Best Management Practices Recommendations to BNWR- 11/09/06

These Guidelines are for the drilling of two 14,000 feet test wells by Lexam Explorations, Inc. Should gas or other valuable minerals be discovered, these guidelines will be held in full force, but an additional set of guidelines will be developed to cover the extraction of discovered gas and all aspects of commercial natural gas production or production of other valuable minerals.“Responsible Development is a proven way of conducting natural gas development operations, which eliminates or minimizes adverse impacts from natural gas development on public health and the environment, landowners, and natural resources; enhances the value of natural and landowner resources; and reduces conflict between industry, landowners, and the community.”

1) Clustered Development of wells: Clustered development places maximum amount of drilling activity on a minimum number of drilling pads in order to centralize infrastructure and minimize surface disruption and impact to landowners and the natural environment. This results in fewer roads, pipelines and drill pads, reduced landowner conflicts, etc. It is important to maximize the distance between pads used for down-hole drilling and maximize the use of directional drilling, based on the best available technology.

2) Recognition of sensitive areas near waterways, wildlife areas or migratory corridors, wetlands or floodplains. Consideration for safety, noise, traffic, and visual impacts should be taken into consideration.

3) Spiritual and historical preservation- Written notification to SLVCA of any archaeological and sacred sites found on or around the proposed drilling area during exploration, production and cleanup phases of operation. Also, full disclosure to consulting experts in this field and interested Native American tribes and agencies.

4) Create “continuity of development plan” with BNWR, Lexam, and SLVCA.

a. Identify areas where drilling will take place before drilling begins in order to create a development plan utilizing Clustered Development guidelines so that pads can be used during both exploratory and development operations; Work with all industry operators to achieve a plan that has longevity and continuity;
b. Locate vehicle transportation corridors prior to the commencement of drilling operations;
c. Locate production corridors for gas gathering and transportation pipelines as well as water and or fluid disposal pipelines, placing as many lines as possible in the same trench or corridor in order to minimize area impact.
d. Written notice provided to BNWR and Crestone/Baca community of all new technologies being used, their components and material that make up and fuel such technologies.

5) Provide Wildlife Refuge (BNWR) and community with a generalized semi-annual drilling plan.

a. Industry cooperation in producing periodic newsletter for area residents.
b. Use of pit-less (closed loop) drilling systems to eliminate drilling mud, fracking flow back and petrochemical and produced water waste pits and their associated odors; If pits must be used, they will be lined with plastic, fenced and netted sufficient to protect domestic livestock and wildlife;
c. Water used for drilling and fracture treatment to well sites should be transported in pipelines to a central facility where feasible, rather than hauled by trucks. Wastewater should be transported to a permitted water disposal injection wells. No wastewater will be stored other than in temporary storage tanks. No evaporation pits will be used.
d. Place multiple pipelines (water and gathering) in the same trench when practical.
e. Erosion control to meet all Storm Water regulations.
f. Use county-approved plan to control invasive, toxic weeds.
g. Use heavy-duty flow-back units that reduce odors and the need for flaring by 85-95%.
h. Use odor control and combustion devices on industry equipment to reduce VOCs and odors.
i. Monitor and reduce “fugitive emissions” (i.e., emission of ozone and other smog-related compounds from leaking tanks, pipes, etc.)
j. Use barriers and berms around well pads to reduce noise, light, and visual impacts of drilling.
k. Noise levels not to exceed COGCC day and nighttime standards.
l. Use fully enclosed compressor stations equipped with noise reduction equipment to minimize noise.
m. Set-backs from inhabited dwellings of 500 feet whenever possible;
n. Removal of petrochemical waste, pond liners and any surface contamination after drilling is completed;
o. No horns, bells, or other noise-making devices to delineate shift changes;
p. Telemetry on all producing wells to reduce truck traffic checking wells and increase safety;
q. Water quality testing of all domestic wells within 1/2 mile of pad before drilling begins;
r. Water quantity testing available when requested by the landowner, taking into consideration seasonal flow fluctuations;
s. Monthly testing of domestic water wells that are 1/2 mile down gradient of drilling operations;
t. Quarterly testing of all domestic water wells within 100 feet of a drilling pad for the first three years of operation and as necessary, but at least annually, throughout the productive life of the well;
u. Random community irrigation water testing throughout the area and in specific locations where there is cause for concern.
v. Graveled pads to reduce mud and the resulting dust on roads;
w. Use of smaller, newer rigs to reduce noise and surface impacts;
x. Compliance with the Colorado Water Quality Control Commission’s storm water runoff regulations;
y. All hydraulic fracturing operations (“fracking”) shall be conducted with “green frack” methods, utilizing only sand and water as fracing materials or other “green frack” materials greed upon between the community and industry. The use of diesel fuel, petroleum products or chemicals containing aromatic compounds such as benzene and toluene or other compounds such as 2 BE, will not be permitted as a part of the fracking process.
z. Written notification and listing to BNWR and SLVCA (now WWA) of any other mine-able materials found on site during exploration, production, and cleanup phases of operation that are not components of oil and gas.

 

Please see the appendix section of this document for the definition of a “green frac.”

6) Monitoring area air and water quality for impacts from drilling activities, including:

a. Baseline monitoring of existing water and air quality to county health officials, BNWR, POA, and WWA (formerly SLVCA).
b. Written reports provided to BNWR, the POA, the SLVCA of total dissolved solids and contaminants from wells, fracing and cleanup in which the written reports will disclose any pollutants harmful to area residents and plants and animals on the Wildlife Refuge.
Surface spills of petrochemicals and hazardous wastes associated with drilling
c. Contamination of domestic water wells and ground water
d. Ozone-causing VOC emissions from condensate tanks and compressor stations.
e. Ground-level ozone impacts to vegetation and crop health and viability as well as community health concerns
f. Leaching of hazardous chemicals into soils and groundwater from well pad spills
g. Wildlife disruption and wildlife habitat destruction
h. PM-10 (airborne particulate matter measuring 10 microns or larger) impacts on crops and human health. To mitigate these impacts, the industry operators agree to participate in appropriate new and ongoing monitoring activities. Parameters selected will be recommended by the state agencies that oversee specific impacted areas, including:

· Colorado Air Quality Control Commission
· Colorado Water Quality Control Commission
· Colorado Division of Wildlife
· Local county weed programs
· Bureau of Land Management
· Saguache County

Working in conjunction with these agencies, monitoring will document changing onditions from drilling as well as other activities, and plans for mitigation of adverse impacts that result from natural gas drilling will be developed and implemented. Results of monitoring activities will be shared with appropriate agencies, as well as Saguache County, for incorporation into ongoing monitoring programs.

i. We, the BNWR, the POA, and the WWA, reserve the right to have our own team of experts monitor, examine, evaluate, research, and obtain pertinent information and material of the site and surrounding areas in order to determine what is hazardous to our Wildlife Refuge, community, and aquifer and these reports will be made public.

 

7) Plugging and Abandonment of Gas Wells. With the typical producing life of a gas well between 10 and 20 years, it is recognized that the industry operator that drills the well will likely not be the operator responsible for plugging and abandonment. It is, however, understood that when a gas well is no longer capable of producing economic quantities of gas, and re-stimulation does not produce additional gas flow, the well will be plugged and abandoned, as stipulated in the COGCC regulations.

8) Control of Noxious Weeds via collaboration with Baca National Wildlife Refuge. Noxious weed invasion is a significant threat to agriculture and wildlife habitat, rivaling urban sprawl in acres of habitat lost in many rural counties. Studies document that the number one way weeds are spread is from seeds transported on truck tires. Gas industry developers will develop and utilize a program in collaboration with the Wildlife Refuge and Saguache County to actively control the spread of noxious weeds. In conjunction with local governments, the gas industry must be accountable to mitigate any spread of noxious weeds that may result from drilling operations.

In addition to the County’s weed program, this plan will take into consideration the protection of the area’s organic agricultural activities. Management of noxious weeds will apply to all areas disturbed by drilling operations, including but not limited to existing roadways and borrow pits, new roads, pipeline cuts, and well pads.

Reseeding will be done with native high desert plants appropriate for the area.

9) Interim & Final Reclamation. When drilling operations have been completed, COGCC rules require “the surface of the land to be restored as nearly as practicable to its condition at the commencement of drilling operations.” Two types of reclamation are delineated – interim and final. COGCC rules state “interim reclamation shall occur no later than three (3) months on crop land or twelve (12) months on non-crop land after such operations, unless the Director extends the time period because of conditions outside the control of the operator. This reclamation applies to disturbed areas affected by drilling except what is reasonably needed for production operations. Final reclamation takes place when a well is no longer producing and has been plugged for abandonment. At that time, all equipment must be removed and the land re-contoured and reseeded as near to the original condition as possible.

In the Wildlife Refuge, a third type of reclamation will be utilized. Within 30 days of re-contouring and re-grading a pad or any portion of a pipeline corridor, the operator will loosen all surface soils to a depth of 8 inches and seed that area as per recommendations of the Baca National Wildlife Refuge, unless the season of the year makes such activities undesirable, in which case re-seeding will take place as soon as weather and seasonable conditions are favorable. When seed, at a minimum of 50 seeds per square foot, is applied to freshly disturbed soil with an “organ grinder” or “whirly bird” seeder before crusting and compaction can take place, the success of re-vegetation is very high. This method preserves the soil’s health, minimizes dust and is an inexpensive application, even if the sites have additional disturbance in the future. Operators will work closely with landowners on all reclamation matters, including seeding mixture preferences, re-contouring and loosening of compacted soils, which impede the success of re-vegetation. These guidelines will apply to well pads, pipeline corridors, compressor station locations, and any other construction associated with gas development

10) Community Health and Safety

Industrial activities around subdivisions, and within city limits pose a variety of dangers to residents.

Emergency Preparedness measures include:

a. Participation in the county’s emergency response plan for gas development through active participation in the Saguache County or SLVCA Local Emergency Planning Committee.
b. Education and training of all employees and subcontractors regarding emergency plan information and their ability to respond to emergency situations involving spills, leaks, human injury, fire and explosions.

Roads and Traffic

a. ? Work with Saguache County to review and define appropriate industry speed limits and signs and the county’s Road & Bridge Department to obtain all permits, post bonds, and coordinate addressing designated routes, inadequate infrastructure and dangerous areas by creating:
• a plan for traffic management that takes into consideration blind corners and hills, narrow roads and bridges, and dangerous intersections. In addition, school bus routes will be avoided during designated hours by industry traffic during drilling and completion operations. If a school bus route cannot be avoided during drilling and completion operations, the areas near bus stops will be monitored by flagmen or security personnel during designated hours at industry’s expense to protect children loading and unloading from buses.
• a plan for ongoing dust mitigation using environmentally responsible substances.
b. Provide cost mitigation to the towns and the county for road upgrades and road damage.
c. The operator and all its subcontractors agree to abide by all traffic rules and speed limits.

Water Issues

A plan for avoiding disruption to irrigation, including community and individual systems, will be part of all gas development operations. When drilling operations – including roads, pads and pipelines – cross or in any way impact established community irrigation ditch systems, landowners and industry will include the applicable ditch company in the decision making process and obtain approval for mitigation of any impacts. Considerations include: 1) prevention and repair of any disruption to the flow of irrigation water and irrigation runoff caused by roads and pipelines that cross ditches, and; 2) the possibility of piping water in areas where it
is at risk of contamination.

Limitations on new industries and industry activities in Crestone/Baca and BNWR

There will be no new gas-related industries or industry activities within Crestone/Baca and BNWR boundaries.

11) Addressing Financial Impacts

The industry agrees to participate as a good neighbor by helping to financially address negative impacts. Priority areas to consider include:

a. Mitigation of damage to infrastructure, including roads, bridges and irrigation systems caused by drilling activities;
b. Mitigation of socio-economic impacts to schools, hospitals, emergency services, law enforcement and human service agencies;
c. ? Participate with the county and municipalities on road and intersection improvements and signage.

12) Interagency Team

As soon as possible, assemble an interagency team and commit sufficient funding to enable effective implementation of a system to gather baseline data and to monitor the affects of drilling and development on surface and ground water, air quality, vegetation, and selected wildlife species. Also, the use, disposal, and movement of all listed hazardous chemicals should be tracked, recorded and reported to the BLM.

13) Monitor wells

Within three years determine the effectiveness and longevity of cementing a well bore after it is abandoned.

14) Establish a reclamation guarantee system

As soon as possible, implement a reclamation guarantee system that follows the well regardless of ownership to ensure that sufficient funding is available to plug and abandon the well, to re-contour the disturbed surface to as near its original condition as possible according to state law, and to establish viable populations of native plants. Where industry pays a mill levy to the state based upon production, provisions must be made to ensure that these funds remain available for the entire productive life of the fields for reclamation of drilling pad and road impact areas, including abandoned wells when needed.

15) Monitor, inspect and enforce lease terms

Make timely inspections and enforcement of all lease terms a high priority. Companies should not be given years in which to come into compliance with lease terms.

16) Bonding

a. Make sure the amount posted as bond is sufficient to cover the kinds of clean-up costs that are typically associated with gas mining operations.

b. Bonding reclamation facts, stipulations, and the processes they enact or impede.

17) Lexam costs

a. Any research reports, flow sheets, or material Lexam provides BNRW, POA, or SLVCA, they will incur the costs of these.

b. Written lists of Lexam’s protocol of weekly cleanup to BNWR and SLVCA (or its future equivalent) and issued as public record to be posted.

18) Full Disclosure

Full disclosure of any buy-outs or leases to other companies or corporations while exploration is in effect and in the event product is found, including in the cleanup phase.

Written notice to BNWR, the POA, and SLVCA (or its equivalent) of any Lexam employees cited for intoxication or drug abuse while on duty.

19) Open door policy

We (the SLVCA or its equivalent) reserve the right to negotiate and revise during and after exploration, production, and cleanup with Lexam officials and the BNWR presented in written format the concerns and guidelines we as a community wish to discuss.

20) NEPA, EIS, or ES Studies on BNWR

It is important that baseline data for the BNWR be established through traditional avenues of conducting NEPA, EIS, or ES studies. We encourage the BNWR to get have these studies, either through government funding or by Lexam, if possible.

References:

1. The Rifle, Silt, New Castle Community Development Plan, January 1, 2006, A Project of the Grand Valley Citizens’ Alliance, and
2. Management Guidelines for Oil & Gas Development (August 4, 2005), Colorado Mule Deer Assoc.
3. Oil and Gas at Your Door? A Landowner’s Guide to Oil and Gas Development, 2nd Edition, Oil and Gas Accountability Project (OGAP), 2005