ninilchik Traditional Council concerning protection of ground water resources in the vicinity of DCU and depth of drinking water wells. 8. The Commission has jurisdiction in this matter under AS 31.05.030(h), 20 AAC 25.440, and 40 CFR 147, Subpart C - Alaska. 9. The Commission submitted a copy of Unocal's Aquifer Exemption application and related docUl1lents to the U.S. Environmental Protection Agency, Region 10, ("EPA Region 10") on October 15,2004. A draft of this aquifer exemption order was sent to EP A Region lOon October 26, 2004. 10. In correspondence dated ----þ 2004, EP A Region 10 concurred with the proposed aquifer exemption order for the DCU. 11. Unocal also submitted a Disposal Injection Order ("DIO") application for converting Well NNA No.1 to disposal service within the DCU. The application was received October 4,2004 and public review was initiated October 8,2004. FINDINGS: 1. Extent of Aquifer Exemption Area.l The Deep Creek Unit ("DCU") is located on the Kenai Peninsula approximately six miles east and south of the city of Ninilchik. Development operations are underway to begin regular gas production from the Happy Valley drill site by the end of2004. There are two plugged and abandoned oil exploratory wells, one shut in gas exploratory well, and ten delineation and production gas wells that have been drilled in the unit. As noted in the DIO application, the Unocal NNA No.1 well located on a pad approximately two miles north of the Happy Valley gas production pad is proposed for conversion to disposal injection service. Supporting data has been provided in the record for an aquifer exemption within the DCU covering Township 2S, Range 13W, Seward Meridian, specifically described as: A one quarter mile radius around the NNA #1 well in Section 11; AIl of Section 22 which includes the existing Happy VaIley development drill site and associated weIls; The southeast one-quarter of Section 15; and AIl of Section 21. 1 All depths noted in this Order are true vertical depth ("TVD") below ground level. Aquifer Exemption Order 1_ , Deep Creek Unit November -, 2004 e Page 3 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 sources of drinking water for much of the Kenai Peninsula and are locally over 800 feet thick. Current control from oil and gas wells within the DCU indicate these fresh water aquifers may range to 1,000 feet in the vicinity of the NNA No.1 and Happy Valley drill sites. Gravel rich deposits with very desirable aquifer properties range to 300 feet deep in this area. The value of this aquifer system has long been recognized and hydrocarbon exploration 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 in Kenai Group sandstone reservoirs. Specifically in the DCU, gas will be produced from the Tyonek Formation within the Kenai Group between 7,800 feet and 9,400 feet. The Beluga Formation is several thousand feet thick and occurs at depths greater than 2,000 feet in the DCU. This formation is comprised of thinly laminated sandstones, siltstones, shales and coals. Individual sandstone beds within the Beluga Formation are generally less than 30 feet thick, resulting in a heterogeneous sequence of rocks with very poor or no vertical connectivity or permeability. In the area considered for aquifer exemption, the top of the Beluga Formation is at a depth of approximately 2,400 feet and marked by locally continuous, 75-foot thick shale. The entire Beluga Formation interval can be expected to act as a confining zone for the underlying Tyonek Formation. 3. Formation Water Salinity. Well logs from two DCU wells provide data for formation water salinity calculations: Deep Creek No.1 (drilled 1958 within Section 15) and NNA No.1 (drilled 2001 within Section 11). Formation water salinities calculated by a third party contract petrophysicist working for Unocal used estimation techniques described in EP A guidance document "Survey of Methods to Determine Total Dissolved Solids Concentrations", (KEDA Project No. 30-956). A comparison with a produced water sample from the Tyonek Formation in the Unocal NNA No.1 well showed good agreement with the log derived values. The results of this work indicate formation water salinities in the DCU are greater than 3,000 ppm and less than 10,000 ppm at depths greater than 1,800 feet. The Commission independently verified Unocal's analysis using data from the NNA No. 1 well, chosen because of its good data quality. The Commission analysis also relied on the EP A methodology. Comparing the results of Unocal and Commission analyses demonstrates good agreement (see graph "Salinity Determinations - NNA No.1; the Order 1 a 4000 500 3500 3000 2500 i' !!.. f.'I. :; :1000 :ª ;j 1500 1000 lIIIea!lureddepth a. com.es area. c. Aquifer Exemption Order I_ . Deep Creek Unit November -, 2004 e Page 5 4. Suitability of DCU Sediments Below 1.800 feet as Drinking Water Aquifers Regulation 20 AAC 25.440 (a)(1)(B)"Freshwater Aquifer Exemption" provides that the Commission 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". Unocal presents 3 reasons in support of the aquifer exemption below 1,800 feet. First, the area has plentiful groundwater available from surface to approximately 1 ~OOO feet with the most penneable and therefore desirable sediments within 300 feet of the surface. Using the NNA No.1 well as a geographic datum, infonnation about water wells available from the Department of Natural Resources is summarized in the following table: Water Well De): th Depth Within to-miles Within approximately ofNNANo.l 2-miles ofNNA No.1 Average 88 ft 47 ft Maximum 292 ft 50 ft Minimum Oft 45 ft No. of Wells 87 3* * 3 water wells are slightly more than 2 miles from the NNA No.1. In a post hearing submittal, Mr. Bruce OskolkofI, Environmental Program Director for the Ninilchik Traditional Council, alleges water wells in the vicinity of the DCU exist to 800 feet. Second, the groundwater below 1,800 feet depth is predominately between 3~000 and 10,000 ppm total dissolved solids. Given the demonstrated abundance of drinkable water at shallow depths, recovery of drinking water with such quality from below 1,800 feet is highly impractical due to drilling and treatment costs. Third, mud logs from wells drilled to date in the DCU show that hydrocarbon gas~ primarily methane, occurs in increasing quantities (non-commercial) throughout the Kenai Group below depths of 1,300 feet. The presence of gas below 1,300 feet in the DCU is due to trapping of the gas within the DCU anticlinal structure. This is demonstrated by wells that are high on the structure having greater methane concentrations than those on the flanks of the anticline. CONCLUSIONS: 1. Those portions of freshwater aquifers occurring below approximately 1,000 feet within the DCU do not currently serve as a source of drinking water. All known and foreseeable ground water consumption :ITom the DCU vicinity is consistent with usable ground water resources occurring above 1,000 feet. ~ ' Aquifer Exemption Order 1. Deep Creek Unit November -.2004 e Page 6 2. Those portions of freshwater aquifers occurring below 1,800 feet within the DCU contain salinities and hydrocarbon gases, and are situated at depths that make recovery of these waters for drinking water purposes economically impractical. 3. Those portions of aquifers occurring below 1,800 feet and within the DCU cannot reasonably be expected to serve as underground sources of drinking water. 4. Those portions of aquifers occurring within a ~ mile radius around the NNA No. 1 wellbore in section 11, the S.E. 1/4 of Section 15, all of Section 21 and all of Section 22 in TIS, R13W, Seward Meridian and below 1,800 feet qualify as exempt freshwater aquifers under 20 AAC 25.440(a)(1)(A) and 20 AAC 25.440(a)(1 )(B). NOW, THEREFORE, IT IS ORDERED THAT the aquifers or portions of aquifers occurring below 1,800 feet TVD in the following areas within T2S, R13W, Seward Meridian, are exempt as provided by 20 AAC 25.440: A one quarter mile radius around the NNA No.1 well in Section 11; All of Section 22 which includes the existing Happy Valley development drillsite and associated wells; The southeast one-quarter of Section 15; and All of Section 21. Note that this Order does not authorize the injection of any fluids within the exemption area; and, the Commission will require the applicant to demonstrate the existence of an adequate confining layer above the zone of proposed injection before authorizing any injection of fluids into the exempt area. DONE at Anchorage, Alaska, and dated Nowmber -~ 2004. John Norman, Chair Alaska Oil and Gas Conservation Commission Daniel T. Seamount, Jr., Commissioner 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 ftom 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 ftom the date on which the nest is deemed denied (i.e., 10th day after the lication for rehearin was filed). rach the original and four caples of a C(¡lnlntm;lal Invoice or Pro Forma, E,xpOrtLicense No./Symbol (ilapplicable) Receiv~r's VAT/GST or Shipper's EIN/SSN I Drop Box # C Vl!lHe forgustof11s (in US $) ScheC/ule B Number I Harmonized Code (i, applicable) . (as on CditlmerciaVPro Forma Invoice) TRANSPORT COLLECTSTICKERNo. TYPE OF EXPORT D Permanent D Repair/Return D Temporary Deštfi¡'iíon DutleSlraxes If left blank, RI'Jcei'ler pays dulfeS/taxes. e Total Weight If' DHLExpress Document packaging used, enter XD. I x Dimensions (in Inches) Pieces Length Width x Height cr U.S,¡:xpressEnvelope o .USA Overnight OOlher................ WORLDWIDE. EXPRESS D·.lnt1.E:xpre~.E.,velo~. [J'l\Ion-Dutlable q WärldFrelght o Dutiable 0 Other. S~rv,lcé Options O Saturday , Delivery- IPA ISAl e [J3rd Pl!rty 1-800-CALL-DHL In USA on ORIGIN #12 · · · . e 1 2 3 ALASKA OIL AND GAS CONSERVATION COMMISSION 4 PUBLIC HEARING 5 RECEf\/ED OCT 1 5 2004 In Re: 6 UNOCAL AQUIFER EXEMPTION ORDER 7 HAPPY VALLEY, CONTINUED HEARING. AIì1$K¡¡ ..:~ Cons, Commission Anchorage 8 9 TRANSCRIPT OF PROCEEDINGS 10 Anchorage, Alaska September 30, 2004 1:07 o'clock P.m. 11 12 13 COMMISSIONERS: 14 15 JOHN NORMAN, Chairman DAN SEAMOUNT 16 17 18 19 * * * * 20 21 22 23 24 25 METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 e e · 1 TABLE OF CONTENTS 2 3 OPENING REMARKS BY CHAIRPERSON NORMAN Page 3 4 END OF PROCEEDINGS Page 49 5 6 7 * * * * 8 9 10 11 12 · 13 14 15 16 17 18 19 20 21 22 23 24 25 · METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 · · · e e 1 PRO C E E DIN G S 2 (On record 1: 07 p. m. ) 3 CHAIRMAN NORMAN: This is a hearing upon the 4 application of Union Oil Company of California for an aquifer 5 exemption. This hearing was originally noticed for 9:00 6 o'clock a.m. on September 16th. At that time, the commission 7 lacked a quorum because Commissioner Seamount was attending a 8 meeting of the North American Coastal Alliance. The hearing 9 was convened and I reviewed the basis for the hearing. At 10 that time, the hearing was requested by Cook Inlet Keeper as 11 well as an extension of time for one week in which to file 12 additional written materials. The commission continued the 13 hearing without objection to today. I will not summarize the 14 rest of the information because I covered that when the 15 hearing was originally convened, such as publication of the 16 notice, basis for the hearing. But if any parties have 17 questions or require copies of any of the documentation, let 18 us know and we'll see that it's provided to you. 19 This hearing will be recorded today and a transcript 20 will be prepared. Debra Britt with Metro Court Reporting is 21 the court reporter. My name is John Norman, I'm chairman of 22 the Alaska Oil and Gas Conservation Commission. To my left, 23 to your right, is Commissioner Dan Seamount. A quorum is 24 present and so we're able to proceed with the hearing today. 25 The hearing is being conducted in accordance with the METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 3 · 4 5 6 7 8 9 10 11 12 · 13 14 15 16 17 18 19 20 21 22 23 24 25 · e e 1 general hearing rules under Title 20 of the Alaska 2 Administrative Code 20 AAC 25.540 and it's being held pursuant 3 to the aquifer exemption, fresh water aquifer exemption provisions that can be found in 20 AAC 25.440. Anyone requiring copies of those provisions of the administrative code, if you can let us know, we'll see that they're provided to you if you don't already have them available to you. We will hear from the applicant first and then, following that, we will receive testimony from any other parties. Testimony will be under oath. If any party objects to giving testimony under oath, we will still receive the testimony but, by law, I'm obligated to tell you that the commission gives greater weight to testimony offered under oath than testimony not offered under oath. There will be other -- there will be an opportunity for others to propose questions following the applicant's testimony. And you may do so by providing your questions through members of the staff. And I'd ask our senior geologist, please, to indicate, Mr. Crandall -- and if any of you have questions that you would like propounded to the applicant. Additionally, there is a procedure if someone wishes to cross-examine. Ordinarily, we don't do that. But if in the course of the proceedings anyone here believes that's indicated, you may bring that to my attention and then we'll METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 4 · · · e e 1 decide upon that. 2 I'll now ask the applicant to proceed. 3 COMMISSIONER SEAMOUNT: Mr. Chairman? 4 CHAIR NORMAN: Yes? 5 COMMISSIONER SEAMOUNT: I feel I need to make a 6 disclosure at this point. I worked for Unocal Alaska from 7 1993 until the year 2000. In 1999 and the first two months of 8 the year 2000, I actually worked on the prospect that was 9 unitized (ph) and it's called Deep Creek. In any case, I feel 10 that I could make an impartial and a fair decision in this 11 case. 12 CHAIR NORMAN: Let me, then, ask a couple of more 13 questions, please, Commissioner Seamount. I appreciate you 14 making that disclosure, as we're obligated to do. Your 15 employment with the applicant, Unocal, was until through 1999? 16 COMMISSIONER SEAMOUNT: Right, it was up 'till 17 February of 2000. 18 CHAIR NORMAN: Up to February of 2000. And you did 19 work on this particular prospect? 20 COMMISSIONER SEAMOUNT: Yes, I did. It -- I didn't 21 generate the prospect; I -- after there was staff changes at 22 Unocal, I did some fine tuning on the prospect or some more 23 work on it and ran some reserve estimates. 24 CHAIR NORMAN: In the course of that work, did you do 25 any analysis or give any consideration to aquifer exemptions METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 5 · · · e e 1 in the area? 2 COMMISSIONER SEAMOUNT: Not -- no, I did not. 3 CHAIR NORMAN: Since that time, have you done anything 4 further with Unocal or any other party, either part-time or 5 any further consulting or regar- -- with reference to this 6 matter? 7 COMMISSIONER SEAMOUNT: I have not, Mr. Chairman. 8 CHAIR NORMAN: Okay. I think the participants have 9 heard that. I'll hear from anyone now. We have to, I think, 10 address this and see if anyone here has any concerns based 11 upon the disclosure that Commissioner Seamount has properly 12 made into the record. Does anyone wish to be heard on that 13 limited point only? Is there any concern on the part of 14 anyone here with Commissioner Seamount proceeding to 15 participate in this decision? Okay, the record should reflect 16 that the chair hears no objections. So the chair will accept 17 that disclosure and the chair will find that, as to this 18 particular proceeding, Commissioner Seamount may participate 19 and that he has no personal interest in the outcome and has 20 had no direct involvement in the matter before the commission 21 and, therefore, can proceed. Although the chair would 22 emphasize again that I appreciate your thinking to make that 23 disclosure because that is what we are obligated to do. 24 25 COMMISSIONER SEAMOUNT: Thank you, Mr. Chairman. CHAIR NORMAN: With that, I'll call on the applicant, METRO COURT REPORTING 745 West Fourlh Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 6 . . . e e 1 Unocal, and ask whoever is going to testify to please first 2 state your name and then I will have you sworn as a witness. 3 And then, if you are testifying as an expert witness, we will 4 need some statement as to your qualifications. 5 Can you proceed first? Just state your name. 6 MR. ELLER: Full name is John Gary Eller. 7 CHAIR NORMAN: And spell your last name, please. 8 MR. ELLER: E-l-l-e-r. 9 CHAIR NORMAN: And you are here representing the 10 applicant, Union Oil of California? 11 MR. ELLER: That's correct. 12 CHAIR NORMAN: And are you an employee of Union Oil of 13 California? 14 MR. ELLER: I am an employee of Unocal. 15 CHAIR NORMAN: All right. And can I ask you please to 16 raise your right hand? 17 (Oath administered) 18 MR. ELLER: I do so swear. 19 CHAIR NORMAN: Okay. Please proceed, Mr. Eller. 20 MR. ELLER: Thank you. I ask to be recognized by the 21 chair as an expert witness in petroleum engineering. 22 CHAIR NORMAN: Very well, then I will require -- and I 23 note Mr. Ellis, who is well known to the commission, in the 24 audience also and will note his presence. Will you please 25 then state your qualifications so that the commission can METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 7 · · · e e 1 determine and make a ruling upon your suitability to testify 2 as an expert witness? 3 MR. ELLER: Certainly. I have received a Bachelor's 4 and a Master's degree in petroleum engineering, Texas A&M 5 University, 1985 and 1987. I've spend 17 years in the oil and 6 gas industry specializing in production engineering and 7 completions, although I've served -- done duties in other 8 roles of petroleum engineering as well. I've worked -- have a 9 professional engineering certificate from the state of 10 Louisiana in petroleum engineering. And I've worked the last 11 seven years in Alaska for unocal and one other operator in the 12 status as petroleum engineer. 13 CHAIR NORMAN: Commissioner Seamount, any questions? 14 COMMISSIONER SEAMOUNT: I have no questions. 15 CHAIR NORMAN: Mr. Eller, have you had any experience 16 working with aquifers previously, and specifically aquifer 17 exemptions, as opposed to your work in the petroleum 18 engineering field? 19 ELLER: Yes, my previous employer was Marathon Oil 20 Company and I prepared an aquifer exemption application for 21 the Sterling unit in the Kenai Peninsula. 22 CHAIR NORMAN: And in the course of your training and 23 experience, have you worked with ground water hydrology or 24 you're familiar with the behavior of aquifers? 25 I am familiar with the behavior of MR. ELLER: METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 8 e e . 1 aquifers. I would not say it's something I have extensive 2 experience with but I have certainly worked with them. 3 CHAIR NORMAN: Okay, thank you. And if there's no 4 objection, Commissioner Seamount, we will accept this witness' 5 qualifications to proceed to testify. 6 COMMISSIONER SEAMOUNT: I have no objections. 7 MR. ELLER: Okay. I'll be making the first part of a 8 presentation today governing -- relating to Unocal's 9 application for an aquifer exemption order in the Deep Creek 10 unit. This application was submitted on August 4th of this 11 year. Just going over some of the aspects of the -- of 12 Unocal's application, it's specifically requesting an . 13 exemption in the greater Happy Valley structure within the 14 Deep Creek unit. The area we're requesting for exemption 15 covers a total of -- thank you, sir -- covers a total of 15 16 square miles. And we'll offer a testimony, why we believe 17 that size of exemption is appropriate. 18 Furthermore, this is not part of the specific 19 application, but Unocal wishes to make known we're seeking a 20 Class II disposal permit in the NNA Number 1 well. Expect to 21 have that permit submitted within days. There are possible 22 future disposal wells; none have been firmly decided upon but 23 that is part of the thing we want to spell out. There could 24 be future application for disposal. 25 The basis for the aquifer exemption application is . METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 9 e e . 1 that Unocal is requesting exemption below 1,800 feet true 2 vertical depth. And the basis of economics, that is the cost 3 of trying to produce water from a depth below 1,800 feet 4 versus the readily available water much shallower than that, 5 formation water salinities that exceed 3,000 parts per million 6 total TDS below 1,800 feet vertical, and on the basis of 7 methane gas contamination, which is well documented in the 8 Happy Valley structure and occurs shallower than 1,800 feet 9 vertical. 10 I think you can see this first slide; it's just a map 11 showing where the application's taking place. The Deep Creek 12 unit's on the Kenai Peninsula, several miles east of the city . 13 of Ninilchik. This map we're going to show a couple of 14 different times. Within the Deep Creek unit, the area in 15 green, the 15 square miles that we're requesting for an 16 aquifer exemption. This 15 square miles is -- corresponds to 17 the area of the greater Happy Valley structure. As the map 18 shows here, the NNA Number 1 well is on the very northern nose 19 of this. There is a separate pad where several gas 20 exploration wells have been drilled. We'll call that the 21 Happy Valley pad. The main point I want to bring out at this 22 point is that the area that we're requesting covers the entire 23 structure. And we'll go into more detail about why that's 24 appropriate. 25 The NNL -- pardon me, the NNA Number 1 well . METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 10 · · · e e 1 specifically: as previously mentioned, Unocal any day expects 2 to submit an application for converting it to a Class II 3 disposal well. There are no other wells within a quarter-mile 4 of the NNA Number 1. The closest well is the Deep Creek unit 5 Number 1 which is about a third of a mile to the southwest. 6 That's an abandoned oil well that was drilled in the late 7 50's. 8 This map goes on to show that the closest water well 9 for, you know, public consumption is approximately two miles 10 away from the NNA Number 1. There is an update to this slide 11 versus the one that was submitted to the commission in the 12 application. And that one, it left out accidentally the 13 location of the -- Unocal's Happy Valley pad. It's nearly two 14 miles to the south. Other wells that lie within this two-mile 15 radius: I've already shown you the Deep Creek unit Number 1. 16 There's also Happy Valley unit 3122, likewise, an oil well 17 that was abandoned in the 60's. 18 I would like to point out also the -- if you'll note, 19 the slide points out the depths of these water wells, some two 20 miles in distance. The deepest of those are 50 foot and the 21 other two wells are 45 feet deep. And they adequately tap 22 into fresh water aquifers at that depth. 23 This slide shows, within a 10-mile radius of the NNA 24 Number 1 well, all fresh water wells that lie within 10 miles. 25 And within each township, I've listed the number of wells that METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 11 . . . e e 1 are present, their average depth and a maximum depth we could 2 find within this 10-mile radius. In the township where lies 3 the Unocal Happy Valley pad and the NNA Number 1, there are 4 four water wells. The average depth on those is 73 feet, the 5 deepest, 118 feet. In general, though, we're several miles -- 6 the closest water well being about two miles away. The slide 7 is intended to show that fresh water's readily available far 8 shallower than 1,800 feet vertical. Within a 10-mile radius, 9 the deepest water well is 292 feet and it's on the coast. I've also outlined in blue the requested aquifer exemption interval so you can see, in relation to the rest of 10 11 12 these water wells, where it lies. The -- one of the water 13 wells does barely lie within the confines of that exemption 14 interval. I believe that's in Section 16, the very northwest 15 corner of Section 16. 16 CHAIR NORMAN: So within the blue outline, was that 25 17 sections? I haven't counted. 18 MR. ELLER: Fifteen. Fifteen sections. 19 CHAIR NORMAN: Fifteen sections. Okay. 20 MR. ELLER: That's right. 21 CHAIR NORMAN: Fifteen sections within the blue 22 outline. 23 MR. ELLER: If I could back up one more, you'll see 24 the wells I'm speaking of. The boundaries of the requested 25 aquifer exemption includes Section 16. So this well that's METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 12 · · · e e 1 labeled Hansen (ph) water well barely falls inside the 2 boundaries of that Section 16. 3 Unless there's any questions at this point, I'm going 4 to turn the rest of the discussion over to a colleague. 5 COMMISSIONER SEAMOUNT: Mr. Eller, do you know of any 6 water wells out there that make any kind of gas, have 7 dissolved methane in them? 8 MR. ELLER: I'm not personally aware of water wells 9 that are producing any gas. I have heard anecdotes of such in 10 the past but I'm not personally familiar with that. 11 COMMISSIONER SEAMOUNT: Okay. Thank you. 12 CHAIR NORMAN: Mr. Eller, I'd ask that you remain. I 13 assume you intend to anyway, but we may want to come back to 14 some questions. 15 Sir, could you state your name first, please? 16 MR. LYNCH: Yes, my name is Mark Lynch. 17 CHAIR NORMAN: And who are you here representing 18 today? 19 MR. LYNCH: I represent Unocal. 20 CHAIR NORMAN: And are you an employee of Unocal? 21 MR. LYNCH: I am. 22 CHAIR NORMAN: Would you raise your right hand, 23 please? 24 (Oath administered) 25 MR. LYNCH: I do. And I would also mention that I am METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 13 · · · e e 1 testifying as an expert witness for Unocal. 2 CHAIR NORMAN: And could you elaborate on your 3 qualifications? 4 MR. LYNCH: Yes, sir. I received a Bachelor's and a 5 Master's degree in geology from Oklahoma State University in 6 1987 and 1990. I have worked since the date of graduation, 7 the past 15 years as a geologist, both exploration and 8 development, in the employ of Unocal. And I was associated 9 with the development of this prospect and the generation of 10 all the work that I'll be presenting here forward. 11 CHAIR NORMAN: And for what period of time have you 12 been working on this particular -- the geology of this 13 particular prospect? 14 MR. LYNCH: Since September, 2001. 15 CHAIR NORMAN: And what is your experience previously 16 with working with aquifer exemptions? 17 MR. LYNCH: As I mentioned, I wrote the geologic and 18 engineering report for this aquifer exemption. And prior to 19 that, I had written a similar report for the aquifer exemption 20 that Unocal was seeking for the Coho unit Number 1 well on the 21 Kenai Peninsula. 22 CHAIR NORMAN: Commissioner Seamount, any questions? 23 COMMISSIONER SEAMOUNT: I have no questions. 24 CHAIR NORMAN: The commission will accept your 25 qualifications and you may proceed. METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 14 · · · e e 1 MR. LYNCH: Thank you. The geologic section that we'll be looking at today is the upper part of the standard tertiary section that's known to be present on the Kenai 2 3 4 Peninsula. From top to bottom, the unnamed section that you 5 see represented in gray on this stratigraphic column is the 6 quaternary alluvium comprised of glacial sediments and the 7 shallow gravel aquifers that are common on the Kenai Peninsula 8 in the Deep Creek unit area. Uncomfortably underlying that 9 are the tertiary strata comprised of the Sterling, Beluga and 10 Tyonek formations. Unocal would be seeking to exempt aquifers 11 or reservoirs in those intervals, in the lower Sterling, the 12 Beluga and the Tyonek. These intervals are comprised of 13 interbedded sand stones, shales and coals, very numerous coals 14 and shales which provide numerous sealing surfaces throughout 15 the stratigraphic column. Incidentally, the NNA Number 1 16 well, which we will be seeking an injection order on, went as 17 far as the middle of the Tyonek formation. And it TD'd or 18 reached its total depth in the known gas-bearing portion of 19 the Tyonek on the peninsula. It did not go deep enough to see 20 the known oil-bearing reservoirs in this particular area. 21 Again, I'll show you this slide of the Happy Valley 22 structure, reference the NNA well to the north, down-dip from 23 the crest. These are structural contours here on I believe 24 it's a 200-foot interval. So you can see it; it's quite a 25 large structure. It does comprise this 15-square-mile area METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 15 · · · e e 1 that we are seeking the aquifer exemption on. And the reason 2 for doing so is that the various parameters that weIll be 3 discussing and the geological parameters that we think justify this exemption are present in this entire area and are basically confined by this structure such that anything known 4 5 6 to occur here at NNA might similarly occur up on the crest of 7 the structure as indicated by the other wells that we have 8 been drilling in the recent past off the Happy Valley pad. 9 So 1/11 begin by discussing the justification for the 10 aquifer exemption on the basis of formation water salinity. 11 Our work shows that formation water salinity in the tertiary 12 section exceeds the required 3/000 parts per million total 13 dissolved solids at roughly a depth of 1/800 feet true 14 vertical depth or depth below ground level. Furtherl we 15 contracted an independent petrophysicist in Sugar LandI Texas 16 to do an independent evaluation on the same data set we used 17 to see what analysis he came up with. And his analysisl which 18 1 will also showl confirms this or found the same result. 19 AdditionallYI we have a formation water sample from a Tyonek 20 sand in the NNA Number (sic) well which agrees with the 21 calculated trend of the data that 1/11 be presenting shortly. 22 OkaYI this graph is a graph of formation water 23 salinity as calculated for the NNA Number 1 and Deep Creek 24 Number 1 wells in the Deep Creek unit. These are the two 25 wells that are located at the north end of the Happy Valley METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 16 · · · e e 1 structure. The graph shows chlorides in parts per million 2 across the X axis and increasing depth going down across the Y 3 axis. 4 The general trend of the data is down and to the 5 right, indicating increasing salinity with depth. The NNA 6 samples are represented by these red and purple triangles and 7 the Deep Creek, by the dark purple and green. There's two 8 sets of data for each well here. One is salinity as 9 calculated by the SP method and the other is salinity 10 calculated by the RWA method. These are the two methods that 11 are recommended by the EPA for calculating formation water 12 salinity from well log data. Those procedures were adhered to 13 in the calculation of these data. And what I would like to 14 draw your attention to is this red dash line at 3,000 parts 15 per million chlorides. And you can see, where the trend of 16 this data crosses this line, generally all formations of a 17 greater depth have increasing water salinity greater than 18 3,000 parts per million. 19 There's a spread In the data that would suggest that 20 that depth may occur anywhere from about 800 feet down to 21 about 1,800 feet. So we chose the base of that and said we 22 would like to exempt all strata below this depth, essentially 23 down here, where formation water salinities are shown to be in 24 excess of 4,000 parts per million on up to almost 10,000. 25 This yellow dot down here at approximately 7,800 parts METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 17 · · · e e 1 per million represents the water sample that we had from the Tyonek sand in the NNA well at about 6,200 feet measured depth. And you can see how it is quite within the trend of the data that we have calculated from the well logs. 2 3 4 5 This next plot is the same well log data but 6 calculated by the third-party, independent petrophysicist that 7 we contracted in Sugar Land, Texas to do his own analysis. He 8 used the same logs but he picked his own points. He did his 9 own analysis and these are his results. 10 Similarly, this plot shows increasing chlorides from 11 the left to the right along the X axis and increasing depth 12 from the upper left, down along the Y axis. And, again, you 13 can see the trend of his data with increasing resistivity with 14 depth. The 3,000 parts per million line is represented by 15 that red dash line. And you can see how his data approach 16 that line at approximately 1,500 to 1,800 feet TVD. If we go 17 to the next slide, you'll see an enhanced view of this data 18 set. Again, he used -- he calculated this data using the NNA 19 well by the RWA method and the SP method, the same way that I 20 made my calculations. And you can see that the trend of those 21 data both approached the 3,000 parts per million line at about 22 1,700 to 1,800 feet. The exact values that he calculated are 23 shown here labeling each point. 24 CHAIR NORMAN: Before you leave that slide, the expert 25 from Sugar Land, Texas, Linseecom (ph), am I pronouncing that METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 18 . . . e e 1 right? 2 MR. LYNCH: Linscom (ph), Val. 3 CHAIR NORMAN: Linscom. 4 MR. LYNCH. Val Linscom, yes, sir. 5 CHAIR NORMAN: And do you have a statement as to his 6 qualifications? I didn't see that. 7 MR. LYNCH: No, sir, I do not. I did not think to 8 bring one. 9 CHAIR NORMAN: Could you provide that to the 10 commission so that we can..... 11 MR. LYNCH: I will. 12 ... ..gage his ability to -- maybe a CHAIR NORMAN: 13 brief, quick statement as you understand it, but then we'd 14 like his professional information. 15 MR. LYNCH: Certainly. As I understand it, he has had 16 I believe in excess of 20 years experience as a petrophysicist 17 in the oil industry, both with producing companies and with 18 service companies. He worked for Schlumberger which is 19 probably the largest well logging company in existence today. 20 And he worked -- I believe he worked for ARCO, but I'm not 21 exactly sure what his previous employ was. He's been in the 22 employment of Unocal off and on for the last three years, used 23 in a variety of different capacities both in our Sugar Land 24 office and up here in Alaska as well. 25 So both of these analyses demonstrate that, as we METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 19 · · · e e 1 approach 1,800 feet depth below ground level, formation water 2 salinity is increasing in a regular and somewhat predictable 3 way toward the 3,000 -- or actually crossing the 3,000 parts 4 per million line so -- such that all strata below there would 5 be anticipated to have formation water salinity in excess of 6 the 3,000 part per million requirement. 7 Next, I would like to talk about methane gas 8 contamination in strata below that 1,800-foot dept. The 9 evidence for methane gas contamination in these rocks comes 10 from the mud log total gas curves from all of the wells 11 present in the Deep Creek unit or on the Happy Valley 12 structure. All such wells indicate trace to increasing 13 14 amounts of methane gas beginning at or around 1,300 or 1,350 feet true vertical depth, and increasing with depth toward the 15 total measured depth of any given well. 16 This trend is predictable and common enough that any 17 wells or all strata below 1,350 feet would be expected to 18 produce, if they would flow water, both water and associated 19 methane in some quantity. Methane being a recognized safety 20 hazard, we would consider these -- any such reservoirs to be 21 contaminated. 22 Okay, just to outline some of the hazards of methane 23 gas contamination: methane is known to be a simple It is explosively combustible at very low 24 asphyxiant. 25 concentrations and it reacts violently with chlorine which is METRO COURT REPORTING 745 West Fourlh Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 20 · · · e e 1 a common water treatment agent. The reaction with chlorine 2 creates chloroform which is an EPA and Alaska DEC regulated 3 contaminant. Methane can be removed from drinking water but 4 it is costly to do so and any such process would add to, you 5 know, the cost of drilling a well below these already 6 excessive depths. 7 Again, I will show you the Deep Creek structure. The 8 NNA well is located out here. The Deep Creek unit Number 1 9 well is located just up-dip of that. And here's the crest of 10 the structure. Here's the Happy Valley pad and the numerous 11 wells that we have drilled off of the Happy Valley pad in the 12 past two years. Mud logs from all of these wells indicate 13 methane gas contamination in the shallow subsurface. 14 And I will now direct your'attention to either the 15 cross-section on the screen or the cross-section on the wall 16 which might be easier to see. And this cross-section goes 17 from south on the left to north on the right, through the 18 Happy Valley wells, up to the Deep Creek unit Number 1 and the 19 NNA well at the far north end of the structure. Ground level 20 is represented here at the top of this brown area. And the 21 brown area itself represents the quaternary glacial alluvium 22 and/or gravels that commonly act as the aquifer in this area. 23 You'll note that it is approximately 200 to 500 feet thick as 24 indicated by well log data in this area. 25 The curves that I have shown for each well are either METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 21 · · · e e 1 a gamma ray or SP as available on the left track, the depth in 2 the middle, and then a total gas curve shown in red on the right. The total gas is scaled from five units to 300 units on each log just to show how the gas is increasing. So the 3 4 5 trend of this curve, going from the left edge for, say, five 6 units or less and approaching the right edge, shows how it's 7 increasing. Gas is increasing to the right on all of these 8 trends. 10 sea level at zero and this is 500 feet above sea level. And 9 You can see, if you can read the depth scale, this is 11 the ground level out here is roughly 700 feet. So that's 12 where that ground level is shown. And as we go down below sea 13 14 level 500 and 1,000 feet, you can see how the gas begins to increase in each well and has a fairly predictable or a fairly 15 recurrent top at about 1,300 feet or so below ground level. 16 For reference, I put this blue line on here which is simply 17 1,500 feet TVD or below ground surface. 18 I will mention, referencing back to the stratigraphic 19 column, that these rocks that you see here are strata of the 20 Sterling formation. You can see there is numerous interbedded 21 sand stones and shales in that. There is a continuous shale 22 body here that sits on top of the Beluga formation which 23 begins right here and is present throughout the area as far as So you can see Beluga strata down 24 we have drilled to date. 25 below the Sterling with the continuation of methane gas. METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 22 · · · e e 1 Were I to present data all the way down, you would see 2 methane continuing to increase or being present in all strata 3 in each of these wells down to their total depth. I have not 4 shown these Happy Valley wells because that information is 5 still being held proprietary by Unocal. 6 CHAIR NORMAN: Could I interrupt you just for a 7 question? 8 MR. LYNCH: Yes. 9 CHAIR NORMAN: Your application seeks an exemption 10 below 1,800 feet and you've referred to 1,300 feet as the 11 point at which the salinity crosses 3,000 parts per million, 12 is that right? 13 MR. LYNCH: Yes, sir. Well, no, salinity crossed the 14 3,000 parts per million at about 1,800 feet. 15 CHAIR NORMAN: At about 1,800. 16 MR. LYNCH: Yes, sir. The 1,300 feet that I mentioned 17 was the onset of appreciable methane gas contamination. 18 CHAIR NORMAN: Okay, I have it now. Okay. And 19 the..... 20 MR. LYNCH: Right. And the re -- go ahead. 21 CHAIR NORMAN: No, please, go ahead and finish. 22 MR. LYNCH: Okay. I was just going to say the reason 23 Unocal chose 1,800 feet was that it was about 500 feet below 24 the top of the shallowest gas that we saw and coincident with 25 the point where the formation water salinity reached that METRO COURT REPORTING 745 West Fourlh Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 23 · · · e e 1 3,000 parts per million requirement. 2 CHAIR NORMAN: Okay. And while you still have that 3 your attention on the chart there, that shale layer: could 4 you comment on that shale layer? 5 MR. LYNCH: This shale layer, what I've termed the pre 6 Beluga shale, is approximately 50 to 70 feet thick and it has 7 been seen to occur in all of the wells that have been drilled 8 out here to date. I cannot say if it would extend across the 9 entire Happy Valley area but it is present -- if you'll go 10 back to the map -- it is present in these wells to the north, 11 and then the Happy Valley wells which are approximately two 12 miles to the south. So it is known to be present in this area 13 here and it may well extend across the entire structure. 14 CHAIR NORMAN: And to your knowledge, does that 15 constitute an impervious barrier across that area? 16 MR. LYNCH: I believe it would. It is a very uniform 17 shale body. In addition to that, there are numerous other 18 shale bodies interbedded with the various strata of the 19 Beluga, Sterling and Tyonek formations. But that one is a 20 fairly discrete bed which is readily noticeable in all of the 21 well logs present. And finally, I have a map of the top of the first known gas occurrence as indicated by the mud logs, contoured 22 23 24 in true vertical depth on a 50-foot contour interval, which 25 simply shows that the gasses would probably occur between METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 24 · · · e e 1 1,300 feet and, say, 1,350 to 75 feet across the entire unit 2 area. That would be where one would expect to find the first 3 occurrence of methane gas were one to drill a well in this 4 area. 5 So to summarize, aquifers and/or reservoirs of the 6 entire Happy Valley structure can be exempted below 1,800 feet 7 true vertical depth on the basis of the economic viability of 8 drilling a water well to such depths, on the basis of 10 waters have been demonstrated to be equal to or in excess of 9 formation water salinity, such that all water -- all formation 11 the 3,000 part per million requirement and, more importantly, 12 on the basis of methane gas contamination which is prevalent 13 14 throughout the area. And as we said, Unocal will be seeking 15 disposal well if this aquifer exemption is granted below 1,800 shortly to convert the NNA Number 1 well to a Class II 16 feet. 17 I'd be happy to answer any questions. 18 CHAIR NORMAN: Okay, thank you very much for your 19 testimony. Commissioner Seamount? 20 21 I have no questions. COMMISSIONER SEAMOUNT: CHAIR NORMAN: Do you feel you have enough control 22 here over the 15-square mile area to seek an exemption of that 23 size? 24 MR. LYNCH: Let's see, if we could go back to the 25 structure map? One of the common principles of geology, of METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 25 . . . e e 1 petroleum geology, is that hydrocarbons tend to accumulate in 2 anticlinal structures. It's the simplest form of geologic 3 trap of which the Happy Valley structure is a very good 4 example. It's a nice, elliptical anticline. You can see the 5 crest is located here, just west of the Happy Valley pad, In 6 the center of the area that we are seeking to exempt. And its 7 lower limits are out beyond the NNA well. 8 The fact that gas is known to be present in the 9 shallow subsurface in the NNA and Deep Creek wells suggests 10 that it would be present on a common contour throughout this 11 area. And the fact that it is present up-dip demonstrates 12 that it is, in fact, being trapped by this structure. That is 13 why we thought it would be reasonable to exempt this entire 14 area, because it could be -- can be shown and understood that 15 gas contamination, methane gas contamination, will very likely 16 occur across this entire area in the shallow subsurface. 17 The strata of the Beluga, Sterling and Tyonek 18 formations, as I said earlier, contain numerous coal bodies 19 which are the self-source of the methane gas in these 20 sections. So it is not requisite that there's a specific 21 migration pathway. Gas is simply present throughout these 22 rocks because of the presence of these coals, once they're 23 buried to a depth sufficient to start that methanogenesis. So 24 it is very likely, as I've said, and I think the data support 25 it and is fairly conclusive that this entire structure will METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 26 · · · tit tit 1 have shallow methane gas contamination. 2 CHAIR NORMAN: And where would the 1,800-foot depth 3 contour be? The first contour there, is it 2,400? That 4 inner -- at the apex of the structure right there..... 5 MR. LYNCH? Yes, sir. 6 .... .is 2,400? So where would you CHAIR NORMAN: 7 extrapolate? If you were to go down right on the top of the 8 structure, where would 1,800 where would you hit 1,800? 9 MR. LYNCH: Well, it would be 600 feet higher than the 10 crest here. The 1,800 feet would essentially be a datum that 11 parallels the ground level. So you could think of it as a 12 plane present on top of this structure. 13 CHAIR NORMAN: Right. 14 MR. LYNCH: So it's probably expressed well by the 15 cross-section, where you can see the structure dipping off to 16 the south and dipping off to the north. And if we look at 17 this 1,500 foot datum that I've put on there, that exists as a 18 plane. And then below that, the structure is just naturally 19 convex upward. So we are actually seeking to exempt all 20 strata below 1,800 feet, which would occur a little bit 21 deeper. And you can think of it as a plane passing through 22 the structure. At that depth, all strata below there would be 23 contaminated with the methane gas that we see present on all 24 these mud logs. 25 CHAIR NORMAN: And above that one, shale. That's METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 27 · · · e e 1 nicely identified there. Though you would be seeking to 2 exempt above that shale and below it? 3 MR. LYNCH: We are seeking to exempt from 1,800 feet 4 below ground level. So that would be a few hundred feet above 5 that shale, yes. 6 CHAIR NORMAN: Uh-huh (affirmative). 7 MR. LYNCH: We are not seeking to exempt anything in 8 the upper Sterling or the shallow quaternary gravel section. 9 MR. ELLER: Can I add to that? 10 CHAIR NORMAN: Please. 11 MR. ELLER: I want to point out, Commissioner, that 12 Unocal has requested, as you point out, the interval between 13 1,800 feet (indiscernible -- rapid speech) and the top of that 14 confining layer. However, we're not requesting -- we're not 15 requesting a disposal interval in that.· The NNA disposal well 16 itself that we're seeking a request for, the disposal zone for 17 that, the top of it, that's 6,200 feet plus or minus. So it's 18 well below both the confining layer and the requested depth 19 for the aquifer exemption. 20 CHAIR NORMAN: Sure. And for the record, that was Mr. 21 Eller testifying again. And thank you for that clarification. 22 Anything else? 23 COMMISSIONER SEAMOUNT: It's fairly complete 24 (indiscernible -- mumbled speech) case. 25 MR. ELLER: If I could offer one other comment, and it METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 28 . 5 6 7 8 9 10 11 12 . 13 14 15 16 17 18 19 20 21 22 23 24 25 . e e 1 has to do with the size of the aquifer exemption. And for the 2 record, this is Gary Eller speaking one more time. Mark has 3 given a great geological review about why it's applicable. 4 And in Unocal's continued development of this structure, you can the one disposal well that we will be applying for within days is the NNA Number 1. But as we continue to develop this structure, there could be the need for other disposal wells for produced water and drill cuttings and such. That is the second reason, if you will. Not a technical reason but more of a commercial reason why Unocal's seeking this area, so that for other disposal wells, the aquifer exemption will already be in place and we won't have to go through a -- through the commission, get the specific disposal injection orders for any other wells that might come down the road. CHAIR NORMAN: Here's a question for you, and you need not respond to it because you may not be prepared to, so don't. But if you were asked to contract the area that you have requested right there at this time, the area for the aquifer exemption, if you were asked to contract it because the commission was concerned that 15 square miles at this juncture is too large, where or what could you contract to? MR. ELLER: Commissioner, I think we probably would want to offer that in writing as a follow-up, if that's possible? METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 29 . . . e e 1 CHAIR NORMAN: That's certainly possible. 2 MR. ELLER: I mean, it's obvious from the map that the 3 main area of development right now is from the Happy Valley 4 pad. The wells there are approaching the crest of the 5 structure. It's also obvious, looking at the map, that, you 6 know, there are significant portions of the structure that we 7 can't access from the existing Happy Valley pad. So I think 8 that's something we prefer to think over a little bit and give 9 you a little more thoughtful response. 10 Okay, so you will make note to provide CHAIR NORMAN: 11 us with the qualifications of the gentleman from Sugar Land, 12 Texas and then you'll also provide us with an alternate option 13 of a contracted area if -- and I'm just speaking if -- if the 14 commission felt like the 15 miles was too much at this point? 15 MR. ELLER: Yes, sir. 16 CHAIR NORMAN: One last question of you gentlemen: in 17 order to exempt the aquifer, why, we have to fit within 18 certain provisions of the regulation. And I want to make sure 19 that I understand your basis for believing that this aquifer 20 can be exempted below 1,800 feet. 21 And you have indicated that there are two basic 22 provisions, one of which is that it doesn't currently serve as 23 the source of drinking water and will not in the future 24 because A, Band C. And A is that it's hydrocarbon producing. 25 B, it's at such a depth that recovery of water is economically METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 30 . . . e e 1 and technologically impractical. And C is contamination of 2 the recovered drinking water. And then, the second part talks 3 about total dissolved solids exceeding the 3,000 limit. Can 4 you specifically review for me again the conclusion of your 5 testimony, which of these criteria you believe you've 6 satisfied? 7 MR. LYNCH: Yes, sir. Although we have not shown the 8 economics of drilling a well to, say, 2,000 feet measured 9 depth, of drilling a water well, we deem it to be somewhat 10 obvious that it would be economically challenging to do so. 11 As we demonstrated earlier, most of the water wells on the 12 peninsula in this area are shallower than 100 feet measured 13 depth. It's not only would it be economically unfeasible, 14 but it would be technologically unfeasible to really drill a 15 water well to depths greater than that. 16 We did -- we do specifically demonstrate that any 17 aquifers or reservoirs or sands present below 1,800 feet can 18 and should be exempted on the basis of formation water 19 salinity and methane gas contamination. Both of those would 20 address that second point of contamination. 21 And although we're not specific in it, none of the 22 reservoirs that we are seeking to exempt are hydrocarbon 23 producing at this time so no state resources are in jeopardy. 24 We demonstrated with the drilling of the NNA well, which we 25 tested exhaustively, that there were no commercial gas METRO COURT REPORTING 745 West Fourlh Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 31 · · · e - 1 deposits on the north end of the Happy Valley structure. So 2 while they're not currently serving as a natural gas 3 reservoir, they at no time in the future would be serving as 4 one either. 5 CHAIR NORMAN: Okay, one of the functions, of course, 6 of this commission is to try to look as far into the future as 7 we can and ask ourselves: might some future community have a 8 need for a fairly large quantity of water, and industrial 9 water, and might we have foreclosed that by granting this 10 exemption? With that in mind, is -- looking back to your 11 right, at the logs and the cross-section -- is there 12 communication across that shale barrier right now? I mean, 13 absent drilling a well. But is that an impervious barrier? 14 MR. LYNCH: Across this barrier here? 15 CHAIR NORMAN: Yes. 16 Sir, I do not have any direct evidence MR. LYNCH: 17 that it is, that there's communication across or that there's 18 not communication across. I suspect, given the magnitude and 19 the thickness of that shale, that it would act as a very 20 efficient aquatard. And it does seem to be present over at 21 least the northern half of the unit, as demonstrated by the 22 NNA and Happy Valley wells. But as for direct evidence of it, 23 I cannot -- I cannot state. 24 CHAIR NORMAN: And keeping In mind, again, that we 25 understand that you're not right now applying for an injection METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 32 · · · e e 1 order, but could you function -- let me ask it this way: how 2 would your proposed operations be impeded if the exemption 3 applied to the aquifer below that shale barrier? 4 MR. LYNCH: Well, as we stated, we were seeking we 5 will be seeking with the NNA Number 1 injection order to 6 permit that well to dispose of Class II waste at a depth of 7 about 6,200 feet. So it would really in no way impede us if 8 the commission wanted to move the top of the exempted interval 9 to that shale body. 10 I should mention that, you know, you do see from the 11 mud log gas curves the presence of methane gas in some amounts 12 above that shale body, up into the top of the Sterling 13 formation, but that those ga- -- that that gas is dropping off 14 very quickly toward the surface. And the fact that we don't 15 commonly hear about a lot of methane gas in water wells on the 16 peninsula suggests that the boundary between the quaternary 17 and alluvium and the underlying tertiary section is itself a 18 potential seal. Otherwise, what little gas we do see here 19 should find its way up to surface and very readily contaminate 20 the shallow gravel aquifers. So that seems to -- perhaps it's 21 a negative inference, but it does imply that there's numerous 22 opportunities for sealing this, even in the very shallow 23 subsurface, whatever contaminants are down here from the 24 shallow gravel aquifers. 25 CHAIR NORMAN: Thank you. Commissioner Seamount? METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 33 . . . e e 1 COMMISSIONER SEAMOUNT: I have no comments at this 2 time or questions. 3 CHAIR NORMAN: Well, I thank you for that 4 presentation, both of you. Do you have anything more at this 5 point? I'd ask you to remain and I'll ask if anyone else 6 wishes to make a statement. You may remain seated where you 7 are for the moment. 8 Are there any other persons present today in the 9 hearing room who wish to offer any testimony with reference to 10 this matter? All right, I recognize you, ma'am. Could you 11 come forward? You may be seated here. And could you state 12 your name for the record, please? 13 MS. EPSTEIN: My name is Lois Epstein and I am 14 representing Cook Inlet Keeper. 15 CHAIR NORMAN: And would you raise your right hand, 16 please? 17 (Oath administered) 18 MS. EPSTEIN: Yes. 19 CHAIR NORMAN: And do you wish to be qualified as an 20 expert to speak to any of the technical points or do you wish 21 to offer just general testimony? 22 MS. EPSTEIN: At this point I will just offer general 23 testimony. 24 CHAIR NORMAN: Then proceed, please. 25 MS. EPSTEIN: Thank you. My name is Lois Epstein and METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 34 . . . e e 1 I am an Alaska licensed civil and environmental engineer with 2 Cook Inlet Keeper. Cook Inlet Keeper is a non-profit 3 organization whose mission is to protect the Cook Inlet 4 watershed and the life it sustains. I've brought along with 5 me today three Russian environmental attorneys sitting in the 6 back -- and some of you may have heard the quiet translation 7 going on -- who are visiting Alaska this week and who are 8 interested in state, federal and public oversight of oil and 9 gas operations. Happy to introduce anybody in the room with 10 my colleagues -- my colleagues from Russia. 11 Cook Inlet Keeper requested this aquifer exemption 12 order hearing because we have technical and process questions 13 associated with Unocal's application for the AEO. We would 14 like AOGCC to answer the following questions: first, in a 15 5-27-04 e-mail to Unocal which was in the file for the order 16 application, AOGCC stated that, quote: the surface casing 17 shoe in well NNA Number 1 is located at 2,140 feet, it is 18 inconceivable that the commission would allow injection above 19 the surface casing shoe, end quote. Since Unocal proposes to 20 inject produced water and drill cuttings below 1,800 feet 21 which is above the surface casing shoe, shouldn't the 22 commission disallow that? 23 Second, that same e-mail states that an exemption 24 would require evaluation of the confinement of the injected 25 fluid. Shouldn't AOGCC require confinement to be discussed in METRO COURT REPORTING 745 West Fourlh Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 35 e e · 1 detail in the AEO application? As we heard today, the 2 disposal injection order application has not yet been 3 submitted. And it was included in the e-mail that both those 4 should be reviewed concurrently. 5 Third, 20 AAC 25.440 (a) (1) (b) addresses whether a 6 fresh water aquifer, now or in the future, will serve as a 7 source of drinking water if recovery of water is uneconomic or 8 technologically impractical. Based on information we have 9 gathered from local residents -- and this is just a phone 10 conversation so I can't verify everything and which 11 presumably is not in the DNR WELTS database, Cook Inlet Keeper 12 has learned that nearby drinking water wells much deeper than 13 the 292-foot maximum depth listed in the WELTS database exist. · 14 So going back to the slide we saw earlier which showed the 15 wells, that was based on data only from the WELTS database. 16 There potentially are other wells out there that have 17 different depths than those we saw in the presentation. 18 Given the lack of good data on the depth of the 19 quaternary fresh water zone near the proposed injection well, 20 isn't it incumbent on AOGCC to require Unocal to preform a 21 more complete analysis on nearby well depth, greater than that 22 available in the WELTS database? And what evidence is there 23 that future water wells won't be drilled deeper than those 24 currently in existence as, Commissioner Norman, you also were 25 asking some questions about? · METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 36 · · · e e 1 And fourth, Cook Inlet Keeper's process concern 2 involves information we have received that injection of 3 drilling waste already is occurring at the Deep Creek unit 4 site. We think it's important that AOGCC investigate whether 5 that's true and, if so, is it allowable under AOGCC 6 requirements prior to the granting of an aquifer exemption 7 order? 8 Thank you very much for your attention to Cook Inlet 9 Keeper's concerns. 10 CHAIR NORMAN: Thank you for that statement. 11 Commissioner Seamount, question? 12 COMMISSIONER SEAMOUNT: Is it Ms. Epstein? 13 MS. EPSTEIN: Yes. 14 COMMISSIONER SEAMOUNT: Do you know any reasons why 15 the WELTS database is incomplete? 16 MS. EPSTEIN: Well, I'm no expert on the WELTS 17 database but I understand that it doesn't not all wells 18 that are drilled are required to be incorporated into that 19 database. 20 COMMISSIONER SEAMOUNT: Okay, that's all I have. 21 Thank you. 22 CHAIR NORMAN: Do you have any information on the 23 wells that -- right now, that may not have been included, as 24 to proximity and depth, that you're referencing may not have 25 been included in the database? METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 37 · · · e e 1 MS. EPSTEIN: Well, ideally -- and one reason we 2 wanted to have the extra time, partly because I was out of 3 town on business and personal travel before. I wasn't able to 4 get the documentation but we need that documentation, as much 5 as possible, to be submitted to you. So I don't have that 6 information in writing at this point. 7 CHAIR NORMAN: Where would you propose to get that, 8 from DNR? 9 MS. EPSTEIN: Well, actually, it is local residents. 10 They have -- they're saying that these wells are deeper. I 11 would like for them to provide that. But I also believe that 12 Unocal or AOGCC could be talking to some of the local 13 officials in the Ninilchik area and do, you know, a best 14 effort to see whether there are wells around there that are 15 deeper. Because, you know, apparently, it's wide-spread, I'm here in Anchorage, 16 widely known, from what I understand. 17 my colleagues are in Homer and neither of us is in Ninilchik 18 but we're trying to get as much information as we can and 19 submit it to the commission. 20 21 CHAIR NORMAN: Okay, well, we would welcome receipt of that. There is a procedure for registering wells with the 22 state a couple of different ways. And then, you're 23 suggesting, though, that there may be possibly additional 24 unregistered wells? The registered information would be 25 fairly easy for us to come by. METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 38 · · · e e 1 MS. EPSTEIN: Right. 2 CHAIR NORMAN: In a 15-square mile area there, it may 3 be difficult for us to go around and locate unregistered, 4 unknown wells. 5 MS. EPSTEIN: But it may be possible for Unocal to do 6 a little more work there. 7 CHAIR NORMAN: It may be possible but I would again 8 encourage you, if you have any information, to provide it to 9 us and then we will do our own follow-up on that at that 10 point. 11 MS. EPSTEIN: Certainly, we'll do our best. 12 CHAIR NORMAN: How long do you think that might take 13 you to get that information to us? 14 MS. EPSTEIN: Well, as I understand it, the deadline 15 for your -- right now, to get your comments is the next week. 16 We're planning on trying to track that down in the next week. 17 CHAIR NORMAN: Okay. Anything more, Commissioner 18 Seamount? 19 COMMISSIONER SEAMOUNT: I have nothing else. 20 CHAIR NORMAN: My last I guess my last question: 21 outside of filling out the database for wells in the area, is 22 there anything else that you feel the commission should have 23 in mind as we're looking at this application? 24 MS. EPSTEIN: Well, I guess I would like to see some 25 sort of analysis and justification for allowing the injection METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 39 . . . e e 1 level to be determined to be 1,800 feet rather than below the 2 casing shoe which is at 2,100 feet. You know, the commission 3 that's the evaluator earlier thought that that was a 4 critical -- I thought it was a strong statement in the e-mail, 5 that it is inconceivable that the commission would allow 6 injection above the surface casing shoe. And I don't -- I 7 don't see any evidence right now about why that should be 8 allowed, anything different from what was in the file as of 9 May. 10 CHAIR NORMAN: Okay. Does that conclude your 11 statement? 12 MS. EPSTEIN: Well, and I was also raising the concern 13 about is there injection currently occurring? And I would 14 appreciate some follow-up on that from the commission. 15 CHAIR NORMAN: The commission is aware -- if I 16 misstate, I'd ask staff to hand me a note or Commissioner 17 Seamount to correct me -- but there has been some limited 18 injection but that is done under limitations at depth. And 19 that is not an on-going or continuing program. The commission 20 is aware and that's not uncommon with prospects that are being 21 drilled. But what we have here now is an application to 22 exempt an aquifer that will presumably be followed by requests 23 for dis- -- conversion to a Class II disposal well. Okay, so 24 that will be a whole different so the commission is aware 25 of some -- if you need details on that, we'll be happy to METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 40 · · · e e 1 provide it to you. But we are aware. The applic- -- there 2 has been an application submitted to us and we've acted on it. 3 But that is limited and it's my understanding that that will 4 be coming to an end. And then any future injection will have 5 to be through an approved disposal well. 6 MS. EPSTEIN: And who would I speak with to get more 7 information on that limited injection? 8 CHAIR NORMAN: You can contact the commission's 9 special assistant, her name is Jody Colombie. And that is 10 being done under the Alaska Administrative Code Regulations 20 11 AAC 25.080 that allows for annular disposal, disposal down the 12 annulus of an existing well. 13 MS. EPSTEIN: Okay. Thank you. 14 CHAIR NORMAN: But I do recall that the commission has 15 indicated that that will be coming to an end, no further annular disposal of that type will be permitted. All right, I would ask the applicant if there was 16 17 18 anything raised by Ms. Epstein's statement that you would like 19 to respond to? You may have an opportunity to do so. 20 MR. ELLER: We would like to respond. We would ask 21 the chair if we might have a moment to -- where we could take 22 a break and discuss this prior to offering testimony on that? 23 CHAIR NORMAN: Certainly. Let's take about a -- well, 24 we'll take a 10-minute recess for everyone. There are rest- - 25 - there's coffee right outside the door, water. Through the METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 41 . . . e e 1 hallway there are rest room facilities. And I have 2 approximately 2:15, and we'll reconvene at 2:25. 3 (Off record) 4 (On record) 5 CHAIR NORMAN: Thank you. We ran a little over on our break but I think it was useful. We were able to go over a few points. And, in doing that, I think we've saved some 6 7 8 questions that otherwise might have been asked of you. So the 9 time was well spent. 10 We've asked for some additional information from you all, and you understand what we're looking for? And within a week, you'll be able to provide it to the commission? 11 12 13 MR. ELLER: This is Gary Eller speaking. That's 14 right, sir. Our understanding of the information you want 15 were some more detail to the qualifications of the independent 16 petrophysicist, Val Linscom. You wanted some feedback about 17 if we were to retract some of the area. 18 CHAIR NORMAN: Contract, yeah. 19 MR. ELLER: Okay, contract. 20 CHAIR NORMAN: Contract, yeah. 21 MR. ELLER: Contract, better word. What point might 22 we consider acceptable from Unocal's standpoint. And third 23 was some feedback regarding the noted confining Beluga 24 confining layer that occurs around 2,500 feet or so in the NNA 25 Number 1 well. Was there anything else I'm lacking? METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 42 . . . e e 1 CHAIR NORMAN: No, that's it. 2 MR. ELLER: And you requested the written comments by 3 what time, sir? By what day? 4 CHAIR NORMAN: Well, we'd like to have them within a 5 week but if that's possible. 6 MR. ELLER: Certainly. 7 CHAIR NORMAN: You tell me. If you think you're going 8 to need more time then we'll..... 9 MR. ELLER: No problem whatsoever. 10 CHAIR NORMAN: Okay. And then, Ms. Epstein, on these 11 additional wells that were not noted, in trying to think it 12 through, there is a procedure by law where everyone was 13 supposed to register a well with the Department of Natural 14 Resources. And that's what we rely upon. And it is an 15 impossible burden to go out and try to discover -- I'll use 16 the word bandit wells. But there is a procedure in the state 17 of Alaska for extracting water and a procedure for registering 18 wells. And that's ordinarily what we work from. It's not 19 practical within a IS-mile area, particularly where the road 20 system is not good, to wander around and try to find wells. 21 So I don't want to conclude the hearing leaving you 22 the impression that we have the capability to go out and try 23 to discover wells. But we will check with the Department of 24 Natural Resources again to try to fill out the base of wells 25 in the area and would appreciate it, if there's anything else METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 43 . . . e e 1 that missing, if you could have that to us. How much time 2 will you need to provide that to us? 3 MS. EPSTEIN: As I've said, we will try to get that to 4 you within a week as well. 5 CHAIR NORMAN: Okay. I'll ask now: is there anything 6 further by way of a closing statement? I think you've done a 7 very good job. And, in fact, I would commend you on the 8 application that was submitted. It's one of the best I've 9 seen. I think it's a very good product and thorough and 10 formed the basis for some useful discussion. Is there 11 anything further? You need not say anything, but if there is 12 anything that you'd intended to say, I want to give you the 13 opportunity. 14 MR. ELLER: Mister..... 15 CHAIR NORMAN: Oh, that's right. I'm sorry. 16 Commissioner Seamount's reminded me that you were going to 17 have the opportunity to respond to Ms. Epstein. So thank you. 18 MR. ELLER: Yes, sir, thank you for the opportunity. 19 And we would like to go ahead and take that opportunity to 20 respond to the points Ms. Epstein brought up. 21 The first issue that was raised was regard to -- it 22 was a well-specific issue related to the NNA Number 1 well, 23 the fact that it has a surface casing shoe at a depth of 2,140 24 feet and we're asking for an exemption at 1,800 feet in depth. 25 I believe the reference was that was an e-mail that METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 44 . . . e e 1 said it would be -- AOGCC would find it inconceivable to allow 2 injection above that surface casing shoe at 2,140. And Unocal 3 agrees with that; it is inconceivable that, in that specific 4 well, that Unocal would not seek nor would we expect AOGCC to 5 approve disposal above the surface casing shoe. That's really 6 a well-specific issue. And in future wells, if the surface 7 casing were -- it's just going to be a well-specific issue 8 that we'd address in each case. 9 Secondly, regarding confinement, the issue of adequate 10 confining zones: again, that is really a well-specific issue. 11 The aquifer exemption application is really not meant to 12 address that. That comes -- takes place in more the well's 13 specific disposal injection application. Unocal's NNA Number 14 1 disposal application which is forthcoming will address that 15 in length. And I just want to reiterate the point that Mr. 16 Lynch made about that there have to be some other shallow 17 barriers in place or we'd see greater evidence of gas in water 18 wells, and it's just not present commonly. So that implies 19 that there is some other impediment to gas migrating to the 20 shallow layers. 21 Finally, with regard to water wells that may be 22 undocumented: it is conceivable that undocumented water wells 23 exist within the 10-mile radius. What I believe is 24 inconceivable is, given that the deepest well we're able to 25 locate -- and we've located a number of wells on the METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 45 . . . e e 1 database -- the very deepest is 292 feet. It's inconceivable 2 that any wells approach the depth of 1,800 feet that Unocal's 3 asked for. 4 And finally, regarding the issues about unauthorized 5 annular -- or unauthorized disposal, Unocal does not endorse 6 or practice any unauthorized disposal of waste. There are 7 disposal operations -- the statements Mr. Norman made were 8 exactly accurate. There are disposal -- annular disposal 9 operations taking place in the Deep Creek unit and they are 10 coming to a close. And we're seeking this Class II 11 application accordingly, which, that's the way the process is 12 designed. 13 And I believe that's all we have to say. Thank you 14 for your time. 15 CHAIR NORMAN: Yes, thank you for that response. And 16 the commission and the chair does appreciate the fact that, 17 before any specific disposal occurs, you will apply. And 18 that's not what this hearing is about right now. You will 19 apply and the commission will examine the configuration of a 20 specific well with reference to the proposed order. 21 So what we're looking at now is this area order. But 22 also, the commission asked the question because, primarily, as 23 we start down that road, I think it's unrealistic to think 24 that we might exempt this aquifer and we want to have a 25 complete understanding of it. So it's in that vein that we METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 46 . . . e e 1 ask itl not because we/re not aware that there is a next step 2 that you must go through. 3 MR. ELLER: Sure. 4 CHAIR NORMAN: Ms. Epsteinl do you have anything you/d 5 like to say? 6 MS. EPSTEIN: Yesl just briefly. I think it/s 7 important to remember that in the May 27thl 104 e-mail it does 8 say that it/s appropriate to consider the aquifer exemption 9 application concurrent with the disposal injection order 10 request. And I you knowl to date there is not such an 11 application. So I thinkl as we/ve heardl that/s critical and 12 almost inseparable from this. And I you knowl it/s important 13 not to make a decision on this until that/s fully reviewed. 14 CHAIR NORMAN: Mr. Seamount I any remaining questions? 15 COMMISSIONER SEAMOUNT: NOI Mr. Chairman. 16 CHAIR NORMAN: I think there was one point that we had 17 for the applicant and that related around the level of methane 18 content that you/re aware of around the 1/300-foot level. How 19 much methane is there around that -- around 1/300 feet? 20 MR. LYNCH: As I mentionedl the -- this is Mark Lynch 21 speaking again. As I mentionedl the mud log gas curves that 22 are depicted on the cross-section are scaled from five to 300 23 units. A unit of gas on a mud log is a fairly widely used 24 thing. It/s actually just called a unit. And it represents a 25 certain part per million concentration. I do notl off the top METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 47 . . . e e 1 of my head, know what that concentration is. I'd be happy to 2 try to research that and provide that to you with the other 3 written comments that we are going to provide. But it does 4 show increase from essentially negligible or background levels 5 in the very shallow subsurface, on up to a couple hundred 6 units, at least, as we move down toward 2,000 feet in the 7 shallow subsurface. 8 CHAIR NORMAN: If you could put that on your list of 9 additional information? We would like to know that level of 10 saturation, if you will, of methane in the water or 11 entrainment of methane in the water. 12 COMMISSIONER SEAMOUNT: Have you done any calibrations 13 using the gas show you get out of coal? I mean, is there any 14 kind of -- I assume you've got coals and sands in there. Both 15 have gas shows. Which has the higher total gas show, the coal 16 or the sand? 17 MR. LYNCH: Typically, the coals will exhibit a much 18 higher gas show in the shallow subsurface where they are 19 maturing but not mature enough to actually source, say, 20 economic quantities of hydrocarbons. Sands will give a much 21 lesser show because they have a small or a much lower 22 saturation. In fact, it's commonly referred to as fizz gas or 23 fizz water in a lot of these things. You could think of it as undersaturated with respect to methane in these reservoirs and aquifers. But there is gas present there in some minute 24 25 METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 48 . . . e e 1 amount in the sands. The coals will almost always give a 2 greater gas show unless -- except in the deep subsurface where 3 actual gas reservoirs are found to occur, in which case you 4 may see a show that is comparable with what you'd find in a 5 sh- excuse me, in a coal. 6 COMMISSIONER SEAMOUNT: Okay. 7 CHAIR NORMAN: Is there anyone else in the hearing 8 room that would like to address the commission on this 9 specific matter? We, then, have agreed that by close of 10 business one week from today, the additional items will be 11 submitted to the commission. And you all have in mind what 12 that information is that we have requested? 13 MR. LYNCH: Yes, sir. 14 CHAIR NORMAN: Okay, I hear no one else asking to be 15 addressed. I would like to acknowledge the visitors from 16 Russia; we're happy to have you here and hope you have a good 17 visit in our state. 18 (Addresses visitors in COMMISSIONER SEAMOUNT: 19 Russian) 20 CHAIR NORMAN: Okay, these proceedings are closed. 21 (Off record 2:55 p.m.) 22 * * * END OF PROCEEDINGS * * * 23 24 25 METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 49 . . . . e 1 C E R T I FIe ATE 2 SUPERIOR COURT ) ) ss. ) 3 STATE OF ALASKA 4 5 I, Kelley Hartlieb, Notary Public in and for the State of Alaska, do hereby certify: 6 THAT the annexed and foregoing pages numbered 3 7 through 49 contain a full, true and correct transcript of the Public Hearing before the Alaska Oil and Gas Conservation 8 Commission, taken by Metro Court Reporting and transcribed by me: 9 THAT the Transcript has been prepared at the request of 10 the Alaska Oil and Gas Conservation Commission, 333 West Seventh Avenue, Anchorage, Alaska. 11 DATED at Anchorage, Alaska this 15th day of October, 12 2004. 13 SIGNED AND CERTIFIED TO BY: 14 15 \lll(f(({lr¡: \,\\ \ \.\.~~.~ ,!¿f/',r ~ ~ ~.' ..... .~)o.~ ~ ,.' ~07".A" '.~~ -..; ...,~.~- ~:' ~ ...... ~r)...d1~ ;.~: ~ ~LIC .: ~ - .~.... "" ...",. lilt . =" - '. ' =" ~ ~"~A.LJ>.~'~" ~././~~: . .~,'1.\\\'\ //JJ} liJÞffl)" d4M~~~~ Kelley H i b Notary in and for Alaska My Commission Expires: 4/12/07 16 17 18 19 20 21 22 23 24 25 METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 50 #11 (ill . n IA\ Ú\j !Æ . í If I FRANK H. MURKOWSKI, GOVERNOR / f / 333 W. 7'" AVENUE, SUITE 100 ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 FAX (907) 276-7542 A'ItASIiA OIL AND GAS CONSERVATION COMMISSION October 15,2004 Certified Mail- Return Receipt Requested 7002 3150 0005 35211003 Mr. Thor Cutler Ground Water Protection Unit US EP A Region 10 1200 Sixth Avenue, OW-137 Seattle, W A 98101 Dear Mr. Cutler: The Alaska Oil and Gas Conservation Commission ("Commission") received from Union Oil Company of California ("Unocal") a request for an aquifer exemption covering the Deep Creek Unit, located on the Kenai Peninsula. The following documents are attached for EP A's review in accordance with Paragraph 14 of the Memorandum of Agreement (November 22, 1991) between EP A Region 10 and the Commission: · Aquifer Exemption Order application, as originally submitted, dated August 4,2004; · Public notice of the aquifer exemption request, published in the Anchorage Daily News on August 6, 2004; · Undated letter (received August 13, 2004) from Cook Inlet Keeper requesting a hearing; · Commission's August 16,2004, letter to Cook Inlet Keeper setting a hearing date for the aquifer exemption, and extending the public comment period; · Copies of email correspondence regarding the proposed aquifer exemption; · Supplemental information provided by Unocal addressing questions posed by the Commission during the public hearing; included is an amended area for the aquifer exemption (significantly contracted from the August 4 request); · Additional correspondence from Cook Inlet Keeper dated October 7, 2004; · Transcript of the September 30, 2004, public hearing. The Commission has also recently received a disposal injection order (DIO) application from Unocal requesting authorization for the underground injection of oil field wastes in the Deep Creek Unit. Unocal proposes to convert exploration well NNA#1 for Class II disposal into the Tyonek sand intervals between 5,495 and 8,954 feet subsea true vertical depth. That application is being reviewed in accordance with regulations at 20 AAC 25.252, and a public hearing date has been set for November 9,2004, The Commission believes there is sufficient information to grant the aquifer exemption request to Unocal for the Deep Creek Unit. Preparation of an aquifer exemption order for the Deep Creek Unit, addressing all comments received and additional information provided by the Mr. Thor Cutler October 15,2004 Page 2 of2 . . applicant is underway and will be sent to EP A for concurrence in the near future. Contact Jim Regg at 907 -793-1236 should you have any que . ns about the information being provided. Attachments UNITED STATES POSTAL SERVICE First-Class Mail Postage & Fees Paid USPS Permit No. G-10 ~§ <~~r~ -Î~ase priñt your name, address, and ZIP+4 in this box · OC1 '~ 2 2004 . .. .ld.!'/· I!ni5~io\l r \aska Oil & Ga<; t.\1I'AK VI & Gas Conservation Commission f\I1ch')r;J333 W 7TH Ave, Ste 100 Anchorage, AK 99501-3539 '::1 ':.::1~. !::! ! + :::.::S:3·J , I , I " I, f ,"I, I, /I, .. , ../1../1 ,,1,1 " I 11.1.1. " ./1 " . ",, ! I ! " U.S. Postal SerViceTM CERTIFIED MAILM RECEIPT (Domestic MslI Only¡ No Insursnce Coversge Prøvlded) IT1 CJ CJ ,...::¡ ,...::¡ ru L11 IT1 Postage $ L11 CJ CJ Return Reclept Fee CJ (Endo/"Sljmenl Required) CJ Restricted Delivery Fee L11 (Endorsement Required) ,...::¡ IT1 Certified Fee Total Postage & Fees ru CJ CJ I"'- · Complete items 1, 2, and 3, Also complete item 4 if Restricted Delivery is desired. · Print your name and address on the reverse so that we can return the card to you, · Attach this card to the back of the mailpiece, or on the front if space permits, ï&7;;r (/¿; r/e- (jttJ)J(!0 IIi ¡Ç pp. /0/"",.)'" ktlo 6P-/J¡/e OW-/37 J elff-l/ C fA/ IJ. 9 tf/ô / '~002 3150 0005 3521 0990 .i> :, ~{; 3. Service Type ~ertlfied Mail o Registered o Insured Mail o Express Mail )(Return Receipt for Merchandise OC,O.D, 4. Restricted Delivery? (Extra Fee) DYes 2. Article Number (rransfer from servicI PS Form 3811, August 2001 Domestic Return Receipt 102595-02-M-0835 #10 Protecting Alaska's Cook Inlet watershed and the life it sustains October 7, 2004 RECEIVED OCTO 7 2004 Alaska Oil & Gas Cons. Commission An~rage 3 : :3 'J PrYl Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501-3539 To the AOGCC Commissioners: Cook Inlet Keeper appreciates this opportunity to comment on the application for an Aquifer Exemption Order (AEO) for the Deep Creek Unit by Union Oil Company, discussed at the September 30, 2004 AOGCC public hearing. My name is Lois Epstein and I am an Alaska- licensed civil engineer with Cook Inlet Keeper. Cook Inlet Keeper is a non-profit organization whose mission is to protect Alaska's Cook Inlet watershed and the life it sustains. Cook Inlet Keeper requested the September 30 AEO hearing because we have technical and process questions associated with Unocal's application for the AEO. We would like AOGCC to answer the following questions: 1. In a 5/27/04 email to Unocal, AOGCC stated that "the surface casing shoe in [well] NNA#1 is located at 2,140 ft.; it is inconceivable that the Commission would allow injection above the surface casing shoe." Since Unocal proposes to inject produced water and drill cuttings below 1800' (which includes depths above the surface casing shoe), shouldn't AOGCC disallow that? 2. That same email states that an exemption would require evaluation of the confinement of the injected fluid. Shouldn't AOGCC require that confinement be discussed in detail in the AEO application, and that any knowledge gaps with respect to confinement geology be filled before this application is approved? 3. 20 AAC 25.440(a)(I)(B) addresses whether a freshwater aquifer now or in the future will serve as a source of drillking water if recovery of the water is uneconomic or technologically impractical. Based on information we have gathered and which presumably is not in the DNR WELTS database because it is not mentioned in Unocal's application (see attached letter from the Environmental Program Director for the Ninilchik Traditional Council to Cook Inlet Keeper), Cook Inlet Keeper has learned that nearby drinking water wells much deeper than the 292' maximum depth listed in the database exist. These wells were most likely drilled by property owners with portable 308 G Street, Suite 219, Anchorage, Alaska 99501 · Phone: (907) 929-9371 · Fax: (907) 929-1562 www.inletkeeper.org . . Page 2 AOGCC Commissioners October 7, 2004 equipment, and thus they did not submit well data to the WELTS database. 1 Given the lack of good data on the depth of the Quaternary freshwater zone near the proposed injection well, isn't it incumbent on AOGCC to require Unocal to perform a more complete analysis of nearby well depth data than what's available in the WELTS database? Also, what evidence has been provided that future private or industrial water wells will not be drilled deeper than those wells currently in existence? It may be economic to drill deeper wells at a future time. 4. Cook Inlet Keeper's "process" concern involves information we have received that injection of drilling wastes already is occurring at the Deep Creek Unit, resulting in significant local truck traffic and a lack of local knowledge on the volume and type of materials that are being injected. At the AOGCC September 30 hearing, AOGCC said that it is allowing "limited injection" at the Deep Creek Unit under 20 AAC 25.080 (Annular Disposal of Drilling Waste), which would soon stop. Will AOGCC provide information to the public on the volume and composition of these injected wastes? Finally, a clarification: At the September 30 public hearing, I brought along with me three Russian environmental advocates who were visiting Alaska and who are very interested in state, federal, and public oversight of oil and gas operations. Due to a language misunderstanding, I misspoke during my oral testimony. Only two - rather than all three - of the Russian environmental advocates I escorted are environmental attorneys. Thank you very much for your attention to Cook Inlet Keeper's concerns. Sincerely, rÞvlt ~ Lois N. Epstein, P.E. Senior Engineer Oil and Gas Industry Specialist Attachment 1 Additionally, according to the WELTS website, "The Division makes NO representation regarding well location, completeness or accuracy of the data in the database or data extraction procedures provided, The user assumes total responsibility for verification" (http://info,dec.state,ak.us/welts/default.asp ), . . ATTACHMENT Lois N. Epstein, P.E. Senior Engineer Oil and Gas Industry Specialist Cook Inlet Keeper 308 G Street, Suite 219 Anchorage, Alaska 99501 October 6, 2004 Dear Ms. Epstein, I am writing to convey to you some of the concerns I and the Ninilchik Traditional Council have regarding the operations known as the NNAI #1 GRIND and INJECTION PAD. I have discussed the concerns I have, as well as the outpouring of concern being expressed by our Tribe, our members and many of our community residents who are all critically concerned for public health and safety reasons, with Cook Inlet Keeper, the EP A, the State of Alaska ADEC, and others. The community is still in shock and dismay that such a facility could have ever been permitted without at least some form of public review and opportunity to speak against such risky development in an area known particularly for its pristine water and groundwater resources and critical habitat for fish and wildlife. There are clearly, many valid reasons why such dangerous and potentially damaging activities such as underground contaminate injection should not be permitted or allowed in these critical areas. Not the least of which is the crucial need to sustain and maintain protected groundwater resources that serve all of our entire communities here in the Ninilchik and Deep Creek areas. In this regard, I would like to bring to your attention the fact that many, if not all, of the personal-use water wells for residences in close proximity to the NNAI #1 Grind and Inject operation facilities located East of the community ofNinilchik, are drilled to depths many times that which is stated as the average well depth in the UNOCAL drilling permit and supporting documentation. It is commonly known that water wells for private and public use in areas lying east of the coastal development communities near Ninilchik and Deep Creek require water wells drilled to depths as much as five times the depth (500 feet to 800 feet) of most of the ADEC certified or reported water wells that are recorded with the State. . . Wells in the areas most likely to be first impacted by contaminate injection, are all much deeper than was reported in geologic reports submitted with UNOCAL applications and permit documentation. I am currently working to document well depths and well log data from as many well owners as I can locate and contact. However, since the areas adjacent and surrounding the NNAI #1 G&I facility are not accessible by normal water-well drilling rigs, all of the wells currently in use were drilled by owners with portable equipment, and do not usually have well log data readily available. I have made contact with a number of the well owners and will compile all known records and data as quickly as possible. I am familiar with the depths of some of these wells however, as I was present when two of them were drilled and tapped. One of these is approximately 620 feet in depth. The other was stated as being almost 800 feet in overall depth. There are likely others even deeper, as no shallow level aquifers are logged for any of these rapidly developing areas, and no other readily available sources of potable water are known. There are other known wells drilled and operational to both private residences, and area lodges and camps, and should also be factored into discussions and decisions about the allowance of dumping and forced injection of critical contaminates into depths so closely associated with the deep aquifers being tapped for personal consumption. The negative consequences of continued injection, particularly in such close proximity to water resources being utilized for human consumption, are unconscionable. Please relay this information to those who may recognize the critical importance ofthese issues and who may be able to intercede in the oversight ofthe permit issuance and regulatory process. Once the damage is allowed, there will be no going back. Had the public been properly noticed and invited to comment, I know the blatant misstatement of the facts concerning local water well depths and water utilization concerns would have likely led to a very different outcome in permit consideration. Thank you greatly for your time in considering the issues and concerns we and our communities have relative to the planned Grind and Injection permitting in our areas. Sincerely, Bruce Oskolkof[ Environmental Program Director NINILCHIK TRADITIONAL COUNCIL #9 . . UNOCALi) -Alaska .t. Gary Eller Advising Completion Engineer Unocal Alaska Tel 907.263.7848 Cell 907-351-1313 Fax 907-263-7847 E-mail: ellerg@unocal.com October 5, 2004 RECEIVED OCT () is 2004 Alaska Oil &. Gas Cons. Commission Anchorage Commissioner John Norman Alaska Oil & Gas Conservation Commission (AOGCC) 333 West th Avenue, Suite 100 Anchorage, AK 99501 Re: Hearing of September 30, 2004 Regarding an Aquifer Exemption Application for the Deep Creek Unit Dear Mr, Norman: During the hearing of September 30, 2004 regarding Unocal's application for an Aquifer Exemption in the Deep Creek Unit, the AOGCC asked Unocal a number of questions for which further research and discussion were needed, Unocal's responses to the Commission's questions are listed below, 1, What are the professional qualifications of Val Lincecum. independent petrophvsicist? Subsequent to the hearing of September 30, Mr. Lincecum confirmed that the following information remains true and correct: Val Lincecum obtained a 8,S. degree in Geology from Texas Tech University in 1978, After graduation, he served as Senior Log Analyst for Western Atlas in Houston, Texas until 1991. He subsequently served as President Director Western Atlas Indonesia until 1996. He served as Western Atlas' Technical Advisor to Shell Offshore until 1998. Since 1998 he has been employed as Senior Petrophysicist/Petrophysical Consultant for Petrophysical Solutions Inc, in Houston, Texas. 2, Can Unocal contract some portion of the requested Aquifer Exemption area? Unocal's application for an Aquifer Exemption in the Deep Creek Unit requested that aquifers below 1,800 feet TVD in 15 sections in Township T2S, R13W, Seward Meridian be designated exempt freshwater aquifers. The AOGCC asked Unocal to reconsider the total acreage requested for exemption, Union Oil Company of California I Unocal Alaska 909 West 9th Avenue. Anchorage. Alaska 99501 http://www.unocal.com Alaska Oil & Gas conse.on Commission . Aquifer Exemption Application for the Deep Creek Unit October 5, 2004 Page 2 Practically speaking, Unocal can reduce the area of the proposed Aquifer Exemption to something that more concisely fits the needs of the Deep Creek Unit development program, It is worth restating however that the technical basis for exempting the entire 15-section area remains sound. The 15-section area in the application covers the greater Happy Valley anticlinal structure, Aquifers below 1,800 feet TVD throughout this structure can technically be exempted on the basis of: (a) economic impracticality of recovering these waters, (b) the formation water salinity being greater than 3,000 ppm TDS, and (c) contamination by methane gas, No information has been presented to the AOGCC which challenges the technical merits of the Aquifer Exemption application as originally submitted by Unocal. The wells in the Deep Creek Unit are drilled from centralized gravel pads, There are currently two existing pads in the Deep Creek Unit: the NNA #1 well was drilled from a pad in the southwest corner of Section 11 and the Happy Valley wells were drilled from a pad in the southeast corner of Section 22, Unocal is contemplating building a third pad in the southeast corner of Section 21, Therefore, the practical description of an Aquifer Exemption area would provide for a potential Class II disposal well on each of these pads, Unocal proposes amending its request for Aquifer Exemption to the following three areas: · A one-quarter mile radius around the NNA #1 well bore in Section 11, · All of Section 22 which includes the existing Happy Valley pad and associated wells, · The southeast corner of Section 15 to include the tail end of well Happy Valley #7, · All of Section 21 which will cover the new pad and associated wells that Unocal is expecting to build, A map of Unocal's revised proposal for the Aquifer Exemption area is attached. A quarter-mile exemption radius around the NNA #1 well is sufficient because the NNA #1 is a near-vertical well and it is unlikely that additional development wells will be drilled from that pad. Conversely, as the attached map shows, the wells from the existing Happy Valley pad traverse most of Section 22. Wells from the new pad are expected to similarly cover most of Section 21, Exempting all of Sections 21 and 22 and the southeast corner of Section 15 gives flexibility in deciding which well(s) to eventually convert to Class II disposal. The southeast corner of Section 15 is added to cover the entirety of well Happy Valley #7, which is perhaps the most likely future disposal candidate from the Happy Valley pad. 3, Should the depth of the Aauifer Exemption interval be deepened from 1.800 feet TVD to the thick shale that lies on top of the Beluaa formation (Le, 2.474 feet MD in the NNA #1 well)? Union Oil Company of California I Unocal Alaska 909 West 9th Avenue, Anchorage, Alaska 99501 http://www.unocal.com Alaska Oil & Gas conse.on Commission . Aquifer Exemption Application for the Deep Creek Unit October 5, 2004 Page 3 Unocal does not favor deepening the Aquifer Exemption interval below 1,800 feet TVD, The depth of 1,800 feet TVD lies within the Sterling formation. Sterling Sands in the Happy Valley area have substantially better porosity than the deeper Beluga and Tyonek Sands, In the NNA #1 well, for instance, the average porosity of the Sterling Sands below 1,800 feet TVD is 24% versus 12% for average Beluga and Tyonek Sands, It is reasonable to conclude that these higher porosity Sterling Sands would make better disposal intervals than tighter Tyonek and Beluga Sands. Therefore, if containment issues can be satisfied there is no reason not to exempt the Sterling formation aquifers below 1,800 feet TVD, The information presented below is intended to communicate that containment of wastes is feasible in the Sterling formation, although it is not intended to rigorously assess that containment. A rigorous assessment of containment is more appropriate to a specific Disposal Injection application, should that eventually become necessary, From a containment standpoint, thick, bounding shales and coals are not as common in the Sterling formation as they are in the Beluga and Tyonek formations. But there are several significant shales in the Sterling formation that would likely serve to contain injected wastes, Numerous continuous shale beds are evident in the NNA and Happy Valley wells in the interval from just below the base of the Quaternary gravels to roughly 1,300 feet TVD. Three such shale beds are depicted in an updated cross section diagram, which is presented as a replacement to Figure 6 from the original application, These three shale beds are in aggregate roughly 250 feet thick, These shales almost certainly act to keep the surface gravels hydro-dynamically isolated from the underlying Tertiary strata as evidenced by the general lack of contamination in the surface gravel aquifers, If the surface gravels and the underlying Tertiary strata were in communication, one might expect to find numerous reports of brackish water and/or methane gas contamination in water wells in the Deep Creek Unit area. The abundance of fresh water in the surface Quaternary gravel aquifers suggests that they are effectively sealed at or near the Quaternary-Tertiary unconformity at the base of the glacial gravel sequence, The shale beds of the Sterling formation in the shallow subsurface may constitute such a seal, and therefore would be expected to effectively seal off any drilling materials injected below 1,800 feet TVD. In addition to these bounding layers, the higher permeability of the Sterling Sands would make it more difficult to build injection pressure sufficient to break through confining layers, It is more difficult to reach "breaking" pressure when the injected interval leaks off quickly, which is what would take place in the Happy Valley Sterling sands, This is obviously a simplistic explanation, and only a detailed engineering analysis would accurately assess the confining capability of a particular Sterling formation injection interval. Once again, this information is not intended to rigorously asses the ability of particular shale intervals to contain fracture growth in the Sterling formation. There is, however, a Union Oil Company of California I Unocal Alaska 909 West 9th Avenue, Anchorage, Alaska 99501 http://www.unocal.com Alaska Oil & Gas conse.on Commission . Aquifer Exemption Application for the Deep Creek Unit October 5, 2004 Page 4 reasonable expectation that containment issues can be adequately addressed in the Sterling formation below 1,800 feet TVD. Unocal simply asks that the Aquifer Exemption definition remains as originally proposed so that disposal into Sterling sands below 1,800 feet TVD is open to evaluation at a later date. 4. How much methane is present at a depth of 1300 feet? What is the definition of a "unit" of Qas in a mud loq, and can it be equated to formation Qas saturation? Mud log gas curves are calibrated to a unit standard established by the Society of Professional Well Log Analysts (SPWLA), such that 1 "unit" of gas is equivalent to 200 ppm. For example: 5 units = 1,000 ppm and 300 units = 60,000 ppm, The mud log gas curves shown on the geologic cross section (Figure 6) are scaled from 5 to 300 units of methane equivalent (i.e, 1,000 to 60,000 ppm methane equivalent). It is difficult to accurately estimate the gas saturation in the shallow subsurface section by normal well log calculations as such methods are typically too crude to resolve accurate saturations at these concentrations, Standard water saturation (Sw) calculations at such concentrations typically result in an estimate of 100% water saturation even though the mud log gas detection equipment clearly indicates the presence of methane, Standard well logging tools are simply not sensitive enough to measure methane saturation at these levels. 5. Additional Information Enclosed is a report prepared by Hoefler Consulting Group which discusses their review of Unocal's request that an Aquifer Exemption be granted for the Deep Creek Unit. Included in the report is a summary of regulations, properties, and treatment methods for methane found in drinking water. Please append this report to Unocal's application, s..'......n.erely, .. l· '\ \. '\. ~-- "', '. '-- ~~ ,- '~, ' r~( J.~~ Eller_~ \ Advi'Sìhg Completion Engineer Attachments Union Oil Company of California I Unocal Alaska 909 West 9th Avenue, Anchorage, Alaska 99501 http://www.unocal.com s 0.5 0 Miles DEEP D\J~~~ ~6/íO-~' ~f~fe'f~ -------- I I I I I I I -2000 : I I I I I I I I I I I -2500 : t I I I I I I I I , -3000 : I I I I I I I I I I I I I I I I I I I I I I I I I I NO HORIZONTAL SCALE I ----------------------------------------------~ -- -_._----_.__..__.__.__.._-_._-~-- .-.._---------,--- HAPPY VALLEY FIELD MTL_HV _DC COOK_INLET -- 1 :3000 FEET -- Fixed _10M -- -- - SEALEVEL - MTL 4-0ctober-2004 STRUCTURAL CROSS SECTION 0.5 . 0.25 0 Miles 0.5 REVISED AREA OF . I' I I . , \ Aquifer Exemptions prepared for the Union Oil Company of California (d.b.a. Unocal) . . . . . . . . . . ~ . . . . . . . . . . . ~ . . . . . . . . . . e _ . . . . . . . . . . . . . . ~ ~ ~ ~ . . . . . . . . . . . ~ September 2004 [~N~HIIN~ ~~~~r . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e. . . . G . . . _ . .e ~ ~ Þ. ð ~ ~ ~ . . . . * . . . . . I Hoefler Consultinf! Grou. . I I I I Aquifer Exemptions 40 CFR 146.4 An aquifer may be considered exempt under 40 CFR 144.8 if it meets the following criteria: I a) It does not currently serve as a source of drinking water; and b) It cannot now and will not in the future serve as a source of drinking water because: I I I 1. It is mineral, hydrocarbon or geothermal energy producing, or can be demonstrated by a permit applicant as part of a permit application for a Class II or III operation to contain minerals or hydrocarbons that considering their quantity and location are expected to be commercially producible. 2. It is situated at a depth or location which makes recovery of water for drinking water purposes economically or technologically impractical; I 3. It is so contaminated that it would be economically or technologically impractical to render that water fit for human consumption; or I 4. It is located over a Class III well mining area subject to subsidence or catastrophic collapse; or I c) The total dissolved solids content of the ground water is more than 3,000 and less than 10,000 mgJl and it is not reasonably expected to supply a public water system. I I I I I Water analysis in April 2004 from the NNA Well #1 aquifer is attached, Total dissolved solids were present at a concentration of 7,671 mg/!. Under the current regulations, the NNA Well #1 aquifer should meet the requirements (tabulated in Table 1) for granting an aquifer exemption because of the · TDS concentration, · depth of the aquifer, · danger of confined methane in domestic water wells and homes, and · cost of removing methane from water. I I Aquifer Exemptions September 2004 I Hoefler Consultinf! Grou. . I Table 1. Summary of Aquifer Exemption Regulations I I a) It does not currently serve as a source of drinking water; and The aquifer is not currently used for drinking water. I b) It cannot now and will not in the future serve as a source of drinking water because: I 1. It is mineral. hydrocarbon or geothermal energy producing, or can be demonstrated by a permit applicant as part of a permit application for a Class II or III operation to contain minerals or hydrocarbons that considering their quantity and location are expected to be commercially producible. No I 2. It is situated at a depth or location which makes recovery of water for drinking water purposes economically or technologically impractical; Yes I 3. It is so contaminated that it would be economically or technologically impractical to render that water fit for human consumption; or Contaminated with methane I 4. It is located over a Class 1/1 well mining area subject to subsidence or catastrophic collapse; or No I c) The total dissolved solids content of the ground water is more than 3,000 and less than 10,000 mg/I and it is not reasonably expected to supply a public water system, It contains 7671 mgll TDS. It is not expected to supply public water because of its depth and methane contamination. I Below is listed the support information used to come to the conclusion that the aquifer will not be used as a source of drinking water in the future. I I I I I I I I Aquifer Exemptions September 2004 I I I I I I I I I I I I I I I I I Hoefler Consulting Grou. . Methane in Drinking Water Methane is a colorless, odorless, tasteless gas that occurs naturally in formations above and in crude oil deposits on the Kenai Peninsula, Regulations · Methane is not regulated in drinking water by the Alaska Department of Environmental Conservation (ADEC) in 18 MC 80 or by the U.S. Environmental Protection Agency (EPA) in the Safe Drinking Water Act. · When methane is mixed with chlorine, chloroform is produced which is regulated both by the ADEC and USEPA in drinking water. · OSHA regulates gases in underground construction sites when the gas reaches 10% of its lower explosive limit. OSHA does not regulate methane in drinking water, · Methane CAS number is 74-82-8. OSHA recommends measuring methane with an AUERlMSA detector tube at a detection limit of 5000 ppm or with a Draeger detector tube with a detection limit of 0.5% by volume. The lower explosive level for methane is 5%. Physical Properties · Methane is a simple asphyxiant, a combustible gas and is very explosive. · Methane will stay dissolved in water below 42 degrees F and will stay as a gas at temperatures above 58 degrees F. · It is rapidly eliminated from the body if consumed. · It reacts violently with chlorine. · It can form chloroform, a carcinogen, when mixed with chlorine, a common drinking water disinfectant. Chloroform is also called trichloromethane or methyl trichloride. · Water containing methane is milky white in color. · Methane concentration in wells is highly variable, Drinking Water Treatment Methods · Well Venting: Vent gas from well at the well head by extending well casing above ground and installing a vented well cap. The casing should extend past head level so that vented methane is not ignited by normal ignition sources such as lawn mowers, barbeque grills or cigarettes, Aquifer Exemptions September 2004 I Hoefler Consulting Grou. . I I I I I I I I I I I I I I I I I I · Gas Shroud: Install a gas shroud on a submersible water pump, The shroud seals the pump from at least five feet above the motor to below the water intake. Water must flow up over the top of the shroud and down to the pump intake. Gas will continue to travel upward rather than remain in solution, A well vent should be installed to allow gases to flow out of the well. · Vented Tank: Water from a well is sprayed into a vented tank through a spray bar. Gas flows out a vent pipe in the tank. A float switch in the tank controls the well pump, and another pump is used to pump water from the vent tank to a pressurized tank. The tank vent system must terminate above the roof line of the building and must contain a check valve to prevent air-borne pathogens from entering the water supply. Water retention time in the vent tank is critical to efficiently remove methane. Methane will off-gas little in the pressurized tank. · Air Separator: Water flows in a cylinder near the top and discharges through an outlet at the bottom. Centrifugal force causes heavier, gas-free water to move toward the outside. Gas rises and leaves through a vent at the top of the cylinder. The vent terminates above the roof line of the building. Water from the cylinder discharges into a vented tank through a narrow diameter pipe, which results in a high velocity discharge, increasing turbulence in the tank. Water is pumped from the vented tank to a pressurized tank. · Culligan water treatment services offer methane removal treatment systems. Problems with Treatment · Methane can be removed from drinking water, but the additional equipment and space necessary for the treatment may be cost-prohibitive for individual domestic users, Cost for aeration may be approximately $3000 and will include routine maintenance by a professional. · Public water suppliers use chlorine for bacteria treatment. Chlorine may react with methane to form trichloromethane or chloroform, which is known to cause cancer. · Oxidation may occur in vented tanks which may lead to turbidity problems, Additional treatment may be necessary after methane gas removal. · Methane treatment systems must be installed by a professional and maintained routinely to prevent failure of the system. Methane that is not removed from drinking water will build up and be released through faucets or toilets. Methane is very explosive if confined. Methane gas accumulation has been known to result in exploding houses, camps and wells, Aquifer Exemptions September 2004 I I I I I I I I I I I I I I I I I I I Hoefler Consulting & . Bryan R. Swistock and William E. Sharpe Methane Gas and Its Removal from Wells in Pennsylvania January 29, 2004 Penn State College of Agricultural Sciences Cooperative Extension www.sfr,cas,psu,edu/water/methane%20fact%20sheet.pdf - 2004-01-29 u.S. Department of Labor Occupational Safety & Health Administration Safety and Health Topics: Methane Revised: October 14, 2003 www.osha.Qov/dts/chemicalsamplinoldata/CH250700.html Donald K. Keech (Michigan Department of Public Health) and Michael S. Gaber (Michigan Department of Public Health) Methane in Water Wells February 1982 The Consultants Collection - Water Well Journal Roger Clark, Director Directorate of Compliance Programs U.S. Department of Labor Occupational Safety & Health Administration July 24,1993 Memorandum to Gilbert J. Saulter, Regional Administrator, Leo Carey, Director Office of Field Programs Subject: Definition of Potentially Gassy Atmosphere (29 CFR 1926.500) u.S. Environmental Protection Agency Ground Water & Drinking Water List of Drinking Water Contaminants & MCLs. www.epa.Qov/safewater.mcl.html Water Analysis Report by Baker Petro lite Tyonek Formation Sampling Date: April 30, 2004 40 CFR 146.4 Criteria for Exempted Aquifers Aquifer Exemptions September 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 . . . 0 eo. . . . . . . . . . . . . . 0 . . . . . . . [~N~~lJIN~ ~~~~r . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . #8 · · · 1 . . 2 ALASKA OIL AND GAS CONSERVATION COMMISSION 3 4 In Re: 5 PUBLIC HEARING ) ) Oil) ) ) 6 Hearing on Application of Union Company of California. 7 8 9 10 11 12 TRANSCRIPT OF PROCEEDINGS Anchorage, Alaska September 16, 2004 9:02 o'clock a.m. COMMISSIONERS: 13 14 15 16 17 18 19 20 21 22 23 24 25 JOHN NORMAN, Chairperson * * * * RECEIVED (1< .. "1.-1 tUa'ilka 011 & GIs Coos. eomm..,,¡ ~ METRO COURT REPORTING 745 West Fourlh Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 I ~RIG~NA~ I e e · 1 TABLE OF CONTENTS 2 3 OPENING REMARKS BY CHAIRPERSON NORMAN Page 3 4 END OF PROCEEDINGS Page 4 5 6 7 * * * 8 9 10 11 12 · 13 14 15 16 17 18 19 20 21 22 23 24 25 · METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 . 5 6 7 8 9 10 11 12 . 13 14 15 16 17 18 19 20 21 22 23 24 25 . e e 1 PRO C E E DIN G S 2 (On record 9:02 a.m.) 3 CHAIRMAN NORMAN: This is a hearing before the 4 Alaska Oil and Gas Conservation Commission on the application of Union Oil Company of California. I'll read briefly into the record a summary of the application. I will state at the outset Commissioner Dan Seamount has been asked to attend a meeting of the North American Costal Alliance and that has caused his travel out of Alaska. Consequently, we do not have a quorum and so what I will do is convene the hearing, enter into the record the purpose of the hearing, note the parties that we have heard from, but it will be my intention then to continue the hearing to a date certain at which time we will have a quorum and go forward. The application is submitted by Union Oil of California; it was submitted by letter dated August 4th. The application lS for an aquifer exemption order. The Commission tentatively scheduled a hearing for today and subsequently we did receive a request from Cook Inlet Keeper asking that the hearing go forward, also asking that the period for submission of written comments be extended for a period of one week. The Commission granted both the request for the hearing and the request for an extension of time to grant or to file written comments. Notice of this hearing was duly published in the METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 3 · 10 11 12 · 13 14 15 16 17 18 19 20 21 22 23 24 25 · e e 1 Anchorage Daily News on August 6th. A copy of the notice is 2 available for any parties wishing to obtain a copy. Likewise 3 any parties wishing to obtain information or any of the 4 documentation concerning the application itself may contact 5 the Commission. The Commission's special assistant is Jodi 6 Colombie and she will assist in providing any information that 7 may be needed. 8 With that note that we have a duly noticed hearing and 9 also the observation that we do not at this time have a quorum, I will recess to continue at a later date. Proposed date for continuing of this hearing is September 30, 2004, at 1:00 p.m. and I'll ask now if any parties in attendance have any questions or comments, or if that date is not convenient, then I'm more than willing to consider an alternate date. Are there any comments? Okay, the record should reflect that there are no comments and so we will recess this hearing to be reconvened at the hour of 1:00 p.m. Alaska standard time on September 30, 2004. (Off record 9:15 a.m.) * * * END OF PROCEEDINGS * * * METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 4 · · · . e 1 C E R T I FIe ATE 2 SUPERIOR COURT ) )ss. ) 3 STATE OF ALASKA 4 5 I, Debra J. Britt, Notary Public in and for the State of Alaska, do hereby certify: 6 THAT the annexed and foregoing pages numbered 2 7 through 4 contain a full, true and correct transcript of the Public Hearing before the Alaska Oil and Gas Conservation 8 Commission, taken by Metro Court Reporting and transcribed by me: 9 THAT the Transcript has been prepared at the request of 10 the Alaska Oil and Gas Conservation Commission, 333 West Seventh Avenue, Anchorage, Alaska. 11 DATED at Anchorage, Alaska this 22nd day of September, 12 2004. 13 SIGNED AND CERTIFIED TO BY: 14 '.,\\\\\Uflllllll/ ~"\::.. Do. J. 8b 1'* ~Ð.~"'''''''..'JI)- ~ ~~~. ..<~ :§()! 01A~L. " ~ ,__.~ r__ -- : "IIIIi;"~.. 1... .-..,.'" .- - , c.. - ~ \ ÞUB\..~ /1... is ~ \ ~ ~..., . ..s ~ .ft' ... ~ ~"'ì'A ......_....~~~ ~~vte of ~ ~~ 11Im,,\\\\~ 15 ~ Debra J. ritt Notary in and for Alaska My Commission Expires: 8/5/08 16 17 18 19 20 21 22 23 24 25 METRO COURT REPORTING 745 West Fourth Avenue, Suite 425 Anchorage, Alaska 99501 (907) 276-3876 5 #7 e . STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION Aquifer Exemption Hearing September 16,2004 at 9:00 am NAME - AFFILIATION ADDRESS/PHONE NUMBER TESTIFY (Yes or No) (PLEASE PRINT) H+t-f £ SuLU V fW' .' LJ NDCftL II /" ~ ~ 3- ~7lt;,gb PÕj) t q G~41 A,^-~. qCt 51&( J4 <8 \Hearing_Sign-In #6 AEO Happy Valley . . Subject: AEO Happy Valley From: ombie <jody _ colombie@admin.state.ak.us> 04 12:59:03 -0800 Per our conversations this morning, the Commission will be going on the record September 16, 2004 at 9:00 am strictly to continue the hearing on the Aquifer Exemption for Happy Valley until Septe1'l'tber 30, 2004 at l~:pm. The Commission must continue the hearing simply because Commistioner Seamount is unavailable at that date and time. I have notified Cook Inlet Keepers of the scheduling change as well. We anticipate the hearing September 16th to last approximately 10 minutes. No testimony will be given at that time. On August 16, 2004 Chairman Norman granted Cook Inlet Keepers request to file written comments one week after the hearing. The date will be adjusted to October 7, 2004. If you have any questions, please call me at 793-1221. Jody 1 of 1 8/31/200412:59 PM #5 It ~ìf Jh\ ìíu ~ rm fE ® ~ r~ ~~UlÏ\ @ U fDj L!::J UlJ J fJlj LS u\J æJ lJ\.1 Uu . AI1ASIiA OIL AND GAS CONSERVATION COMMISSION i ¡ ¡ f ¡ f í í I ¡ ! j I FRANK H. MURKOWSKI. GOVERNOR 333 W. 7'" AVENUE, SUITE 100 ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 FAX (907) 276-7542 August 16, 2004 Lois N. Epstein, P.£. Cook Inlet Keeper 308 "G" Street Ste 219 Anchorage, Alaska 99501 Re: Unocal's Aquifer Exemption Order Deep Creek Unit Happy Valley Dear Ms. Epstein: The request by Cook Inlet Keeper for a hearing on the referenced Aquifer Exemption application is hereby granted. The hearing will be held at 9:00 am on September 16, 2004 at the Commission's offices at 333 West Seventh Avenue, Suite 100, Anchorage, Alaska. If you have any questions concerning the hearing or if special accommodations are needed for any persons attending the hearing please contact the Commissions Special Assistant Jody Colombie at 793-1221. Additionally pursuant to the request of the Cook Inlet Keeper the Commission hereby extends the period for written comments on the referenced application for one week following the conclusion of the hearing date; and, during this period any parties wishing to do so may submit written comments or may supplement any written comments previously submitted. cc: Gary Eller, Unocal Kirk McGee, Cook Inlet Regional Corporation Ninilchik Native Association Carol Lee, Department of Natural Resources, Div of Oil and Gas #4 Protecting Alaska's Cook Inlet watershed and the life it sustains Commissioner John K. Norman Chairman, Alaska Oil and Gas Conservation Commission 333 West ih Avenue, Suite 100 Anchorage, AK 99501 Dear Commissioner Norman: Cook Inlet Keeper, a membership-based watershed protection organization, hereby requests a hearing on the Aquifer Exemption Order applied for by Union Oil Company of California ("Unocal") by letter dated August 4, 2004. The Aquifer Exemption Order would cover portions of the aquifers underlying the Happy Valley structure in the Deep Creek Unit in Sections 10, 11, 14, 15, 16,20,21,22,23,27,28,29,32,33, and 34 of Township 2 South, Range 13W, Seward Meridian, below 1,800 feet true vertical depth. In addition, Cook Inlet Keeper requests that AOGCC extend the written comment deadline to one week past the hearing date to allow the hearing to inform our written comments. If you have any questions about these requests, please contact me at the phone number listed below or at 10is@inletkeeper.org. Thank you very much. Sincerely, ~/l~ Lois N. Epstein, P.E. Senior Engineer 308 G Street, Suite 219, Anchorage, Alaska 99501 · Phone: (907) 929-9371 · Fax: (907) 929-1562 www.inletkeeper,org #3 STATE OF ALASKA ADVERTISING ORDER . NOTICE TO PUBLISHER . INV· .. UST BE IN TRIPLICATE SHOWING ADVERTISING ORDER ,CERTIFIED AFFIDAVIT OF PUBLICATION (PART2 OF THIS FORM) WITH ATTACHED COPY OF ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE ADVERTISING ORDER NO. AO-02514006 F AOGCC R 333 W 7th Ave, Ste 100 ° Anchorage, AK 99501 M AGENCY CONTACT Jod Colombie PHONE DATE OF A,O, Au st 5 2004 PCN ~ Anchorage Daily News POBox 149001 Anchorage, AK 99514 August 6, 2004 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Type of Advertisement X Legal o Display STOF0330 Advertisement to be published was e-mailed o Classified DOther (Specify) SEE ATTACHED DATE ARD 02910 4 FIN AMOUNT SY CC PGM LC ACCT FY NMR DIST LID 1 05 2 3 4 REQUISITIONED BY: 02140100 73451 DIVISION APPROVAL: 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: Deep Creek Unit Happy Valley Field Aquifer Exemption Order Kenai Peninsula, Alaska Union Oil Company of California ("Unocal") by letter dated August 4, 2004, has applied for an Aquifer Exemption Order for those portions of aquifers underlying the Happy Valley structure in the Deep Creek Unit in Sections 10, 11, 14, 15, 16,20,21,22,23,27, 28,29,32,33, and 34 of Township 2 South, Range 13W, Seward Meridian, below 1,800 feet true vertical depth. Unocal's request is pursuant to 20 AAC 25.440. The Commission has tentatively scheduled a public hearing on this application for September 16, 2004 at 9:00 am at the offices of 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 August 23, 2004. If a request for a hearing is not timely filed, the Commission may 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 September 7, 2004 except that if the Commission decides to hold a public hearing, written protest or comments must be received no later than the conclusion of the September 16, 2004. If you are a person with a disa . . ty who may need a special accommodations in Ii aring, please contact Jody Colombie at 793- Published Date: August 6, 2004 ADN AO# 02514006 tChOrage Daily News Affidavit of Publication - ]00] Northway Drive, Anchorage, AK 99508 PRICE OTHER OTHER OTHER ~ OTHER GRAND AD# QAI:t; fQ ACCOUNT PER DAY CHARGES CHARGES #2 CHARGES it3 CHARGES #4 CHARGES #5 TOTAL 253051 08/06/2004 02514006 STOF0330 $135.78 $135.78 $0,00 $0,00 $0.00 $0,00 $0.00 $135.78 Notary Public in and for the State of Alaska. Third Division. Anchorage, Alaska . MY ÇOMMISSION EXPIRES, ,o~¥JtJ()Z \ \ t '.! {~.~ (fr II'¡- ~·d~!r (;~ . /r. \: ,,1Ç. . . . . ... /If> -;.. ~.~\;... ",J~G<. "','<~~,~~ :'::: ~....... () TI~tÞI'. ~'1,-::. '= .. ,~., '"""''i .!},~... .J£~ _ ""- ";\¡(.,,"jr.,oR', ' .. ~~ ::: <'): : Pffl,~UC . ~ :::.'" .~. 'I:?" ~ ~ _(''',...rj-_ L3.s:::;....... .... 1;<:" 'v =" -s. OF A~ . . ~Ì;\" "'/. . '. . .' ,~.. \ //,/,.' 2.,)1,_' 'Y;>:;"\\ ) lj/}~/}')i-~ i \ \ \ Notice of Public Heoring STATE OF ALASKA Alaska Oil and G<!s . Conservation CommisSion Re' Deep Creek Unit Håppy Valley Field Aquifer Exemption Order Kenai Peninsula. Alaska Union Oil Company of California ("unocal") by letter dated August 4. 2004. has applied. for an Aquifer Exemption Or- der for those portions of oquifers underlying t~e HapPY Valley structure on \ the Deep Creek Unit in , Sections 10. 11. 14. 15. 16. : 20.21.22.23.27.28.29..32. 33, and 34 Of TownshiP 2 South. Range 13W. Se- ward Meridian. be.low 1.800 feet true vertical depth. Unocal's request is pursuant to 20 AAC 25.440. The Commission has tén' tativelY schedu\e~ a pu~- lie hearing on this appli- cation for September 16. 2004 at 9:00 am at the o!- fices of the Alaska ~II ond Gas Consérvatlon Commission at 333 West 7th Avenue. Suite 100. Anchor~ge. Alaska 99501. A person may re~uest that the tentatively scheduled hearing be held by filing a written r.e- quest with the CommIs- sion no later than 4: 30 pm on August 23. 2004. If 0 request for <! hearing is not timelY filed. the Commission may con- sider the issuance o~ on order without 0 hearo~g. TO learn if the Comml~' sian will hold the. public hearing. please call 793-1221. In addition, a person may submit wri~ten ~om- ments regardong this a~- plication to the Alaska .0'1 and Gas Conservation Commission at 333 West 7th Avenue. suite 100. AnChòrage, Alaska 99501. Writ~n comments must be received no later than 4' 30 pm on September 7. 2Ô04 except that. if the commissiondeclde.s to hold a public heaflng. written protest or c.om- ments must be receIved nO later than the conclu- sion of .the September 16. 2004. If YOU are a person with a disabilitY who may need a speciQI accammodCl- tionsin order to com- '-i1'IeftFor tøoHeo<:l· the- public hearing. plE!ase contact JodY Colombie at 793-1221 before Septem- ber 8. 2004. John K. Norman Chairman STATE OF ALASKA THIRD JUDICIAL DISTRICT Teresita Peralta, being first duly sworn on oath deposes and says that she is an advertising representative of the Anchorage Daily News, a daily newspaper. 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. Signed VrJf¿~lOv Subscribed and sworn to me before this date: 12¡'jY'1L{}f /fJ, 'dl}C tj AO# 02514006 Pub: AU9~~t 6. 2004 STATE OF ALASKA ADVERTISING ORDER . NOTICE TO PUBLISHER . ADVERTISING ORDER NO. INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO.. CERTIFIED AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE AO-02514006 F AGENCY CONTACT DATE OF A.O. AOGCC 333 West 7th. Avenue, Suite 100 o Anchorage, AK 99501 M 907-793-1221 R DATES ADVERTISEMENT REQUIRED: T o Anchorage Daily News POBox 149001 Anchorage, AK 99514 August 6, 2004 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 2004, and thereafter for _ consecutive days, the last publication appearing on the _ day of , 2004, 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 2004, Notary public for state of My commission expires 02-901 (Rev, 3/94) Page 2 AO.FRM PUBLISHER Notice ABO Happy Valley . e lof2 8/512004 11:52 AM Notice AEO Happy Valley 2of2 e e Content-Type: applicationlmsword Content-Encoding: base64 8/5/2004 11 :52 AM Notice e e Please publish the attached. Jody Content-Type: applicationlmsword Content-Encoding: base64 1 of 1 8/5/2004 11 :52 AM Notice e e Please publish the attached tomorrow. Jody Content-Type: application/msword Content-Encoding: base64 Order Content-Type: application/msword Content-Encoding: base64 1 of 1 8/5/2004 11 :52 AM Citgo Petroleum Corporation PO Box 3758 Tulsa, OK 74136 Kelly Valadez Tesoro Refining and Marketing Co. Supply & Distribution 300 Concord Plaza Drive San Antonio, TX 78216 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 Mark Wedman Halliburton 6900 Arctic Blvd. Anchorage, AK 99502 Baker Oil Tools 4730 Business Park Blvd., #44 Anchorage, AK 99503 Gordon Severson 3201 Westmar Cr. Anchorage, AK 99508-4336 James Gibbs PO Box 1597 Soldotna, AK 99669 Richard Wagner PO Box 60868 Fairbanks, AK 99706 Williams Thomas Arctic Slope Regional Corporation Land Department PO Box 129 Barrow, AK 99723 . Mary Jones XTO Energy, Inc. Cartography 810 Houston Street, Ste 2000 Ft. Worth, TX 76102-6298 Robert Gravely 7681 South Kit Carson Drive Littleton, CO 80122 Richard Neahring NRG Associates President PO Box 1655 Colorado Springs, CO 80901 Samuel Van Vactor Economic Insight Inc. 3004 SW First Ave. Portland, OR 97201 Schlumberger Drilling and Measurements 3940 Arctic Blvd., Ste 300 Anchorage, AK 99503 Ciri Land Department PO Box 93330 Anchorage, AK 99503 Jack Hakkila PO Box 190083 Anchorage, AK 99519 Kenai National Wildlife Refuge Refuge Manager PO Box 2139 Soldotna, AK 99669-2139 Cliff Burglin PO Box 70131 Fairbanks, AK 99707 North Slope Borough PO Box 69 Barrow, AK 99723 e David McCaleb IHS Energy Group GEPS 5333 Westheimer, Ste 100 Houston, TX 77056 George Vaught, Jr. PO Box 13557 Denver, CO 80201-3557 John Levorsen 200 North 3rd Street, #1202 Boise, ID 83702 Michael Parks Marple's Business Newsletter 117 West Mercer St, Ste 200 Seattle, WA 98119-3960 David Cusato 200 West 34th PMB 411 Anchorage, AK 99503 Jill Schneider US Geological Survey 4200 University Dr. Anchorage, AK 99508 Darwin Waldsmith PO Box 39309 Ninilchick, AK 99639 Penny Vadla 399 West Riverview Avenue Soldotna, AK 99669-7714 Bernie Karl K&K Recycling Inc. PO Box 58055 Fairbanks, AK 99711 /l7¿¿,¡IL cL '/ ~/ð¡ #2 · . UNOCALaE:CE,VED /91 AitlSkfl on & Gas '. ..14 A~ Comrni8eion APPLICA TION FOR AN AQUIFER EXEMPTION ORDER DEEP CREEK UNIT OPERATED BY UNION OIL COMPANY . . . e . APPLICATION FOR AN AQUIFER EXEMPTION ORDER DEEP CREEK UNIT OPERATED BY UNION 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 Union Oil Company of California (Unocal) is applying for an aquifer exemption order to exempt those portions of aquifers underlying the Happy Valley structure in the Deep Creek Unit in Sections 10, 11, 14, 15, 16, 20, 21, 22, 23, 27, 28, 29, 32, 33 and 34 of T2S, R13W, Seward Meridian, below 1,800 feet true vertical depth (TVD). Ground waters in Tertiary strata below 1,800 feet TVD in this area are contaminated with naturally-occurring methane gases that make them unsuitable as potential sources of water for human consumption or use. Moreover, waters below 1,800 feet TVD generally have total dissolved solids (TDS) that is more than 3,000 mg/I and less than 10,000 mg/I. Unocal will demonstrate that the aquifers below 1,800 feet TVD in the Deep Creek Unit 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), Unocal will also demonstrate that available sources of drinking water are readily and economically available from surface to approximately 300 feet TVD. Deep Creek Unit The Unocal NNA #1 well in the Deep Creek Unit (DCU) is located on the Kenai Peninsula approximately six miles east of the city of Ninilchik (see Figures 1 and 2). Eight other wells Aquifer Exemption Application - NNA #1 FINAL August 4, 2004 · · · Application for an Aquifer Ex!tion Order - Union Oil Company . Page 2 of 7 have been drilled in the DCU besides the Unocal NNA #1 as of June 1, 2004. Two of these have been permanently abandoned, one has been suspended, and five await installation of a gas pipeline. There are currently no producing wells in the DCU, although operations are underway to begin gas production by the end of 2004. Table 1 summarizes the status of wells within the DCU as of June 2004. Figure 3 shows that no other wells lie within a quarter-mile of the Unocal NNA #1, and Figure 4 shows that only the two abandoned wells lie within a two-mile radius of the Unocal NNA #1. Table 1. Wells Within the Deep Creek Unit Peñorated Peñorated Well Spud Date Interval Interval Current Status MD SSTVD 3/19/1958 N/A N/A 9/9/1963 N/A N/A 12/17/2001 6,182' - 9,647' 5,495' - 8,954' #1 6/17/2003 7,978' - 10,730' 6,374' - 8,826' #2 7/15/2003 6,784' -10,052' 5,673' - 8,907' #3 2/3/2004 9,228' -10,678' 7,922' - 9,365' 2/6/2004 9,277' - 9,888' 8,474' - 9,070' 2/8/2004 N/A N/A 4/7/2004 10,854'-10,882' 8,728' - 8,756' Local, low-cost disposal of produced water and drill cuttings is necessary to have economic production of gas and conservation of resources from wells within the DCU, As such, it is the desire of Unocal to exempt aquifers below 1,800 feet TVD from produced water injection/disposal restrictions. It is Unocal's intention to convert the NNA #1 well into a Class II disposal well once an Aquifer Exemption and Disposal Injection Order have been granted, Geoloaic Review The geologic column (see Figure 5) 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 within the DCU, the fresh water gravels appear to extend to a depth of 200 to 300 feet below the surface as evidenced by log data from the Deep Creek Unit #1 and Happy Valley #31-22 wells. Quaternary alluvial deposits may extend further down to approximately 1,000 feet below ground level, but a lack of palynological or paleontological control makes it difficult to determine where the Quaternary-Tertiary contact is in these wells. Below the Quaternary freshwater zone lays the Kenai Group which includes the reservoir and non-reservoir lacustrine and fluvial-derived continental rocks of the Sterling, Beluga, Tyonek, Hemlock and West Foreland formations. Regionally, hydrocarbons are produced in commercial quantities from 3,000 feet to 12,500 feet SSTVD in Kenai Group sandstone reservoirs. Specifically in the DCU commercial quantities of gas are found in the Tyonek Formation between 7,800 and 9,400 feet SSTVD. Aquifer Exemption Application - NNA #1 FINAL August 4, 2004 Application for an Aquifer Ex.tion Order - Union Oil Company e Page 3 of 7 · Figure 6 is a southwest to northeast cross-section through DCU wells Happy Valley #6, Happy Valley #1, Happy Valley #2, Happy Valley #3, Superior Oil Happy Valley Unit #31-22, Standard Oil Deep Creek Unit #1, and Unocal NNA #1. The Beluga Formation is comprised of thinly laminated sandstones, siltstones, shales, and coals resulting in a heterogeneous stratal assemblage that have very poor or no vertical connectivity or permeability. Therefore, the Beluga Formation as a whole acts as a confining layer for the strata of the underlying Tyonek Formation. The transition between the Beluga Formation and the overlying Sterling Formation is marked by a locally continuous shale bed approximately 70 to 75 feet thick which may act as a confining layer for the underlying strata of the Beluga Formation. This confining layer, shown in Figure 6, occurs at approximately 2,400 feet TVD in the Unocal NNA #1 well. Structurally, the NNA #1 well is downdip of the Happy Valley wells on the greater Happy Valley field structure, which is a northeast-southwest trending anticline as seen in Figure 7. Due to the domal nature of the Happy Valley anticline, it is apparent that any wastes injected into strata intersected by the NNA #1 wellbore will be contained within the confines of the Happy Valley field structure. The shaded portion of Figure 2 designates the extent of the Happy Valley anticlinal structure in the DCU which consists of all or parts of Sections 10, 11, 14, 15, 16, 20, 21,22,23,27,28,29,32,33 and 34 of T2S, R13W, Seward Meridian. Groundwater Hydrology (20 AAC 25.440(a)(1 )(8» · In the DCU, drinking water is readily and economically available much shallower than 1,800 feet based on available data from the Alaska Department of Natural Resources, Division of Mining, Land and Water, Well Log Tracking System (WELTS). WELTS data is available online at http://info.dec,state,ak,us/welts/default.asp, The WELTS database shows that economically obtainable drinking water is commonly available within the upper 100 feet of unconsolidated Quaternary sediments. These sediments are represented on the cross section (Figure 6) as the gravels which occur from surface to approximately 200 ft below ground level. It should be noted that none of the water wells in the vicinity of the DCU have drilled into the sands and shale sequence below the Quaternary gravels. Table 2. Water Well Depth in the Vicinity of the NNA #1 Within Within Within Within %- Depth of Well 10-miles of 2-miles of T2S R13W SM, mile of (feet) NNA #1 NNA #1 b Adjacent to NNA #1 Section 118 AveraQe 88 47 N/A N/A Maximum 292 50 N/A N/A Minimum 0 45 N/A N/A No. of Wells 87 3 0 0 a Within T2S R13W SM, Sections 1,2,3,10,12,13,14, and 15. b No water wells exist within a 2-mile radius of the NNA #1. These three water wells are the closest wells to the NNA #1 location, and are located slightly more than two miles away from the NNA #1. · Aquifer Exemption Application - NNA #1 FINAL August 4, 2004 Application for an Aquifer Exltion Order - Union Oil Company e Page 4 of 7 · Data presented in Table 2 provides information on local water well depth based on information from the WELTS database as of June 23, 2004. The closest water wells to the NNA #1 are located slightly more than 2 miles away (see Figure 4) and are drilled to a maximum depth of 50 feet. Figure 8 shows that even as far as 10 miles away drinking water is commonly available within 100 feet of the surface, and the deepest water well is 292 feet. Detailed information on each of the water wells within ten miles of the NNA #1 is presented in Appendix A. · · Formation Water Salinitv (20 AAC 25.440(a)(2)) Logs from wells within the DCU were used to characterize groundwater conditions deeper than 50 feet. Evaluation of total dissolved solids (TDS) was accomplished via the Spontaneous Potential (SP) Method and the Apparent Resistivity (Rwa) Method. Use of these methods is outlined and suggested in the EPA document "Survey of Methods to Determine Total Dissolved Solids Concentrations" (US EPA, 1989). The Standard Oil Deep Creek #1 well (1958) in Sec. 15, T2S, R13W, S.M. and the Unocal NNA #1 (2001) in Sec. 11, T2S, R13W, S.M. acquired wireline logs through the groundwater table and documentc¡¡d the freshwater zone to be from the surface to approximately 1,800 feet TVD. Both the SP and Rwa Methods were used to evaluate formation salinity in these two wells. Figure 9 shows the calculated salinity in wells NNA #1 and Deep Creek Unit #1 using both the SP and Rwa Methods. Attachments 1 and 2 provide details of the calculation methods for each well. Data sets using both the SP and Rwa Methods agree that TDS in the DCU is more than 3,000 and less than 10,000 mg/I below 1,800 feet TVD. Figure 10a is a graph of the log-derived salinity estimates for sands of the Sterling and Tyonek formations in the NNA #1 well made by a third-party contract petrophysicist at Unocal's request. This estimate is meant to serve as an independent analysis for comparison purposes since analyses of this sort can be influenced by the assumptions made by the interpreter (e.g., estimate of porosity, choice of formation factor, etc). While the individual values are not precisely the same as those presented in Figure 9, the overall trend of the data is consistent and within the +/-15% margin of error accepted for these analyses in "Survey of Methods to Determine Total Dissolved Solids Concentrations." These analyses demonstrate clearly that the water below 1,800 feet MD has greater than 3,000 mg/I TDS. Figure 10b is a detailed view of the data presented in Figure 10a in the depth range of 300 feet to 1,800 feet MD; this data clearly shows a trend of increasing salinity with depth of burial, up to roughly 3,000 ppm at a depth of 1,600 feet MD. (Note that the petrophysicist did not estimate salinity for sands in the Beluga formation between 2,500 feet and 6,000 feet MD, as he believed that the thin-bedded nature of the Beluga formation would likely provide spurious results.) The data and analyses that went into Figures 10a and 10b are shown in Attachment 3, and the equations and assumptions used in the course of this analysis are included in Attachment 4 to this report. Estimates of water salinity derived from well logs are prone to error due to a variety of factors, including difficulty reading log values, borehole conditions, drilling mud composition, equations or charts used in calculations, and others. It is therefore useful to check the validity of these methods by comparison with a physical water sample. A water sample from the T-5 Sand in the Unocal NNA #1 (6,182 to 6,222 feet TVD) was captured on April 30, 2004 (Attachment 5). Analysis of this water sample indicates TDS of 7,670.7 mg/I. This TDS of 7,670.7 mg/I from a physical water sample compares with calculated salinities of 6,959 mg/I (third-party Aquifer Exemption Application - NNA #1 FINAL August 4, 2004 Application for an Aquifer Exltion Order - Union Oil Company e Page 5 of 7 · petrophysicist) and 9,100 mg/I (Unocal) using the Rwa Method. The TDS of 7,670.7 mg/I from the T-5 Sand is displayed in Figure 9 along with Unocal's calculated TDS from well log data. Evidence of Hvdrocarbons (20 AAC 25.440(a)(1 )(A)) Commercial quantities of hydrocarbons have been proven in the DCU as shallow as 7,800 feet SSTVD in the Tyonek T-70 Sand in well Happy Valley #1. However, there are no commercial quantities of hydrocarbons present in the Unocal NNA #1 well. Additionally, well logs run by Unocal in the recent wells drilled near the crest of the Happy Valley structure (referenced in Table 1) indicate that there are no commercial quantities of hydrocarbons in strata of the Beluga and Tyonek formations at the level at which those wells penetrate the structure. Thus, it is reasonable to conclude that there are no commercial quantities of hydrocarbons in the strata for which Unocal is seeking an Aquifer Exemption in the area between the crestal Happy Valley wells and the NNA #1 well downdip, An important distinction should be made between commercial quantities of hydrocarbons and the presence of hydrocarbons in detectable amounts. While it is true that hydrocarbons are not present in producible quantities above 7,800 feet SSTVD, it is also true that there is ample evidence of low concentrations of gaseous hydrocarbons (i.e. methane) in nearly all of the strata within the subject interval. Evidence of gas presence is provided by mud logs from each of the wells on the Happy Valley structure and is depicted by the red Total Gas curve on the well logs displayed on the attached cross section (Figure 6). · The presence of methane gas is to be expected in all Tertiary strata regardless of depth of burial, since all such strata are known to contain coals beds of varying thickness and lateral extent. The coals present in the Sterling, Beluga and Tyonek formations have long been recognized to be the primary source of dry gas in the Cook Inlet basin. The significance of this gas with regard to the surface water supply will be discussed further below. Impractical and Uneconomical for Drinkina Water Purposes (20 AAC 25.440(a)(1)(8)) Aquifers below 1 ,800 feet TVD are exemptible via the uneconomic criteria for the following reasons, First, the area has plentiful groundwater available from surface to approximately 300 feet TVD, WELTS data demonstrate that the deepest water well within a 2-mile radius of the NNA #1 is only drilled to 50 feet with plentiful other groundwater being available within 100 feet of surface. Second, the water below 1,800 feet TVD is predominately between 3,000 and 10,000 mg/I TDS making recovery of drinking water highly unlikely and impractical. Finally, the cost to drill a drinking water well below 1 ,800 feet TVD would be more than five times the cost of a conventional well drilled to 400 feet and many times the cost of a well drilled to 50 feet. Contamination of Drinkina Water (20 AAC 25.440(a)(1)(C)) · The presence of even moderate amounts of hydrocarbon gas in otherwise freshwater aquifers presents a known, documented hazard in the recovery of fresh water for human consumption. Numerous cases of water wells catching fire due to accumulation of hydrocarbon gases have been documented globally and on the Kenai Peninsula. While reconnoitering the southern Kenai Peninsula for exploration purposes, Unocal personnel spoke with a number of property Aquifer Exemption Application - NNA #1 FINAL August 4, 2004 Application for an Aquifer Ex!tion Order - Union Oil Company e Page 6 of 7 · owners who related anecdotal evidence of natural gas being 'produced' along with water from domestic water wells. Such occurrences highlight the likelihood of encountering natural gas in the process of exploring for domestic water supplies, a likelihood which existing data indicates increases substantially with depth. As shown on the geologic cross section (Figure 6) included with this report, gas chromatograph data from mud logs obtained in the Happy Valley field wells, as well as NNA #1 and Deep Creek Unit #1, reveal that the first appreciable shows of methane gas in the Tertiary section occur at approximately 1,300 feet TVD below ground level. Figure 11 is a map which depicts the depth at which methane gas is first encountered in noticeable quantities above background levels. While such shallow gas shows do not indicate that gas is present in commercial quantities, they do suggest that strata in this depth range is part of the active petroleum system in the basin and not part of the surface fresh water aquifer system. Note that gas is present in barely discernable "background" levels of contamination as shallow as 500 feet below ground level (approximately 200 feet above sea level) and tapers off toward the ground surface. Gas shows from the wells depicted in Figure 6 are entirely absent from the surface Quaternary gravels. · As previously stated, the Happy Valley structure comprises a northeast-southwest trending anticlinal feature with the NNA #1 well being located near the downdip limit of that feature, as is shown on the structure map included in this report as Figure 7. The anticline is the simplest form of geologic structure known to be conducive to the trapping of hydrocarbons. All strata below 1,300 feet TVD can be seen to conform to this general anticlinal structure as shown on the attached cross section (Figure 6). The anticlinal structure has the effect of concentrating and focusing the accumulation of biogenic gas, as is evidenced by the greater magnitude of the gas shows in the wells near the crest of the structure. It can be inferred that all strata within the confines of the greater Happy Valley structure are prone to trapping gaseous hydrocarbons within coal-bearing strata of the Tertiary sections such as are known to be present 1,300 feet below ground level. Thus, all Tertiary strata in the northern part of the DCU which comprises the Happy Valley anticline - specifically, Sections 10, 11, 14, 15, 16, 20, 21, 22, 23, 27, 28, 29, 32, 33 and 34 of T2S, R13W - are likely to contain measurable quantities of methane gas and should be exempted from consideration as potential fresh water sources. The sections in which gas contamination is known or expected to occur are indicated and superimposed on the Structure Map shown in Figure 7. Hence, for reasons the reasons cited above, and for the protection of public safety and health, all strata below 1 ,300 feet TVD should be considered as unsuitable sources of water for human consumption or use due to the known presence of gaseous hydrocarbons in measurable quantities, regardless of the salinity of the associated groundwater. Summarv The future economic development of the Deep Creek Unit reserves requires injection/disposal of produced water into aquifers that require an aquifer exemption order. Unocal has acquired and reviewed available public and proprietary data and concludes that aquifers below 1 ,800 feet TVD would provide suitable zones for produced water disposal without endangering drinking water sources. · Aquifer Exemption Application - NNA #1 FINAL August4,2004 Application for an Aquifer ExJtion Order - Union Oil Company e Page 7 of 7 · According to the AOGCC statutes, aquifers below 1 ,800 feet TVD in the Deep Creek Unit 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: (B) Aquifers below 1,800 feet TVD are situated at depths that make recovery of water for drinking water purposes economically and technologically impractical. Readily available sources of drinking water are commonly found at less than 100 feet in the local area. (C) Aquifers below 1,800 feet TVD are commonly contaminated with gaseous hydrocarbons to the extent that they are unsuitable for drinking water. (2) The total dissolved solids content of the groundwater below 1 ,800 feet TVD in the Deep Creek Unit is typically more than 3,000 and less than 10,000 mg/I, and it is not reasonably expected to supply a public water system. · · Aquifer Exemption Application - NNA #1 FINAL August4,2004 · · · . e List of Tables and Figures Figures Figure 1 - Cook Inlet Regional Overview Figure 2 - Deep Creek Unit Boundaries Figure 3 - Surface Parcels within One-Quarter Mile of the NNA #1 Figure 4 - Water Wells within Two Miles ofthe NNA #1 Figure 5 - Geologic Column of the Kenai Peninsula Figure 6 - Deep Creek Unit Cross Section Figure 7 - Happy Valley Structure within the Deep Creek Unit Figure 8 - Water Wells within Ten Miles of the NNA #1 Figure 9 - Calculated Formation Water Salinity in the Deep Creek Unit Figure lOa - Third-Party Calculation of F ormation Water Salinity in the Deep Creek Unit Figure lOb - Third-Party Calculation of Formation Water Salinity in the Deep Creek Unit - Detailed View, 300' to 1,800' MD Figure 11 - Depth of First Detected Gas in the Deep Creek Unit Tables Table 1 - Wells within the Deep Creek Unit Table 2 - Water Well Depth in the Vicinity of the NNA #1 Attachments Attachment 1 - Formation Water Salinity Calculations, Unocal NNA #1 Well Attachment 2 - Formation Water Salinity Calculations, Standard Oil Deep Creek Unit #1 Attachment 3 - Third-Party Formation Water Salinity Calculations Attachments 4 - Methodology and Assumptions for Calculation of Formation Water Salinity Attachments 5 - Analysis of Water from the T-5 Sand (6,200 feet TVD) in the NNA#1 Appendices Appendix A - Listing of Water Wells within Ten Miles of the NNA #1 FIGURE 1 COOK Regional Overview N A 10 5 0 Alaska 4, NAD27 FIGURE 2 CRK U 1 V U 31 HV1 HV2 HV3 HV4 HV5 HV6 NA 1 2 . Q M,lès 2 . FIGURE 3 NNA1 Surface Parcels within 1/4 Mile N A 0,25 0.125 o 0.25 Alaska State Plane Zone 4, NAD27 NNA 1 to Deep Crk U 1: 1 Planar distance calculated within Alaska State Plane coordinate system, NAD27 datum. All parcels within 1/4 mile of well location owned by N!NILCHIK NATIVE ASSOCIATION. FIGURE 4 0.75 0.375 o 0.75 LAS 9595. Owner: J,F. Carpenter. 45 foot water well completed 6/10/1981. Location based on ADFG/USGS KBEC database (1,2). LAS 5743. Owner: R.E. Clark. 50 foot water well. Certificate issued 5/19/1987 (2), Location approximate but within parcel boundary shown. LAS 2981. Owner: P.J. Hanson. 45 foot water well complete 4/30/1985. Location based on ADFG/USGS KBEC database (1,2). Deep Creek U1. Owner: Standard Oil. Plugged & abandoned oil & gas ~ well completed 8/611958 with a bottom hole depth 14,221 feet (1,3). Listed as an unused water well (1). Happy Valley U31-22. Owner: Superior Oil. Plugged & abandoned oil ~ & gas well completed 12/9/1963 with a bottom hole depth 13,550 feet (1,3). Listed as an unused water well (1). (1) KBEC database. htlp:/Iwww.state.ak.lJsJadfglhabitatlgenlnfolnerrlkbeclhydrodatalgmdwtr.htm/ (2) ADNR Land Administration System. htip:/Iwww.dnr.state.aklJs/las (3) A/aska Division of OiJ and Gas. htip:llwww.dog.dnr.state.ak.lJs/oiJlprodlJctsldatalweHslweJis.htm NNA1 Water Wells within 2 Miles N A iles Alaska State Plane Zone 4, NAD27 FIGURE 5 ook Inlet me M.Y. 10 20 30 40 50 (þ r:: (þ m o (þ lig. (þ r:: (þ m g Eocene - as a. Paleo. .. 18 FIGURE 6 I 1 -2~Ø : I I I I I I I I I I -3ØØØ : I I I I I I I I I I I I I I I I I I I I I I I , I I NO HORIZONTAL SCALE 1-- ----------------------------------------------~ ':I .~ DEEP CREEK UNIT MTL_HV _DC COOK_'NLET HAPPY VALLEY FIELD -- - 1 :3529 FEET Fixed -- -- - SEALEVEL MTL 2-Au ust-2004 STRUCTURAL CROSS SECTION . ~~~ß tD- ~)/~y~ ~~. --.....~..."...--~-''''~="'.._._. FIGURE 7 7 18 24 25 35 36 5 7 HAPPY VALLEY STRUCTU Shallow Beluga Horizon JULY 30,2004 8 " 0.5 o Alaska State Plane Zone 4, NAD27 18 FIGURE 8 NNA 1 1 4814W 4 1 NNA1 Waterwells in 10 Mile Vicinity 3 1.5 o 3 58 5 v\] Alaska State Plane Zone 4, NAD27 FIGURE 9 1000 2000 3000 Deep Creek Unit 1000 2000 3000 4000 ppm 5000 6000 1& 1& .... 4000 (j) .æ 5000 1& 6000 1& 7000 I 8000 9000 1& 1& 7000 9000 8000 I I I + I I FIGURE 10 4000 :r: l- I:\. ILl Q 5000 Q ILl c:: ;:) ø « 6000 ILl ::i 7000 10000 o NNA #1 Formation Salinity ~ Independent Val lincecum, Sugar land, TX 19-JUl·04 o , I ! I I t- I I I ... II.E! I I. NACL_RW A r- I.! .. ¡¡II I II. . i ~, II NACL_SP ;- & "', i j I I. +c_c~........ i I .... I .................. ."" ¡ ....... I .. .~.. j ..... ; ~ ~ .... ... .~.. c ....... ..... 1 I 1 .~c~_. '.m j.......cc. - .. ..... .~~m mm. ~~.. f~. .... .mc·_c .. I·~~ .. .......... mc ~_c_~ ......~. ....... m~c~m~ ~.. .. .. .... ..~...... .. I············· ..~~ .m .... ~~ f·. .....~... ......... i . I .. ... ·····.c ....... m .......... ............ .m. .... ..... i I I ~~.. ....... ......... ...... m . _c I I I I .~.. I ... ... ....... ...... ..... .. I~ .... ...... c .m 1 .....~. .....~. . ··c I i I m. ....... ............. ¡ i .~......... .... I ... ..... .. ... .......~ . ......... I I ¡. ... ............ 1 ...~.. ..~ I···· ~m~c ......... C ~~. i ...... .~..... I . ¡il ..~.....~. .....~..i , '.. 1 ...~ ........ ......... .... ............... ...... ...~.. .~....... ···1 ... I ,...... ~ ..... ......... I ...... I i I .... ..... ..~ ................ .. ~m I······ ....... ....... ........ I ,..... 1 , ¡.~m ...~ I I. .. ¡.m.......... ... ...... ........... I .~.~....~.... . ... ..... ...... I ... ....... 1 I I. ..cc I ~j; i. I " .. ... . ........~ ...... ..... I i ! I 1000 2000 3000 8000 9000 5000 10000 15000 NACL EQ (PPM) 20000 25000 30000 NNA #1 Formation Salinity. Independent Assessment Val Lincecum, Sugar Land, TX 19-JUL-04 300 400 117 A . 1916 22 A 2037 500 "~~- 429 A . 2190 600 707 A 700 800 900 ;:¡: .... n. 1000 w Q Q w 1100 0::: ::I r.n « 1200 w ::E 1300 1400, 1500 1600 1700 1800 0 11 12 9 A 1000 1820 . A 1860 A 1895 A 1759 A .254 2039 A2310 1951- 2041 . 2221 . 2943 .246 A 3073 3064 2000 3000 --~. ~,_. ---~-- -~-- "'~""~~~"-- . 362 4000 5000 NACl EQ (PPM) 6000 7000 8000 ANACL_RWA . 9000 10000 FIGURE 11 , , , . , , , ATTACHMENTS · . . Salinity Calculations from Well Logs Well Name: Unocal Deep Creek Unit NNA #1 Location: Sec. 11-T2S-R13W Spud Date: Dec. 17,2001 Depth and Temp SP METHOD Depth Tgrad Tf (ft) (F/ft) (deg F) · 121 00102 860 00102 1330 0.0102 1490 0.0102 1915 0.0102 2242 0.0081 2460 00081 2964 00081 3885 0.0081 5510 0.0081 6200 0.0081 6652 0.0081 7512 0.0081 8395 0.0081 Notes: Tsurf = BHT= Rmf= Rmf= 65 F 145 @ 2.84 @ 0.043 @ 66 74 79 80 85 88 89 94 101 114 120 124 131 138 SP Kc Rmf @Tf Rmfeq (mv) (ohmm) (ohmm) -24 698 2.8 2.4 12 70.8 2.6 22 15 71.5 2.4 2.1 23 71.7 2.4 2.0 15 72.2 2.3 1.9 na 72.7 0.036 0.031 na 72.9 0.036 0.030 na 73.4 0.034 0.029 na 74.4 0.032 0.027 na 76.2 0028 0.024 na 769 0.027 0.023 na 77.4 0026 0.022 na 78.4 0.025 0.021 na 79.3 0.024 0.020 9840 66 73 Ft Run 1: Surface to 2156' Run 5: 2156' to 8428' Physical Water Sample Water Sample of May 15, 2004 Analyzed by Baker Petrolite May 27,2004 Rwa METHOD Rweq Salinity Porosity Rt F Rwa (ohmm) (ppm) (ohmm) (ohmm) 5.31 1100 0.34 100 7.0 1434 1.48 4000 0.33 22 7.4 2.99 1.27 4100 0.32 22 7.8 2.83 0.96 5300 0.34 19 7.0 2.73 1.19 4200 0.26 13 11.3 115 #VALUE' 0.30 7.5 8.7 0.86 #VALUE! 0.27 6 10.6 0.57 #VALUE! 0.20 17 181 0.94 #VALUE' 0.18 18 21.9 0.82 #VALUE! 0.16 22 27.1 0.81 #VALUEI 0.14 13 34.4 0.38 #VALUE! 0.19 11 19.9 0.55 #VALUE! 0.18 9.5 21.9 0.43 #VALUE! 0.24 5 13.1 0.38 #VALUE! = SP not valid below 2156' in salt mud Formation temperature based on temperature recorded during logging. F = 1/<p^m where a=1 and m=1.8 from Deep Creek #1 core data Salinity from Schlumberger Chart - Resistivity of NaCI Solutions Base of freshwater indicated on Array Induction log at approx. 146' MD IValid Values I ~1IJf~liIi¡.i~ì¡¡ì¡~1 Cations Depth TDS CI Bicarb C03 S04 Na Mg Ca St Ba Fe K (ft) (mg/l) (mgll) (mg/l) (mg/l) (mg/l) (mgll) (mg/l) (mg/l) (mgll) (mg/l) (mg/l) (mg/l) 6182 7670.7 3060.0 1375.0 0.0 63.0 1488.7 7.0 55.0 3.0 2.0 60.0 1557.0 · ATTACHMENT 1 Salinity (ppm) 500 "tJ 1700 ~ 1800 ..r::: (/) 1800 ~ 4400 u.. 5700 8300 4900 5200 -g 4600 ~ 9100 ~ 6200 7500 8000 C\I to- Z UJ ~ I, Ü « l- I- « Salinity - Independent Sugarland e e Attachment 4 · Methodology and Assumptions for Calculation of Formation Water Salinity Objective A quantitative evaluation offonnation water salinity in the NNA-l reservoir quality sands is described below. Process Two independent methods of defining water salinity were used, following and adhering to the standard accepted petrophysical practices as outlined in "Survey of Methods to Determine Total Dissolved Solids Concentrations" prepared for EP A by Engineering Enterprises, Inc. The first is the RWA method, which utilizes computed porosity, measured deep resistivity, and measured temperature. The second is the SP method, which is based on measured mud filtrate resistivity, measured temperature, and measured SP deflection. According to the authors of "Survey of Methods to Detennine Total Dissolved Solids Concentrations" these methods yield reliable estimates ofTDS concentrations within an acceptable range (±15%) of error. · BWA Method RWA = (RT*PHI**m)/a Where: RT=Measured deep resistivity PHI= Total Porosity calculated from density log m=cementation exponent (1.8 used) a=fonnation tortuosity factor (1 used) PHI = [{(VSH*RHOSH) + (VSD*RHOSS)}-RHOB] / [{(VSH*RHOSH)+(VSD*RHOSS)}-RHOFL] Where: VSH =Computed shale volume VSD=I- VSH RHOB=Measured bulk density RHOSH=2.76 RHOSS=2.65 RHOFL=1.0 VSH = (SP1og-SP clean)/(SP clay-SP clean) Where: SP10g = SP deflection SPclean = Maximum deflection clean sand (-32 Used) SP clay = Shale baseline (-4 Used) · Methodology and Assumptions for Calculation of Formation Water Salinity Page 1 of3 · · · . . SP Method The algorithm used solves Schlumberger charts SP-l, SP-2, and Gen-9 for Rw @ formation temperature which is then converted to N aCI concentration. Inputs included: SP¡og = Baselined SP T = Formation Temperature (based on temperatures of 65° F at the surface and 87° F at 2155' via log header information. For intervals below 2155' , assumed a temperature gradient of 0.81 degrees per 100 feet.) Rmf = 2.84 at 66° F Results /20 GR M 1001ID~/H 1/1 AHü90 M 100110.6 DPHI 01 106 BVI 0111 BVI 01110 f?WA C 01 GAPI OHMM VN VN VN OHMM l~e7 :t¡Wl ji~% 1001 Jr-- --"'~~l 1ÕÕ þ6 TNPH M 01 106 BW'Æ 0111 BW'Æ 01 110 f?W SPC 01 GAPI VN VN VN OHMM 1-60 USPC 201 I fu;;i.'i'.';. II ...3 DPHI' Þ.6 PHIE 0111 PHIE 01 10 NACl f?WA 101 MV AH090_M AH010_M TNPH_M VN VN kppm 18 HCAl 281 7:::" 7:::2,22 'IDPH TNPH_M 1 10.6 PHlT 0111 VSAND 01 Þ NACl SP 101 IN IAH<)1 AH09 VN VN kppm - 400 - - -~ fo-¡"'; 500 - - 1= == 600 - - 1- 700 - ~ - >- 800 - - r--- t- - . 900 - ~ - f- c- 1000 -- ~ I- - - ,.. - -= I- ~ po 1100 - - 1200 - ~ ... - 1300 - ~ ~ I "~ -~ - m ~ 1400 - - ~ 1500 -- - "";11 1800 - ., - 1700 - -- - 1800 - ':II"'" Ir' Figure 1: Composite presentation of output curves. Methodology and Assumptions for Calculation of Formation Water Salinity Page 2 of 3 · 300 400 500 600 700 800 [ 900 % ~ 1000 Q Q ~ 1100 ::> '" ; 1200 1300 1400 1500 1600 1700 e e NNA_1 117 I)( e1916 I x NACL_RWA t 22)( ¡, 2037 I eNACL_SP 429)( e 2190 707 )( e 254 2 ¡.oz*9 118 )( ~ 2041 12 ~)( e 2221 .OW . '" 1895 )( I 2943 1759 )( e 246 22~0 )( e 362 3073 ( 3064 1800 o 7000 9000 10000 2000 8000 1000 3000 4000 5000 6000 NACL EQ (PPM) Figure 2: Average results ofNaCI equivalent versus measured depth. Average results based on reservoir quality sands only. · · NNA_1 300 400 500 600 700 800 ï=' 900 !!:. % l- f!¡ 1000 Q Q ~ 1100 ::> '" i:\ 1200 :IE 1300 1400 1500 1600 1700 ~ )( )( )( )( "" )( )( 'W m )( ) )( )( 1800 o 0.4 0.5 0.6 0.1 0.2 Figure 3: Average results of computed total porosity versus measured depth. 0.3 TOTAL POROSITY Methodology and Assumptions for Calculation of Formation Water Salinity Page 3 of3 . e e West Coast Region 5125 Boylan Street Bakersfield, CA 83308 (661) 325-4138 Lab Team Leader - Sheila Hernandez (432) 495-7240 Water Analysis Report by Baker Petrolite Company: UNOCAL ALASKA RESOURCES Sales ROT: 31100 Region: ALASKA Account Manager: MIKE PING (907) 252-4082 Area: KENAI, AK Sample #: 235940 Lease/Platform : NNA #1 Analysis 10 #: 43437 Entity (or well #): Analysis Cost: $40.00 Formation: TYONEK Sample Point: WELLHEAD Summary Sampling Date: Analysis Date: Analyst: 4/30104 5/27104 JAMES AHRLETT TDS (mg/l or g/m3): 7670.7 Density (g/cm3, tonne/m3): 1.005 ion/Cation Ratio: 0.9999999 Carbon Dioxide: Oxygen: Comments: Analysis of Sample 235940 @ 75 of Anions mgll meq/l Cations mg/l meqll Chloride: 3060.0 86.31 Sodium: 1488.7 64.75 Bicarbonate: 1375.0 22.53 Magnesium: 7.0 0.58 Carbonate: 0.0 O. Calcium: 55.0 2.74 Sulfate: 63.0 1.31 Strontium: 3.0 0.07 Phosphate: Barium: 2.0 0.03 Borate: Iron: 60.0 2.17 Silicate: Potassium: 1557.0 39,82 Aluminum: Hydrogen Sulfide: Chromium: pH at time of sampling: Copper: Lead: pH at time of analysis: 7.77 Manganese: pH used in Calculation: 7.77 Nickel: Conditions Values Calculated at the Given Conditions - Amounts of Scale in Ib/1000 bbl Gauge I Calcite Gypsum Anhydrite Celestite Barite CO2 Temp Press. CaC03 CaSO 42~ 0 CaSO 4 SrS04 BaSO 4 Press of psi Index Amount Index Amount Index Amount Index Amount Index Amount psi 80 0 I 0.78 29.22 -2,42 0.00 -2.49 0.00 -1.92 0.00 1.00 1.04 0.29 100 0 I 0.86 32.70 -2.44 0.00 -2.44 0.00 -1,91 0.00 0.86 1.04 0,41 120 0 I 0.95 35.48 -2.44 0.00 -2.37 0.00 -1.88 0.00 0,74 1.04 0.57 140 0 1.03 38.26 -2,44 0.00 -2.27 0.00 -1.85 0.00 0.64 1.04 0.77 Note 1: When assessing the severity of the scale problem. both the saturation index (51) and amount of scale must be considered. Note 2: Precipitation of each scale is considered separately. Total scale will be less than the sum of the amounts of the five scales. Note 3: The reported C02 pressure is actually the calculated C02 fugacity. It is usually nearly the same as the C02 partial pressure. . ATTACH 5 APPENDIX Water Wells Within 10-Miles of the NNA #1 Deep Creek Unit Kenai Peninsula Borough, Alaska 23.Jun-04 APPENDIX A e WELL DEPTH TOWNSHIP & STATION ID SITE USE H20_USE1 (feet) SECTION RANGE OWNER 600729151325001 Withdrawal of water Domestic 101.00 S05 T001S R013W S JONES DARREL&DRESSLER ROXANNE 600659151333801 Withdrawal of water Domestic 127.00 S05 T001S R013W S WALLIS BOB 600601151344601 Withdrawal of water Domestic 55.00 S07 T001S R013W S JONES ALBERT 600553151345101 Withdrawal of water Domestic 58.00 S07 T001S R013W S LENG FOSTER 600557151344601 Withdrawal of water Domestic 58.00 S07 T001S R013W S THORNTON LEO 600624151334201 Withdrawal of water Domestic 48.50 S08 T001S R013W S ISSERMOYER CAROLYN 600550151344601 Withdrawal of water Domestic 110. 00 S18 T001S R013W S PINNOW TAMMY&ROBERT 600521151364800 Commercial 0.00 S13 T001S R014W S WALDSMITH DARWIN E&KAYE S 600518151363401 Withdrawal of water Domestic 60.00 S13 T001S R014W S KIRKLAND 600521151362401 Withdrawal of water Domestic 78.00 S13 T001S R014W S BROWN ERIC 600549151361301 Withdrawal of water Domestic 92.00 S13 T001S R014W S TIEMAN ERNIE 600517151364901 Withdrawal of water Domestic 160.00 S13 T001S R014W S MCCOMBS JOHN 600428151375001 Withdrawal of water Domestic 86.00 S23 T001S R014W S JOHNSON MELVIN 600439151371101 Withdrawal of water Domestic 35.00 S24 T001S R014W S JACKINSKY SHAWN&CINDY 600439151365701 Withdrawal of water Domestic 48.00 S24 T001S R014W S JACKINSKY SHAWN&CINDY 600446151370301 Withdrawal of water Domestic 71.00 S24 T001S R014W S JACKINSKY GARY 600406151381001 Withdrawal of water Domestic 64.00 S26 T001S R014W S KVASNIKOFF JACK 600426151385101 Withdrawal of water Domestic 131.00 S26 T001S R014W S WIMMER BILL 600349151385501 Withdrawal of water Domestic 146.00 S26 T001S R014W S BANTA ELMER 600343151384901 Withdrawal of water Domestic 153.00 S26 T001S R014W S BANTA BILL 600318151391501 Withdrawal of water Domestic 106.00 S27 T001S R014W S LEMAN NICK 600246151395501 Withdrawal of water Commercial 20.00 S34 T001S R014W S INLET VIEW BAR CAFE 600236151394701 Withdrawal of water Domestic 24.00 S34 T001S R014W S HERMAN CLARENCE 600258151394101 Test Unused 30.00 S34 T001S R014W S USGS NINILCHK 600235151393101 Withdrawal of water Domestic 50.00 S34 T001S R014W S SENIOR CITIZENS BUILDING 600238151395101 Withdrawal of water Domestic 60.00 S34 T001S R014W S KOPCZYNSKI B 600228151403001 Withdrawal of water Other 67.00 S34 T001S R014W S T.J. STORE NINILCHK 600257151395001 Withdrawal of water Domestic 69.00 S34 T001S R014W S KVORNSKIEFF DEAN 600250151393101 Withdrawal of water Domestic 70.00 S34 T001S R014W S COVEY ROGER 600237151402502 Withdrawal of water Institutional 80.00 S34 T001S R014W S NINILCHIK SCHOOL 600225151392701 Withdrawal of water Domestic 83.00 S34 T001 S R014W S PHILLIPS ARNOLD R 600235151401301 Withdrawal of water Institutional 95.00 S34 T001S R014W S NINILCHIK NATIVE ASSN 600225151392601 Withdrawal of water Domestic 106.00 S34 T001S R014W S TSCHOEPL WENTSEL 600300151400901 Withdrawal of water Commercial 121.00 S34 T001S R014W S BERMAN PACK. CO 600259151394501 Withdrawal of water Public supply 125.00 S34 T001S R014W S NINILCHIK CITY OF e . . . .e e . WELL DEPTH TOWNSHIP & STATION ID SITE USE H20 USE1 (feet) SECTION RANGE OWNER 600251151400701 Withdrawal of water Public supplv 201.00 S34 T001S R014W S AK DNR NINILCHK 600238151401501 Withdrawal of water Institutional 280.00 S34 T001S R014W S ADH NINILCHK 600237151402501 Withdrawal of water Institutional 292.00 S34 T001S R014W S NINILCHIK SCHOOL 600312151390001 Withdrawal of water Domestic 35.00 S35 T001S R014W S COOPER NICK 600240151384601 Withdrawal of water Domestic 50.00 S35 T001S R014W S PASCO JEFF 600234151384001 Withdrawal of water Domestic 70.00 S35 T001S R014W S HENDERSON 600316151384001 Withdrawal of water Domestic 72.30 S35 T001S R014W S ENCELEWSKI RICHARD 600226151385601 Withdrawal of water Domestic 97.00 S35 T001S R014W S KINGSLY COLVIS 600230151384401 Withdrawal of water Domestic 157.00 S35 T001S R014W S BYRNE GERALD T 600256151400401 Withdrawal of water Domestic 180.00 S35 T001S R014W S AK DIV PKS NINILCHICK 600145151352501 Withdrawal of water Domestic 82.00 S06 T002S R013W S MAZE ART 600147151352401 Withdrawal of water Domestic 118.00 S06 T002S R013W S MAZE ARTHUR 600044151320701 Withdrawal of water Domestic 45.00 S09 T002S R013W S CLARK KENNETH 600039151320101 Withdrawal of water Domestic 45.00 S16 T002S R013W S HANSON PAULINE 600219151361901 Withdrawal of water Domestic 38.00 S01 T002S R014W S POTTER RONALD 600140151372401 Withdrawal of water Domestic 43.00 S02 T002S R014W S CONSTANCE AL 600148151384701 Withdrawal of water Domestic 50.00 S02 T002S R014W S COVEY ROGER 600142151372301 Withdrawal of water Domestic 58.00 S02 T002S R014W S MCHONE DON 600141151374801 Withdrawal of water Domestic 71.00 S02 T002S R014W S WHITMORE ELMER 600142151374201 Withdrawal of water Domestic 80.00 S02 T002S R014W S WILCOCK JACK 600145151385301 Withdrawal of water Domestic 85.00 S02 T002S R014W S COREY 600139151382801 Withdrawal of water Domestic 90.00 S02 T002S R014W S MCHONE JACK 600204151373701 Withdrawal of water Domestic 162.00 S02 T002S R014W S DEMMICK 600208151403501 Withdrawal of water Domestic 25.00 S03 T002S R014W S KELLY VICTOR 600215151390501 Withdrawal of water Domestic 40.00 S03 T002S R014W S BEYER PAT 600204151393601 Withdrawal of water Domestic 45.00 S03 T002S R014W S HASTINGS RODLEY 600222151391902 Test Unused 50.00 S03 T002S R014W S USGS NINILCHIK 600220151394601 Withdrawal of water Domestic 52.00 S03 T002S R014W S KVASNIKOFF DEAN 600220151393001 Withdrawal of water Domestic 73.00 S03 T002S R014W S CHENIER ROBERT 600222151391901 Test Unused 181.00 S03 T002S R014W S USGS NINILCHIK 600201151412001 Withdrawal of water Domestic 58.00 S04 T002S R014W S STEIKALVIN 600145151404301 Withdrawal of water Domestic 86.00 S04 T002S R014W S LUCASON ROBERT 600211151413001 Withdrawal of water Domestic 195.00 S04 T002S R014W S PORTER CLlFFORD&BETTY 600203151413001 Withdrawal of water Domestic 198.00 S04 T002S R014W S STEIK MIKE 600202151414601 Withdrawal of water Domestic 215.00 S04 T002S R014W S MOE STEVE . . Water Wells Within 10-Miles of the NNA #1 Deep Creek Unit Kenai Peninsula Borough, Alaska 23-Jun-04 #1 Re: FW: NNA Aquifer Exemption Holdup (Revised Excel File) N tJS\ ~1 Mark; Very good Mark, please include the methods and assumptions you used in your calculations. BC Lynch, Mark T wrote: Bob, As you can see from the chart labled "100 - 2500FT" included in the attached file, there is no appreciable difference between the salinity values you calculated (shown by orange dots) and the values we calculated by the two different methods in the shallow Sterling section. Therefore, we consider this issue resolved and wil! present these findings in our Request for Aquifer Exemption. (As you've said on more than one occasion, salinity is not the issue here anyway; jt,(sthe, contamination by natura! gas seepage that is going to exempt these aquifers.) Thank you for your diligence in helping us refine our application. Regards, Mark Mark T. Lynch Unocal Alaska 909 w. 9th. Ave, Anchorage, AK 99501 907-263-7851 Ph 907-263-7828 Fax mark,lynch@unocal.com -----Original Message----- From: Crandall, Robert P -AOGCC Sent: Tuesday, July 20,20048:41 AM To: Eller, Gary; Lynch, Mark T Cc: jim reç¡q@admin.state.ak.us; dan_seamount Subject: Re: FW: NNA Aquifer Exemption Holdup (Revised Excel File) Gary and Mark; A discussion of how you calculated the salinities, including how you calculated porosities, what intervals were averaged, how "sands" are defined ect. is necessary to understand the significance of the numbers you are presenting, the epa has published guidance on this and we need to be able to determine if your work is consistent with that guidance. I still don't understand how you know the temperature on the log header is not not best indicator of the well's temperature at the time it was logged, you'll have to help me there. A key factor in this situation is the non-commercial gas saturations that render the water in these intervals unusable. The distribution of this gas is structurally controlled, as you've lof3 7/21/20049:30 AM hv, ~. .. . l~l~A A<.juÌIer bxemption Holdup (Revised Excel File) shown in your cross.ction. We'll need a map that shows thAtribution of the gas (structural closure), and a section township and range description of the area you are requesting an aquifer exemption for. The aquifer exemption area will need to be clearly within the area of the gas saturations and hence within the structural closure. A map that clearly illustrates the area of the structural closure and the area of the aquifer exemption you are requesting will be a simple way to illustrate this relationship. The application should state up front that you are asking for an aquifer exemption (describe the area in section township and range), in an area where ground waters are contaminated by methane. I suggest you limit the area of the aquifer exemption you are requesting to an area that clearly within the structure, My number is 793-1230 I'd be glad to discuss this. Bob Crandall Eller, Gary wrote: -----Original Message----- From: Lincecum, Val -Contract rmailto:lincecumv@unocal.com] Sent: Monday, July 19, 2004 12:28 PM To: Eller, Gary Subject: RE: NNA Aquifer Exemption Holdup (Revised Excel File) -----Original Message----- From: Eller, Gary rmailto:ellerc¡@unocal.com] Sent: Monday, July 19, 20042:13 PM To: Crandall, Robert P -AOGCC Cc: Lynch, Mark T; Lincecum, Val -Contract; dan seamount@admin.state.ak.us; Krueger, Philip J Subject: FW: NNA Aquifer Exemption Holdup Bob - Below is the text of what I originally understood that you wanted regarding additional information for us finish our NNA #1 Aquifer Exemption application. I thought that we had satisfied your first item by getting an independent party to perform an independent analysis of the salinity data. I understand now that you desire a detailed description of how we arrived at the calculated salinities: i.e, method for calculation of porosity, Rwa, temperature estimates, etc. understand that you also prefer a calculated salinity log trace instead of selecting discrete sand bodies. I'll discuss that aspect with the contract log analyst in Sugarland, but it was my understanding that the salinity calculation would not be meaningful outside of discrete, water-saturated sand bodies. Regarding the structure map, Mark Lynch's plan was to reference the Upper Beluga structure map already included in the packet (Figure 7) but include text that describes that closure and gas contaminant accumulation is likewise achieved in all of the Tertiary strata below 1300'. -----Original Message----- From: Eller, Gary Sent: Wednesday, July 14, 2004 3:38 PM 200 7/21/20049:30 AM ~'-'~. .FW: NNA AqUIfer Exemption Holdup (Revised Excel File) To: LynCh.rk T Cc: Krueger, Philip] Subject: NNA Aquifer Exemption Holdup e Mark - I spoke to Bob Crandall (AOGCC) who relayed to me his conversation with you regarding the NNA Aquifer Exemption. Bob mentioned two items which are currently holding up the Aquifer Exemption from being submitted to EPA. The first is a more robust Rwa analysis. Bob's major bone of contention is the porosities that we used for shallow Sterling sands, He understood that you were going to get someone at Sugerland to do a more detailed analysis of this, The second was a more "interpretive" structure map showing that we have closure to this shallow gas contaminant. What he really wants here is a simplistic structure map to readily convey the info to non-technical people at the EPA. J. Gary Eller Unocal Alaska Advising Completion Engineer Office: 907-263-7848 Cell: 907-351-1313 300 7/21/20049:30 AM Re: FW: NNA Aquifer Exemption Holdup (Revised Excel File) .'- "- , . , Gary and Mark; A discussion of how you calculated the salinities, including how you calculated porosities, what intervals were averaged, how "sands" are defined ect. is necessary to understand the significance of the numbers you are presenting, the epa has published guidance on this and we need to be able to determine if your work is consistent with that guidance. I still don't understand how you know the temperature on the log header is not not best indicator of the well's temperature at the time it was logged, you'll have to help me there. A key factor in this situation is the non-commercial gas saturations that render the water in these intervals unusable. The distribution of this gas is structurally controlled, as you've shown in your cross-section. We'll need a map that shows the distribution of the gas (structural closure), and a section township and range description of the area you are requesting an aquifer exemption for. The aquifer exemption area will need to be clearly within the area of the gas saturations and hence within the structural closure. A map that clearly illustrates the area of the structural closure and the area of the aquifer exemption you are requesting will be a simple way to illustrate this relationship. The application should state up front that you are asking for an aquifer exemption (describe the area in section township and range), in an area where ground waters are contaminated by methane. I suggest you limit the area of the aquifer exemption you are requesting to an area that clearly within the structure. My number is 793-1230 I'd be glad to discuss this. Bob Crandall Eller, Gary wrote: -----Original Message----- From: Lincecum, Val -Contract [mailto:lincecumv@unocal.com] Sent: Monday, July 19, 2004 12:28 PM To: Eller, Gary Subject: RE: NNA Aquifer Exemption Holdup (Revised Excel File) -----Original Message----- From: Eller, Gary [mailto:ellerq@unocal.com] Sent: Monday, July 19, 20042:13 PM To: Crandall, Robert P -AOGCC Cc: Lynch, Mark T; Lincecum, Val -Contract; dan seamount@admin.state.ak.us; Krueger, Philip J I of2 7/20/20048:57 AM H.v. l"h. NNA Aquner Exemption Holdup (Revised Excel File) \ ,,,' Subject: FW: NNA .ifer Exemption Holdup e Bob - Below is the text of what I originally understood that you wanted regarding additional information for us finish our NNA #1 Aquifer Exemption application. I thought that we had satisfied your first item by getting an independent party to perform an independent analysis of the salinity data. understand now that you desire a detailed description of how we arrived at the calculated salinities: i.e. method for calculation of porosity, Rwa, temperature estimates, etc. I understand that you also prefer a calculated salinity log trace instead of selecting discrete sand bodies. I'll discuss that aspect with the contract log analyst in Sugarland, but it was my understanding that the salinity calculation would not be meaningful outside of discrete, water-saturated sand bodies. Regarding the structure map, Mark Lynch's plan was to reference the Upper Beluga structure map already included in the packet (Figure 7) but include text that describes that closure and gas contaminant accumulation is likewise achieved in all of the Tertiary strata below 1300'. -----Original Message----- From: Eller, Gary Sent: Wednesday, July 14, 2004 3:38 PM To: Lynch, Mark T Cc: Krueger, Philip J Subject: NNA Aquifer Exemption Holdup Mark - I spoke to Bob Crandall (AOGCC) who relayed to me his conversation with you regarding the NNA Aquifer Exemption, Bob mentioned two items which are currently holding up the Aquifer Exemption from being submitted to EPA. The first is a more robust Rwa analysis. Bob's major bone of contention is the porosities that we used for shallow Sterling sands, He understood that you were going to get someone at Sugerland to do a more detailed analysis of this, The second was a more "interpretive" structure map showing that we have closure to this shallow gas contaminant. What he really wants here is a simplistic structure map to readily convey the info to non-technical people at the EPA. J. Gary Eller Unocal Alaska Advising Completion Engineer Office: 907-263-7848 Cell: 907-351-1313 20f2 7/20/20048:57 AM Re: DRAFT - Aquifer Exemption Application for NNA #1 Gary- Thanks for the opportunity to review the draft copy of your aquifer exemption order application for the NNA pad. I circulated to key staff here and we have some comments to help with the application -- see attached. As you noted, there was not much provided for the disposal injection order; please make sure you address the requirements as noted in 20 AAC 25.252(c), and specifically the following: - confinement of injected fluids; - fracture analysis; injection pressure (max and avg), frac gradient; - demonstration of mechanical integrity of injection well; - annular disposal to date, including the formation receiving fluids and the zone of influence; - proposed completion for the disposal welles); - fluids proposed for disposal; - disposal rate; - evidence that the shallow gas zones are either isolated from disposal, or if the receiving formation for waste injection, are not producible; we need more than a statement; perhaps some certification fromDNR? Hope this is helpful. Jim Regg AOGCC 907-793-1236 Eller, Gary wrote: Jim - As we discussed earlier this week, I am submitting you a draft copy of the Aquifer Exemption application for the NNA pad (Sec, 11, T2S, R13W, S,M.) with attachments for your review. The purpose of this draft submittal is to identify areas of insufficient analysis or documentation to justify approval of an Aquifer Exemption. Most of the attachments are also included, however I am still working to get you an electronic copy of the log cross-section. I am also attaching a well bore schematic for the NNA #1, which may not be necessary for the Aquifer Exemption permit but will certainly be required for a Disposal Injection permit. I look forward to hearing back from you soon. «NNA #1 Aquifer Exemption Exhibits,ppt» «Aquifer Exemption Application - NNA #1 ,doc» «NNA-1 Actual Schematic 6-9-03,doc» J. Gary Eller Unocal Alaska Advising Completion Engineer Office: 907-263-7848 Cell: 907-351-1313 lof2 6/8120045:11 PM Re: DRAFT - Aquifer Exemption Application for NNA #1 - iNNA draft AEO comments.doc - - - 20f2 e, . nI d Content-Type: apphcatlO mswor Content-Encoding: base64 6/8/20045:11 PM · e Draft AEO for Deep Creek Unit (DCU), Well NNA#1 UNOCAL email dated 5/27/04 AOGCC Comments 1. The basis for exemption below 1,500 feet (TVD) is unclear; the surface casing shoe in NNA#1 is located at 2,140 ft; it is inconceivable that the Commission would allow injection above the surface casing shoe. Please clarify. 2. Cross section identified as Figure 6 must be provided 3. The well count referenced in the draft application for DCU is out of date 4. An exemption will require the evaluation of injection interval, confinement of injected fluid, and the mechanical configuration ofNNA#l; to this end, it seems appropriate to consider an aquifer exemption application concurrent with the disposal injection order request. 5. Geologic Review - Last sentence of the first paragraph may read better as "Locally in the DCU, the Quaternary section is approximately 830' thick (note - on page three you use 750') with _ net feet of sand and gravel." 6. Groundwater Hydrology - Unocal makes some good points about underground sources of drinking water near the DCU. Showing WELTS data for number, depth range, and average depths of water wells from adjacent townships can strengthen this argument. These reports are readily available from DNR. Including these data for T2S 12W, T2S 13W, T2S 14W, and TIS 13W will show the Quaternary is regionally the source of drinking water and not just locally in the DCU. 7. Evidence of Hydrocarbons - What is the shallowest evidence of gas within a sand formation in the DCU? a. The Commission can exempt fresh water if it is hydrocarbon producing or cam be demonstrated to contain hydrocarbons that, considering their quantity and location, are expected to be commercially producible (20 AAC 25.440(a)(l )(A)). b. There must be determination of commercially producible (now or future) if injection is to be permitted into a hydrocarbon-bearing formation (this determination more appropriately relates more to the DIO than the AEO) c. Gas saturations in drinking water are very dangerous; the water well at the Homer hospital exploded years ago. d. Gas trapped in sand may indicate the well is within the Happy Valley structural closure and injected wastes will be confined laterally. 8. Formation Water Salinity - suggest contacting Bob Crandall (793-1230) if you have questions about the following comments. Bob constructed the table below showing three sets of salinity calculations based on info provided by Unocal and generated from his review oflog data from existing files. Based on our review, the salinity profile of this well should be re-examined, and the depth of the exemption re-evaluated. a. The SP log we have for the surface hole of this well is problematic and difficult to interpret. b. The first set uses parameters provided in the draft AEO application, but calculates salinities using the Archie method (EP A endorsed). The results · e ofthis calculation compares favorably with what Unocal is suggesting - the top of 3,000 ppm waters are near 1,500 feet in NNA #1. c. The second set of calculations uses density log data for porosities, different Rt values, and a cementation exponent for friable sands (l.8). d. Specific infonnation from referenced water sample should be presented, including the quality and how it was obtained. Factors in the salinity calculations should be calibrated with the water sample (M-factor). For example, the 3rd grouping of calculations in the table below uses a more appropriate M-value for highly porous sands Depth TDS Archie Method - Unocal Values NNA 121 0.27 100 1.8 9.472285 2.65 2,16 66 8.430 577 NNA 860 0.27 22 1.8 2.083903 2,65 2.12 72 2,007 2605 NNA 1330 0.27 22 1,8 2.083903 2.65 2.16 76 2.109 2472 NNA 1490 0.27 19 1.8 1.799734 2.65 2,12 77 1.844 2849 NNA 1915 0.27 13 1.8 1,231397 2.65 2,16 81 1.322 4048 Using Density Log-Derived Porosities NNA 121' 0,363636 100 1.8 16,1883 2,65 2,05 66 14.407 329 NNA 860' 0.333333 40 1,8 5,536582 2,65 2.1 72 5,333 932 NNA 1320' 0.327273 24 1,8 3.214022 2,65 2.11 76 3.253 1567 NNA 1490' 0,345455 19 1.8 2.804512 2.65 2.08 77 2.873 1786 NNA 1915' 0.327273 15 1.8 2.008764 2.65 2,11 81 2.156 2416 Using M-value for Highly Porous Sands NNA 121' 0.363636 100 1,3 26.84525 2.65 2.05 66 23,891 194 NNA 860' 0.333333 40 1,5 7.698004 2.65 2,1 72 7.416 660 NNA 1320' 0.327273 24 1.5 4.493409 2.65 2.11 76 4.548 1102 NNA 1490' 0,345455 19 1.5 3,857802 2.65 2,08 77 3.952 1277 NNA 1915' 0.327273 15 1,5 2,808381 2.65 2.11 81 3.014 1698