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HomeMy WebLinkAbout1.0 Statement with Intent to ApplySTATEMENT OF INTENT TO APPLY This Statement oflntent to Apply is fi led with the Board of Count y Commissioners for Garfield County, Co lorado ("Board") by American Soda, L.L.P. ("Applicant"), whose address i s 2717 County Road 2 15, Parachute, Co lorado 8 1635, pursuant to Section 5.08.04.01 of the Fiscal Impact M iti gation Program as contained within Section 5.08 of the Garfield County Zoning Resolution of 1978, as amended. Substance of Requested permit(s). App li cant will app ly fo r Special/Conditional use pennit(s) for the construction and operation of dual 19 m il e product and water return pipelines appurtenant to App li cant's Industri al P rocessing Facility, previously permitted by the Board under Resolution No . 99-055 on May 17 , 1999. Proposed Scope of Fiscal Impact A nalys is. App li cant will request that the Board, pursuant to Section 5.08.04.05, exempt Appli cant from the provisions of th e Fiscal Impact Analysis Requirements (5.08.05) and Fiscal Impact Mitigation Program (5.08.07). In the event Applicant is not exempted from these provisions, Applicant wi ll prepare a F i scal Impact Analysis addressing a ll subjects set forth within Section 5.08.05 .0 1 as the same pertain to Appl icant's project which includes in constituent part, the Industrial Processing Facility of App licant above identified, the pipelines above described and the Rail Spur , prev ious ly pennitted by the Board under Reso lution No. 99-054 on May 17 , 1999. Timetable for Fiscal Impact Study. Subject to possible changes to the proposed scope of the Fiscal Impact Analysis made by the Board under the Pre-Application Procedure, App licant es t im ates that th e y w ill be able to complete the F iscal Impact Analysis (Study) with in (1) month of applicant's receipt of the Pre-Application Report issued by the Board pursuant to Secti on 5.08.04.06 . Exemptions to Pre-Application Procedures. App li ca nt does not at this time, anticipate making any requests fo r exemption to the Pre-Application Procedures. Stat ement of !11te11t to Apply A111 erica11 Soda , l.L.P. 04-Aug.-99 Submitted this 4•h day of August, 1999 American Soda, L.L.P . By~~~~~~~~Lf.~·~"----'-'_,_~ -~~- Scott Ba lc o ~ Balcomb & Green P.C. Attorneys for An1erican Soda, L.L.P . P .O. Box 790 Glenwood Springs, CO 8 1602 (970)945-6546 RECEIVED AUG 0 4 1999 GARFI ELD COUNTY PLANNING DEPAH T MENT 109 8TH ST. • SUIT E 303 GLENWOOD SPRINGS, CO 8180 1 .JOHN A. THULSON EDWARD MULHALL, .JR. SCOTT BALCOMB LAWRENCE R. GREEN TIMO THY A. T HULSON LORI .J . M . SATTERFIELD EDWARD B. O L SZEWSKI DAVID SANDOVAL DENDY M . H E ISEL CHRISTOPHER L . COYLE .JEFFERSON .J. CHENEY MarkBean BALCOMB & GREEN, P.C. ATTORNEYS AT LAW (FORMERLY DELANEY 15. BALCOMB, P.C .) P. 0. DRAWER 790 818 COLORADO AVENUE GLENWOOD SPRINGS, COLORADO 81602 Telephone: 970.945 .6546 Facsimile: 970.945.8902 August 4, 1999 Garfield County Building and Planning Dept. 109 gth Street, 3rd Floor Glenwood Springs, CO 81601 OF COUNSEL: KENNETH BALCOMB Re: American Soda, LLP -Request for Exemption from the Garfield County Fiscal Mitigation Program and Statement of Intent to Apply Dear Mark: Enclosed please find the original and five (5) copies of Am erican Soda LLP's Requ es t for Exemption from the Garfield County Fiscal Mitigation Program and its Statement of Intent to Apply. We request that the Board of County Commissioners of Garfield County consider and approve the Req ues t for Exemption and Statement oflntent to Apply at their meeting on August 4, 1999at1:30 p.m. Should you have any questions regarding any of th e above, please contact either myself or Tim Thulson at your earliest convenie nce . CLC:kjk Enclosure RECEIVED AUG 0 4 1999 -'., 'T'f OAAFlELD COUNTY PLANNING DEPAATMENT 109 8TH ST. -SUITE 303 ~b:f;NWOOIJ fJPRINGS, CO 81001 Very truly yours, BALCOMB & GREEN, P.C. REQUEST FOR EXEMPTION FROM THE GARFIELD COUNTY FISCAL MITIGATION PROGRAM American Soda, LLP ("American Soda"),2717 County Road 215, Parachute, Colorado 81635 hereby requests that it be granted an Exemption from the Garfield County Fiscal Mitigation Program as set forth at Section 5.08 et seq. of the Garfield County Zoning Resolution of 1978 instant to the construction of American Soda's Industrial Processing Facility located in Parachute, Colorado. In support of this request, American Soda states the following: 1. On May 17, 1999, the Board of County Commissioners of Garfield County approved its Resolution No. 99-055 granting a Special Use Permit for the construction and operation of the Industrial Processing Facility at the Parachute site. A copy of this Resolution is attached hereto as Exhibit A and incorporated here by reference. Likewise,on that same date, the Board of County Commissioners of Garfield County approved its Resolution No. 99-054 granting American Soda and Union Oil Company a Special Use Permit to operate a Rail Spur servicing the Industrial Processing Facility. A copy of this Resolution is attached as Exhibit B and incorporated herein by reference. 2. Under Section 5.08.03, "[all] applicants seeking land use permits for Major Projects are subject to the requirements of the County Fiscal Impact Program."; Section 5.08.02.08 defines a Major Project as a project which during its construction will "[e]mploy at any (1) one time a total work force of two hundred (200) or more employees in the County. 3. At all times during the County's review and approval of the special use permits above referenced, American Soda had projected under its Proposed Action Plan, a total work force for construction of the Industrial Processing Facility of under (200) employees.1 1Addressing the construction of the Industrial Processing Facility and the applicability of the same under the Fiscal Impact Mitigation Program, Paragraph 19 of Resolution No. 99-055 provided in relevant part, Applicant shall meet the requirements of Section 5.08, Fiscal Mitigation Program, of the Garfield County Zoning Resolution of 1978 aa. as may be required during the construction or operation of the facility. This paragraph was included within the Resolution to address American Soda's Accelerated Request for Exemption from the Garfield County Fiscal Mitigation Program REC E\VEO AUG 0 4 1999 American Soda, LLP -1- GARFl ELD COUNTY PLANNING DEPARTMENT 109 8TH ST. -SUITE 303 . GLENWOOD SPRINGS, CO 81601 3. Due to various delays in the construction schedule as well as engineering changes in the required labor force, during the construction of the Industrial Processing Facility under the Proposed Action Plan, American Soda will now exceed the Fiscal Impact Mitigation threshold of 200 employees. The basis for such changes is further explained in the correspondence from Charlie Yates to John Barbee, of July 28, 1999, previously provided to the Board and attached herewith as Exhibit C. A revised workforce projection for construction of the Industrial Processing Facility accounting for these changes is attached herewith as Exhibit D. 5. American Soda has been in contact with the city government of the town of Parachute, the various officials ofBattlementMesa, the School District for Parachute, and the Police Chief of Parachute. None of these parties is of the opinion that the Parachute/Battlement Mesa area will require any Fiscal Impact Mitigation from the American Soda construction project insofar as the construction of the Industrial Processing Facility and Rail Spur are concerned. The only area which will be impacted as defined by the County Fiscal Impact Mitigation Program by the American Soda Project is the Parachute/Battlement Mesa area. 6. Currently, American Soda is restricting its employee count to less than 199. American Soda is conscientiously monitoring its number of employees in order to keep itself in compliance with the terms of its Special Use Permit and the Fiscal Impact Mitigation Program of Garfield County. Continuing to require American Soda to restrict its number of employees will work a hardship on various small contractors in the Parachute and Garfield County area whose work does not fall within the definition of the critical path for the American Soda project. 7. Section 5.08.03 of the Garfield County Zoning Resolution of 1978 provides: 5.08.03 ProITTam Compliance Requirement. All applicants seeking land use permits for Major Projects are subject to the requirements of the County Fiscal Impact Mitigation Program. In addition to any other requirements of this Resolution, applicants for Major Project permits should prepare and submit the following to the Board unless ITTanted an exemption from any or all such requirements by the Board: Action Plan - a second construction and production plan also contained within American Soda's application for special use permit --which plan could be implemented sometime in the future and which, in comparison to the Proposed Action Plan, would have increased Nacholite production at the Industrial Processing Facility from 1.4 million tons per year (tpy) to 4 million tpy. Request for Exemption from the Ga1field County Fiscal Mitigation Progra1n American SodaI LLP -2- 1. A Statement of Intent to Apply; 2. A Pre-application Notice; 3. A Review Fee; 4. A Fiscal Impact Analysis; 5. A Fiscal Impact Mitigation Program; 6. Housing and Fiscal Impact Mitigation Monitoring Reports following issuance of land use permits. (A . 82-318). Pursuant to this section, American Soda states the Board is empowered to and should exempt the Industrial Processing Facility authorized by Resolution No. 99- 055 and the Rail Spur authorized by Resolution NO. 99-054 from the requirements of the County Fiscal Impact Mitigation Program. 8. American Soda states it will be filing an Application for a Special Use Permit with Garfield County in the immediate future for product solution and water return pipelines to be constructed and operated by it. As a part of that permitting process, it will comply with the requirements of Section 5 .08 e t seq. of the Garfield County Zoning Resolution of 1978. In this regard, it will be filing, the Statement of Intent to Apply attached hereto as Exhibit E in conjunction with the filing of this Request for Exemption. American Soda requests the Garfield Board of County Commissioners grant it an exemption from all the requirements of the County Fiscal Impact Mitigation Program which might p e rtain to Resolution No. 99-054 and No. 99-055. AMERICAN SODA, LLP By_fdLy_----+--- Scott Balcomb Balcomb & Green, P.C. P .O . Drawer 790 Glenwood Springs, CO 81602 (970) 945-65 46 Req uest for Exemption fro m the Garfield Co unty Fiscal Mitigation Progmm American Soda, LLP -3- ' / AMERICAN SooA, L.L.P. 2717 County Road 215 Parachute, CO 81635 July 28, 1999 Mr. John Barbee Garfield County Planning Department 109 8"' Street Glenwood Springs, Colorado 81601 Dear John, Telephone (870J 285-6500 Toll Free C877J SODA-ASH Facsimile C970J 285-6383 RECEIVED AUG O 4 1999 GARFIELD COUNTY PLANNING DEPARTMENT 109 8TH ST. -SUITE 303 GLENWOOD SPRINGS, CO 81601 The Special Use Permit for the construction of the American Soda Facility at Parachute, Colorado was granted on the basis that it is not a major project and that the construction workforce would not exceed 200 persons. At the time that American Soda applied for the permit and at the time that the permit was granteg.,the estimate from our contractor, Kvaerner Metals, placed us under the 200 person limit. At that·time American Soda was proceeding under the assumption that the Pipeline Special Use Permit (not yet applied for or granted] was a separate project for the purposes of counting construction personnel. Since the granting of the Special Use Permit, American Soda has received two revised cost estimates from our contractor, Kvaerner Metals, dramatically increasing the cost of our project. Most of the cost increase has been in the area of field labor and subcontractors. These increases have resulted in a large increase in the total field effort and the peak manpower loading at any given time. Please find attached a chart of the expected peak manpower loading in Garfield County. In order to give you an idea of the magnitude of change that has occurred since the original estimate in May 1998 to the present, please consider the following: • Total project cost has increased by 33% • Total project manlilours have increased from 915,000 to 1,337,000 (Including the Pipeline] • Total Garfield County manhours have increased from 531,000 to 794,500 (Including the Pipeline] While the project cost estimate has increased by 33%, the manhours expended in Garfield County have increased by 50%. All of this increase is in the plant construction, not in the pipeline construction. American Soda understands that as a major project we will have to go through the mitigation process of the Special Use Permit. We would like to start that process immediately. American Soda also requests permission from Garfield County to exceed the 200 person limit while we are going through the process. If we are allowed to exceed the 200 person cap, we will continue to be on schedule at the Parachute Site and will enclose the building by winter weather, greatly increasing the safety and productivity of the contract workers during the winter months. EXHIBIT C Natural Sodium Products For a Cleaner Environment Page 2 American Soda appreciates the cooperation and professionalism that we have received during the permitting process in Garfield County and look forward to working with Garfield County on this modification to our permit. Sincerely, Charlie Yates _,, ...... .. 2 The Yankee Gulch Project Garfield County Pre-Application Notice Prepared For Garfield County Commissioners Garfield County Building 109 8th Street Glenwood Springs, Colorado 81601 Prepared By BBC Research & Consulting 3773 Cherry Creek North Drive, Suite 850 Denver, Colorado 80209 (303) 321-254 7 RECEIVED SEP 1 5 1999 ELD couNTV G.~.RFl DEPARTMENT "-.... f . ;-.NNING E 303 1:_:~ 0 FJT1-\ ST. -5S~~;NGS. CO 01601 GLENWOOD Final Report September 14, 1999 Table of Contents I. Introduction Background ..................................................................................................... 1-1 Process ........................................................................................................... 1-1 Applicant ......................................................................................................... 1-2 Report Organization .......................................................................................... 1-3 II. Project Description Development Plans ......................................................................................... 11-1 Current Operations of the Yankee Gulch Project ................................................. 11-4 Employment Projections ................................................................................... 11-6 Residency and Commuting Patterns for Non-Local Employees ............................. 11-8 Population Impact ......................................................................................... 11-10 Local Workforce ............................................................................................ 11-11 Indirect and Induced Employment ................................................................... 11-11 Operating Employment ................................................................................... 11-14 Ill. Socioeconomic Implications of Project Construction and Operations Future Studies ................................................................................................. 1-4 SECTION I. Introduction BBC Research & Consulting (BBC) was hired by American Soda, L.L.P (American Soda) to complete the pre-application required by § 5.08 Fiscal Impact Mitigation Program of the Garfield County Zoning Regulations. This report is intended to fulfill the socioeconomic elements of the pre-application requirements. Background American Soda is seeking approval from Garfield County to operate a nahcolite processing plant located just north of the town of Parachute. The Yankee Gulch Sodium Minerals Project (Yankee Gulch Project) is a proposed nahcolite solution mining operation. The processing plant would be connected to a mine to be established in the neighboring county of Rio Blanco by a 44 mile pipeline. The plant is located on an existing, inactive industrial facility formerly owned by Unocal and recently purchased by American Soda. Under Garfield County Resolution 99-055, which granted a Special Use Permit, American Soda began full scale construction activities at the processing plant in July 1999. Process § 5.08 Fiscal Impact Mitigation Program of the Garfield County Zoning Regulations defines projects within the county employing over 200 individuals at any one time as Major Projects. Applicants seeking land use permits for Major Projects are subject to the requirements of the County Fiscal Impact Mitigation Program. Unless granted an exemption, applicants are required to submit the following: 1) a statement of intent to apply; 2) a pre-application notice; 3) a review fee; 4) a fiscal impact analysis; 5) a fiscal impact mitigation program; and 6) housing and fiscal impact mitigation reports following issuance of land use permits. BBC Research & Consulting Section I, Page 1 Once the pre-application notice is submitted to the Garfield Board of County Commissioners (the Board), the Board must notify the governing bodies of government entities that will be impacted by the proposed project. The Board must also publish a summary of the notice in the local newspaper. No later than 90 days after receiving the pre-application notice, the Board must conduct a public informational meeting to provide information about the proposed project, to receive the concerns of the public and potentially affected governmental entities and to determine the nature and extent of exemptions from any provisions of the Fiscal Impact Mitigation requirements. The Board must also prepare a report based on the pre- application notice and the public meeting. Under the regulations, a governmental entity is considered impacted by a Major Project if its population would increase by 15 percent or more. Applicant The applicant for this submittal is: American Soda, LLP, a Colorado Limited Liability Partnership 2717 County Road 215 Parachute, CO 81635 Contact Person: Kurt Nielsen, General Manager 2717 County Road 215 Parachute, CO 81635 This includes Limited Liability Partner: American Alkali, Inc., a Colorado corporation 2717 County Road 215 Parachute, CO 81635 Contact Person: Irv Nielsen, President 2717 County Road 215 Parachute, CO 81635 and Limited Liability Partner: Williams Sodium Products Company, a Delaware corporation P.O. Box 2400 One Williams Center Tulsa, OK 74102 BBC Research & Consulting Section I, Page 2 Contact person: Martin Flusche, Staff Vice President Williams Holdings One Williams Center, 22"' Floor Tulsa, OK 74172 Report Organization The remainder of this report is organized as follows. Section II of the report provides a description of the Yankee Gulch Project, data on the current level of employment being generated by the Yankee Gulch project and the best current estimates of employment during the remainder of the construction phase and for the operations phase of the project. Likely residency and commuting patterns of non-local employees are emphasized. Section III of the report identifies jurisdictions located within Garfield County that are likely to be impacted by the Yankee Gulch project. Estimated population increases for each jurisdiction are also provided. A more detailed socioeconomic and fiscal analysis may be prepared for those jurisdictions that are officially deemed impacted areas after county review of this analysis and consideration of public input from the forthcoming public meeting discussion. BBC Research & Consulting Section I, Page 3 SECTION II. Project Description This section provides a description of the Yankee Gulch Project, data on the current level of employment being generated by the Yankee Gulch project and estimates of employment anticipated during the remainder of the construction phase and for the operations phase of the project. Particular attention is paid to the number of non-local employees, the residency choices of non-local employees and other employment impacts. Development Plans Description. The Yankee Gulch Sodium Minerals Project (Yankee Gulch Project) is a proposed nahcolite solution mining operation owned and operated by American Soda. The project consists of a mining operation located in Rio Blanco County, Colorado near the town of Meeker (the Piceance site) and an associated processing facility in Garfield County, Colorado near the town of Parachute (the Parachute site). The two sites will be connected by a 44 mile pipeline. The thirty year project will utilize vertical solution mining wells to extract bedded and disseminated nahcolite deposits. American Soda holds the Yankee Gulch Joint Venture Leases and thus can develop the leases for the maximum recovery of sodium. Mining of the nahcolite is accomplished by pressurized hot water injection. Some on-site processing occurs to render the production fluid into stable sodium carbonate/ sodium bicarbonate solutions suitable for pipeline transport to the Parachute processing site. From Parachute, the nahcolite will be shipped by train and processed into baking soda (sodium bicarbonate) and soda ash (sodium carbonate) at locations outside of Colorado. Soda ash is used in manufacturing glass, chemicals, pulp and paper, soaps and detergents, water treatment products and cleaning preparations. Baking soda is used in manufacturing effervescent salts and beverages, baking powder, sodium salts, pharmaceuticals and cleaning preparations. BBC Research & Consulting Section 11, Page 1 Location. The entire Piceance site is located in the Bureau of Land Management (BLM) White River Resource Area. Access to the site is provided from Colorado Highway 64 to the north or from Colorado Highway 13 to the southeast by Piceance Creek Road. American Soda has been conducing experimental mining activities under a BLM approved plan at the site since 1996. The Parachute processing site is located on an existing, inactive industrial facility owned by American Soda. Access to the site is provided by Interstate 70 and Parachute Creek Road. The processing plant area will include several process buildings, four pond systems, storage tanks, product packaging and loadout facilities, utilities and a dedicated rail spur. The pipeline corridor connecting the Piceance and Parachute sites would contain two pipelines: one carrying product from the Piceance site to the Parachute site and an identical parallel return water pipe. Most of the northern part of the pipeline will also be located on BLM lands. The southern part of the pipeline will be located on private property. The pipeline will parallel an existing pipeline corridor to the extent possible to minimize impacts from construction. The map on the following page (Exhibit II-1) shows the location of the different facilities associated with the project. Wages and salaries. The jobs associated with the construction of the Yankee Gulch Project are relatively well paying. Expected hourly salary ranges for selected types of employees are described in Exhibit II-2. EXHIBIT 11-2. Expected Weekly Salary Ranges, Selected Employees Source: American Soda and BBC Research & Consulting. BBC Research & Consulting Parts Runner Operator Laborer Carpenter Ironworker Crane Operator Engineer/Safety Engineer Site Manager/Supervisor $13 $16 $12·$17 $19 $19 $20·$21 $25-$26 $23-$36 Section 11, Page 2 Current Operations of the Yankee Gulch Project Construction began at the Parachute processing site in Spring 1999 and experimental mining activities continue at the Piceance site. Total construction activities are expected to be completed by the Fall of 2000 with operations beginning about the same time. The socioeconomic impact of the Yankee Gulch Project on Garfield County is largely dependent on employment levels and particularly the number of non-local workers that will seek housing and perhaps other services in the county. Current employment by location of Job. In July 1999, the Yankee Gulch Project employed a total of 209 individuals and in August 1999, the project employed a total of 232 individuals. Exhibit II-3 summarizes total employment levels by county for July and August 1999. EXHIBIT 11-3. Current Employment by Location of Job Source: American Soda and BBC Research & Consulting. Gartield Rio Blanco 196 218 13 14 The employment figures presented in Exhibit II-3 represent monthly peak, not daily average, employment levels. We have conservatively chosen to use peak employment workforce estimates throughout this report even though peak employment is likely to be higher, and in some months significantly higher, than average daily employment. As a result, estimates of housing demand and impacts also represent peak period demands. Local v. non-local employees. All of the employees at the Piceance site in August 1999 were local employees (persons already residing in the local area prior to employment at the Yankee Gulch Project). Of the individuals employed at the Parachute site in August, 1999, 37 percent were local workers and 63 percent were non-local workers (persons moving to the area in association with their employment at the Yankee Gulch Project). These distributions are reflected in Exhibit II-4. EXHIBIT 11-4. Current Local and Non- local Employees Source: American Soda and BBC Research & Consulting. Parachute Sile 84 Piceance Sile 14 370/o 134 63°!o 100% 0 QO/o Residency of local employees. In August 1999, the largest percentage of local employees employed at both sites lived in Parachute followed by Rifle, Battlement Mesa, Grand Junction and Meeker. Exhibit II-5 indicates the residency of local employees at the Parachute site for August 1999. BBC Research & Consulting Section 11, Page 4 EXHIBIT 11-5. Residency of Local Employees, August 1999 Source: American Soda and BBC Research & Consulting. Clifton (1%) Palisade (1%) De Beque (2%) \ I Rangely (1%) Other (3%) \ . . Craig {3%) Glenwood Springs (3%) Meeker (8%) Residency of non-local employees. Though other types of employees may choose to live in different communities or may be forced to live in different communities because of housing availability, the choices of current workers provides some indication of where the non-local workers over the life of the project will reside. In July 1999, the majority of non- local workers at the Parachute site stayed in Parachute. In August 1999, new workers were predominantly housed in Battlement Mesa. Exhibit II-6 describes where all non-local workers at the Parachute site were living in August 1999. EXHIBIT 11-6. Residency of Current Non-Local Employees, August 1999 Source: American Soda and BBC Research & Consulting. BBC Research & Consulting Battlement Mesa (41%) Glenwood Springs (1%) Meeker (1%) Rifle (4%) I. / Section 11, Page 5 Employment Projections Total employment. Peak employment for the Yankee Gulch project is expected to be between 200 and 800 individuals a month during the construction phase. Exhibit II-7 shows the projected number of employees on a monthly basis for the construction period for the Piceance site and the Parachute site. Employees building the pipeline have been assigned to the Parachute site if they are working in Garfield County and the Piceance site if they are working in Rio Blanco County. EXHIBIT 11·7. " Estimated Peak Employment by Location of Job Source: American Soda and BBC Research & Consulting. ! • 90 Total Piceance Site/Pipeline Parachute Site/Pipeline o-1-J~*=T=-=r*'T"L,-~~~~~~~~~~~~~~ It should be noted that the great majority of employment growth occurring after September 1, 1999 will occur at the Piceance site. Local v. non-local labor. American Soda has committed to use local labor as much as possible in constructing the Yankee Gulch Project. However, some non-local labor with specialized skills not available in the Garfield and Rio Blanco County area will also be required. American Soda and their construction contractors, primarily Kvaerner Metals, have carefully researched the local availability of employees with the skills needed during the construction period. Based on this research and the experience of Kvaerner staff, the assumptions included in Exhibit II-8 have been used to develop the number of local and non-local employees over the construction period. BBC Research & Consulting Section II, Page 6 EXHIBIT 11·8. Anticipated Local v. Non-Local Employment by Craft Crall .. ••·.·•··'••·•·• •l . • ;i. Architectural .>. (%:LQ¢a1 . .. % N.bn·Local 50% 50% Source: American Soda and BBC Research & Consulting. Boilermakers Concrete Electrical & Instrumental HeatingNentilation Heavy Equipment Insulators lronworkers Mechanical Millwrights Pipefitters Pipeline Supervisors American Soda 20% 80% BOo/o 20o/o 25% 75% 25o/o 75°/o 50°/o 50% 20% 80% 50% 50% 20% 80% 20% 80% 20% 80% 20% 80% 0% 100% 90% 10% Based on the above labor force availability estimates and anticipated construction scheduling, Exhibit II-9 displays the best current estimate of the number of non-local employees expected on a monthly basis for the life of the construction phase. Again, employees building the pipeline have been assigned to the Parachute site if they are working in Garfield County and the Piceance site if they are working in Rio Blanco County. EXHIBIT 11·9. Estimate of Non-Local Employees Source: American Soda and BBC Research & Consulting. l ' .i ! z ~ 1,00 90 8 Parachute Site/Pipeline Total -h...,_..-,-.-.,-,.~h-~~~~~-~~~~-..=:;oi"-\Piceance Site/Pipeline As shown by Exhibit II-9, between 70 and 500 non-local employees per month are expected to be working on the Yankee Gulch project from July of 1999 through September 2000. Total non-local employment will peak in March 2000, non-local employment at the Parachute Site and on the Garfield County portion of the pipeline will peak in April 2000 and non-local employment at the Piceance Site and on the Rio Blanco County portion of the pipeline will peak in July 2000. BBC Research & Consulting Section 11. Page 7 Residency and Commuting Patterns for Non-Local Employees Exhibit II-10 indicates the approximate driving distance between the two construction sites and various local communities in which workers may choose to live. EXHIBIT 11-10. Approximate Driving Distance Between Worksites and Communities Source: BBC Research & Consulting. ..•. ···•· ... ; .. \i. )i.:1•· ................ Battlement Mesa Craig De Beque Grand Junction Glenwood Springs Meeker New Castle Parachute Rangely Rifle Silt . }Oi.~!llrte~J(om •:. Dl~ta~c~ from ••r111~i\1fo1~·$11~ ; . . Pi~ailc~ Sile >5 65 100+ 80 15 80 50 100+ 40 75 50 30 30 65 >5 65 75 25 15 50 20 60 Housing availability. Non-local construction workers are expected to utilize motel/hotel rooms, apartments and RV campgrounds in the cities and towns closest to the two construction sites. To determine the available supply of these types of housing, BBC undertook a telephone survey of all motels, hotels, apartment complexes and RV parks in Battlement Mesa, De Beque, Meeker, New Castle, Parachute, Rifle, Rangely and Silt listed in the yellow pages and identified in interviews with local government officials. BBC also contacted several motels in Craig and Glenwood Springs. Owners and managers were queried about seasonal rooms or unit availability and willingness to rent long-term to construction workers. The availability of motel/hotel rooms and RV campgrounds in the area is not consistent throughout the year. During hunting season in particular many of the motels and hotels in the area are filled or near capacity. Summer brings high occupancy levels to motels and RV parks along the I-70 corridor. It may be necessary for American Soda or their contractors to reserve or guarantee accommodations for several months in advance of actual requirements. Some proprietors indicated that they preferred to rent to short-term or overnight guests. Exhibit II-11 takes seasonal availability and proprietor preferences into account by presenting ranges of the number of workers that can likely be accommodated in each type of housing. Further, BBC has assumed that that 1.5 workers will stay in each motel/hotel room, 3 workers will stay in each apartment and 1 worker will stay at each RV site. Anecdotal evidence indicates that non-local workers at the Parachute site are actually exceeding these occupancy levels with as many as 2 workers per motel room and 4 workers per apartment. Exhibit II-11 provides BBC's best estimate of the number of workers that can be accommodated by the various types of housing in local communities between September 1999 and September 2000. BBC Research & Consulting Section 11, Page 8 EXHIBIT 11·11. Workers that Can be Accommodated In Local Housing Options • Battlement Mesa and Parachute numbers represent capacity to absorb additional non- local workers above current (September 1, 1999) levels. ** Data for Meeker apartments also includes available cabin space in the area. Source: BBC Research & Consulting. Battlement Mesa• Craig De Beque Glenwood Springs Meeker0 Newcastle Parachute• Rangely Rifle Silt Motels/Hotels 0 45-300 0 100·350 0-50 0 0 0·40 9·160 0 RV Pads Apartments 40-100 120 0·7 Lim ited 0 0 0-30 Limited 0·23 54·130 0 0 0 30 60 15-45 5 40 10·20 0 Parachute site. Battlement Mesa has the capacity to absorb a large proportion of non-local employees working at the Parachute site and discussions are ongoing between Battlement Mesa and American Soda to reserve available space and ensure that this community absorbs as many non-local employees as necessary. Though the interviews indicated that the only motel in Parachute is already renting all available weekly rooms, the Parachute apartment complex currently has 10 vacancies. Given the proximity of Battlement Mesa and Parachute to the Parachute site, m ost workers at the Parachute site will likely seek h ousing first in these two communities. As demonstrated in Exhibit II-9, peak non-local monthly employment at the Parachute sit e is estimated at 235, which is roughly 115 workers above current levels (September 1999). Battlement Mesa and Parachute together can absorb between 190 and 250 additional workers and thus are likely to absorb almost the entire Parachute site non-local workforce. Plceance site. Non-local employees at the Piceance site will likely seek housing in Meeker, Rangely and Rifle. Meeker, the closest community, has the capacity to absorb between 50 and 200 employees, though availabi lity is severely limited in hunting season and is quite limited during the summer. Combined, Rangely and Rifle can accommodate between 130 and 300 workers. As demonstrated in Exhibit II-9, peak non-local monthly employment at the Parachute site is estimated a t 254. Between Meeker, Rangely and Rifle there should be eno u gh capacity to absorb the Piceance site workforce. It should be n oted that the above estimates of absorpti on capacity are somewhat dependent on the number of RV pads available. If the supply of RV spaces exceeds the demand, then demand for other accommodations such as motel/hotel rooms and apartments will increase. One w rinkle in the availabi lity of h ousing for Piceance site workers is the prospect qf ascond nacholite mine in close proximity to the American Soda mine site. This faci lity, which is in the process of completing federal permitting, could employ an additiona l 100- 140 workers during a similar time frame as the American Soda project. Although scheduling is uncertain, the prospect for overlap of employment remains and underscores the importance of proactive efforts to secure housing or stimulate housing creation in the Piceance site area. BBC Research & Co ns ulting Sectio n 11, Page 9 Based on the prior projections of non-local workforce requirements, the available supply of housing as summarized in Exhibit II-11 and the limitations described in the preceding text, Exhibit II-12 demonstrates the likely housing patterns for non-local workers. EXHIBIT 11-12. Estimated Residency 20 Patterns of Non-Local 175 Battlement Mesa Employees • ¥ ~ 15 Note: July and August 1999 • • 12 Meel<er data for Parachute and Battlement • Mesa based on actual ~ "" residency patterns. • 10 ~ Source: BBC Research & ii 75 Consulting. ~ ~ 50 " 25 It is impossible to predict with absolute certainty where non-local construction workers will choose to live. Actual patterns of residency may vary from Exhibit II-12. For example, some current, non-local workers are choosing to live in Grand Junction and Glenwood Springs. The important point, however, is that based on information given by housing providers in nearby communities, the capacity exists to absorb the expected influx of construction workers in close proximity to site. Additionally, American Soda is taking steps to ensure the availability of enough accommodations in Battlement Mesa to absorb any overflow or unanticipated peak demands from either the Parachute or Piceance sites. Population Impact The total population impact of the Yankee Gulch Project will depend not just on the number of non-local workers, but upon the total number of individuals that move to the area as a result of construction activities. The majority of construction workers will not bring a spouse or children either because of the short project duration or because they are single and childless. However, some workers will bring spouses, significant others and/ or children. Based on the experience of Kvaerner staff, including the experience of the American Soda project to date, BBC has assumed that the total number of spouses or significant others will be equivalent to 15 percent of the number of non-local workers. The number of school aged children will be equivalent to an additional 10 percent of non-local workers and the number of non-school aged children will be equivalent to 5 percent of non-local workers. Therefore, the total number of new residents for any given jurisdiction will be 1.3 times the number of non-local workers temporarily residing in the area. BBC Research & Consulting Section II, Page 10 Though all new residents have the potential to increase the demand for local government services, school-aged children deserve particular attention. Children between the ages of 5 and 17 are likely to be in enrolled in local public schools for all or part of the 1999-2000 school year. Exhibit II-13 provides the best current estimates of the number of school aged children that are likely to be enrolled in local schools as a result of the construction on the Yankee Gulch Project. All figures count kindergartners as full, not 'h, students. EXHIBIT 11-13. Potential Student Enrollments Source: BBC Research & Consulting. Local Workforce RE·2 Gartield County SD16· Parachute Rio Blanco Schools 3,491 746 1,497 7 25 20 i>ereeni' c <'~~r~a~~ 0.20% 3.35% 1.34% Based on the distributions set forth in Exhibit II-8, the local labor force working at the Yankee Gulch project (i.e. persons already residing in the area prior to employment at Yankee Gulch) will range from 80 to 320 persons. Though American Soda will hire some local individuals during the construction period, for the most part, local employees will be current employees of local subcontractors. In other words, they are currently employed, but simply working on other projects in the general vicinity. Currently, local workers are drawn largely from communities near the Parachute site including Parachute, Battlement Mesa, Rifle and Grand Junction. When construction activities begin at the Piceance site, additional local employees will likely be drawn from Meeker, Rangely and Craig. As the total number of local employees needed increases, more people are likely to come from larger communities, located somewhat farther out such as Glenwood Springs, Grand Junction and Craig. Construction jobs associated with the Yankee Gulch Project are relatively high- paying and unemployment in Garfield County is low. The project may attract local employees currently employed at lower wages or on a part-time basis -particularly those commuting long distance for employment. Competition with other employers in the area could contribute to wage inflation. It may also attract new residents to the county -as individuals move in to fill the jobs left vacant by individuals going to work for American Soda. Indirect and Induced Employment The presence of a large construction and eventually an operating workforce associated with the Yankee Gulch project will produce new wages and business expenditures within Garfield and surrounding counties. In economic terms, the employment and business expenditures associated with the construction and operation of the mine, pipeline and processing facility is termed direct basic economic activity because it BBC Research & Consulting Section 11, Page 11 involves business activity that brings outside dollars into the local economy. Direct activities include employees of American Soda as well as local contractors and suppliers. As a result of increased business activity spurred by American Soda's investments, local contractors and suppliers will in turn purchase additional goods and services and retain additional staff. This secondary round of business expenditures is referred to as indirect business activity. Finally, the households that are supported by American Soda, either through direct employment with the company or through contracting and service arrangements, will also stimulate the economy as they purchase goods and services locally through local retailers, grocery stores and personal services These rounds of additional household spending are referred to as induced economic activity. In sum, by importing dollars, basic economic activity drives a local economy. The full cycle of ongoing expenditures by businesses and local residents as these dollars re- circulate through the local economy defines the full economic impact of a project. The total amount of direct, indirect and induced economic activity created by a specific basic economic generator depends upon a number of specific local factors, including the average wage and salary paid to workers, the business support requirements of the industry in question, and the size and support capabilities of the local economy. Yankee Gulch operations. The total effects of a large direct workforce can be best measured by use of a input output model. Employment of such a model requires considerable data from the subject project on materials expenditure patterns and a considerable effort to fine tune model factors for the specific counties in questions. In most situations where a fully calibrated I/O model is unavailable, analysts employ an employment multiplier as a simplified modeling alternative. A precise determination of the indirect and induced employment effects of the project is beyond the scope of this Pre-Application Notification. A reasonable rule of thumb would suggest that each full time operating position will, over time, generate an additional 1.4 jobs in the regional economy, primarily in services, government and retailing.1 Thus, the employment of 80 full time workers during operation of the plant will produce approximately 112 additional workers for a total of 192 new positions in the influence area. It is likely that full-time American Soda workers will reside in the Parachute/Battlement Mesa area while the induced and indirect workers will be distributed more broadly across the region reflecting the tendency of local services to aggregate in regional centers such as Glenwood Springs and Grand Junction. Yankee Gulch construction. As a rule, a temporary construction workforce will generate indirect and induced business activity than similar full time operations and thus generate far fewer secondary jobs. In this instance, factors limiting the impacts of construction include: I Jim Wescott, The Use of RIMS Multipliers for Economic Impact Assessment, Colorado Department of Local Government, 1992. BBC Research & Consulting Section II, Page 12 • A construction workforce consists of a series of specialized trade. The majority of the American Soda construction workforce will be in the area for a relatively short duration (2-6 months with some workers less than one month) and thus are less likely than operating employees to make major local purchases. • Most construction workers will utilize temporary housing and arrive with most of their equipment, clothing and necessities. Construction workforce expenditures will generally be limited to groceries, entertainment, occasional clothing items, and some consumer goods. • In part because of the short duration of work and in part because of the isolation of the site, few construction workers are expected to bring families and children. • The Piceance site is isolated and housing difficult to obtain. The construction workforce is likely to develop dispersed residential patterns, thus generating an equally dispersed secondary impact effect. • American Soda and their subcontractors anticipate long work days and extensive overtime, which will further limit opportunities for expenditures in the local community. • Most accommodations and retailers in the area know that the construction workforce will be temporary and will be reluctant to add employees or expand their businesses knowing that the workforce will diminish significantly within one year's time. Rules of thumb for construction multipliers that would be applicable to the unique features of this project are more difficult to determine. Based on BBC experience, and our construction workforce case study research,2 we would anticipate a modest secondary response to the American Soda construction presence on the order of .20-.30 indirect workers for every direct construction position. By these calculations, the construction workforce, which will average about 550 persons over the peak one year construction period, will generate sufficient induced spending to support roughly 110-165 new jobs for approximately one year's time. Most of these positions will be in consumer services, retailing and government. New employment will largely occur in retail/ service centers including Glenwood Springs, Grand Junction and Rifle. Some additional employment growth may occur in Meeker and Rangely although these communities appear to have considerable ability to absorb new retail and service activity without significant employment additions. 2 Denver Research Institute and Browne, Bortz and Coddington, A Case Study of Electric Generating Facility Construction, prepared for the Electric Power Research Institute, 1982. BBC Research & Consulting Section 11, Page 13 A more detailed analysis of the indirect and induced effects of Yankee Gulch project would be part of the full Fiscal Impact Analysis if such an analysis is required of the applicant. Operating Employment Once construction is completed, American Soda expects to employ approximately 85 workers at the Parachute site and 35 workers at the Piceance site on an ongoing basis. Ninety percent of these employees are expected to be hired from the local area. The remaining 10-15 workers who will move to Garfield and Rio Blanco counties to work at the processing plant or the mine are not likely to impose significant new costs on local communities. BBC Research & Consulting Section 11, Page 14 SECTION Ill. Socioeconomic Implications of Project Construction and Operations This section documents the political entities and jurisdictions most likely to be affected by the construction and operation of the Yankee Gulch Project. Current population estimates are compared with population increases attributable to the project. Exhibit III-1 lists all government entities within the Western part of Garfield County in the general vicinity of the Yankee Gulch Project. BBC Research & Consulting Section Ill, Page 1 EXHIBIT 111-1. Local Jurisdictions, Garfield County Source: 1998 Abstract of Assessment, Garfield County, Garfield County Emergency Communications Authority. Towns/Cities Glenwood Springs New Castle Silt Rifle Parachute School Districts RE-2 Gartield County SD16· Parachute Fire Districts Grand Valley Fire (Parachute) Rifle Fire Water & Sanitation Districts Bluestone Water Conseivancy Battlement Mesa Metro District Special/Other Districts Grand River Hospital Grand Valley Cemetery Parachute/Battlement Park & Rec Rille Downtown Improvement Rifle Metro Park Gartield County Emergency Communications Authority ,';\<~!0~11611 $102,918,671 $12,567,210 $7,727,100 $38,602,830 $4,167,260 $155,913,210 $61,100,230 $61,431,500 $97,234,770 $61,540, 780 NIA $210,393,390 $61,100,230 $29,097,510 $4,464,220 $38,602,830 NIA Exhibit III-2 lists the municipalities in the neighboring counties of Rio Blanco and Mesa that could experience some impact from the Yankee Gulch Project. EXHIBIT 111-2. Municipalities, Rio Blanco, Mesa and Moffat Counties Source: Twenty-Seventh Annual Report, Colorado Dept. of Local Affairs, 1997. Tol'ir\/clii~s·: ,,, ~ > Na!i.iat1on Meeker $8,804,940 Rangely $8,623,300 Craig $34,302,610 De Beque $1,246,090 Grand Junction $316,074,290 The data presented in Section II indicates that non-local workers are most likely to live in Battlement Mesa, Parachute, Rifle, Meeker and Rangely. Jurisdictions most likely to be impacted by the Yankee Gulch Project are highlighted in Exhibit III-3. Garfield County Regulations define an impacted area as one that experiences an increase of population of 15 percent or more, so the expected percentage increase in population is also indicated in Exhibit III-3. BBC Research & Consulting Section Ill, Page 2 EXHIBIT 111·3. Potential Impacted Areas Source: Colorado Department of local Affairs and BBC Research & Consulting ·.··/····•·.····•'•/i··'' •.·;.[" •....... ··.···············.•••.199~. ·.• •. ··· .· l'opulatlon Towns/Cities Rifle 6,367 Parachute 1,153 Gartield Coun1y 40,299 School Districts RE-2 Garlield Coun1y 9,595 SD16· Parachu1e 4,172 Special Districts Battlement Mesa Metro 3,500 Parachute/Battlement Park& Rec 4,172 Garfield Emergency Communications Aulhority 40,299 Non-Garlleld Coun1y Meeker 2,466 Rangely 2,720 De Beque 399 Grand Junction 42,901 •Pf•Kr••J!l9t•·· • Peak nojec1 .% Population Employees · Populatlon Increase 71 92 1.4% 65 85 7.3% 327 425 1.1% 71 92 1.0% 256 333 8.0% 191 248 7.1% 256 333 8.0% 327 425 1.1% 125 163 6.6% 71 92 3.4% 0 0 0.0% 0 0 0.0% According to Exhibit III-3, no jurisdiction would meet the definition of an Impacted Area under the current regulations. However, Exhibit III-3, in keeping with the analysis in this entire Pre-Application Notice, does not take into account possible new local workers attracted to Garfield County as a result of American Soda or any indirect or induced effects. In order to gauge, at least in a rough fashion, what might constitute a "worst case" or extreme scenario, BBC has modeled a hypothetical situation in which all construction workers employed at the Parachute and Piceance sites are non-local employees. In this process we have made the same assumptions regarding worker preferences to live in close proximity to the job site and recognized the current limitations on housing availability. Exhibit III-4 demonstrates the results of this analysis. BBC Research & Consulting Section 111, Page 3 EXHIBIT 111-4. Worst-Case Scenario, Potential Impacted Areas Source: Colorado Department of Local Affairs and BBC Research & Consulting Towns/Cities Rifle Parachute Silt Glenwood Springs Garfield county School Districts RE-2 Garfield County SD16· Parachute Special Districts Battlement Mesa Metro Parachute/Battlement Park & Rec Garfield Emergency Communications Authority Non-Garfield County Meeker Rangely Cralo De Beque Grand Junction 6,367 164 213 3.3% 1,153 65 85 7.3% 1,512 10 13 0.9% 8,202 46 60 0.7% 40,299 476 619 1.5% 9,595 174 226 2.4% 4,172 256 333 8.0% 3,500 191 248 7.1% 4,172 256 333 8.0% 40,299 476 619 1.5% 2,466 125 163 6.6% 2,720 145 189 6.9% 9,082 45 59 0.6% 399 0 0 0.0% 42,901 45 59 0.1% Exhibit III-4 indicates that under a worst case or "all new labor force" scenario, the maximum increase in population for any given jurisdiction is 8 percent. However, the maximum population increase for an affected jurisdiction is 8 percent. The local housing market will be strained and the impact of the project will likely extend to additional communities such as Craig, Glenwood Springs and Grand Junction. Perhaps of greater importance, this scenario highlights the need for American Soda to aggressively intervene in the marketplace and by contracts with Battlement Mesa, private entities or other communities stimulate the provision of additional housing that is suitable for temporary construction worker use. Future Studies American Soda will continue to monitor the number of employees and family members associated with the Yankee Gulch project and report such information to Garfield County. American Soda will comply with any county requirements to submit information on steps American Soda has taken to facilitate housing availability and the diversity of housing choices for its employees. If the County Commissioners do not exempt American Soda from performing a Fiscal Impact Analysis, then such a report would be the next step. The Fiscal Impact Analysis would include a more detailed study of the socioeconomic impact of the Yankee Gulch Project. BBC Research & Consulting Section Ill, Page 4 AMERICAN SODA, L.L.P. YANKEE GULCH SODIUM MINERALS PROJECT PRE-APPLICATION REVIEW October 6, 1999 INTRODUCTION, PURPOSE AND REQUESTS FOR EXEMPTIONS Pursuant to Section 5.08.04.03, of the Garfield County Zoning Resolution of 1978, as amended, American Soda L.L.P. filed, on September 20, 1999, a Pre-Application Notice for a Garfield County land use permit for the Yankee Gulch Sodium Minerals Project (hereinafter, the Yankee Gulch Project) with the Board of County Commissioners of Garfield County, Colorado (hereinafter, the Board). The Yankee Gulch Project is classified as a Major Project according to the provisions of Section 5. 08 FISCAL IMP ACT MITIGATION PROGRAM of the Garfield County Zoning Resolution of 1978, as amended resulting in the requirements that the project applicant prepare a Pre-Application Notice describing the Major Project and that the Board conduct a public meeting in order that all interested individuals and other parties may offer comments on the Yankee Gulch Project as described in the Pre-Application Notice. Subsequent to the receipt and initial review of the Pre-Application Notice, the county requested more information regarding certain socioeconomic details of the project. In an attempt to respond to the county request, American Soda submitted some supplemental information on October 5, 1999 in the form of four memoranda which were all prepared by BBC Research & Consulting. The memoranda were prepared regarding the following topics: 1. Employment and Population Impacts of Yankee Gulch Project 2. Supplemental Fiscal Impact Data 3. American Soda Property Tax Receipts 4. IMPLAN MultiIJ,lier Discussion for American Soda's Yankee Gulch Project These memoranda are attached in the Appendix to this review and incorporated by reference into the Pre-Application Notice. The Pre-Application process is intended to be a prelude to a Fiscal Impact Analysis. The Pre- Application meeting is an opportunity for affected local governments and the public to address potential impacts that may be generated by the development of the Yankee Gulch Project (i.e., the Major Project). American Soda -Yankee Gulch Project Pre-Application Review Page I American Soda has indicated that it will request: that American Soda be either totally exempted from the remaining provisions of Section 5.08 FISCAL Ilvll'ACT MITIGATION PROGRAM of the Garfield County Zoning Resolution of 1978, including the Fiscal Impact Analysis or; that American Soda be allowed to prepare a Fiscal Impact Analysis (and implicitly, a Housing and Fiscal Impact Mitigation Program) concurrently with the processing and review of its remaining land use permits. PROJECT SUMMARY The Yankee Gulch Project is comprised of three principal components with all facilities and appurtenances necessary to mine, transport and process nacholite. A nacholite solution mining operation will be developed in Rio Blanco County, Colorado about 30 miles from the Town of Meeker (the Piceance site). The mine product will be conveyed by pipelines, approximately 44 miles in length, from the mine site to a processing plant located north of the Town of Parachute, Colorado in Garfield County (the Parachute site). The processing plant is located at the site of the former Unocal Shale Oil Upgrade Plant which has been purchased and is being refitted by American Soda for the Yankee Gulch Project processing plant. Construction of the processing plant began in the spring of 1999 and is projected to be complete in the fall of2000. The construction work force at the Parachute site is projected to reach a maximum of approximately 353 workers in April 2000. The construction of the pipeline in both Garfield and Rio Blanco Counties is projected to begin in the spring of 2000 with a maximum number of pipeline construction workers in both counties of approximately 196 workers in the summer of 2000 with pipeline construction to be substantially complete in the fall of 2000. Mine development activities at the Piceance site are projected to begin in December 1999 and be completed in the fall of2000. The peak construction work force at the Piceance site is projected to reach approximately 468 in March 2000. Once construction is completed, the Yankee Gulch Project will employ approximately 85 workers at the Parachute site and approximately 35 workers at the Piceance site. In addition to the direct work force cited above, there will be a secondary work force generated by the economic activity associated with the Yankee Gulch Project. Furthermore, the direct and secondary work forces will create a certain level of population that is economically linked to the Yankee Gulch Project. The peak combined direct and secondary work force during the construction period has been projected by American Soda to be approximately 1, 139 with a maximum project-related population of 1,565 [BBC Research and Consulting -Memorandum regarding Employment and Population Impacts of Yankee Gulch Project, October 4, 1999]. Upon completion of the Yankee Gulch Project, once a stable operating condition has been achieved, the projected direct and secondary work forces, and associated population are substantially less and are summarized in the following table. American Soda-Yankee Gulch Project Pre-Application Review Page 2 Projected Yankee Gulch Project Direct and Secondary Work Forces and Associated Population -Operation Phase of the Project Direct Work Force Secondary Work Force Total Work Force Population Parachute Site 83 104 187 492 Piceance Site 35 49 84 220 Total -Both Sites 118 153 271 712 Source: BBC Consulting & Research -October 4, 1999 The Yankee Gulch Project will also generate public revenues both directly and indirectly in the forms of property and sales taices, mineral lease payments and so on. Those revenues would be identified in the Fiscal Impact Analysis. American Soda has provided a brief summation of property taices accruing to local governments in Garfield County from the Parachute plant. In the initial years of operation (once the plant is fully assessed) the total property taic revenues will amount to approximately $1. 7 million annually although, due to the vagaries of taic limitation laws and depreciation provisions, individual local governments may not actually receive large amounts of new property tax revenues. The increased assessed valuation from the project will either increase revenues to individual local government entities or result in lower mill levies depending on whether or not the trucing authority has "de-Bruced" (BBC Research & Consulting -Memorandum - American Soda Property Tax Receipts -October 4, 1999). PRE-APPLICATION ISSUES Supplemental Information The Pre-Applic~tion Notice is, in essence, an elaborate description of work force and population and some general socioeconomic aspects (such as housing) of a Major Project. The Pre- Application Notice initially submitted to the Board on September 20, 1999 has been augmented with a more complete accounting of the Yankee Gulch Project-related work force and population which was received by Garfield County on October 5, 1999 and mailed that day to potentially affected government entities and other interested parties. Time constraints preclude a thorough review of the latest project information although some relevant details are noted in preceding sections and will be referenced as appropriate throughout this review. It is assumed, for purposes of this review, that the supplemental information is accurate. American Soda -Yankee Gulch Project Pre-Application Review Page3 Work Force and Population Projections and Schedule An accounting of the American Soda work force as well as the secondary work force and project related population are found in the Appendix to this review in the memorandum regarding Employment and Population Impacts of Yankee Gulch Project. The county requested this information in order to provide a more complete estimate of population and work force factors. It should be noted that the direct work force level reported for the Parachute site are different than the estimates provided to the Board of County Commissioners by American Soda when the Board allowed the project to exceed the 200 worker limit originally imposed on the Parachute site work force. American Soda has indicated that the work force levels previously submitted to the Board included a large (20%) contingency. [Ed Cooley testimony to the Garfield County Board of County Commissioners October 4, 1999] Informal discussions with Rio Blanco County staff indicate that the work force levels used in the Environmental Impact Statement and in county permits for the Piceance site facilities are also different than the levels reported in the Pre- Application Notice. It would seem appropriate to base permits and analyses on a consistent set of figures. The construction schedule is critical to the evaluation of the impacts of the project. For example, the relatively short duration of the construction phase of the project helps moderate the effects of the secondary work force and the project-related population which are generated over time particularly for the non-local construction workers. The short construction period and the secondary work force associated with the non-local workers are reflected in the IMPLAN Construction Employment Multiplier of 1.34 and the Construction Population Multiplier of 1.30. The schedule also affects the availability of temporary housing required for the construction work force. The housing assumptions in the Pre-Application Notice are based on a housing survey which recognizes seasonal variations notably in Rifle and Meeker and perhaps in Rangely. Accelerating the construction schedule by increasing the work force would exacerbate the potential demand issues pertaining to temporary housing as well as other ancillary issues such as construction-related traffic. Again, construction activities in Rio Blanco County are potentially problematic since the Piceance site is more remote than the Parachute site and because convenient housing and government services are not as readily available as in Garfield County. Accelerating the construction could .result in some "spill over" of workers and secondary work force and population into Garfield.County from the Piceance site. Extending the construction schedule would have the possible affect of prolonging fiscal impacts on local governments by creating a more sustained demand for services. A protracted construction period would also increase the likelihood that the secondary work force and the population will achieve maximum levels. American Soda-Yankee Gulch Project Pre-Application Review Page4 Housing As noted in the preceding section, housing is necessary for the project to be built in a timely manner. The Pre-Application Notice highlights the importance of housing as noted in the following quotation. "The availability of motel/hotel rooms and RV campgrounds in the area is not consistent throughout the year. During hunting season in particular many of the motels and hotels in the area are filled to near capacity. Summer brings high occupancy levels to motels and RV parks along the I-70 corridor. It may be necessary for American Soda or their contractors to reserve or guarantee accommodations for several months in advance of actual requirements. Some proprietors indicated that they prefer to rent to short-term or overnight guests." [Pre- Application Notice Section II Page 8, emphasis added. Additional housing observations are found on pages II/8-10.] The Pre-Application Notice did not address the housing demand created by the secondary work force nor did it take into account the entire project-related population generated by the project. Impact Area Section 5.08.02.05 of the Garfield County Zoning Resolution of 1978, as amended, defines the Impact Area as follows: IMPACT AREA: That geographical area which includes any government entity whose total population would be increased by fifteen percent (15%) or more as a result of a Major Project. The base year shall be the same as the year in which the Statement oflntent to Apply is filed. The importance of the Impact Area is that the fiscal impacts of the Major Project on public facilities and services of each government entity in the Impact Area are to be addressed in a Fiscal Impact Analysis [§5.08.05] The peak population of the Town of Parachute is projected to increase 16 percent [Memorandum -Employment and Population Impacts of Yankee Gulch Project - Exhibit 6] while the Parachute/Battlement Mesa Park and Recreation District population is projected to peak at a 12 percent increase and the SD-16 enrollment to increase 11 percent. These peaks are expected to be reached primarily during the construction phase of the project. Cumulative Impacts The plans for the development of the Amer Alia (nacholite mining) project in Rio Blanco County indicate that a peak direct construction work force of approximately 130 workers will occur in the summer of 2000. This could complicate all aspects of the socioeconomic affects of the Yankee Gulch Project including fiscal impacts and housing availability. American Soda -Yankee Gulch Project Pre-Application Review Page5 EXEMPTION REQUESTS American Soda has indicated that it will request that one of two exemptions to the Fiscal Impact Mitigation Program be granted by the Garfield County Board of County Commissioners at the Pre-Application meeting. American Soda will request that the Board grant the following described exemptions to the Fiscal Impact Mitigation Program: 1. American Soda be exempted from the Fiscal Impact Analysis (§5.08.05) and the Fiscal Impact Mitigation Program (§5.08.07). or 2. American Soda be allowed to process its application for a Special Use Permit for its product and return pipelines simultaneously with its Fiscal Impact Analysis and Impact Mitigation Program. It is difficult to evaluate the merits of the exemption requests based on the information submitted to date. Since the purpose of the Pre-Application process is to provide project information and to solicit comments from local governments and the public, those comments will need to be considered by the Board. There appears to be widespread political support for the project and it also seems that once the Yankee Gulch Project is operating that it will be an economic benefit to the area. The potential impacts are a short time in duration and will consequently create short term public service demands although they could be keenly felt by some local governments. The Board may consider a total exemption if it concludes that the long term economic benefits to the area will outweigh short term fiscal impacts to local governments and public services or if the Board determines that the potential impacts are not significant. The initial responses from potentially affected local government entities will be helpful in this determination. No obvious reasons why the second exemption request described above should not be granted by the Board have been identified although the Pre-Application meeting may identify such reasons. If a Fiscal Impact Analysis is required, it would probably be limited to the Parachute area although the impacts on Rifle from the Piceance site development activities may require closer scrutiny. The Fiscal Impact Analysis could be reviewed simultaneously with the Special Use Permit application. There has not been any rigorous detailed analysis of the impacts from the project beyond the information submitted to date which may be characterized as a project description although some minimal analysis has been completed on population, housing, property taxes and cursory fiscal reviews of Parachute and Rifle. Typically, all of these issues and data would be refined in a Fiscal Impact Analysis. However, a third exemption alternative should also be considered by the Board. Issues that are obvious to some local government officials and analysts that have been identified to date include housing availability, traffic impacts, and police and public safety concerns. It may be American Soda -Yankee Gulch Project Pre-Application Review Page6 appropriate to forgo a detailed comprehensive Fiscal Impact Analysis in favor of concentrating on developing a mitigation plan addressing a limited number of most likely potential impacts. The mitigation plan would be based on the level of analysis necessary to define a problem and develop an acceptable solution or mitigation strategy. The following topics constitute an initial suggested list of issues to be addressed. Topics may be added or deleted as a result of the comments received at the Pre-Application meeting. • Housing availability (the objective being that the project is not delayed or accelerated beyond the capabilities of the housing market). This is a concern in terms of both the Piceance and Parachute sites and is complicated by potential cumulative affects noted previously. • Transportation and Traffic -traffic control is a particular concern of the Town of Parachute. Transportation to and from work is also a major concern of Rio Blanco County particularly in the winter. • Police -The Town of Parachute has expressed some concern over demands on the Town Police both in the Town and in response to Battlement Mesa under the terms of its mutual aid agreement with the Garfield County Sheriff. • General public services in the Town of Parachute associated with the construction work force and associated population residing in the Town and to a certain extent in Battlement Mesa. • A monitoring program consistent with §5.08.08.02 should be established based on a single set of numbers. American Soda -Yankee Gulch Project Pre-Application Review Page 7 ' ! AMERICAN SODA, L.L.P. 2717 County Road 215 Parachute. CO 81635 July 28, 1999 Mr. John Barbee Garfield County Planning Department 109 8"' Street Glenwood Springs, Colorado 81601 Dear John, Telephone (970J 285-6500 Toll Free C877l SODA-ASH Facsimile C970J 285-6393 The Special Use Permit for the construction of the American Soda Fa9ility at Parachute, Colorado was granted on the basis that it is not a major project and that the construction workforce would not exceed 200 persons. At the time that American Soda applied for the permit and at the time that the permit was granted ,the estimate from our contractor, Kvaerner Metals, placed us under the 200 person limit. At that·time American Soda was proceeding under the assumption that the Pipeline Special Use Permit (not yet applied for or granted] was a separate project for the purposes of counting construction personnel. Since the granting of the Special Use Permit, American Soda has received two revised cost estimates from our contractor, Kvaerner Metals, dramatically increasing the cost of our project. Most of the cost increase has been in the area of field labor and subcontractors. These increases have resulted in a large increase in the total field effort and the peak manpower loading at any given time. Please find attached a chart of the expected peak manpower loading in Garfield County. In order to give you an idea of the magnitude of change that has occurred since the original estimate in May 1998 to the present, please consider the following: • Total project cost has increased by 33% • Total project manlilours have increased from 915,000 to 1,337 ,000 (Including the Pipeline] • Total Garfield County manhours have increased from 531,000 to 794,500 (Including the Pipeline] While the project cost estimate has increased by 33%, the manhours expended in Garfield County have increased by 50%. All of this increase is in the plant construction, not in the pipeline construction. American Soda understands that as a major project we will have to go through the mitigation process of the Special Use Permit. We would like to start that process immediately. American Soda also requests permission from Garfield County to exceed the 200 person limit while we are going through the process. If we are allowed to exceed the 200 person cap, we will continue to be on schedule at the Parachute Site and will enclose the building by winter weather, greatly increasing the safety and productivity of the contract workers during the winter months. EXHIBIT C " Natural Sodium Products For a Cleaner Environment: Page 2 American Soda appreciates the cooperation and professionalism that we have received during the· permitting process in Garfield County and look forward to working with Garfield County on this modification to our permit. Sincerely, Charlie Yates " " 2 Management and Planning Research P.O. Box 1293 Glenwood Springs, Colorado 81602 July 31, 1999 Board of County Commissioners Garfield County 109 8th Street Glenwood Springs, Colorado 81601 Commissioners: (970) 928-0872 The County has requested a cost estimate to assist the County staff in the review of a Fiscal Impact Analysis and Fiscal Impact Mitigation Program that may be required if American Soda redefines its project in a manner that reclassifies it as a Major Project subject to the provisions of Section 5.08 of the Garfield County Zoning Resolution. The purposes of this letter are to generally describe a scope of work that I would perform for the County and to provide the requested cost estimate. The review of a Fiscal Impact Analysis and Mitigation Program is complicated somewhat by the nature of the analytical procedures applied. There are numerous approaches, assumptions and significance tests that affect the methodology to be employed and alternative analyses that may be used. The need to consider and select approaches and test assumptions begins in the initial stages of the analysis and concludes with the final results of the analysis. This is somewhat different than, for example, an engineering review of a water line where the laws of physics ultimately drive a design and where there are more established standards and design guidelines (although this does not stop engineers from arguing fine points). The nature of economic analysis requires that I be involved in the early methodology assumptions in order that reasonable confidence in the outcomes can be anticipated and that the County's interests are accounted for in the analysis. This involvement is codified in Section 5.08 -the (Garfield County) Fiscal Impact Mitigation Program which anticipates an active involvement by the County as well as other local government entities in the analysis process. With this in mind, I propose that the scope of work consist of two broad tasks. 1. Direct the analysis of the Fiscal Impact Analysis from the County perspective and coordinate the Pre-Application process and other review activities with the County Commissioners and staff, local government entities and American Soda. I will review and provide written comments regarding all aspects of Section 5.08 provisions, as necessary, to the County Planning Commission and Board of County Commissioners. Garfield County Commissioners July 31, 1999 Page 2 of2 2. Design and implement a Project Employment Monitoring System to establish baseline employment data and verify ongoing compliance with any project employment criteria the Board may deem appropriate. The results of the monitoring will be reported to the Board on a regular basis. Considering the fluid nature of this engagement, it is difficult to determine with certitude the costs associated with the completion of the above tasks. The first estimate of the level of effort for the work program is one hundred (100) hours assuming reasonable support from the County staff for preparing public notices, meeting minutes, et cetera. It is proposed that the work be performed on an hourly basis. My hourly rate is seventy-five dollars ($75 .00) per hour. Therefore it is proposed that the compensation for the work outlined above not exceed Seven Thousand, Five Hundred Dollars ($7,500.00) without further authorization from the Board of County Commissioners. Please understand that this is a very rough estimate of the level of effort. The total compensation may be higher depending on the review permutations incorporated in Section 5.08 and the nature of the Fiscal Impact Analysis process. In addition, there may be reimbursable expenses for data acquisition, mileage, copies, and so on. Mileage will be billed at thirty cents ($0.30) per mile. All other expenses will be charged at my cost. I appreciate the opportunity to present this proposal for profess ional s ervices. If you have any questions or require additional information, do not hesitate to call. Sincerely, .0~ .. :-.a . Dennis A . Stranger MEMORANDUM TO: AFFECTED GOVERNMENT ENTITIES FROM: MARK BEAN, DIRECTOR, BUILDING & PLANNING DEPARTMENT DATE: RE: SEPTEMBER 22, 1999 AMERICAN SODA FISCAL IMP ACT PRE-APPLICATION NOTICE AND REPORT Enclosed with this memorandum is a copy of the Pre-Application Notice and Pre-Application report for the American Soda project on Parachute Creek. The report was filed with the Board of County Commissioners on September 20, 1999. The enclosed notice is for a public informational meeting to held at the Parachute Town Hall on October 12, 1999 at 9:00 a.m .. The meeting shall be conducted to accomplish the following purposes: (I) To provide information about the proposed facility and its potential impact area; (2) To receive the concerns of the public and each government entity regarding the potential impact of the proposed Major Project; and (3) To determine the nature and extent of exemptions from any provisions of the Fiscal Impact Mitigation program that may be granted to the applicant. Any other questions should be directed to Mark Bean at 945-8212. / New Castle Fire Department P.O. Box90 New Castle, CO 81647 Silt Fire Department P.O. Box70 Silt, CO 81652 City of Rifle Box 1908 Rifle, CO 81650 Town of Silt P.O. Box 70 Silt, CO 81652 Attn: Craig Ohlson, Town Administrator Town of Parachute P.O. Box 100 Parachute, CO 81635 Town ofDeBeque P.O. Box60 DeBeque, CO 81630 Town of Rangely 209 E. Main Rangely, CO 81648 Attn: Jeff Looney Grand River Hospital (District) P.O. Box 912 Rifle, CO 81650-0912 ' Rifle Metropolitan Parle District 1010 Y, Munro Avenue Rifle, CO 81650 Garfield County Emergency Communications Authority 109 8th Street, Suite 203 Glenwood Springs, CO 81601 Parachute Fire Department P.O. Box295 Parachute, CO 81635 Rifle Fire Department P.O. Box 1133 Rifle, CO 81650 RE-2 School District 839 Whiteriver Avenue Rifle, CO 81650 School District 16 Box68 Parachute, CO 81635 ' Battlement Mesa Water & Sanitation Box 6116 Battlement Mesa, CO 81636 Rio Blanco County P.O. Box599 Meeker, CO 81641 Attn: Jim Komatinsky Town of Meeker P.O. Box38 Meeker, CO 81641 Attn: Sharon Day Grand Valley Cemetery (District) P.O. Box 103 Parachute, CO 81635-0103 Parachute Parks & Recreation District 222 Grand Valley Way Parachute, CO 81635 Associated Governments ofN.W. Colorado 202 Railroad Avenue Rifle, CO 81650 Rifle Downtown Development Authority 201 W. 3n1 6) ft10 ~ /qJcf Rifle, CO 81650 Attn: Ed Weiss Steve Colby State of Colorado I:ept. of Natural Resources 1313 Shennan Street, Roan 11323 Denver, 0) 80203 ( 1 1 ~~·"4/-<// j "f'C/1 /?)(~I I: ff?} 4-J/kJ~ ~~F /) ~ ·--Ofi JJ1 ~A "... -.... l:c/).~A··· -r-.~ ------------·--------------------------!·------------- !-----------+--------~- ... · ... town of Rangely --··:-') JeffLooney Town Manager 209 E Main Rangely, CO 81648 ' " -··------------t----------- Phone (970) 675-8476 Fax (970) 675-8471 \ I ··----------!--------------!--------- ----------~--------------+--------- -·---------~-------1-------------------r--------- -----·-----·--r-----------------t--------- ---------\---·------------·--!--------- -------------\-----··--------------!---------- .. -·-----------------------· ---------·---·--·----------1•---------- _,.. r ~ECEIV E D APR 2 5 2000 JOHN A. THULSON EDWARD M ULHALL, J R . SCOTT BALCOM B LAWRENCE R. GREEN TIMOTHY A. T HULSON L O RI J . M. SATTERFIELD EDWARD 8. OLSZEWSKI DAVID SANDOVAL D E N DY M . H EISEL H AND D ELIVERE D Mr. MarkBean BALCOMB & GREEN, P.C . ATTORNEYS A'l.' LAW P. O. DRAWER 790 818 COLORADO AVENUE GLENWOOD SPillNGS, C OLORADO 81602 T elepho ne: 970.9 45.6546 Facsimi le: 970 .945.8902 April 25, 2000 Garfield County Building and Planning Department 109 Eighth Street, Third Floor Glenwood Springs, Colorado 81601 OF COUN SEL: K E NNETH BALCOM B Re: Conditions Subs equ ent to th e Product and Water Return Pipeline Special Use Permit for America n. Soda, LLP Dear Mark: Pursuant to conditions 11 and 12 of the above refe rence d Special Use P ermit Approva l (R esolution No. 2000-005) I e nclose h erewith for yo ur fi les, copies of th e Reimburse m ent Agreement between Am erican Soda, LLP and the City of Rifle and written confirmation from the Town of Parachute regarding fiscal impacts the reto. I thought I had previously forw arded th ese docume nts to you, via my co rres ponde nc e ofJanuary 18, 2000; howev er, I wa s in error in this regard. Should you have any questions or concerns re garding the above, please fee l free to contact m e at your conve ni e nce . TAT:nmk Enclo s ures Very h·uly yours, BALCOMB & GREEN, P.C. By ~:),\Tu ~LJ\'\12) Timothy A. Thulson Torm, of Pan;zchute Admin(stratton 222 rand Valle 'Na .:-~>>;'c.• Telephone: (970) 28S-Z:'G3~s;~"f-.~ facsimile: (970) 285-9146 January 7, 2000 Garfield County Commissioners l 091 B"' Street, Suite 300 Glenwood Springs, CO 8160 l I I I .. _I Post-II" Fax Nole To~ CoJDept. FIJ,)I . .; ~-..... µte, CO 8 1635-0 l 00 Mayor John Loschke Gentlemen: , f The Town of Parachute recently entered into a Reimbursement Agreement with American Soda. \ L.L.P to add~ess the possible_ impacts their op ration and the additional work force would have on the 'r own. This agreement provides for the rei ursement of police officer and court staff wages. The Town feels that the issues covered in the a~ ent are the actual impacts to the Town. at this time. The agreement provides for the possibility Fha he impacts would be greater or less than anticipated. In the event that there were additional im11a the Town is confident that American Soda would renegotiate the agreement in a manner thelTo n would accept.\ Sincerely, l /:!:L~e#-- xc: Board of Trustees REIMBURSEME>IT AGREEMENT BETWEEN AMERICAN SODA, LLP AND THE CITY OF RIFLE, COLORADO This Reimbursement Agreement is made and entered this 19th day of January, 2000 by and between American Soda, LLP and the City of Rifle, Colorado. WHEREAS, American Soda, LLP, a Colorado Limited Liability Partnership ("American Soda") is the proponent of proposed commercial nahcolite mining operations ("American Soda Project") located in western Garfield and Rio Blanco Counties. WHEREAS, the City of Rifle, Colorado ("City") is a Colorado Home Rule Municipal Corporation duly formed and existing under the Colorado Constitution. WHEREAS, the major components of the American Soda Project include a commercial nahcolite miningand initial processing operation located in Rio Blanco County ("Piceance Site") and a final product processing and shipping operation located in Garfield County ("Parachute Site"). The Piceance Site is located within the U.S. Bureau of Land Management White River Resource Area approximately 22 miles west-southwest of Meeker, Colorado. The Parachute Site is located approximately 2.5 miles northwest of the Town of Parachute, Colorado at the former Union Oil Company of California Oil Shale Upgrade Facility. A pair of parallel buried pipelines approximately 44 miles long will connect the Piceance and Parachute Sites. WHEREAS, American Soda has received all requisite approvals from the Board of County Commissioners for Garfield County, Colorado ("Board of Commissioners") for the construction and operation of the processing and rail shipping facilities at the Parachute Site. WHEREAS,American Soda has made application to the Board of Commissioners for Special Use Permit approval for the construction and operation of the buried parallel pipelines (collectively"Pipeline Special Use Permit"). The Application for Pipeline Special Use Permit is presently scheduled for consideration by the Board ofCountyCommissioners of January 3, 2000. WHEREAS, pursuant to the Fiscal Impact Mitigation Program regulations as contained within Section 5.08 of the Garfield County Zoning Resolution of 1978, the Board of Commissioners has required American Soda, as a condition precedent to issuance of the Pipeline Special Use Permit, to: Reimbursement Agreement American Soda, LLP and the Tow11 of Rifle -1- Enter into an Agreement with the City of Rifle to deal with possible additional calls for service in town and as a mutual aid agreement with the Garfield County Sheriff for police service. The Board of Commissioner Resolution No. 99-113, October 12, 1999. WHEREAS, in accordance with the mandate of the Board of Commissioners above described, American Soda and the City desire to set forth the provisions pursuant to which American Soda will mitigate the identified Fiscal Impacts to the City presented by the American Soda Project. NOW THEREFORE, forand in consideration of the mutual covenants and promises of the parties and other good and valuable consideration, the adequacy and sufficiency of which is hereby acknowledged and confessed, American Soda and the City, on behalf of themselves, their successors, assigns and/or transferees, agree as follows: l. Upon the execution of this Agreement, American Soda shall pay to the City the lump sum of $2,500.00. 2. On the first day of each month beginning on the first full month following the execution of this Agreement, American Soda shall pay to the City ten (10) equal monthly payments of $3,000.00. The total amount to be paid by American Soda under this provision shall not exceed $30,000.00. 3. American Soda shall provide to the City in a form acceptable to City staff, a letter of recommendation in support of the City's anticipated future Applications for Energy Impact Grants from the Colorado State Department of Local Affairs. 4. This Agreement shall not become effective until such time as the Board of Commissioners approve, upon conditions acceptable to American Soda, the Pipeline Special Use Permit. For the purpose ofimplementingthis provision, American Soda shall be deemed to have accepted the Board of Commissioners approval upon the initiation by American Soda of any construction or other activities governed under the Pipeline Special Use Permit so approved. 5. Unless earlier terminated by mutual agreement of the parties, this Agreement shall terminate by its own terms upon the payment by American Soda to the City of all amounts owed under this Agreement. Reimbursement Agreement American Soda, LLP and the Town a/Rifle -2- 6. In the event of any material failure by either party hereto to comply with the terms of this Agreement, the other party shall have standing to bring suit at law or in equity to enforce compliance herewith. It is expressly agreed that anydefault in the provisions hereof may be specifically enforced. 7. Each parties obligations under this Agreement shall be assignable to any grantee, purchaser, transferee, or assignee of the parties interests, and shall survive any such conveyance, purchase, transfer or assignment. Any such assignment by American Soda will not relieve it of joint and several responsibility with the assignee for compliance with the conditions of this Agreement, unless released by the City. 8. In the event arbitration or litigation is necessary to enforce the rights of the parties to this Agreement, as between themselves, the prevailing party in such arbitration or litigation may be entitled to reasonable attorney fees and costs actually incurred in the discretion of the arbitrator or the Court. 9. This Agreement shall be binding upon an entered to the benefit of the parties, their successors, grantees and assigns. 10. No provision of this Agreement may be waived except by an agreement in writing signed by the waiving party. A waiver of any term or provision of this Agreement, or a finding that any of the terms and conditions hereof are illegal or unenforceable shall not be construed as a waiver of any other term or provision; the terms of this Agreement are intended to be severable. IN WITNESS WHEREOF, the parties have executed this Agreement on the date above written. The Mayor has been authorized to sign this Agreement on behalf of the City by motion of the City Council at a regular meeting held on January 19, 2000. [SIGNATURES ON FOLLOWING PAGE] Reimbursement Agreement American Soda, LLP and the Town of Rifle -3- City OF RIFLE Attest: TOWN CLERK By Qo:.e.b Uk~ AMERICAN SODA, LLP Reimbursement Agreement American Soda, LLP a11d the Town of Rifle -4- PUBLIC NOTICE AMERICAN SODA, L.L.P. YANKEE GULCH SODIUM MINERALS PROJECT PRE-APPLICATION NOTICE Pursuant to Section 5.08.04.03, of the Garfield County Zoning Resolution of 1978, as amended, American Soda L.L.P. filed, on September 20, 1999, a Pre-Application Notice for a Garfield County land use permit for the Yankee Gulch Sodium Minerals Project (hereinafter, the Yankee Gulch Project) with the Board of County Commissioners of Garfield County, Colorado (hereinafter, the Board). The Yankee Gulch Project is classified as a Major Project according to the provisions of Section 5. 08 FISCAL IMP ACT MITIGATION PROGRAM of the Garfield County Zoning Resolution of 1978, as amended resulting in the requirements that the project applicant prepare a Pre-Application Notice describing the Major Project and that the Board conduct a public meeting in order that all interested individuals and other parties may offer comments on the Yankee Gulch Project as described in the Pre-Application Notice. PROJECT SUMMARY: The Yankee Gulch Project is comprised of three principal components with all facilities and appurtenances necessary to mine, transport and process nacholite. A nacholite solution mining operation will be developed in Rio Blanco County, Colorado about 30 miles from the Town of Meeker (the Piceance site). The mine product will be conveyed by pipelines, approximately 44 miles in length, from the mine site to a processing plant located north of the Town of Parachute, Colorado in Garfield County (the Parachute site). The processing plant is located at the site of the former Unocal Shale Oil Upgrade Plant which has been purchased and is being refitted by American Soda for the Yankee Gulch Project processing plant. Construction of the processing plant began in the spring of 1999 and is projected to be complete in the fall of2000. The construction work force at the Parachute site is projected to reach a maximum of approximately 347 workers in late 1999 and early 2000. The construction of the pipeline in both Garfield and Rio Blanco Counties is projected to begin in the spring of 2000 with a maximum number of pipeline construction workers in both counties of approximately 196 workers in the summer of 2000 with pipeline construction to be substantially complete in the fall of 2000. Mine development activities at the Piceance site are projected to begin in December 1999 and be completed in the fall of2000. The peak construction work force at the Piceance site is projected to reach approximately 467 in the spring of2000. Once construction is completed, the Yankee Gulch Project will employ approximately 85 workers at the Parachute site and approximately 35 workers at the Piceance site. Public Review: A copy of the Pre-Application Notice is filed in the office of the Garfield County Clerk and Recorder and may be reviewed at that office located in the Garfield County Courthouse at 109 8th Street, Glenwood Springs, Colorado between the hours of8:30 a.m. and 5:00 p.m., Monday through Friday. The Garfield County Board of County Commissioners shall conduct a public information meeting to review the Yankee Gulch Project Pre-Application Notice at 9:00 a.m. on October 12, 1999 at the Town of Parachute Town Hall, 222 Grand Valley Way, Parachute, Colorado. The meeting shall be conducted to accomplish the following purposes: (!) To provide information about the Yankee Gulch Project and its potential impact area; (2) To receive the concerns of the public and government entities regarding the potential impact of the proposed Yankee Gulch Project; and (3) To determine the nature and extent of exemptions from any provisions of the Fiscal Impact Mitigation Program that may be granted to the applicant. All interested persons or other parties are invited to attend the public information meeting to state their views regarding the fiscal impacts of the Yankee Gulch Project. The Board will also accept written comments regarding the project provided the comments are submitted before the conclusion of the October 12, 1999 public information meeting. ~ ~ \.!,,) Yankee Gulch Project Presentation of Impact Analysis Results Prepared for Garfield County Commissioners Prepared by BBC Research & Consulting Ford Frick and Jennifer Lakins Mello 3773 Cherry Creek N Drive, Suite 850 Denver, Colorado 80209 303.321.254 7 l&Jl&J~ October12,1999 REsEARCH & CONSULTING -··--------------------·----- CT. 17. 2000 11: 06Rl1 KVAERNER (JOBSITEJ N0.841 P. 1/11 Kvaerner FAX Sheet1 ~ Metals E & C Division, 2717 County Road 215, Parachute, Colorado 81635. USA To: Marl< Bean From~ Ed Hudock Company: Building & Planning Fax: 970-285-1688 Fax: 970-945-7785 Tel: 970-285-1294 Date: October 9, 2000 Ext: 201 Cost Code: 306900 Ref: Period of 10/09 thru 10/15 Copies: E. Cooley C. Freeman A. Sass T. Thulson -(970)-945-8902 C. Yates Fife No: 5.1.6 Subject: /\meric:an Soda L.L.P /Yankee Gulch Sodium Minerals Project Attached Wee!(ly Graphs: tJ Project Staffing·-Personnel 05/12/99 thru 10/15/00. o \Neekly Manning Report 10/09/00 thru 10/15/00. a Daily Manpower Reports 10/09/00 thru 10/15/00. KVA:RNER'. Jut99 Aug99 Sep 99 Oct99 Nov99 Dec 99 Jan 00 Feb 00 MarOO AprOo MayOO Jµn oo Jul 00 Augoo SepOO octo.o Novoo D.ecOO 0 ""'o N. 'W 0 0 0 0 0 Number of Employees "" en 0) .... 00 0 0 0 0 0 0 0 0 0 0 ~ ~ co 0 .... 0 0 0 0 0 0 II II II ~ N 0 0 m a ,, -~ a CD a ~ ~ -· .. = CD ~ !I. CD Number of Employees m G') a 5. b N w .i::. (II 0) ..... ,, s. Q Q Q Q Q Q -Q Q Q Q Q Q Q Q 0 ::? Jul 99 '< .g Aug 99 a CD' a ~ CD n :I .... Sep99 "ti "ti i;· .. ,... ~ .,, .. : . Oct99 .. C'> :I ,,. C'> c .,, S' Ill Nov99 ;:;: Ill S' .,, ;:;: .,, Dec 99 n m Jan 00 ,... -· 0 Feb 00 :I -Mar 00 n AprOO 0 :I MayOO l .. Jun 00 s:: n Jul 00 ,... -· 0 AugOO :I Sep 00 Ro Oct 00 0 ,, Nov 00 CD .. D,) Dec oo ,... -· 0 :I en ...... 0 Jul 99 Aug 99 Sep 99 , __, Oct99 N en en 0 Nov 99 "'~~ . . ..__. Dec 99 . .... en Total Number of Workers Housed .... .... .... .... N N N N 0 N en ..... 0 N en ..... 0 en 0 en 0 (11 0 . en + I I I I Jan ()0 r--i--~~~ Feb.00 MarOO Apr ()0 May 00 Jun 00 Jul ()0 Augoo Sep 00 Oct 00 Nov 00 DecOO (,) g Yankee Gulch Project Population Distribution Assumptions % · LocaLEmployees % Lo!:al Employees Working at Working at %Secondary Location Parachute· Site Piceance Site Employees - Battlement Mesa 15% 5% 10% Parachute 30% 5% 5% Meeker 0% 30% 5% Rangely 0% 20% 10% Rifle 25% 25% 30% Glenwood Springs 5% 5% 20% Grand Junction 10% 0% 10% Craig 5% 5% 5% Unicorp. Garfield 10% 5% 5% Garfield County (Total) 85% 45% 70% Yankee Gulch Project Potential Maximum Population Impacts Peak Total % Population Month Total Locaticm/Entity Population Chaoge Employment Peaks Battlement Mesa 328 9% April 2000 Parachute 183 16% August 2000 Meeker 280 11% March 2000 Rangely 192 7% March 2000 Rifle 346 5% August 2000 Glenwood Springs 130 2% August 2000 Grand Junction 76 0% December 2000 Craig 46 1% August 2000 Unicorporated Garfield County 56 0% August 2000 Garfield County 987 2% March 2000 Parachute/Battlement Mesa Park & Recreation 518 12% April 2000 RE-2 Garfield County School District 375 4% August 2000 SD16 Parachute School District 518 11% April 2000 Garfield Emergency Communications Authority 987 2% March 2000 Yankee Gulch Project Operations Population LOcation/Entity Battlement Mesa Parachute Meeker Operations I Rangely Employment Rifle Multiplier 1.39 Glenwood Springs Grand Junction Craig Operations I Unicorporated Garfield County Population Garfield County Multiplier 2.63 Park & Recreation RE-2 Garfield County School District SD16 Parachute School District Garfield Emergency Communications Authority Peak Operations 1998 Population Population Population Change 87 3,500 2% 91 1,153 8% 55 2,466 2% 57 2,720 2% 190 6,367 3% 94 8,202 1% 60 42,901 0% 34 9,082 0% 44 16,404 0% 507 40,299 1% 200 4,172 5% 212 9,595 2% 200 4,653 4% 507 40,299 1% Yankee Gulch Project Projected Property Tax Revenue Current Forecasted Entity Valuation MilFLevy Revenue Garfield County General Fund $496,648,840 8.306 $307,300 Road and Bridge $496,648,840 1.393 $51,050 All Other Funds $496,648,840 5.349 $197,900 Amerim Soda I Colorado River Conservancy $496,648,840 0.309 $11,400 Estimated Valuation $37,000,000 Colorado Mountain College $481,585,350 3.539 $130,100 Jan 1, 2002 SD16 Parachute $61,100,230 16.598 $613,800 Grand Valley Fire (Parachute) $61,431,500 3.267 $120,800 Bluestone Water Conservancy $61,540, 780 0.122 $4,500 Grand River Hospital $210,393,390 4.282 $158,430 Grand Valley Cemetery $61,100,230 0.209 $7,730 Parachute/Battlement Park & Rec $20,097,510 3.646 ~134,900 Total 47.02 $1,737,910 Piceance Site De Beque Parachute Site 3t\f.t -~-----· I I 250 i 20() 150 100~ 50 0 09-0ct Monday 10.0cl Tuesday 11-0cl Wednesday Persm1el! 12-0cl Thursday ---·------------------ Average: 144 13-0cl 14-0ct Friday Saturday I I -----, l r: \ 0 15-0ct Sunday ~ I l [ I ! il i ' I 1 Ji I 0 n _, p "' N GO t3 :-• .~ ., "' (J> :0 ::r 7' < ~ Al :z "' Al '-< 0 OJ (f) H _, rl :z 0 C1 "' ;-" CJ I\) ' p p AMERICAN SODA YANKEE GULCH PROJECT KVAERNER METAt.S 2000 STAFFING REPORT (continued) -----I I ! l?R.0,JECT STAfflNG I ~ z 400 ~ ! -----··------------------·-----------------------------1 I 350-t-~~~-~~-~~~-~~~~.~~--~~-~-~~~-~-30()~~-~---~-~=! L 1 1 i 250 0 200 ~ w D.. 150 100 50 I! ._ .. #'/.._ .. #:~./:.~ .#',.#'_.#~ .. ~~~##'_~~"~h~~~~~//~ .. ~,~~~~~~~ ~ #-#-'" '#"#' .. R:.P:JP~~~ ._r§ ._<§ ,..,~,~$'~ .. ~ ._r,i ._'1 ,...:; .. ~ ._.s ..... ~ "" "" "" "" ._#'I' .. ~ .. ~ ~ zy _,. B ... __, ~ ~ ,~ ,_, <SJ "' ~ "' < D ~ ~ '-< 0 3l H --< r'l z 0 CD ,,, ... -0 w ' ... ... AMERICAN SODA YANKEE GULCH PROJECT KVAERNER METALS 2000 STAFFING REPORT I PROJECT STAFFfNG ·------,, ! I 40\J ·r--··--· ~-------·---· '1 11 ~ I l , ' I I j 350 i .. • ....... ~I I ! i iii ~ 15 £1.. 300 +-----·------...,,..__, 250.,._.--------~ 200 150 100 SD 0 ,. .. ' ~"~~1~~&>!~~~~.:~~(~~~:~~f&>!~!~?!~((((~«<l~~~~,~~~~ ~~~~~~~~~&~~~~·~~~~~~~~~-~·~#~~~~~~~~~~~~-~~~ g -< .... --.) f\J "' fS) (Sj ,_. ,_. "' ~ 7' < D "' "' z ,,, ;u '-< 0 m H ;;l ~ 5 ~·· - " .. ' .... .... .. •• £XA/11PLE STEP RATE TEST The following is an ex;,mple of a Step-R;,te Test with t;;bular ;;nd gr;;phic results. The step-rate test data ;,nd gr;,phic rHults of the tHt ;,re on the following pages. The op€r;;tor of Anyw€1l #l set up a SRT for the following conditions: A) M;;>.imum <onticipioted injection rate was 4 bbl/min. 8) Following the recommended test procedures, the oper;;tor planned on using these rates for the test: l) 53 of 4 bbl/min = 0.2 bbl/min 2) JO% of 4 bbl/min= 0.4 bbl/min 3) :t03 of 4 bbl/min = 0.8 bbl/min 4) 40% of 4 bbl/min = l .6 bbl/min 5) 603 of 4 bbl/min= 2.4 bbl/min 6) EO% of 4 bbl/min= 3.2 bbl/min 7) l003 of 4 bbl/min= 4.0 bbl/min C) The form;;tion permeability is Htim;;ted as JOO md, therEfore each step will last for 30 minutes: For this test, the injection form;;tion broke down at ;;pproxim<otely 1200 psi, <ind the ISJP was listed as lOOO psi. Because the injection form;;tion will part at J 000 psi, the maximum injection pressure will be held to the JSJP. Jf the formc:tion had not broken down at 1200 psi, the mc:ximum allowable injection prHsure would be the maximum prHrnre obtained during the test. .MPLf S7lP RATE T£ST. t'l'e//: £@'£4' ti/ D;de: E/£1/94 OpHilOI -"""-~.r &...~ S1[P#l T ul R;;te ( £.% of m;;>imum r;;te) 0.2 (bbl/min) jTime (min) 0 t: 10 IS 20 2S 30 I I I I Pressure (p•i): 0 t;O (;t: t;F 99 100 100 I ,., STEP #2 Test Rate ( lf2% of m;;>-imum r;;te) O.tl (bbl/min) JTime (min) 0 t: 10 1£ 20 2S 30 I 1 I I Pressure (p•i): go ii() IFS ;e-t: ;t;t; EOO EOO I ,., STEP #S Test Rate ( l.f!2f, of ma~mum 1ate) O.f (bbl/min) JTime (min) 0 t: 10 1£ EO 2S 30 I l Pressure (psi): l'iO EZS ;/;' [.t: ~ !! ::92 E'<iF 399 400 S1 EP #4 Test Fic:le (~of m;;>imum rote) 1.6 (bbl/min) I Time (min) 0 t: 10 1£ EO 2S 30 I l Pressure {psi): EFO 700 790 "i92 79S 79F [02 STEP #5 Test R;;te ( §JlZ of m•>imum rate) 2.4 (bbl/min) !Time (min) 0 t: 10 1£ 20 2S 3() I I Pressure (psi): 7SO 990 1030 1(190 !ISO nro IEOI STEP #6 Test Rate ( §JlJIJ of m;;;imum rate) 3.2 (bbl/min) !Time (min) 0 t: 10 IS EO 2S so I !Pressure (psi): 1100 /I:SO IEE6 1870 1890 1395 l«X) I STEP #7 Test R;;te ( lQf!Z of mo~mum rate) 4.0 (bbl/min) !Time (min) 0 t: 10 1:. 20 2S 30 I I I I Pressure (p•i): IE?.O /ti SO 1£00 1!.80 1!70 1£90 1600 I ISIP : 1000 (psi) . -• SlEP FiAl E TEST DATA • Well: D;;te: OpE1ator ST[F#l THI Rote ( a of m<•imum lcte) (bbl/min) I Tim"""') , """" <•0' I ST [F #2 THI Fiole ( lf!% of m<>imum 1<t<) (bbl/min) !Time (min) : ''""" '"'' I STEP'/13 Te~ t Fi 2 le ( ?0% of m;;>imum 1;;te) (bbl/min) I Time (min) : '"'"" ,.,,, ST[P'/14 THI R;;le (~of ma>imum Hile) (bbl/min) !Time (min) : '"""' <•O' STEP #5 THI Role (£.!!%of m<>imum 1;;te) (bbl/min) I Time (min) : ''" "" ,.,,, STEP #6 Test Fi;;le ( !}J!!%, of maximum 1;;te) (bbl/min) I TC""""') ' ''""" c.o, STEP #7 Test Role ( lJ!Q$ of m;;>imum 1;;te) (bbl/min) I Tim"..., , """" '"" ISIP : (psi) Tut Run/ Witnnud Sy: __________________________ _ ' . 5) 6) 7) 8) 9) lO) 11·) l2) .. .. Flow r ctH should be rnee:sured with a calibr a led turbine flowmeter. fiecord injection rotes using a chart recorder or a strip chart: Mee:sure pre~wres with a down hole pressure bomb. Mee:sure and record injection pre~sures with a gauge or recorder (lor immediate test results). A plot of injHtion r <:tu e:nd the cones ponding stabilized pre~wre values should be grc.phice:lly represented e:s e: comtant slope strc.ight line to a point at which the formation fraclure, or "bree:l<down", preHure is EXCeeded. The slope ol this wbsequent stre:i&ht line should be less than thal of the before-fracture straight line. If the forme:tion frcciure preHure has definitely been exneded, evidenced by at least two injection re:te-pressure combirn;tions greoter than the breakdown pressure, the injection pump should be stopped, the line valve closed, and the pressure is allowed to bleed-off into the injection formction. There will occur a significant imtant<>neous pressure drop (lnst<>nl<>neous Shut-in PreHure or !SIP), atter which the pressure values begin to level out. This ISIP value must be read and recorded. The !SIP obtained in this manner may be considered to be the minimum pruwre required to hold open a fracture in this formation at this well. Once lhe !SIP is obtained, the SRT is concluded. In the evenl lh<>t the breakdown pressure was not obt<>ined at lhe maximum test injection prHsure utili;:ed, the test rHults may indicote that lhe for mat ion is occepting fluids without fracturing. H:\ UIC\/i£ UIC-G<iidance \INF 0-Sl<pli•1< 7 <st. wpd January J2, JS99 2 OCT. 1 7 . 2000 11 : 06AM KVAf.~RNER ( JOBSITE) N0.841 P. 5/11 13NNOS~ad ·-·~·····--··--·-···-·-~· ~--·---------------· '; I OCT.17.200121 i1'07AM KVAERNER CJOBSITE) .. N0.841 P.6/11 . KV AERNER/AMERICAN SODA,L~L.P. lcy ANKEE GULCH PROJECT" PMLY MANPOWER REPORT SECURITY OFFICER ON DUTY tv, -5 · ~ ~ it: c-s T01~AL MANPOWER COUNT #J. lNC!IHlINTAL SERVICES,GOVERMENTAL AGIN • DPA~.·~ ~-~~--~~~~~~~-~~-~~~~~~~ llXG~COIJN'm.Y~~G .. ~~~~~-'--~~~--~_;..~~~~~ m'~"'JtOTEL~L-~~~~....:....~~-~~--'--~~---...,,._·~~­ OOJEPlllN'l.iE~TP'flONE CO •• _---------------·--'A'O\[r!f'SV.AC. '!'Rl1CKSERVICE, _______________ _ it::tW!CilE'!~,'ntllCKS_, _______________ . __ .... -- C(llNCgf(!;'ll'i!l'UMP 'fIUJ'CJCS, ___________________ _ .. »~~!:'!!l';l!J!C:Y·1'.¥~~· -=-_ ...... _______ ...... ____ _,,_...J "Every ... w k Ct\ enir/ "'1'11.,. wn~e •lsei'' .-; . -TOM !!TOPPAl\D OCT .17. 20D0 ) ; : 0-?AM KVAERNER (JOBSITEl N0.841 P.7/11 ' . KV AERNER/AMERICAN SODA,L.L.P. "YANKEE GULCH PROJECT" ;D,AII.YMANPOWER REPORT SECCJRITY OFFICER ON DUTY 4tt~e.-. /J,,,11 "'~"---• -=~--~·-~--~-------------------... #PERSONNEL -#NEWHIRES KVAERNER~-~~~~~-~--~~~~~·~~- WYU.IAMS ___ ...J .e:_--'---------_;_.~_..-~-- AMERtCAN SODA~-~--'5::...:<:~'--~"'"-...;.....-~~_;.._;.;......._~~- JTJ---3_ lf•ACIFIC ELECT •. ___ 2..--_________________ ._ -·~-- C!:H<:J.7 SlHJR.TLEFF & ANDREWS. ___ ....iSo1-..-~----~~---_;_- PLA.c"lT MAINT. SERVICES=-=-----J.f~----== ___:;_,_-__ CONST,'SURVEY _______ _,_ ____________ _ GMfH'll .~--~~----------------IlUCKi" l':L:i<~C'f. u:1nnv Y ·-- CON-s~r~.~--L ·----------------~- AL'!A._~--~-~----~--------~----'-'-----MORl1M & SONS B&BPLUMBING~-~~~--------~---"-~--~ ~"""')'-"fU'"'' '"'C " 5 .!ll'l~<-~-J.i"i'. )j,~.fl' AI"i =-----~ .... =---'------'---"-,..--- rucrrTERS HVAC._~---------------~..;..... __ _ HF-ilITAGE ROOFING -----~ ' ' l TOTAL MANPOWER COUNT# N<:roENTAL SERVICES,GOVERMENTAL AGENeIEs .-... ~---- l)l'A __________ -------------- IDGH COUNTRY ENG •. -'--------------~--'c----­ UP GEO'l'ECll J.NDE?El\!ll~NTPHONECO .. ~~~..Z:!.:..._----'-----'-'-'-~~--I TOGY'!l VAf'-TRUCK SF.RVICE. __________ _._..-:...-'------ I ·CONC~:€TE T.RUCKS. _______________ -_-'..--'------ll CON~ft;;.l'UMPTRUCJCS, ____________ ---'--_ _;_ __ _ __ n&~s.=_~IE_'l'..;!)_Sl!_RVI:.::::C~ES::....~=.,.£,.= ...... ~-..... ~====---==~=.J nTn..isr yourself. You /(110W" more 11\Qn you rhlnk you do:" -OE.NIAMIN SPOCK MD OCT.17.2000 11'07RM KVRERNER (JOBSITE) .~NQ.841 P.8/11 KV AERNER/AMERICAN SODA,L.L.P. ''YANKEE GULCH PROJECT".·· . DAILY MANPOWER REPORT WEATHER: 6J tJ ~&4;;,a SECURITY OFFICER ON DUTYkL;e.c:. A"'ee&';7'#k • COMPANY #PE ONNE KV ft...ERN.ER I~ ;.._.;,-"-~~~~~--~--~~~...-..,..,.~~~ WILl,JAMS ___ __f ______________ ...... ..;, __ _ .A ... MEIUC.4..N SODA ___ ""'.S-""C:c-______________ _ !TJ_q_ ____ -- l.> A C!FI C. ELECT .. c,;'°~-----~---------~-­C:tH(_~-· q 7 SHURTLEFF & ANDREWS ___ __.~.___,_ ______ --'..._ __ _ PLANT MAINT. \§ERVICES ____ ___,6-'0=------------ CON§T; SURVEY_ll~-------------_;,...---- GROTH . ....,::,.0~~~~~~-~~--~-~-'---.--,---,- DUCEY ELECT, & UBRW 1<5 ~~-------~-~-~~.,..__~~~ ~-• ..!~ ~ CON-SY~····-'"'/..r.1-.:.c.....---------------'-"-"-~- ALT'A_~-------------------..._-----~~-MO;~Jl.lS & SONS__,<tJ"'--------------------'-~­ JJ&B PLUMB!NG--=e?'-----~o---------··-'"·~- INSVLA'l'ION !NC _______ __...,,_.'----------'-'- 1UC'J:l'.1'EH:S .HV AC 6 -"''--~~~--~-----~~~~~-"--HER l' I' AGE ROOFING o . TOTAL MANPOWER COUNT# INCIDENTAL SERVICES,GOVERMENTAL AGENCIES •No one <'.Qn mQk<> yau feel Inferior wlrhoGr youtoonie"·r. • -ELEANOR RoOSr:yELT '-''-'' • .1.1 ,<-Ui[_g; .'-.L'~(l"il'I !-'\YHt..t'(l'1t.I"< ~JUtsb!lt.J N0.841 P.9/11 K\!J\ERNER/AMERICAN SODA,L.L.P. "YANKEE GULCH PROJECT" 1-:.p).J fYltHn"-. DAJJ..Y MANPOWER REPORT © DA'l'E:2-12-t!'i0 WEATHER: -7) 0 ~·-ri/ SECURITY OFFICER ON DUTY j-4..-11 tJ .i. /;:. -:j;ie-~· GROTH ____ ----------------~---- DUCEY !\Gl,ECT. UBRW f'( - COi'i-SY __ ll.=...,.+-6..---&;;-.=...,,.,,....J...,,....,e;;Jt,...._-.-. ~-__,....~.,--------:--=,....·:· -- ALTA ___ ,~ -~---~----------~~ MO!!Rl~&SONS __ ,....e::e:!c....... ____________ ~~-'-- E&BPLUMBJNG_,..'---~--...,,...,=-c--~------'--..-....-,,--..,.~ IN1H.JLATION INC ___ ........., __ ..=.L---..;..._--_._,___....,....__ __ _ RICHTERS HVAC_,...-:;:.o ________ ~-----~-~-- HERITAGE ROOFING TOTAL MANPOWER COUNT# . -.. ·• "There ls no crisis to which acocleml<:s wlll nor resp<lnd wlli'I osemlnor." 1 --ANONYMOUS ---------- OCT. 17. 2000 J 1: ff?AM KVAERNER ( JOBSITE) -··N0.[J41 P.10/11 -. - KVAERNER/AMERICAN~soDA~L.L.P. '~YANKEE GULCH PROJECT" DAILY MANPOWER REPORT SECUIU'1.-Y OFFICER ON DUTY....;.._wi<..:...·--$;" __ 1-_;..-_"'..._.w_._1<'_· """_-_'S'_ ~O P ANY #P RSONNE · -#NEWBIRES KVAERNER~-~~~~~--,..;_8~~~~~--"-'~-~ WlriLLJAl\1S _______ ....w:.· ----- AMERICAN SODA _____ ~l._9-.,,_ _ JT{ ____ ,., ________________ .:__c_. , ___ _ l'AC!:lflC ELECT. ___ ~-------------------- CDK SH'ORTLEFF & ANDREWS._c_ ___ __,i:.:._ ___ ~...._---·-- PLANl' M'.AINT. SERVlCES. ____ _,;...._f_,_~~---"---o..;....o.....--- GRO'fti _ DUCEY ELECT. __ -· UBRW .. ~~---------,,,--------...,.;;.;......~-- CON-SY ___ .. ~~-----.L;te,.,_ _ _,U"""-A)..Lf'17:!l?~L--:::::C.:::.() fl~;--'---- ALTA ti<l'l!!ULATIONtNc -·~~~~-~--~----~~-~·~~- RX Cl'.J:TE'.RS HVAC---------------~-~--'--­ EfElUTAGE ROOFING ---------~, ' ' . TOTAL MANPOWER COUNT# CIDENTAL SERVICES,GOVERMENTAL AGENCIES . . 'A well•lnform~ employ.;., Is - 111 .. bl>Br ioJespeBOn o company · con ho.ve." -EDWIN J. THOMA.I~ UC I • 17. 2060 i 1 ' 08RM l<VRERNER ( JOBSITE l N0.841 P.11/11 k-V Al1~RNER/AMERICAN SODA,L .. L.P. "YANKEE GULCH PROJECT" DAILY MANPOWER REPORT D,\TE: __ L0-/3-dd WEATHER: ~J.o c,~ SJJ~CTJRITY OFFICER ON DUTY 1~<4-eut-;f#p 1-w!-. #PERSONNEL # WHIRES KVAERNER.~•/;6~~~~~~~~~~ .......... --..-..~~ WILLIA1\1S l, AMERICANSODA.__~--'S~'~~~~~~~--"--~~~ I'll.' d PACmlCELF.CT. -0<--~-~~-~~-~-----~~~--......____ CDI(_ '31. --11h-., ~· 3 (./JK -SlHJR'fLEFF & ANDREWS. ___ ....:.S=..._.....-__ __. __ "'...,.;~.;,,._-- PLAN'.!.' MAINT. SERVICES. ___ ~1:...C{..L.-----=--: :~~- GROTH • .12.~-----·---------------........--DUCE'tt .ELECT. ·~~~·~~-~~--~--~~~--~~ mnrw / CON·i'.lY_ ·-1 -~-:-..L.--V..-11-,·-tt,J--Cm-t.---:7--------- ALTA~--4'._·-~----"'-----.------------- INSlf.LATION INC ·---------i:1--------·..;_...-~­ RICR'l~RS HVAC.~__,,,__~-----~----~-'-~-~~~ HERITAGE ROOFING TfJTAL MAN.POWER COUNT# ficii~iiEiNiliTiALiti!SiERiVIiiiiiCiiEtiS'iGiOliiVERMiiiiiiiiENiiTiiALi· iiiAiGiiEiNiiCilEii_ i!L. __ "· I Dl'JJ~---·· --~-- j Rl:GHCOUN'I'RY .ENG. __ ·----------------'--·--- i Rl'GE-OTECH ~~~~~~~-~~-~--~~-! fii\rolWENDEN'l' PRONE CO. • I ~'OlJ'Y'S VAC. ·rnuCKSERVICE. ___________ ~---- 1 ,CONCltE'l'E 'IlUJCK$. _________ ~------- ,, co_NCl.m'TI~ PUMl' TRUCKS. ________ _.;... ___ _.,;..~---- D&S mm:D SERVICES ~-~,~~' ••• • ..... + -~·~f·• I "EdU<;oHon ~ when you .,.Cd me • I fin& prlnr. Exp@rlt>nc" 1s'·whot 'IOU ger If YOU don'r. ~ -PETE SEEGER c.. Telephone: (970) 285-7630 /. Facsimile: (970) 285-9146 August 9, 1999 Mayor John Loschke Town of Parachute MEMO: American Soda, L. L. P. 1 mpact 1 i ~ ;"!i""" .... . .• ,_::_· -.... _./ -------- · Town Administrator Juanita Satterfield -------------------------- The impact of the work force for the construction at the American Soda location has increased the activity in the Town of Parachute. 1. Letter from Police Chief David Higuera 2. Court Revenues: April $1,524.85, May 800.00 and June $1.440.00 3. Sale Tax report through the month of June reflects collection for May of 1999, this is not a current indicator of impact from American Soda This is a heavy tratlic time of year along I-70. Many of the numbers ie. dollar repOI1s are delayed by at least one month. The same goods and services are used by these travelers as would be used by a labor force staying in the area. This traffic, also, effects the numbers included in the Police Department and Court reports. More accurate indicators: 4. A block of rooms at the motel is full and kept full by employees of American Soda and/or contractors working at their location. 5. The River Manor Apartment Complex reported August 6, 1999 that there were only 4 vacant apartments ( 192 total apartments) No indicator of how many work at the American Soda location 6. There is an increased interest in sales and development of vacant prope11ies within the Town of Parachute. 7. There has been an increase in building permits for new residential units. ( 1998 for 1 duplex unit -1999 (to date) 5 residential units). 8. The increased in the number of people in the apartments, the motel and additional housing has contributed to higher water and sewer usage Parachute Police Department Office of the Chief 222 Grand Valley Way Cell phone (970) 250-6353 Telephone: (970) 285-7630 Facsimile: (970) 285-9146 August 4, 1999 To: Juanita Satterfield, Administrator RE: Noticeable Growth ! In the Jlast two months I have noticed a 10% increase in service call's to area businesses as well as call's for service to residence. I have also noticed an increase in traffic flow in town. Our vehicle contacts have risen approx. 20% in the past months. These increases have put a strain on a already short handed department. Continued increases as mentioned above will have to be met with an increase in officers to be able to answer all call's in a prompt and safe manner. As the Field Administrator I feel this may be attributed fo the increase in activity with the Soda Ash plant and a couple of new business in town. · · · Respectfully D.W.Higuera Ref: 8P-W-GW UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION 8 999 18'" STREET • SUITE 300 DENVER, CO 80202-2466 Phone 800-227 -8917 http://www.epa.gov/region08 UNDERGROUND INJECTION CONTROL PROGRAM FINAL PERMIT Class I Non-Hazardous Waste Disposal Well Permit No. COl 0932-04664 Well Name: Getty No.1-7LW County & State: Garfield, Colorado issued to: American Soda, L.L.P. 2717 County Road 215 Parachute, Colorado 81635 Date Prepared: April 9, 2002 ft \;)Printed on Recycled Paper cc: Mr. Robert EU Smith, OGWDW Mr. Paul Daggett, BLM, Meeker Office Colorado State Engineer's Office Attn: Mr. George Van Slyke Mr. Hal Copeland, Steigers Corporation Mr. Allen Sorenson, CDMG Garfield County Planning Commission Mr. Ed DiMatteo, COGCC Mr. David Holm, CDPHE Mr. George Morevec, CDPHE Mr. Gary Baughman, CDPHE Mark Bean, Garfield County Page 3 of 3 TABLE OF CONTENTS TITLE SHEET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I TABLE OF CONTENTS ....................................................... 2 PART I. AUTHORIZATION TO CONSTRUCT AND OPERATE ................... 5 PART II. SPECIFIC PERMIT CONDITIONS .................................... 7 A. WELL CONSTRUCTION REQUIREMENTS ......................... 7 I. Casing and Cementing ........................................ 7 2. Tubing and Packer Specifications ................................ 7 3. Monitoring Devices .......................................... 7 4. Proposed Changes and Workovers ............................... 9 5. Logging and Well Testing Specifications .......................... 9 B. CORRECTIVE ACTION ......................................... 10 C. WELL OPERATION ............................................. 11 1. Prior to Commencing Injection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I I 2. Mechanical Integrity ......................................... 12 3. Injection Interval ............................................ 13 4. Injection Pressure Limitation .................................. 13 5. Injection Volume Limitation ................................... 13 6. Injection Fluid Limitation ..................................... 13 7. Annular Fluid .............................................. 13 D. MONITORING, RECORDKEEPING, AND REPORTING OF RESULTS . 14 I. Injection Well Monitoring Program ............................. 14 2. Monitoring Information ...................................... 15 3. Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 4. Reporting of Results ......................................... 16 E. PLUGGING AND ABANDONMENT ............................... 17 I. Notice of Plugging and Abandonment ........................... 17 2. Plugging and Abandonment Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 3. Inactive Wells ............................................... 17 4. Plugging and Abandonment Report ............................. 17 EPA Final Permit No. CO 10932-04664 Page 2 of 77 TABLE OF CONTENTS CONTINUED F. FINANCIAL RESPONSIBILITY ................................... 17 1. Demonstration of Financial Responsibility ........................ 17 2. Insolvency of Financial Institution .............................. 18 3. Cancellation of Demonstration by Financial Institution .............. 18 PART III. GENERAL PERMIT CONDITIONS .................................. 18 A. EFFECT OF PERMIT ............................................ 18 B. PERMIT ACTIONS .............................................. 19 1. Modification. Reissuance. or Termination ........................ 19 2 Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 3. Operator Change of Address ................................... 19 C. SEVERABILITY ................................................ 19 D. CONFIDENTIALITY ............................................ 19 E. GENERAL DUTIES AND REQUIREMENTS ........................ 20 1. Duty to Comply ............................................. 20 2. Penalties for Violations of Permit Conditions ...................... 20 3. Need to Halt or Reduce Activity not a Defense ..................... 20 4. Duty to Mitigate ............................................ 20 5. Proper Operation and Maintenance .............................. 20 6. Duty to Provide Information ................................... 20 7. . Inspection and Entry ......................................... 21 8. Records of Permit Application ................................. 21 9. Signatory Requirements ...................................... 21 10. Reporting of Noncompliance .................................. 21 FIGURE 1. (STRUCTURAL FEATURES OF PICEANCE BASIN) .................. 23 FIGURE 2. (STRATIGRAPHIC AND HYDROLOGIC COLUMN) ................... 25 APPENDIX A (CONSTRUCTION DETAILS) .................................... 27 EPA Final Permit No. CO 10932-04664 Page 3 of 77 TABLE OF CONTENTS CONTINUED APPENDIX B (REPORTING FORMS) .......................................... 29 APPENDIX C (PLUGGING & ABANDONMENT PLAN) .......................... 36 APPENDIX D (CEMENT BOND LOGGING) .................................... 38 APPENDIX E (GUIDANCE-TEMPERATURE LOG) ............................. 58 APPENDIX F (GUIDANCE -RADIOACTIVE TRACER SURVEY) .................. 60 APPENDIX G (GUIDANCE FOR CONDUCTING A PRESSURE TEST) ............. 63 APPENDIX H (GUIDANCE FOR CONDUCTING STEP RATE TEST) ............... 71 EPA Final Permit No. CO 10932-04664 Page 4 of 77 PART I. AUTHORIZATION TO CONSTRUCT AND OPERATE Pursuant to the Underground Injection Control Regulations of the U. S. Environmental Protection Agency codified at Title 40 of the Code of Federal Regulations, Parts 124, 144, 146, and 147, A111erica11 Soda, L.L.P. 2717 County Road 215 Parachute, Colorado 81635 is hereby authorized to operate a Class I non-hazardous disposal well, commonly known as the: Getty No. 1-7LW Disposal Well NE 114 of the NE 1/4 1282 feet from the north line and 386 feet from the east line Section 7, Township 8 South, Range 97 West, 6'h PM Garfield County, Colorado Injection shall be for the purpose of disposing of water from a Nahcolite solution mine processing plant, consisting of partially saturated to saturated brine solution, including sodium carbonate solutions, in accordance with conditions set forth herein. No hazardous waste material or waste which is generated off-site may be injected into the well. Injection between the outermost casing protecting underground sources of drinking water (USDWs) and the wellbore is prohibited. If the well is not converted from its existing Class II status within one (I) year from the effective date of this Permit, the Permit shall be terminated unless extended according to Part II, Section A. 6. Injection activities shall not commence until the operator has fulfilled all applicable conditions of this permit and has received written authorization from the Director. "Prior to Commencing Injection" requirements are set forth in Part II, Section C. 1. of this Permit. All conditions set forth herein refer to Title 40 Parts 124, 144, 146, and 147 of the Code of Federal Regulations and are regulations that are in effect on the date that this permit becomes effective. This permit consists ofa total of77 pages and includes all items listed in the Table of Contents. Further, it is based upon representations made by the permittee and on other information contained in the administrative record. Any information submitted by the permittee found to be incorrect may be cause for modification or termination of the permit and/or may subject the permittee to formal enforcement action. It is the responsibility of the permittee to read, understand, and carry out all provisions of this Permit. This permit and the authorization to inject are issued for a period often (10) years, unless terminated (Part Ill, Section B); no reapplication will be necessary during this period, unless the EPA Final Permit No. CO 10932-04664 Page 5 of 77 pennit is tenninated for reasonable cause (40 CFR 144.39, 144.40 and 144.41). However, the pennit will be reviewed at the end of five (5) years and the results of the review will be used to detennine if changes in the pennit are needed. The pennit will expire upon delegation of primary enforcement responsibility for Class I wells of the VIC Program to the State of Colorado, unless that State has adequate authority, and chooses, to adopt and enforce this pennit as a State pennit. Issued this day of APR I 8 2!)02 This pennit shall become effective _A_P_R_l_8_2002 Kerrigan G. Clough *Assistant Regional Administrator Office of Partnerships and Regulatory Assistance *NOTE: The person holding this title is referred to as the "Director" throughout this pennit. EPA Final Permit No. CO 10932-04664 Page 6 of 77 PART II. SPECIFIC PERMIT CONDITIONS A. WELL CONSTRUCTION/CONVERSION REQUIREMENTS 1. Casing and Cementing. The construction details submitted with the application are hereby incorporated into this permit as Appendix A which graphically displays the details of the injection well under consideration. The permittee intends to convert an existing Class II disposal well (Getty No. 1-7LW) to a Class I non-hazardous disposal well in the following manner: (a) SURF ACE CASING (8-5/8 inch) is set in a 12-114 inch diameter hole to a depth of 311 feet into bedrock. The casing is secured with cement which has been circulated to the surface with 300 sacks of cement, isolating the casing from the wellbore. (b) LONG STRING CASING ( 4-112 inch) has been set in a 7-7 /8 inch diameter hole to a depth of approximately 4,364 feet KB and cemented from TD to approximately 3,240 with 350 sacks of 65/35 Posmix. A casing leak was repaired in September 2001 by squeezing the interval from 617 feet to 682 feet with 237 sacks of cement and a casing leak was squeezed from 2,460 feet to 2,525 feet with 350 sacks in August 1989. (c) TUBING AND PACKER: Approximately 3,891 feet of2-3/8 inch tubing has been placed in the hole with a 4-112 inch tension packer. 2. Tubing and Packer Specifications. All Class I injection wells, except those municipal wells injecting non-corrosive wastes, shall inject fluids through tubing with a packer set immediately above the injection zone, or tubing with an approved fluid seal as an alternative [40 CFR § 146.12 (c)]. This well shall have a tubing and packer suitable for the proposed injection activity. The packer shall set on tubing and maintained at a location that is no more than 100 feet above the top most perforation at 3,911 feet. 3. Monitoring Devices. The primary method of monitoring shall be continuous pressure monitoring of the injection and casing tubing annulus pressure and continuous monitoring of the injection rate and volume. Prior to beginning Class I non-hazardous injection operation, the operator shall install and maintain in good operating condition the following equipment: (a) Injection pressure: a continuous pressure monitoring device in the 2-3/8 tubing at the wellhead connected to an instrument with a sampling frequency of at least every 15 seconds and a one-half (1/2) inch Female Iron Pipe (FIP) fitting, isolated by plug or globe valves and located on the tubing to allow attachment of one-half (1/2) inch Male Iron Pipe (MIP) pressure gauges or EPA Final Permit No. CO 10932-04664 Page 7 of 77 the attachments for equivalent "quick-disconnect" pressure gauges certified for ninety-five (95) percent accuracy, or better, throughout the range of permitted operation in order to verify values for injection pressure being recorded from the continuous monitoring device. (b) Wellhead pressure of the tubiug/casiug annular space: a continuous pressure monitoring device in the wellhead casing/tubing annulus shall be connected to a device with a sampling frequency of at least every 15 seconds and a one-half(l/2) inch Female Iron Pipe (FIP) fitting, isolated by plug or globe valves, and located on the tubing/casing annulus; and the above fittings shall be positioned to allow attachment of one-half ( 1/2) inch Male Iron Pipe (MIP) pressure gauges or the attachments for equivalent "quick- disconnect" pressure gauges certified for ninety-five (95) percent accuracy, or better, throughout the range of permitted operation in order to monitor the annulus fluid pressures. The tubing/casing annulus shall be maintained full of either fresh water treated with a non-toxic corrosion inhibitor or other packer fluid as approved, in writing, by the Director. This fluid shall be maintained under a positive pressure of between 20 and 80 psi using a nitrogen gas blanket. A diesel freeze blanket or other fluid as approved, in writing, by the Director may be circulated from surface to below frost level at completion to prevent freezing and possible equipment failure during winter months. (c) Automatic well shutdown: the continuous monitoring system shall have an automatic well shut down switch installed which shall automatically shut-in the well if either of the following occur: (i) The surface injection (tubing) pressure shall be maintained between 200 to 930 psi. Any operation outside of this range shall result in an immediate shut down of the injection pumps; (ii) Because the gas pressure will vary as a result of fluctuation in the injectate temperature, the tubing/casing annulus pressure shall be maintained between 20 and 80 psi. Any operation outside of this range shall result in an immediate shut down of the injection pumps. When adjusting the gas pressure, the operator shall use the target value of 50 psi; or (iii) Ifthere is a 100 psi or greater drop in injection pressure during a one hour period, the well shall be automatically shut-in. ( d) Fluid volume and flow rate: Magnetic flow meters and continuous recording devices with a sampling frequency of at least every 15 seconds EPA Final Permit No. CO 10932-04664 Page 8 of 77 shall be installed in the injection line immediately upstream of the wellhead to track and document disposal fluid flow rates, and total fluid volumes. For a given injection rate, the injection pressure should remain relatively constant. Input flow volumes shall be crosschecked against injection pressure records to identify any possible divergence in the injection pressure for a given flow rate. A drop in injection pressure without a corresponding reduction in input flow rate would indicate a possible casing, packer, or other failure. (e) Fluid analysis: the injection line shall be equipped with sampling ports and appropriate connections to facilitate periodic collection of fluid samples representative of the injection fluids for chemical analysis. 4. Proposed Changes and Workovers. The permittee shall give advance notice to the Director, as soon as possible, of any planned physical alterations or additions to the permitted well. Major alterations or workovers of the permitted well shall meet all conditions as set forth in this permit. A major alteration/workover shall be considered any work performed, which affects casing, packer( s ), or tubing. The permittee shall provide all records of well workovers, logging, or other test data to EPA as part of the quarterly report for the period in which the activity was completed. Appendix B contains samples of the appropriate rep01ting forms. Demonstration of mechanical integrity (tubing/casing annulus pressure test, Appendix G) shall be performed within thirty (30) days of completion of workovers/alterations and prior to resuming injection activities, in accordance with Part II, Section C. 2. (a) of the Permit. 5. Logging and Well Testing Specifications. (a) The operator has obtained a static reservoir pressure measurement using a downhole pressure gage prior to commencing injection; (b) After any workover that involves any remedial cementing of the casing, the operator shall run a new cement bond log (with a gamma ray, travel time curve, casing collar locator, amplitude curve, and variable density log) that covers the area of the cementing to verify the adequacy of the cement placement. This log will be run following the guidelines in Appendix D; (c) Before commencement of injection, the operator shall run a baseline temperature survey from the base of the surface casing to TD to establish baseline temperature conditions for comparison with subsequent mechanical integrity testing to detect fluid flow adjacent to the casing; EPA Final Permit No. CO 10932-04664 Page 9 of 77 (d) Before commencement of injection, the operator shall run a radioactive tracer survey (RA TS) to verify that fluids are confined to the injection zone and to establish the injection profile associated with the perforations; (e) Within four (4) to six (6) months after initial injection, the operator shall run a temperature log to demonstrate Part II of mechanical integrity, as outlined in the Guidance in Appendix E, to ensure that there is no significant upward movement of fluid into or between USDWs in channels adjacent to the casing; and (f) A pressure fall-off test is required for Class I operations (40 CFR § 146.13 (d) (!)]and must be performed on an annual basis forthe purpose of monitoring pressure buildup in the injection zone in order to detect any significant loss of fluids due to fracturing in the injection and/or confining zone, and to aid in determining the lateral extent of the injection plume. The initial falloff test shall take place within a one week period that is one year after the effective date of the Permit. Subsequent yearly tests shall take place within one week of the effective date of the Permit. The pressure fall- off tests shall involve injecting fluids at a constant rate for at least twenty- four (24) hours, or a sufficient period of time until the reservoir pressure reaches stability, followed immediately by a shut-in period of sufficient duration to establish a valid observation of a pressure fall-off curve. This test shall be considered complete when the pressure curve becomes asymptotic to a horizontal line as the reservoir reaches ambient pressure. The initial pressure buildup shall be performed with both a downhole quartz pressure gauge with an accuracy of0.01 psi and the established surface monitoring equipment in order to avoid any effect of casing storage and to establish a correlation between surface and downhole measurements. It is important that the initial and subsequent tests follow the same test procedure, so that valid comparisons ofreservoir pressure, permeability, and porosity can be made. The Director may require the use of downhole quartz gages on any subsequent test if deemed necessary. The permittee shall analyze test results and provide a report with an appropriate narrative interpretation of the test results by a knowledgeable log analyst. The report shall also compare the test results with the previous years test data. B. CORRECTIVE ACTION The operator is not required to take any corrective action before the effective date of this Permit unless the RA TS results indicate the need for additional remedial work. EPA Final Permit No. CO 10932-04664 Page 10 of 77 C. WELL OPERATION 1. Prior to Commencing Injection. Injection operations as a Class I well may not commence until the permittee has complied with (a), (b), (c), and (d) as follows: (a) Well conversion is complete, and the permittee has submitted a Well Completion Record (Form 7520-10) in Appendix B, and copies of all required reservoir tests, mechanical integrity tests and water quality analyses, and (i) The Director has inspected or otherwise reviewed the new injection well and finds it is in compliance with the conditions of the permit; or (ii) The permittee has not received notice from the Director of his or her intent to inspect or otherwise review the injection well within thirteen (13) days of the effective date of this permit, in which case prior inspection or review is waived and the permittee may commence injection. (b) The permittee demonstrates that the well has mechanical integrity and has received notice from the Director that such a demonstration is satisfactory. Demonstration of mechanical integrity shall consist of two parts: (I) a tubing/casing annulus pressure test in accordance with 40 CFR 146.8 and Part II, Section C. 2. (b), below, and (2) a RATS to verify that no movement of fluids exists outside the casing into an underground source of drinking water (USDW) through vertical channels adjacent to the wellbore. Additionally, the initial baseline temperature survey (see Guidance E) shall be run during conversion (Part II, Section A. 5 (c) of the Permit) of the well. The initial demonstration of mechanical integrity and the baseline temperature survey shall be submitted to EPA prior to commencement of injection. The final portion of the temperature survey will be run after injection has commenced (Part II, Section A. S(d) of the Permit). The permittee shall notify the EPA two (2) weeks prior to conducting these tests so that an authorized representative may be present to witness the tests. The results of the tests, including a strip chart recording of the pressure test, shall be submitted to the Director with the Quarterly Report for the period in which the activity was completed; (c) The permittee has submitted the results of the downhole reservoir pressure monitoring; and EPA Final Permit No. CO 10932-04664 Page 11 of 77 (d) The pennittee has submitted a copy of the RATS and temperature logs run during the conversion of the well. Along with this suite of logs, or any other pertinent logs, the permittee shall include appropriate narrative interpretations by a knowledgeable log analyst. 2. Mechanical Integrity. (a) Notification. The Pennittee shall notify the Director at least two (2) weeks prior to any required integrity test. The Director may allow a shorter notification period if it would be sufficient to enable the EPA to witness the mechanical integrity test (MIT). Notification may be in the fonn of a yearly or quarterly schedule of planned mechanical integrity tests or it may be on an individual basis. (b) Test Methods and Criteria. For Part I (internal) of mechanical integrity, test methods and criteria are to follow current UIC Guidance (Appendix G) for Conducting a Pressure Test to Determine if a Well has leaks in the Tubing, Casing or Packer. For Part II (external of mechanical integrity, test methods and criteria are to follow current UIC Guidance (Appendix E and Appendix F) for demonstrating the absence of significant flow into or between USDWs adjacent to the casing. ( c) Routine Demonstrations of Mechanical Integrity. The Pennittee must demonstrate Part I and Part II of mechanical integrity by arranging and conducting a test at least once every five years. A tubing/casing annulus pressure test shall be conducted at the maximum injection pressure to demonstrate Part I (no leaks in the tubing, casing or packer) and a temperature log, a noise log, or a radioactive tracer survey shall be conducted to demonstrate Part II (no flow into or between USDWs adjacent to the casing). Also, Part I of mechanical integrity shall be successfully demonstrated after workovers (see Part II. A. 5. of the Penni!). Results of the test shall be submitted (on EPA fonn found in Appendix B), with documentation, to the Director with the Quarterly Report for the period in which the activity was completed. (d) Loss of Mechanical Integrity. If the well fails to demonstrate mechanical integrity during a test, or a loss of mechanical integrity as defined by 40 CFR § 146.8 becomes evident during operation, the pennittee shall notify the Director in accordance with Part ill, Section E. 10. ( c) of this permit. Furthennore, injection activities shall be tenninated immediately; and operations shall not be resumed until the pennittee has taken necessary actions to restore integrity to the well and the Director gives approval to recommence injection. EPA Final Permit No. CO 10932-04664 Page 12 of 77 3. Injection Interval. The proposed injection zone extends from the top of the Cozzette Member of the Iles Formation at a depth of3,864 feet BGS ( Cozzette is perforated from 3,911 to 3,927 feet BGS) to the base of the Corcoran Member of the Iles Formation. The Corcoran Sandstone is perforated from 4,077 to 4,241 feet BGS. These two intervals are separated by a shale interval making up the base of the Cozzette Member. The overall injection zone is confined by a tongue of the Mancos Shale on top of the injection interval and the main part of the Mancos underlying the interval. 4. Injection Pressure Limitation. Based on the instantaneous shut-in pressure from a fracture treatment of the well, a maximum surface injection pressure of 930 pounds per square inch gauge (psig) has been established. If a higher pressure is requested, it must be accompanied by a valid step-rate test (SRT) of the injection zone, using fluid normally injected, to determine both the instantaneous shut-in pressure (ISIP) and the formation breakdown pressure. The Director will determine the allowable pressure modification based upon the test results and other parameters reflecting actual injection operations. The permittee shall give thirty (30) days advance notice to the Director if an increase in injection pressure will be sought. Details of the proposed test shall be submitted at least seven (7) days in advance of the proposed test date so that the Director has adequate time to review and approve the test procedures. Results of all tests shall be submitted to the Director within ten (10) days of the test. Any changes in the maximum injection pressure established by this section, as dictated by the test results, will be made as a minor modification to the Permit. 5. Injection Volume Limitation. There is no limitation on the number of barrels of fluid per day (BFPD) that may be injected into the Getty# I-7LW disposal well, or in the cumulative number of barrels injected, provided that the maximum allowable injection pressure limitation, Part II, Section C. 4., of this permit, is not exceeded. 6. Injection Fluid Limitation. This Class I Non-Hazardous Underground Injection Control (UIC) individual well Permit authorizes use of the Getty# l-7LW for the disposal of reject brine wastewater, including sodium carbonate from the solution mining fluid processed at the Parachute soda ash plant. No off-site (site meaning the Parachute soda ash processing plant) waste, on-site solvents, or off- specification chemicals will be accepted for disposal. Injection of any hazardous waste as identified by EPA under 40 CFR 261.3 is prohibited. 7. Annular Fluid. Unless an alternative to a packer has been approved under 40 CFR § 146.12 ( c ), the annulus between the 2-3/8 inch tubing and the long string ( 4-1/2 inch) casing shall be filled with fresh water treated with a corrosion inhibitor or other packer fluid as approved, in writing, by the Director. The annulus shall be maintained under a positive pressure ranging from 20 to 80 pounds per square inch EPA Final Permit No. CO 10932-04664 Page 13 of 77 gauge (psig) with a target value of 50 psig. A diesel freeze blanket of approximately one barrel may be placed on the backside to prevent freezing and possible equipment failure. D. MONITORING, RECORDKEEPING, AND REPORTING OF RESULTS I. Injection Well Monitoring Program. Samples and measurements shall be representative of the monitored activity. The permittee shall utilize the applicable analytical methods described in Table I of 40 CFR § 136.3, or in Appendix III of 40 CFR Part 26 I, or in certain circumstances, by other methods that have been approved by the EPA Administrator. Monitoring shall consist of: (a) Sampling and analysis of injection fluids. Analysis of the injection fluids for the first year of injection shall be performed quarterly and whenever there is a change in the source of injection fluids. After the first year of injection, samples shall be taken twice a year except when there is a change of source. If the data collected in the first year demonstrate that some constituents are at insignificant levels (below or close to detection level) or are at consistent levels (less than 10% variation between samples), the operator may request a minor modification to modify the sampling requirements to eliminate or reduce the sampling for specific items. The injection fluid shall be sampled from the injection line downstream of the storage tanks. The samples shall be analysed for the following parameters: carbonate (by colorimetry or other method to be determined), bicarbonate (by colorimetry or other method to be determined), total dissolved solids (TDS), pH, specific conductivity, specific gravity, dissolved sodium, dissolved chloride, dissolved boron, dissolved barium, dissolved calcium, dissolved magnesium, dissolved sulfate, dissolved fluoride, and dissolved potassium. (b) Continuous monitoring of flow rate and cumulative volume. The instrumentation shall be capable of recording at least one value for each of the parameters at least everyone (I) minute. Initially, recordings shall be made once every ten (I 0) minutes. Monitoring must occur whether or not fluids are being injected. This information shall be analyzed in the first annual report to determine if this frequency is representative of the injection activity. A minor modification to the Permit shall be made to increase the frequency ofrecording if the variability of the injection volume and rate (as warranted by the data results) affects the representative nature of the data. A minor modification to the Permit may be made to decrease the frequency of recording ifthe Director determines that the fluctuation of the parameters is such that less frequent data collection would not significantly affect the EPA Final Permit No. CO 10932-04664 Page 14 of 77 representative nature of the reported data. ( c) Continuous monitoring of injection and annulus pressure. The instrumentation shall be capable ofrecording at least one value for each of the parameters at least every fifteen (15) seconds. Initially, recordings should be made once every ten (10) minutes. Monitoring must occur whether or not fluids are being injected. This information shall be analyzed in the first annual report to determine if this frequency is representative of the injection activity. A minor modification to the Permit shall be made to increase the frequency ofrecording ifthe variability of the injection pressure and annulus (as warranted by the data results) affects the representative nature of the data. A minor modification to the Permit may be made to decrease the frequency ofrecording if the Director determines that the fluctuation of the parameters is such that less frequent data collection would not significantly affect the representative nature of the reported data. 2. Monitoring Information. Records of any monitoring activity required under this permit shall include: (a) The dates, exact place, and the time interval of sampling, monitoring, or field measurements; (b) The name of the individual(s) who performed the sampling or measurements; (c) The exact sampling method(s) used to take samples; ( d) The date( s) laboratory analyses were performed; (e) The name of the individual(s) who performed the analyses; (f) The analytical techniques or methods used by laboratory personnel; and (g) The results of such analyses. 3. Recordkeeping. (a) The permittee shall retain records concerning: (i) the nature and composition of all injected fluids until three (3) years after the completion of plugging and abandonment which has been carried out in accordance with the Plugging and Abandonment Plan shown in Appendix C. EPA Final Permit No. CO 10932-04664 Page 15 of 77 (ii) all monitoring information, including all calibration and maintenance records and all original chart recordings or digital files for continuous monitoring instrumentation and copies of all reports required by this permit for a period of at least five (5) years from the date of the sample, measurement or report throughout the operating life of the well. (b) The permittee shall continue to retain such records after the retention period specified in paragraphs (a) (i) and (ii) above unless he delivers the records to the Director or obtains written approval to discard them. ( c) The permittee shall maintain copies (or originals) of all pertinent records [Part II, Section D. I. (a), (b), (c), and (d)] available for inspection at the office of: American Soda, L.L.P. 2717 County Road 215. Parachute, Colorado 4. Reporting of Results. The permittee shall submit Quarterly Reports to the Director summarizing the results of the monitoring required by Part II, Section D. I. (a), (b), and (c) of this permit. The report shall include the monthly average, maximum, and minimum measured values for injection pressure, flow rate and volume, and annulus pressure. The operator shall also provide summary graphs covering the reporting period of the injection pressure, the annulus pressure, and the injection rate. Copies of the analytical results for the samples of injected fluids, and records of any major changes in characteristics or sources of injected fluid shall be included in the Quarterly Report. The Quarterly Reports shall include the results and associated documentation of any mechanical integrity testing, pressure falloff testing, well workover, or well logging completed during the period covered by the report. The first Quarterly Report shall cover the period from the effective date of the permit through the end of that quarter. Subsequent Quarterly Reports for a year shall cover the periods of: January I through March 31; April I through June 30; July I through September 30; and, October I through December 31. Each Quarterly Report shall be submitted to the Denver Office by the 15th of the following month. Appendix B contains Form 7520-8 which may be copied and used to submit the quarterly summary of monitoring. EPA Final Permit No. CO 10932-04664 Page 16 of 77 E. PLUGGING AND ABANDONMENT 1. Notice of Plugging and Abandonment. The permittee shall notify the Director forty-five (45) days before abandonment of the well. 2. Plugging and Abandonment Plan. The permittee shall plug and abandon the well as provided in the Plugging and Abandonment Plan, Appendix C. The Director reserves the right to change the manner in which the well will be plugged ifthe well is modified during its permitted life or ifthe well is not made consistent with EPA requirements for construction and mechanical integrity. The Director may ask the permittee to update the estimated plugging cost periodically. Such estimates shall be based upon costs which a third party would incur to plug the well according to the plan. 3. Inactive Wells. After a two (2) year period of injection inactivity, the permittee shall plug and abandon the well in accordance with the Plugging and Abandonment Plan, unless the permittee: (a) has provided notice to the Director; and (b) has demonstrated that the well will be used in the future; and (c) has described actions or procedures, satisfactory to the Director, that will be taken to ensure that the well will not endanger underground sources of drinking water during the period of temporary abandonment. 4. Plugging and Abandonment Report. Within sixty (60) days after plugging the well, the permittee shall submit a report on Form 7520-13 to the Director. The report shall be certified as accurate by the person who performed the plugging operation and the report shall consist of either: (1) a statement that the well was plugged in accordance with the plan; or (2) where actual plugging differed from the plan, a statement that specifies the different procedures followed. F. FINANCIAL RESPONSIBILITY I. Demonstration of Financial Responsibility. The permittee is required to maintain continuous financial responsibility and resources to close, plug and abandon the injection well as provided in the plugging and abandonment plan. (a) American Soda has chosen to demonstrate financial responsibility through a Standby Trust Agreement and a SAFECO Insurance Company of America Surety Performance Bond (issued to American Soda, L.L.P., the well operator), in an amount sufficient to carry out plugging and abandonment required by the Permit. This bond is part of the overall bonding instrument EPA Final Permit No. CO 10932-04664 Page 17 of 77 for American Soda's Class III area Permit. The performance Bond names EPA as beneficiary in the event of permittee default on the plugging and abandonment requirements and is hereby incorporated as part of this permit. The Standby Trust Agreement established by the permittee shall remain in effect for the duration of this permit, unless part (b), below, has been executed. EPA may require a periodic update of the financial statement, but at least every five years. (b) The permittee may, upon written request to EPA, change the type of financial mechanism or instrument utilized. A change in demonstration of financial responsibility must be approved by the Director. A minor permit modification will be made to reflect any change in financial mechanisms, without further opportunity for public comment. 2. Insolvency of Financial Institution. In the event that an alternate demonstration of financial responsibility has been approved under (b) above, the pennittee must submit an alternate demonstration of financial responsibility acceptable to the Director within sixty (60) days after either of the following events occur: (a) The institution issuing the trust or financial instrument files for bankruptcy; or (b) The authority of the trustee institution to act as trustee, or the authority of the institution issuing the financial instrument, is suspended or revoked. 3. Cancellation of Demonstration by Financial Institution. The permittee must submit an alternative demonstration of financial responsibility acceptable to the Director, within sixty (60) days after the institution issuing the trust or financial instrument serves 120-day notice to the EPA of their intent to cancel the trust or financial instrument. PART III. GENERAL PERMIT CONDITIONS A. EFFECT OF PERMIT The permittee is allowed to engage in underground injection in accordance with the conditions of this permit. The permittee, as authorized by this permit, shall not construct, operate, maintain, convert, plug, abandon, or conduct any other injection activity in a manner that allows the movement of fluid containing any contaminant into underground sources of drinking water, ifthe presence of that contaminant may cause a violation of any primary drinking water regulation under 40 CFR, Part 142 or otherwise adversely affect the health of persons. Any underground injection activity not authorized in this permit or otherwise authorized by permit or rule is prohibited. Issuance of this permit does not convey property rights of any sort or any exclusive privilege; nor does it authorize any EPA Final Permit No. CO 10932-04664 Page 18 of 77 injury to persons or property, any invasion of other private rights, or any infringement of State or local law or regulations. Compliance with the terms of this permit does not constitute a defense to any enforcement action brought under the provisions of Section 1431 of the Safe Drinking Water Act (SDWA) or any other law governing protection of public health or the environment for any imminent and substantial endangerment to human health, or the environment, nor does it serve as a shield to the permittee's independent obligation to comply with all UIC regulations. B. PERMIT ACTIONS 1. Modification, Reissuance, or Termination. The Director may, for cause or upon a request from the permittee, modify, revoke and reissue, or terminate this permit in accordance with 40 CFR Sections 124.5, 144.12, 144.39, and 144.40. Also, the permit is subject to minor modifications for cause as specified in 40 CFR Section 144.41. The filing of a request for a permit modification, revocation and reissuance, or termination or the notification of planned changes or anticipated noncompliance on the part of the permittee does not stay the applicability or enforceability of any permit condition. 2. Transfers. This permit is not transferrable to any person except after notice is provided to the Director and the requirements of 40 CFR 144.38 are complied with. The Director may require modification, or revocation and reissuance, of the permit to change the name of the permittee and incorporate such other requirements as may be necessary under the SDW A. 3. Operator Change of Address. Upon the operator's change of address, notice must be given to the appropriate EPA office at least fifteen (15) days prior to the effective date. C. SEVERABILITY The provisions of this permit are severable, and if any provision of this permit or the application of any provision of this permit to any circumstance, is held invalid, the application of such provision to other circumstances, and the remainder of this permit shall not be affected thereby. D. CONFIDENTIALITY In accordance with 40 CFR Part 2 and 40 CFR 144.5, any information submitted to EPA pursuant to this permit may be claimed as confidential by the submitter. Any such claim must be asserted at the time of submission by stamping the words "confidential business information" on each page containing such information. If no claim is made at the time of submission, EPA may make the information available to the public without further notice. If a claim is asserted, the validity of the claim will be assessed in accordance with the EPA Final Permit No. CO 10932-04664 Page 19 of 77 procedures in 40 CFR Part 2 (Public Information). Claims of confidentiality for the following information will be denied: The name and address of the permittee; and Information which deals with the existence, absence or level of contaminants in drinking water. E. GENERAL DUTIES AND REQUIREMENTS I. Duty to Comply. The permittee shall comply with all conditions of this permit, except to the extent and for the duration that such noncompliance is authorized by an emergency permit. Any permit noncompliance constitutes a violation of the SDWA and is grounds for enforcement action, permit termination, revocation and reissuance, or modification. Such noncompliance may also be grounds for enforcement action under the Resource Conservation and Recovery Act (RCRA). 2. Penalties for Violations of Permit Conditions. Any person who violates a permit requirement is subject to civil penalties, fines, and other enforcement action under the SDW A and may be subject to such actions pursuant to the RCRA. Any person who willfully violates permit conditions may be subject to criminal prosecution. 3. Need to Halt or Reduce Activity not a Defense. It shall not be a defense for a permittee in an enforcement action that it would have been necessary to halt or reduce the permitted activity in order to maintain compliance with the conditions of this permit. 4. Duty to Mitigate. The permittee shall take all reasonable steps to minimize or correct any adverse impact on the environment resulting from noncompliance with this permit. 5. Proper Operation and Maintenance. The permittee shall at all times properly operate and maintain all facilities and systems of treatment and control (and related appurtenances) which are installed or used by the permittee to achieve compliance with the conditions of this permit. Proper operation and maintenance includes effective performance, adequate funding, adequate operator staffing and training, and adequate laboratory and process controls, including appropriate quality assurance procedures. This provision requires the operation of back-up or auxiliary facilities or similar systems only when necessary to achieve compliance with the conditions of this permit. 6. Duty to Provide Information. The permittee shall furnish the Director, within a time specified, any information which the Director may request in order to determine whether cause exists for modifying, revoking and reissuing, or terminating this EPA Final Permit No. CO 10932-04664 Page 20 of 77 permit, or to determine compliance with the permit. The permittee shall also furnish to the Director, upon request, copies of records required to be kept by this permit. 7. Inspection and Entry. The permittee shall allow the Director, or an authorized representative, upon the presentation of credentials and other documents as may be required by law, to: (a) Enter upon the permittee's premises where a regulated facility or activity is located or conducted, or where records must be kept under the conditions of this permit; (b) Have access to and copy, at reasonable times, any records that must be kept under the conditions of this permit; (c) Inspect at reasonable times any facilities, equipment (including monitoring and control equipment), practices, or operations regulated or required under this permit; and ( d) Sample or monitor, at reasonable times, for the purpose of assuring pem1it compliance, or as otherwise authorized by the SDWA, any substances or parameters at any location. 8. Records of Permit Application. The permittee shall maintain records of all data required to complete the permit application and any supplemental information submitted for a period of five (5) years from the effective date of this permit. This period may be extended by the Director at any time. 9. Signatory Requirements. All reports or other information requested by the Director shall be signed and certified according to 40 CFR 144.32. JO. Reporting of Noncompliance. (a) Anticipated Noncompliance. The permittee shall give advance notice to the Director of any planned changes in the permitted facility or activity which may result in noncompliance with permit requirements. (b) Compliance Schedules. Reports of compliance or noncompliance with, or any progress reports on, interim and final requirements contained in any compliance schedule of this permit, shall be submitted no later than thirty (30) days following each schedule date. (c) Twenty-Four Hour Reporting. EPA Final Permit No. CO 10932-04664 Page 21 of 77 (i) The pennittee shall report to the Director any noncompliance which may endanger health or the environment. Infonnation shall be provided orally within twenty-four (24) hours from the time the pennittee becomes aware of the circumstances, by telephoning EPA at (800)-227-8917 and ask for the Class II UIC Program (during nonnal business hours) or at (303) 293-1788 (EPA Hotline for reporting at all other times). The following infonnation shall be included in the verbal report: (A) Any monitoring or other infonnation which indicates that any contaminant may cause endangennent to an underground source of drinking water. (B) Any noncompliance with a pennit condition or malfunction of the injection system which may cause fluid migration into or between underground sources of drinking water. (ii) A written submission shall also be provided within five (5) days of the time the pennittee becomes aware of the circumstances. The written submission shall contain a description of the noncompliance and its cause; the period of noncompliance, including exact dates and times, and ifthe noncompliance has not been corrected, the anticipated time it is expected to continue; and steps taken or planned to reduce, eliminate, and prevent recurrence of the noncompliance. ( d) Other Noncompliance. The pennittee shall report all other instances of noncompliance not otherwise reported at the time monitoring reports are submitted. The reports shall contain the infonnation listed in Part III, Section E. 10. (c) (ii) of this pennit. ( e) Other Infonnation. Where the pennittee becomes aware that any relevant facts were not submitted in the pennit application, or incorrect information was submitted in a pennit application or in any report to the Director, the pennittee shall submit such correct facts or infonnation within two (2) weeks of the time such infonnation becomes known. EPA Final Permit No. CO 10932-04664 Page 22 of 77 FIGURE 1. (MAP OF PICEANCE BASIN AND WELL LOCATION) EPA Final Permit No. CO 10932-04664 Page 23 of 77 I I .. Garfield Coun~ - . -I *Denver ~-----------­~---------------7-.-~-. -----.. , Getty 1·7LW COLORADO 0: •, ., . Yankee Gulch Sodium Minerals Project American Soda, L.L.P. " Class I Underground Injection Control Penni! Application November 200 I ,. " ' ,•• - Source:.Mac.Lachlan 1987 ~"· Surlau· w<•l!'r " r::f the nm1t1err: ... pan of P1ceanct ~ bas1r> crau1s rnt< lht: White RIVP.J a t:ibvtary of tht- arams rnto thr (0101aao Fl1\•er r-"· ·-_, )" ~.·: ... Figure D-1 PlCEANCE CREEK BASIN AND MAJOR DRAINAGES Prepared b} ~. _ STEIGERS 7 CORPORATION FIGURE2. (STRATI GRAPHIC AND HYDRO LOGIC COLUMN) EPA Final Permit No. CO 10932-04664 Page 25 of 77 • a: :::;; m u. :::;; )000· ::c ::c ~ u ::::> .... Cl ..J ct ..J VI w ~~oc · ;: ct !er ;: 600C· ~ n. u. :::::> 0 0~00. :.:: a: a: 0 (.? u. '~- VI w :::;; 0 7S~O- <( a: ..J w 1000-..J > o.., <( "'z ::<o ;: ~E~N (f) . -= O).;(I• f 1.t ROLLINS l~ MBA. :::;; w ;I COZZETTE :iE ·1 MBR. VI ' •ooo· r 1\ CORCORAN ..J • ~ MBA. lj MANCOS SHALE -11 >- a: <x: l- a: w I- Cf) ::::> 0 w l) <x: I- a: l) Getty 1-7LW Well Log Rollins SS To the left, the lower portion of the stratigraphic column shown on the previous page is depicted next to the Induction openhole log of the Getty 1-7LW well. The tops of the Rollins sandstone, the Cozzette Sandstone and the Corcoran sandstone are shown. Note that the Cozzette and Corcoran sandstones are bounded above and below by thick, dense Mancos marine shale. There is a tongue of Mancos shale in the Getty 1-7LW well separating the Rollins sandstone from the Cozzette sandstone. As this illustration, which includes the well log from a well approximately 12 miles away shows, this shale tongue, and the character of deposition of these sediments, is laterally very persistent. Tongue of Mancos Shale Cozzette Sandstone Corcoran Sandstone Mancos Shale 3 APPENDIX A (CONSTRUCTION DETAILS) EPA Final Permit No. CO 10932-04664 Page 27 of 77 • 12· lW hole --------~·~ Getty I -7L W Well Logan Wash Federal Unit UIC Class II: Salt Water Injection Surface Elevation 5.259 Feet 1.281.7' FNL, 355.8' FEL NE/4.NE/4 Section 7, T-8-S. R-97-W Sixth Principle Meridian "Long Point" USGS I :24.000 Quadrangle Garfield County, Colorado 311' 8·5/8" 24 K-55 STC surface pipe, cemented to surface with 300 sacks 1.0f----cosing leak. September 2001 cemented from 617' to 681' with 23 7 socks i·:·· ot------cosing leak. AuguS1 1989 ~. cemen1ed from 2,460' to 2.525' with 350 soc~ 7. 718"' hcie """'""'"f-f----2·3/8" 4.70 J·55 4-1/2" 10.50 K·55 STC cosing cemented 'Nith 350 soc~ 165/35 POZMIX. 2% gel. 1 O°lo salt. and + 2°/o CoCI;) 4· l/2~ tension pock.er Of 3,891' Cozzette perforat1on~ five 0.39" perforot1ons: 3.911', 3.921'. 3,923', 3,925', 3.927" fractured with 32,000 lbs sand and 20 tons CO, when drillec Corcoran pertoro11ons ---~ ten 0.39" perfor011ons: 4,077'. 4.079'. 4,0B r. 4, 131 '. 4, 138" 4, 140". 4. 182', 4, 191". 4,240", 4.241" fractured 'Nith 115.000 lbs sand and 30 tons CO, when drilled TD 4,364' Yankee Gulch Sodium Minerals Project American Soda, L. L. P Sou1ce: Based on the records of the Colorado Oil and Gos Conservation Commission. Formation depths based on interpretation by Energy Ingenuity Company. Class I UJC Pennit Application -Additional Information January 2002 EUE tubing 3656' Rollins Sandstone 381 O' Tongue Mancos Shale 3864' Cozzette Sandstone 4076' Corcoran Sandstone 4280' Mancos Shale Yankee Gulch Sodium Minerals Project ~AMERICAN SODA, L.L.P. GETTY l-7LW WELL COMPLETION DIAGRAM Prepared b) ~_ STEIGERS ~...,CORPORATION APPENDIXB (REPORTING FORMS) 1. EPA Form 7520-7: APPLICATION TO TRANSFER PERMIT 2. EPA Form 7520-8: INJECTION WELL MONITORING REPORT 3. EPA Form 7520-10: COMPLETION REPORT FOR BRINE DISPOSAL WELL 4. EPAForm7520-12: WELLREWORKRECORD 5. EPA Form 7520-13: PLUGGING RECORD 6. EPA Form RS: MECHANICAL INTEGRITY PRESSURE TEST EPA Final Permit No. CO 10932-04664 Page 29 of 77 &.P"' .. •c CME l'tc. JOXl-.."l042 ~PtJto .. •1 •'&-•r•i ~-J(I.-~ · Ul\'11lC !1~1l! lNVIF.ONMlN1.l.l f'fiC· 1N ,e.c;( NC'Y SEPA W.ASHINGiON. DC 20A60 APPLICA1 ION l O l RANSFER PERMIT I NJ.Ml ANO ADDRESS OF U.ISilNG Plf.MITTEE lllAMl J.NO J.OORESS Of SURfilCE OWNER S1All I COUN1' I flF;Ml1 NUMBEF< LOLJ.TE WIU .-.No OlftLINE uNn ON ~E C110N PL>T -6'0 J.CR£S SURF.ACE LOC>ilON OESCRIMION N 'Ai OF ,"OF ," ~ECTION TQWN~Hlf fiJ.NGE I I I I I I LOCJ.11 WELL IN TWO OlfilC110N! FF.OM NLJ.F.Esi LINE~ Of OU.e.F.ilfi SfC110N .ANO ORIUING UNn --1--l--1----1---4--1-- I I I I I I Surtace -T-rT-,_Ti""""T-L.oc.11ton __ h. trom IN/$)_ lint of ou•nlf ..nion --1--l--I--' I I •n< fi. ·~cim II /\NI Un• of cu•n•r ~ton -~----WELL A Cl l\llTf WEU S1J.1US TYPE OF FEfiMIT I I I I I I 0 (lf'Sl I D Qpt-r•un, D lnClnnt'.lull ' ' E w ' I I ' ' I C• (less II D Mooif1te11on/Conversion CJ.rea _ j__LJ__ _J__!__j__ OE: r rnt D1spos.al D f-roposeo Number of Wells __ 0 Enh2ncPC1 fitcovery I I I I I I D Hyoroc2rbon Storage 1--t--t--t---~--r+-D Cl21ss Ill 1-J__Lj__ ,_.l..l...l_ 0 Other I I I I I I ltase Neme Well Number s N.AMEIS) J.ND Ji.OORESS!lSI OF NfW OWN( RISI "4AMl J.ND ilDORESS Of NEW OPER.AlOfl Anach 10 thi~ eipplicction c wrinen eigrt:t:mt:nt between 1he E>iEling end new perminee containing a specific da1e tor tren~fer of permit re:sponsibility, coverage, end liability between them. The new per mine• must show evidence of linancial responsibility by 1ht submission of surety bond, or other adequate cs~urcnce, such as financial s1a1ements or other materials acceptable 10 the director. CERTIFICAllON I unify undfl rh• ptno/ly of law that I hav• ptroonally t>0mined and am familiar with the information wbmined in thi$ document and all anachment$ and that, baoed on my inquiry of those individuals immtdiately rHpomible fm obtaining the information, I btlitve that thE information is true, accurate, and complete. I am• ware that ther• are signifiunt penaltie$ for submitring false information, including th• possibility of fin• Md i'mprisonmtnt. (Ref. 40 CFR 144.32) filAME /.NO OFFICLll. mu,,,..,.,,~ ~I ptinlJ SIGN•TUAE D•TI SIGNED EPA Form 7ti20·7 12·841 •• •• -L1Nl1l[I~1/.1 l! l NV1f.ONME N1Al PF.01lC110N J.Gl NC't I clfm /.pp1r;11•0 W.ASHINGlON, OC J0460 OME No. 2040-0042 &EPA COMFLE1 ION REPORl fOR BRINE DISPOSAL, HYDROCARBON S1 OnAGE, OR ENHANCED RECOVERY WELL J.pp1o~•l t.apue1 S·30-aE NJ.Ml ,_Nt, AOOF.lSS OF l):.~llNG f'lF.MITIEl NI-Ml I-NO ADDRESS OF SUF.F~CE OWNER S1All I C.DUNn Pl F.Ml1 NUMEEF\ LOC.J.1£ WELL /.NO OU1LJNl UNll ON ~~CllON PLJ!.1 -t-AC J.CRE~ SUF.Fl-Cl lOC.?llON DESCF.IF110N • Y. Of 'A Of 'I• Sf Cl ION lOWNSHIF F\.i.NGE I I 1 _ _L1 I I LO(.J.1 l WELL IN lWO [Jlftl(l IONS f Fi.OM NLJ.F.[$1 LIN[ s Of OU.L F.1 E fl Sf Cl 10,.. J.NO DRILLING u~:n --l---4--l--!---4--1-- '' 't''' Surlece -T--r-T T-r-T-lo<:;:11on --fl. 11om IN/SI--Lin• ot ciuener se-ciion --l---4--l-T-!-......1--+-~nc h. from I[ /WI Lin• C'f cufnEr H•riion WELL A Cl !VITI TIPl Of Fl RMll I I I I I I Ci l-r int Oispo•al Cl 1no1vioual E.11ime1ed Frecture Frt-!-~urt ' ' I w o I I _I I I o LJ lnhtnced fi.tcovery 0 Aret ot lnjt>c1ion Zont I _J___LJ_Tj__LJ__ Ci ~yoiotubon E101egt Number o1 W•lls __ I I I I I I ,t.n11ur,i'lf'C Dfily lnjf'nion Vclumt !Eblsl lnjf'C"lion ln1Hvel I --t--t--t---t--r--t-- J.vt:regt Mi,•mum ... , •• ... , _ J__l_J__ _J___Lj_ _ I I I I I I I J.r.1i( 1r.c1t>d Dfilv \nif'rtion F-1t1!urt !PSll Dt:plh IC' E:onom of Lowermo11 fr•1hw•ter form11ion ~ J.vt1egt Me,imum tf•et) : 1ypl ol lnitruon f h.llCl (Chee~ rhf ~pprCJP111tlt L/00./$)) lte5t Nl'mt I Wpll Numti.r 0 f>elt w11 111 0 E:rec~ish W111•1 0 frt~h Weter 0 liouid Hyo1ot1-rb0n 0 Other Ntmt of Jnjf'ction 2ont 0111e Dri\lin' l:egen I 01111 We II C.om~·ltle'Cl Permeebility of lnjeciion 2ont I i Oett Drilling Compltle<l ForosiTy ot lnjtC1ion 2one (.L~ ING J. ND 1UEING CE MENl HOLi OD Eiie W\/fl -Greelt -Ntw or UsMI Depth f<-C~t Clesf Depth en 01rm•t•r INJlCllON 20NE S11MUL.J.110N Vl.'JR( llNE l OG~. llEl LJi.CH T'<Pl lnurvel 1 rti'IP<l Mnrritli tnd Ji.mount Ur.eel le>{: lype& Logg.C lnlerv•ll tomplt1£ J..11c.chmtnU;.. - E listed on 1ht Tf'Vf'TSf. CERllFICAl ION I cenify unde1 lhe penally of law rhal I have perwnal/y examined and am familiar wilh lhe info1ma1ion submirred in rhis documem and all ;;uachmems and rhar. based on my inqwiy of !hose individuals immediarely nspomible for ob1ainin9 rhe intormarion, I believe rhar rhe inlorm8lion is 11ue, accurare, and comp/ere. I ;;ma ware rhal lhtdE are s1{/nificanr penalries fo1 subminin9 I aloe inf or mar ion, includin9 rhe possibilily of fine and impriwnmenl. (Ref. 40 CFR 144.32}. NAME ,t.NO Off ICIAL Till£ (Plt•s~ rypt OT print} o~n SIGNED pp1r~•C. CME Ne. ;ox . ..()()4 •• ~pp1c-r•l •J1Ji111 E·3D..aE LINil l 0£1/. 1 ( £ I NVlf,ONMI NlAL P~OllC110N .&C, y SEPA W.&EHINGlON, DC ;a)'.60 ANNUAL DISPOSAL/INJf:.CllON WELL MONllORING REPORT NJ.. Ml J.NC.. J.DDF.E SS ,Of UIETlNG Pl F.MITTfl t.J..Ml J.NO.&.OOF.lSE Of SURf.ACl OWNER El.All I COUNT\' ~ flf.M/1 t.iUMEER LOCJ.11 wru J.NDOl.nUNE uNn ON SfCTION PL.Al -b40 J.CR£S ~Ufifl-CE lOCJ.TiON Ol$CFllPTIOW N '-'OF \.!.OF "f, ~ffliON lOWNEHIP "'NG( I I I I I : L0(.).11 W(U /NTWO Llf.lCTIONE fF.O~ f.>LJ.f.1£1 UNI£ Of 0UJ.F.11FI £1CTION J.NO OF.ILUNG UNn -+--+-+ ..j I I I I I I I Eurt•ce ~uon __ h. t1om fh/SI--Uni ot ciuen•r uciion .__T-i-I T---ri- .-+-+--I--'--1---4--1--""' h. l1r.m IE fW1 Lin• ot curn11 »-nfon WE U J.C1 IYITY TYPE Of FE ~Mil I I I I I I 0 Er inf DiWQ581 0 lndi ... ielu1I ' ' E w I I I I i I D ( nhE n~ F.f'CC'very DAre1 I I j__ _J_ 0 Hyor()C..ttbon f1011ige Number of Wtl11 __ I I I I I I l t-E5f Ne me Wf'll Number --r I I i-I I _J_ I I I I I I I I I I I s 1Uf1NG U.EING /.NNULUS PRESSURE lfi.JICTION FF.EEEURl 101Al VOLUME IN.HC1l0 !OPTION.Al MONnOfilNG) MONTH YLAR /.VE ht-GI PEIG MA>IMUM PSIG •Bl MCf MINIMUM f'flG MAJ(IMUM PSIG CEA11FICA110N I unity undu thE ptnalty of law that I hHe pe1 wncily vamined and am familial with thE info1motion submi11ed in this document and all Htachmenu and that. ba~ed on my inquily of thou indi1·iduols immediattly 1esponsible for obt•ininr; the info1mttion, I LElieve that the info1mation is llue, ace u1atE. and complete. I am aw01e that there are oi9nificam penahies fo1 submininr; falu info1mation, includin!J the poHiLility of fine ond imprisonment. (Rel. 40 CFR 144.32}. NJ. Ml /.ND Off ICIAL 111Ll (Fl1aJ1 trP* 01 tiflnl) SIGN4'1URE D.AlE SIGNED • IH ---------------~· L1Nlllt,,~1.L1l~ l:N\'IF.0P..:M(N1J.l f-f..Q1((110NJ.C,l SEPA "'J.Ml J.NO J..OORESS Of fl f.M1TIE£ LO(.J.1[ WELL J.NO Oll1llNE uNn ON SEC110N PL>1 -MO J.CRES N _j_J_J_+J_J_tjl I I I I I I -T-rT T-r -+--4-4---L--' -...!...- I I I I I I I I w ; _j_ I I ; _i_i I -1 I TTT I 11 --r-t--t-T-r-.--.1 _J__j_J__J__j_J_I I I I I I I I I ' !-1Jf' WP.!-HING10N. DC :i04&0 WELL REWORK RECORD t.;J.Ml J.NO J.DORESS OJ CON1flJ.C10F. .\COUNT'! ~UF.FJ.CE LOC.J.110N OESCF.IPllON 'J. OF 11. OJ '/, SICllON 10WNSHJF F-Ji.NGE l OC..L ii W[ LL IN TWO [!IF.I: Cl ION~ I F.Olv. NLJ. F.E ~1 llN[ ~ Of 0L1.L F.1 £ F-. S l CllQt,; J.Nt: 0 FllLL ING UNl1 Sun1ct loc111or. __ tt. hom IN/S) __ L me ol cuaner lfC\IOn '"' ti. he>m IE /W\ \'Vltl ,C..(l1VITY [• Erinf Disposal [1 E l'\hf ncE-0 F.t-ccvery [· Mycroc.crbon S101eigt Will CJ.~lNG F.tCORO ''°' f roln lotel Dtpth E:t101t f..1--wor~ I T'YPl OF FlRMl1 Q lno1v1ouel '----, o-,-,-, -u-, P-,-h-~-h-e_r_R_•_w_o_r_, _ _.,I 0 A re1 Numbt1 cit Wrlls __ ~1-u_•_"_R_•_w_o_•_'_(_o_m_m_'_"_'_"_"_---'ll We 11 t-.u mt>er l Delf F.twork Complt1eC1 EHORl REWORK Ac Kl or h•eture 1r•f1rntn1 Fo.tcOrCI W( l l Ct.~ ING F. I c OR c -,. n [ R fir WOF.t< (/flCIC flt ~ddi1ions end Ch~n{:ES Only) (tmf'n1 1 Ff'r101111on1 AclO CH fr1ciure ~-c~! I 1YPt I from 1c 1r*'•'"''"' Fo.f'core Dl~(RIEE ~.[WORK OFERl<llONS IN D£1All USE J.DD1110N.Al SHEElS If NECESSAR'1' CER11FICA110N I WIRE l INE lOGS, LISl EACH T'IP[ lop 1ype1 I lo!f9eCI 1n1er .... al1 I J ct:rtify uridtr rht ptncl1y of law lhcSl I heve pe1~one/ly t>omined end cm fcmili;,r wirh lhE information submi11ed in rhis documem ond oil cllochmems ond lhBI, boud on my inquiry of rhose individus/s immEdicrEly 1Esponsible tor ob1;,inin9 rht info1morion. I bElievE thor rhe info1motion i~ true, hccurare. ond comp/ere. I om 6 wo1E thor the1t CJE ~1Bnificon1ptnolries101 ~ ubmirring f alsE inf or mar ion. incfudin9 rhe possitili1y ol line end imprisonmenr. {Ref. 40 CFR 144.32t NJ.ME J.NO OFflClAl 111ll (flt11Jt 1rpt c1 print} SIGN.C.1URE O.A1E SIGNED -------------"-----------------·-------- ....... _ .... ...·~·· ... 1-... -':, 1.JhlTft ~";.:,Ti! iN\'1J.(;...,,..lN1 .. t. ~J.OtlC 'GiNC\ EPA w.-.~.._,,..G'iCPt, cc :c.-atc Fl UGGING RECORD ~;NC J.Ctflt~! Of FlF.MIT1EE I : : : I I I I I I I : : : I I I I 11 ; I ; ; i I 1 ..!...' __!._' -"1__!...1 ---:-, --'1 !wn•c• L.Oo...altOf\ __ ,..._ lttrr. 1N/!'J __ l.1n1 cl c:uan., sen'°" '"' I', Irr,... I( .l'l/tll D lnch·icual Frrmn Ci.t.111 Ftrmu D~ul< Nurr.t·tr cf Wtll! __ ~u•tt •• c•u1I \."• _, •• .,.,ni t/'le ''"'•••I, ......... l~• .. L• .. ~U• II ,,,,._,1119 It l•U U\I ... ,. ___:l___;l:.___~I _;...-1~1~1_:_1_1 ~ Lt1'' Name c;..:.!.lNG ,,:.Nt iUl:JNG F.tC.:F.C: AF1£1\ f\..VGC.;NG I --------------:---=-=--=----:-------=-:--~ CC~!I WitL!/'7, !1t· !! ?Ui :,., wt'..L !r, r.c !E • rr, '"' 'Ntl!. 1rn1 ~cl! !1%£ I ~ :~~? 11 ... fll-CC c• ........... , ... ..,,,., C• tU..1"'1 .. ~c;a OT>.,•· .. -·,...,,..,.. C· n.. , ...... , ...... ,..~ I :: ........ '·•t-r••• i:: i ,.. .......... ,..C>""o1 ... ( ~ ...... ~.--~ ...... c 'Tll1 t-.,.1 ......... .,.,.. c:-01 .... ~! i C C;...l..!S II.I I ""·L'G ,, •'..VCi •• jl..) cf c ,,.. .• 1"11 Tc E. L191C 111cn CU.JC! I .... \'c•Ul"!'\I 'Tc ! I '"'·'~·c•C ICU. f\.1 c....·~ 1ec lee cf Flue th.I. ,. To CERTIFICATION l cer~ify unc;tr ttr.clty cf 1i"tr th1t trds cc-t~rntnt ind al1 ctt2c:.mrr1tS )ot:rt t:rtciartd L•ndtr my Cirtc":itn or iut·tnii:ion ;n itttrc2nte "'ith a !y~tfm ce!i~ntc tc 2!Surt that cu1lifirc per,cn• ne·1 ~rt.t·trl)' ~ctr.tr i!ne! ev1lui1tt tht infcr.o.tticn !UDT•1t~f~. Ec!rc en rr.y inD\liry cf tht pencn er ~-er.ens .. nc-r..cr.i!~f the !)'ltem, er tr.est ~fncns cirtc-:ly rt!rcnsible for 9attierin9 the infc,.nr.ction. :.ht infcrT,1tion !UbT.itttd is, tc the t·lSt cf my knc.,.ito9t ilnG belief, true. accurztt, enc ccrr.~lttt. 1 • i!.,.trt t.t1at tt,trt. art s'isnificznt Ptnclt'its fer sutndt-:.:n9 false infcmzticn, inc1uc'ing the pcssi~ility cf f~ne i!nd 1rr.cr1nscm1tnt for knc""in9 violations. (REF. 40 CF• lii.221 C"tl !ICNIC •• •• J\1echanica11n1egrity Tesl Casing or Annulus Pressure J\1echani~a1 ln1egrity Test U.~. E.nvironmental Frotf'ction .t.Fency Unourround Infection Control FroETC;m i;.i;.s 1E 1t. ~11t-et. ~uite 500 Denver, CO C:0202·24&t EPA Witness: --------------Date: __ _,_/ __ --'---- Tef'l conducted by: ------------------------ Others present:------------------------- Well Name: ____________ _ Type: ER SWD Stanis: AC TA UC 1 Field: ___________ _ I Loc<1ion: Sec T N I S R EI W County: ______ State:_ Operator: __________________ _ Lasl MIT: h thi! a reflllarly scheduled 1ef1? Initial 1ef't for permit? Tef'l after well rework? !11oximum AJJ0wable Pre~~ure: PSIG Well injeclinf durint 1e~? ) Yes ) Yes ] Yes ) Yes ) No ) No ) No ] No JfYes, rate:-------bpd P1e~1e~1 ca~infltubin,g annulu5 pre~~ure: __________ ps1g MJT DATA TABLE 1 Test #J Te!! #2 Trit #3 TU BJ.NG PRESSURE lnitial Pressure psig psig · ps1g End of test preHure psig psig psig CASJNG I TUBJNG Al'l'NULUS PRESSURE O minutes psif psig ps1g 5 minutes psig ps1g psig 10 minutes ps1g ps1g psig 15 minutes psig ps1g psig 20 minutes psig psig ps1g 25 minutes psig ps1g ps1g 30 minutes ps1g psig psig I minutes psig ps1g ps1g II minutes ps1g ps1g ps1g RISULT I . 1 Pass I lFail I l Pass I ]Fail I l Pan I lF ail Does the Wl!lUlm pressure build back up after the lest ? I ) Yes I ) No J\1ECHANJCAL INTEGRJTY PRESSURE TEST Additional comments for mecchanical intecgrity pressure test, such as volumec of fluid added to annulus and bled back at end of test, rearnn for foiling test (cHing head leak, tubing leak, other), etc.: APPENDIXC (PLUGGING & ABANDONMENT PLAN) EPA Final Permit No. CO 10932-04664 Page 36 of 77 Plugging and Abandonment Plan 1. Immediately prior to plugging and abandoning the Getty # 1-7L disposal well, the retrievable tension-type packer, the 3,891 feet of2-3/8 inch tubing will be released and removed from the wellbore. 2. Run back into the wellbore with a tubing string to the bottom of the 4-112 inch casing and condition the wellbore. A cast iron bridge plug (CIBP) will be set at in the 4-12 inch casing at 3,875 feet. Place a 100 foot cement plug on top of the CIBP using Class B type II neat cement or an equivalent Class G cement. 3. Fill the wellbore from the CIBP to 320 feet BGS with 10-pound-per-gallon calcium chloride brine with a gelling agent to increase viscosity. 4. Set an intermediate plug across the Wasatch contact at 1,050 feet BGS by perforating the casing at 1, 100 feet and squeezing sufficient Class B Type II or Class G cement to establish a 100 plug both in the annular space adjacent to the 4- 1/2 inch casing and inside of the casing. 5. Perforate the 4-112 inch casing at 315 feet and squeeze either Class B Type II or Class G cement to the surface between the 4-1/2 inch casing and the 8-5/8 inch surface casing. Fill the 4-112 inch casing with identical cement to the surface. 6. Cut off the 8-5/8 inch and 4-1/2 inch casings 1 to 3 feet below ground surface and weld a steel cap and a dry hole marker on top of the 8-5/8 inch casing. Restore the surface to landowner and/or County requirements. EPA Final Permit No. CO 10932-04664 Page 37 of 77 APPENDIXD (CEMENT BOND LOGGING TECHNIQUES AND INTERPRETATION) EPA Final Permit No. CO 10932-04664 Page 38 of 77 . .. • • UNl1 ED S 1 Al ES ENVIF. ONMl.N1 AL FF.01 EC110N AG ENCY REGION VIII HS Hth S11\EE"I' ·SUITE ~00 DlNVEI\, COLOF.ACO E0202-:4E~ 1111 ••• 'APR 19 1994 5UEJECT: GROUND \;J..Tr:R SECTJON GUlDANC::E NO. 34 ff.OM: Cen.ent bend lessing techM.i e..s and interi:retation Tolll Pike, Chief ~ ~ UlC Direct ln.Flen.entatio sect.ion TO: J.ll ·sect) on·· Staff Montana Operations Office These procedures are to be followed when running and inier;:reting cet:ent bend legs fer injecticn and Frcducticn (area of review) wells. F.1-Ji.T l -FRE'FAAE THE \,'[LL J..llew cet:cDt to c~re tcr a sut!icient t:n.e to develcp rull cct:fressive strenstb. A safe bet is to let the cet:ent cure !or 72 hcurs. l! you run the bond log l:efore the cet:ent achieves its t:axicum ccmfressive strength, the log may show poor bonding. Check cet:ent tandbooks !or curing tit:es. C!rr::<:1late tbe bcle vitb a tluid (either ~~ter or mud) cf unifoI"'lll consistency. Travel tin.es are influenced by the type cf flu.id in the hole. lf the flu.id changes bet'..·een t'IJo pcints, t.he travel tit:es n.ay "er.i:ft," causing difficulty in interpretation and quality control. Ee prqo~:red to rull the cElteDt bcDd log ULder pressure to reduce tbe etrect~ of :icro-er.nulus. M.icrc-annulus t:ay be caused by sEveral reasons, but the existence of a micro- annulus does not ~Ecessarily destroy the cet:ent's ability to fenn a hydraulic seal. If the log shews poor bonding, rerun the leg with the sli9htly :were pressure en the casing as vas present when the cement cured. This will cause the casing to expand against the cen.ent and clcse the micro-annulus. FJJ\T II -FlJVJ'!LT!:RS TO LOG JJ:ipl!tude (~Vl -This curve shc'\Js how r.uch acoustic signal reaches a receiver and is an i~portant indicator of ce~ent bend. Reccrd the amplitude 0n tbe 3 foot spaced receiver. orn.vel t:il:le (µs) -Th.is curve shews the c:wcunt of time it takes an acoustic sicnal to travel bet¥een the source and a receiver. For free fipe of a given size and weight, the travel tin.e bet;.·een points is very i:r edict able, al though variable a?Long di!!erent company's tools. Service coI!lpanies should be able to i:revide accurate estin.ates of travel tin.es tor free Eipe of a given size and ;;eight. Travel tillle is required as a qllaJity ccnttol measurement. Record the travel time on the J foot spaced receiver. variable among different company's tools. Service companies should be able to provide accurate estimates of travel times for free pipe of a given size and weight. Travel time is required as a quality control measurement. Record the travel time on the 3 foot spaced receiver. Variable density (VDL) -Pipe signals, formation signals, and fluid signals are usually easy to recognize on the VDL. If these signals can be identified, a practical determination for the presence or absence of cement can be made. VDL is logged on the 5 foot spaced receiver. casing collar locator (CCL) -Used to correlate the bond log with cased hole logs and to match casing collars with the collars that show up on the VDL portion of the display. Gamma ray -Used to correlate the bond log with other logs. PART III -LOGGING TECHNIQUE Calibrate the tool in free pipe at the shop, prior to, and following the log run. Include calibration data with log. Run receivers spaced 3 feet and 5 feet from transmitter. Run at least 3 bow-type or rigid aluminum centralizers in vertical holes, 6 centralizers in directional holes. A CCL is not an adequate centralizer. Complete log header with casing/cement data, tool/panel data, gate settings and tool sketch showing centralizers. Set the amplitude gate so that skipping does not occur at amplitudes greater than 5 mV. Record amplitude with fixed gate and note position on log. Record amplified amplitude on a 5X scale for low amplitudes. Record amplitude and travel time on the 3 foot receiver. Record travel time on a 100 µs scale (150 -250, 200 - 3 00) . Logging speed should be approximately 30 ft/min. Log repeat sections. @ Printed on Recycled Paper PART IV -QUALITY CONTROL Compare the tool calibration data to see if the tool ''drifts'' during logging. Differences in the calibration data may require you to re-log the well to obtain reliable data. Compare repeat sections to see if logging results are repeatable. Check the logged free pipe travel times with the service company charts for the specific tool and casing size used. Since the travel times depend on such factors as casing weight, type of fluid in the hole, etc., these charts should be used only as guidelines. When you are confident of the free-pipe travel times as seen on the log, use them. When interpreting the log, a decrease in travel time (faster times) with simultaneous reduction of amplitude may show a de-centered tool. A 4 to 5 micro-second (µs) decrease in travel time corresponds to about a 35% loss of amplitude. A decrease in travel time more than 4 to 5 µs is unacceptable. PART V -LOG INTERPRETATION Do not rely on the service company charts for amplitudes corresponding to a good bond. These amplitudes depend on many factors: type of cement used, fluid in the hole, etc. To estimate bond index, choose intervals on the log that correspond to 0% bond and 100% bond. Read the amplitude corresponding to 100% bond from the best-bonded interval on the log (NOTE: the accuracy of this amplitude reading is very critical to the bond index calculations). Next, find the amplitude corresponding to 0% bond. Some bond logs may not include a section with free pipe. In this instance, choose the appropriate free-pipe travel time from the service company charts for your specific tool, or from the generalized chart (TABLE 2) at the end of this guidance. To calculate a bond index of 80%, use the following equation: where: A = 1 ol(0.2)1og(Ao)+ (0.8)log(A10o)l 80 A80 ; Amplitude at 80% bond (mV) A0 ; Amplitude at 0% bond (mV) @ Printed on Recycled Paper A100 = Amplitude at 100% bond (mV) EXAMPLE: As an example, consider a bond log showing the following conditions: -Free pipe (0% bond) amplitude at 81 mV. -100 % bond amplitude at 1 mV. Substituting the above values into the equation results in: A = 1 Q[(0.2)1og(81 )+ (0.8)1og(1 )] 80 A80 = 2.41mV Another way to calculate the amplitude at 80% bond is by plotting these same log readings on a semi-log chart. Plot the values for 0% Bond and 100% Bond vs. their respective Amplitudes on a semi-log chart -amplitudes on the log scale (y-axis), and bond indices on the linear scale (x-axis). Then, connect the points with a straight line. To estimate the amplitude corresponding to an 80% Bond Index, enter the graph on the x-axis at 80% bond. Draw a straight line upward until you reach the diagonal line connecting the 0% and 100% points. Continue by drawing a horizontal line to the y-axis. This point on the y-axis is the amplitude corresponding to an 80% Bond Index. @ Printed on Recycled Paper s:- _§_ LU a '.:) f--...J Q ~ <t: Using the values from the example above, your chart will look like that shown below: "' " " ~ " ~ " -..: " '-" '-.,.._ ' " '- ~ " " ' '---- 0%BOND ~ I - i ~ 81 mV '----~ • ' ' ~ I ' ' .. ·~-~ I . ' • ' ' i ' i ' l I ' I I I i i I i ! i " %BOND . ~ ""' ...._ I 80% BOND I ' ' I I ' 100% BOND 1 mV . !'---.. '- . I\ i I \ ' I " \._./ ------- - ·-- --------- -·- -- ---· --. ------ , - -~--- ·----- --- ·------- In this example, 80% bond shows an amplitude of 2.4 mV. A convenient way to evaluate the log is to draw a line on the bond log's amplified amplitude (5X) track corresponding to the calculated 80% bond amplitude. Whenever the logged amplified amplitude (5X) curve drops below (to the left of) the drawn line, this indicates a bond of 80% or more. PART IV -CONCLUSIONS -REMINDERS Different pipe weights and cement types will affect the log readings, so be mindful of these factors in wells with varying pipe weights and staged cement or squeeze jobs. @ Printed on Recycled Paper Collars generally do not show up on the VDL track in well- bonded sections of casing. Longer (slower) travel time due to cycle skipping or cycle stretch usually suggests good bonding. Shorter (faster) travel times indicate a de-centered tool or a fast formation and will provide erroneous amplitude readings that make evaluation impossible through that section of the log. Fast formations do not assure that the cement contacts the formation all around the borehole. Although the bond index is important, you should not base your assessment of the cement quality on that one factor alone. You should use the VDL to support any indication of bonding. Also, you must know how each portion of the CBL (VDL, travel time, amplitude, etc.) influences another. Most 3'-5' CBL's cannot identify a 1/2" channel in cement. Therefore, you also need to consider the thickness of a cemented section needed to provide zone isolation. For adequate isolation in injection wells, the log should indicate a continuous 80% or greater bond through the following intervals as seen in TABLE 1, below: TABLE 1 -INTERVALS FOR ADEQUATE BOND PIPE DIAMETER (in) CONTINUOUS INTERVAL WITH BOND ~ 80% (ft) 4-1/2 15 5 15 5-1/2 18. 7 33 7-5/8 36 9-5/8 45 10-3/4 54 Adequately bonded cement by itself will not prevent fluid movement. If the bond log shows adequate bond through an interval where the geology allows fluid to move (permeable and/or fractured zones), fluids may move around perfectly bonded cement by travelling through the formation. Always cross-check your bond log with open hole logs to see that you have adequate bonding through the proper interval(s). @ Printed on Recycled Paper TABLE 2 -TRAVEL TIMES AND AMPLITUDES FOR FREE PIPE (3 FT RECEIVER) CASING CASING TRAVEL TIME (µs) AMPLITUDE SIZE WEIGHT (mV) (in) (lb/ft) 1-11/16" TOOL 3-5/8" TOOL 9.5 252 233 81 4-1/2 11. 6 250 232 81 13.5 249 230 81 15.0 257 238 76 5 18.0 255 236 76 20.3 253 235 76 15. 5 266 248 72 5-1/2 17.0 265 247 72 20.0 264 245 72 23.0 262 243 72 23.0 291 271 62 26.0 289 270 62 7 29.0 288 268 62 32.0 286 267 62 35.0 284 265 62 38.0 283 264 62 26.4 301 281 59 7-5/8 29. 7 299 280 59 33.7 297 278 59 39.0 295 276 59 40.0 333 313 51 9-5/8 43.5 332 311 51 47.0 330 310 51 53.5 328 309 51 40.5 354 333 48 10-3/4 45.5 352 332 48 51. 0 350 330 48 55.5 349 328 48 FCD:March 31, 1994:RCT/RCT/k:\cbl.sop @ Printed on Recycled Paper UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION 8 999 18TH STREET -SUITE 300 DENVER, CO 80202-2466 http://www.epa.gov/region08 January 17, 2001 CEMENT EVALUATION NOTES Compiled for the MIT Workgroup by Jerry T. Thornhill USEPA, Robert S. Kerr Research Lah. Edited by Paul S. Osborne USEPA, Region VIII Background-Acoustic Cement Bond Logging The Reasons for cementing wells are: 1) to support the casing; and 2) to isolate zones (hydraulic seal), such as producing horizons, injection reservoirs, and underground sources of drinking water (USDW). When a well is completed, a cementing record will be submitted as part of the well completion record. This information will not address the question regarding the adequacy of the cement to isolate the various zones. One of the methods utilized to assess the adequacy of the cementing of a well to isolate the various zones is by using an acoustic cement bond log (CBL). Although an acoustic cement bond logs does not directly measure hydraulic seal, the measured bonding qualities do provide inferences of sealing adequacy (zone isolation). The bonding of cement to the casing can be measured quantitatively using a CBL. The bonding of cement to the formation, however cannot be measured quantitatively using a CBL, but it does provide a qualitative estimate of the bonding to the formation. Detennination of cement integrity is accomplished by an analysis of the full acoustic waveform, the amplitude or attenuation rates of the casing arrivals, and a single receiver travel-time measurement. The Acoustic CBL tool used to make the cement bond log puts energy into the well and measures the energy returned. The operating frequency for all conventional instruments is 20 kHz. The time it takes for energy to return and the amplitude of the returned energy are determined by the cement bonding. Elastic compressional waves are propagated down the sleeve of the instrument, vertically through the borehole fluid, and horizontally across the borehole fluid. Of primary interest to the CBL log is the wavefront moving directly toward the casing. As the wave front impinges upon the casing, some energy is reflected, while the balance is transferred into the steel, the cement sheath and the formation. Acoustic energy propagates through fluid at about 180-220 microseconds per foot, and about 57 microseconds per foot through steel. At each of these interfaces, some energy will be reflected, and some will be transferred into the adjoining medium. The reflected waves coming back from the various 0 Printed on Recycled Paper interfaces are recorded preferably by two detectors located 3 and 5 feet from the acoustic transmitter. The Jog results are recorded on five curves: I) a gamma ray curve for lithologic correlation; 2) a casing collar locator for depth correlation; 3) an amplitude curve derived from the 3 foot receiver as a measure of casing bonding; 4) a travel time curve which is an indicator of the centralization of the tool; and 5) a variable density Jog (VDL) and or signature wave forms from the 5 foot receiver as a measure of the formation bonding. CBL Requirements The requirements for obtaining a meaningful cement bond Jog are: I. The Tool must be centered in the casing. 2. The transmitter and receiver(s) must be a known distance apart. The most common transmitter/receiver spacing is 3 feet. This spacing is ideal for measuring fastest sound travel which is through the casing and is used for amplitude and travel time measurements. The attenuation of this signal is a measure of the bonding of the cement to the casing. It is useless for looking at formation bonding. The 5 foot receiver is used to record variable density and/or signature waveforms. This spacing will not show the casing signal but will show the fomrntion signal. The preferred tool has a transmitter with two receivers spaced 3 foot and 5 foot from the transmitter. This arrangement gives the casing signal (3 foot receiver) recorded as the amplitude curve and formation signal (5 foot receiver) recorded as the VDL trace. A 4 foot spacing (single receiver) has been tried as a compromise. It still does not show formation signals. 3. The "gate" must be set properly. Figure A-2 indicates the wave form being investigated. T sub o represents when the tool is turned on. Dead time is the time it takes to receive the first signal (EI through El). As shown in Figure A-4, EI to E3 are measured to determine the casing bonding (3 foot receiver signal). The signals from this receiver give an evaluation of the amplitude changes the sonic energy will experience on its path along the casing. Tool systems are gated to measure a particular part of the wave train. Acoustic Jogging instrumentation uses both fixed and floating gates. A fixed gate system is one in which the transmitter is fired at fixed intervals, followed by a fixed time for the gate to open and remain open, and fixed time interval for the gate to close. Fixed gates are currently being used for primary bond amplitude measurements; however, prior to development of full waveform recordings, older generation 2 CBl's used a floating gate amplitude measurement with a floating gate travel-time curve to evaluate cement conditions. The principle of the floating gate is that it remains open across the entire acoustic spectrum until an amplitude pulse having sufficient amplitude to extend beyond the threshold bias setting is found. This response is then recorded as the time of the first acoustic arrival pulse. The basic waveform consists of four different types of wave arrivals: a. compressional wave in casing , b. compressional wave in the cement sheath, c. compressional, shear, pseudo-Rayleigh, and Stonefeywaves in the formation, and d. mud or fluid waves. 4. The fluid wave travels through the fluid straight to the receiver. After the fluid wave shows up, the V DL is useless. When the fluid wave enters the receiver, distortion occurs. Therefore, the useful part of the V DL is that prior to the fluid wave. When shear waves are detected on the Signature or Variable Density, they are representative of cement integrity in the overwhelming majority of cases. 5. A reliable cement bond log will have the following: 3 foot -5 foot RECEIVER SPACING GAMMA-RAY CASING COLLAR LOCATOR AMPLITUDE CURVE TRAVEL TIME CURVE VARIABLE DENSITY DISPLAY Amplitude Curve Interpretation A. A high amplitude indicates that the casing is relatively free to vibrate; hence, it is poorly bonded or supported. B. A low amplitude indicates that the casing is more confined or bonded, causing absorption of the wave energy by surrounding media. C. Amplitude measurements between maximum and minimum values are functions of the percentage of casing bond. 3 THIS SINGLE MEASUREMENT (AMPLITUDE), AND THE OVERSIMPLIFIED INTERPRETATION OF IT, IS FREQUENTLY THE SOURCE OF MUCH OF THE CONTROVERSY AND ERROR REGARDING CEMENT BOND LOG ANALYSIS. To analyze a bond log, ignore the amplitude curve initially, go to the V DL and measure the casing signal for free pipe. If the casing signal is not present, the signal must have been attenuated. Then, go to the amplitude curve. Determine the time of the first arrivals and their character. VDL formation signals should generally correlate with the gamma log. The V DL is practically tamper-proof. The operator cannot change the property of the rock, thus the time required for the signal to be transmitted. Pitfalls in Bond lntemretation from Amplitude Response A. Amplitude detection method -fixed gate or floating gate .. B. Instrument centering .. C. Insufficient curing time for cement. D. Cement sheath less than 314 inch with either well centered or poorly centered casing . E. Micro annulus. F. Gas bubbles in the borehole fluid. G. Void spaces in the cement sheath. H. Fast formation. I. Cement bonded to the pipe. but not to the formation. J. Changes in acoustic properties of the borehole fluid density and viscosity die to pressure. temperature, and content. K. Minimum amplitude signal in well bonded casing varies with respect to casing size and casing weight. L. Cements are mixed to particular specifications and may be designed with different compressive strengths. M. Cement is sometimes gas cut. 4 CBL Log Quality Checks Free Pipe A Travel time indicating correct expected value for casing size and weight? B. Travel time, magnetic collar locator, amplitude curve and variable density/waveform all indicating casing collars on depth with each other? C. Free pipe amplitude reading correct value for casing size and weight? D. El arrival on variable density display indicating correct travel time to 5 foot receiver, (i.e. 114 microseconds later than 3 foot receiver travel time)? E. Collars on amplitude curve are 3 foot in vertical height and 5 foot on VDL. This ensures amplitude and VDL/WF are measured on proper receiver. Cemented Pipe A Travel time stretching or cycle skipping occurring in well bonded sections. B. 100% and 70% bonded intervals consistent with minimum sonic amplitude picked from CBL interpretation chart? C. Is travel time less than free pipe value indicating eccentering or fast formation? D. If eccentering is expected, check V DL for chevron pattern at collars and low CBL amplitudes. E. If fast formation is suspected, i.e. open hole logs indicate delta T less than 57 microseconds per foot, check 1" formation arrival on VDL/WF. Ifless than expected free pipe value on 5 foot receiver, fast formation can be confirmed. Note: pre-log planning will alert operator to presence of fast formations. F. Have log passes been run under sufficient pressure to eliminate Micro annulus effect? G. Does main log pass agree with repeat section? H. Is main log pass properly correlated to open hole log? Note: if perforations are picked from a pressure pass, make sure field personnel are aware of 5 this and that proper correlation is taken into account prior to perforating. Instrument Centering A. If the logging instrument is properly centered in free or poorly bonded pipe, the travel time should be a reasonably precise value. B. Travel time measurement is the time it takes the signal to leave the transmitter and return to the receiver. This is not formation bonding. There is no way to tell formation bonding quantitatively. Travel time can be very useful. It can be used to determine whether or not the tool is centralized. Travel time will occur early if an instrument is poorly centered. C. Amplitude can also increase when casing is eccentered because a portion of the annular cement sheath is either absent or extremely thin. (less than 3/4 inch). Cycle Skipping Stretch Cycle skipping to later amplitude arrivals is caused by the attenuation of pipe arrivals. A. Travel-time stretch may occur when an attenuated first pipe arrival is detected in bonded intervals. B. Stretch is often an indication of adequate zone isolation. Casing Collars A. Casing collars are identified as a decrease in the amplitude, a slight increase in TT, and/or clear chevron ("W") patterns on the VDL.. B. The distance between the "W" pattern corners on the V DL represents the transmitter-receiver spacing. C. Casing collar anomalies are typically not apparent in well bonded casing. D. Caliper information defining the size and perhaps the shape and rugosity of the borehole wall behind pipe is always an important criteria to log analysis of cement condition. 6 Calibration Well Site Calibration Procedure (Wedge Wireline) A. With tool in hole and in fluid, panel output is calibrated for a linear output relation of I 00 mv. for I 0 chart divisions-I 0 mv/div. This calibration is done in order to scale the amplitude values. B. Secondary amplitude x 4 or x5 is calibrated. C. Internal calibration cycle of35 mv. amplitude and 50 microseconds wave length is activated; the Gate is set on the cycle, and amplitude deflection is adjusted according to previous 0-100 mv. settings. D. Calibration cycle is deactivated. tool signal on 3 foot receiver is present; the gate is set on the first compressional cycle, and amplitude reading is verified. It should be noted that our system does not rely on free pipe sections in order to calibrate or adjust the amplitude curve. Shop Calibration (Wedge Wireline) A. The tool is centered inside a section of 5.5 inch, 15 lb/ft. casing; completely covered with water; the tank is pressured to 5000 psi.; the signal on the 3 foot receiver is adjusted for a maximum output of 80 mv. B. Signal output on the 5 foot receiver is adjusted in order to compensate for energy loss related to the 3 foot receiver, due to the extended travel time of 114 microseconds, which usually ranges in the order of 30% loss. C. Panels are calibrated for response and linearity. D. After the above procedure is completed, a full display of calibration is recorded for every tool. Notes: An internal electrical calibration for the peak amplitude measurement is utilized to calibrate the instrument. (Atlas Wireline) The shop calibration fixture utilized is a 5.5 inch OD aluminum pressure tube. The tube is filled with water and pressured up to 500 psi or greater. 7 (Atlas Wireline). Shop calibrations are required monthly or more frequently as needed. A complete calibration sequence requires BEFORE and AFTER records, including Signature (or V DL) and travel time calibrations. SECOND-GENERATION RADIAL CEMENT EVALUATION INSTRUMENT The Segmented Bond Tool (SBT) is a promising second-generation radial cement bond instrument, which measures the quality of cement effectiveness both vertically and laterally around the circumference of the casing. The SBT is designed to quantitatively measure six segn1ents, 60 degrees each, around the pipe periphery. The instrument employs an array of high frequency steered transducers, which are mounted on six pads. The instrument is capable of logging in casing sizes from 4.5 inches to 13 3/8 inches with any type of fluid or gas occupying the borehole. A 5-foot omnidirectional transmitter-receiver span is provided for Signature or Variable Density display. The Segmented Bond Tool (SBT) examines not only the longitudinal cement quality, but also the circumferential effectiveness of the cement sheath radially around the entire periphery of the casing. 8 CEMENT BOND LOGGING GENERAL INSTRUCTIONS I. Tool Centralization A. Minimum of three centralizers. B. Preferably bow spring or rigid aluminum centralizers. C. Position centralizers immediately above and below transmitter-receiver section and on top of tool assembly. II. V.'ell Data A. Well name, location, serial number (if any). B. Data on cement, including type, volume, time, whether pipe was reciprocated or rotated or both, etc. C. Casing scratcher and centralizer depths. D. Unique downhole conditions. E. Casing data including size, weight, grade, joint type, depths. Well bore fluid data including type, weight, and salinity. G. Bottom hole temperature. H. Well history for maximum previous pressure on casing. III. Calibration Tool should have been calibrated at the company shop and the service company should perform surface calibration before running tool in hole. Each service company has their own calibration procedure. An example of one company's shop and well site calibration procedure is shown below: Shop Calibration A. The tool is centered inside a section of 5.5", 151 b/ft casing; completely covered with water; the tank is pressured to 500 psi; the signal on the 3ft 9 receiver is adjusted for a maximum output ofSOmv. B. Signal output of 5ft receiver is adjusted in order to compensate for energy Joss related to the 3ft., due to the extended travel time of 114 microseconds. C. Panels are calibrated for response and linearity. D. A fuJJ display of calibration is recorded for every tool. Shop calibrations are required monthly or more frequently as needed. A copy of the shop calibration should be attached to the Jog. WeJJ Site Calibration A. With tool in hole and in fluid, panel output is calibrated for a linear output relation of I OOmv. for I 0 chart divisions.-I 0 mv/div. This calibration is done in order to scale the amplitude values. B. Secondary amplitude X4 or XS is calibrated. C. Internal calibration cycle of 35mv amplitude and 50 microseconds wavelength is activated; The gate is set on the cycle, and amplitude deflection is adjusted according to previous 0-1 OOmv settings. D. Calibration cycle is deactivated. Tool signal on 3 foot receiver is present; the gate is set on the first compressional cycle, and amplitude reading is verified. IV. Complete Log Heading. V. Run V DL, MSG, Signature, X-V plot on 200-1200 microsecond time scale. VI. Run repeat sections (200' minimum) through intervals of interest or intervals with questionable bond. VII. Logging speed should be 1800 feet/hr. VII, If tool is improperly centralized, do not continue to log. Pullout of bole and adjust or replace centralizers. IX. Upon completion of logging run, check surface calibration. 10 ACOUSTIC CEMENT BOND LOGGING CHECKLISTS INFORMATION REQUESTED PRJOR TO RUNNING CEMENT EVALUATION LOGS I. CEMENT DATA. A. Types, volumes, slurry weights, pumping rate. _________ _ B. Estimated compressive strength. ______________ _ C. Date and time cementing operation was completed. ________ _ D. Additives. ---------------------~ E. A copy of Cementing Report would be helpful. _________ _ II. ASSOCIATED CEMENTING PROBLEMS. A. Lost circulation? -------------------- B. Unable to reciprocate? Stuck pipe? _____________ _ C. Abnormal pressures held after plug down? How long? _______ _ III. CASING INFORMATION. A. All strings ---size, weight, grade, coupling (flush Joint?) _______ _ B. Top/bottom depths ---overlaps? Annular thickness? ________ _ C. Cementing aids ---scratchers, centralizers, hydrobonders -where? ____ _ IV. \VELL INFORMATION. A. Straight hole or deviated? If deviated, at what depth? Degree? _____ _ B. Bit size? ------------------------ c. Wellbore fluid? Accurate density? Same as plug down fluid? ------ D. Casing problems? Liner not set? Potential for gas cut fluid? ------- 11 E. Open perforations? Unable to pressure up? ____________ _ F. Wellhead connection required? Need pump-in sub? _________ _ G. Any previous cement analysis done? Temperature logs? ________ _ H. Ensure open Hole Logs available at well site. ___________ _ I. Has coated casing been run in well? _______________ _ J. Squeeze guns brought w/CBL? ________________ _ CBL LOG QUALITY CHECKS I. FREE PIPE A Transit time Indicating correct expected value for casing size and weight? __ B. Transit time, magnetic collar locator, amplitude curve and variable density/waveform all Indicating. Casing collars on depth with each other? __ _ C. Free pipe amplitude reading correct value for casing size and weight? ____ _ D. EI arrival on variable density display indicating correct transit time to 5 foot receiver, (i.e. 114 microseconds later than 3 foot transit time)? _______ _ E. Collars on amplitude curve are 3foot in vertical height and 5 foot high on VDL. This ensures amplitude and VDL/WF are measured on proper receiver._· __ _ II. CEMENTEDINTERVAL A. Transit time stretching or cycle skipping occurring in Well Bonded Sections? __ B. I 00% and 70% bonded Intervals consistent with minimum Sonic amplitude picked from CBL Interpretation chart? ------------------ C. Is transit time less than free pipe value Indicating eccentering or fast formation? D. If eccentering is expected, check V DL for Chevron pattern at collars and low CBL amplitudes. ____________ _ 12 E. If fast formation is suspected, i.e. open hole logs indicate -T less than 57 microseconds per foot, check I st formation arrival on VDL/WF. Ifless than expected free pipe value on 5foot receiver, fast fomiation can be confirmed. Note: pre-log planning will Jet .us know whether fast formations are expected. __ _ F. Have Jog passes been run under sufficient pressure to eliminate Micro annulus effect? -------------------------- G. Does main Jog pass agree with repeat section? ___________ _ H. Is main Jog pass properly correlated to open hole Jog? Note: if perforations are picked from a pressure pass make sure field personnel are aware of this and that proper correlation is taken into account prior to perforating. ______ _ 13 APPENDIX E (GUIDANCE-TEMPERATURE LOG) EPA Final Permit No. CO 10932-04664 Page 58 of 77 PURPOSE: UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION VIII 999 18th STREET -SUITE 500 DENVER, COLORADO 80202-2466 TEMPERATURE LOGGING FOR MECHANICAL INTEGRITY January 12, 1999 The purpose of this document is to provide a guideline for the acquisition of temperature surveys, a procedure that may be used to determine the internal mechanical integrity of tubing and casing in an injection well. A temperature survey may be used to verify confinement of injected fluids within the injection formation. Test results must be documented with service company or other appropriate (acceptable) records and/or charts, and the test should be witnessed by an EPA inspector. Arrangements may be made by contacting the EPA Region 8 Underground Injection Control (U IC) offices using the EPA toll· free number 1-800-227·8917 (ask for extension 6137 or 6155). LOGGING PROCEDURE Run the temperature survey while going into the hole, with the temperature sensor located as close to the bottom of the tool as possible. The tool need not be centralized. Record temperatures a 1-5°F per inch, on a 5 inches per 100 feet log scale. Logging speed should be within 20 · 30 feet per minute. Run the Jog from ground level to total depth (or plug-back depth) of the well. When using digital logging equipment, use the highest digital sampling rate as possible. Filtering should be kept to a minimum so that small scale results are obtained and preserved. Record the first log trace while injecting at up to the maximum allowed injection pressure. Subsequent to the temperature survey, the maximum injection pressure will be limited to the pressure used during the survey. LOG TRACES Log the first log trace while the well is actively injecting, and record traces for gamma ray, temperature, and differential temperature. Shut-in (not injecting) temperature curves should be recorded at intervals depending on the length of time that the injection well has been active. Preferred time intervals are shown in the following table: !•··•···· ·· f n OA.Biiv¢Iril¢fti6il t••····.···11 } m•· tt<r ifikf6Vil c·u;;J~g··~1+w~g¢fiffi~g ttH·•·fi&uiil) nm 11111 11 1 month 1 3 6 12 6 months 1 6 10-122 22-24 1 year 1 10·12 22·24 45-48 5 years 1 10-12 22-24 45-48 90-96 1 n "o~r. "' mnrF! 1 .,.,_.,A 4<i.4R Of"l.Ot:: 1Qt:.1 0".> H:\ UIC\RB UJC-Guidance \INFO· T empLog. wpd @ Printed on Recycled Paper APPENDIX F (GUIDANCE FOR CONDUCTING A RADIOACTIVE TRACER SURVEY) EPA Final Permit No. CO 10932-04664 Page 60 of 77 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION VIII PURPOSE: 999 18th STREET -SUITE 500 DENVER, COLORADO 80202-2466 RADIOACTIVE TRACER SURVEY January 22, 1999 The purpose of this document is to provide a guideline for the acquisition of a radioactive tracer survey (RATS), a procedure that may be used to determine whether injected fluids may migrate vertically outside the casing after injection. This guidance may be used to develop a well· specific survey plan that accounts for specific well construction and operation considerations. Prior approval of planned RATS procedures by EPA is strongly recommended. Radioactive Tracer Survey results must be documented with service company and other appropriate log records and/or charts, and the test should be witnessed by an EPA inspector. Arrangements may be made by contacting EPA Region 8 Underground Injection Control (UIC) · offices using the EPA toll·free number 1-800-227-8917 (ask for extension 6155 or 6137). RECORDING GUIDELINES The logging must be done while the well is injecting at normal injection pressure and rate. The pressure and rate should be brought to equilibrium conditions prior to conducting the survey. The survey tool must include a collar locator for depth control, an injector, and two detectors (one above and one below the injector). · Vertical log scale may be one inch, two inches, or five inches per 100 feet. The Gamma Ray log may be run at up to 60 feet per minute (ft/min) at a time constant (TC) of one second, or up to 30 ft/min at a TC of 2 seconds, or up to 15 ft/min at a TC of 4 seconds. The logging speed and time constant used must be indicated on the log heading. The horizontal log scale must be recorded in standard API Units (or in counts per second). The gamma ray (GR) sensitivity must be set so that the tracer will be obvious when detected and will not be confused with normal "hot spots" in the logged formations (e.g., the gamma ray sensitivity set so that the lithology can be correlated by recording a "base log"). Record the beginning and ending clock times of each log pass. Record the injection pressure and rate during each log pass. Record the volume of fluid injected BETWEEN log passes. Record the type, volume, and concentration of each tracer "slug" used. Show the percentage of fluid loss across the perforated interval(s). @ Printed on Recycled Paper RECOMMENDED PROCEDURE: With the GR sensitivity set for the lithologic correlation log as outlined above, run one "base log" from the injection zone to at least 500 feet above the injection zone (or at least 200 feet above the top of the confining zone). Commence operating the well at normal operating injection pressure and rate, and continue to do so until the pressure and rate become stabilized. Set the tool so that the injector is positioned just below the tubing packer and inject a "slug" of tracer. Reduce the GR sensitivity enough to keep the entire slug of the tracer radiation within the width of the chart paper (horizontal scale). To do this, a non-recorded pass through the slug may be run. Drop tool to an appropriate depth below the slug and record Log Pass #l. Log to above the upper interface until the radiation level returns to the same level as below the slug. Drop tool to the appropriate depth below the slug and record Log Pass# 2 in the same manner as #1. Repeat log passes process until the tracer slug strength dissipates to one tenth (1/10) of original strength (on Log Pass #l). At this point, reset (increase) the GR sensitivity to the same settings used for the base log, and log from the injection zone to at least 500 feet above the injection zone (or at least 200 feet above the top of the confining zone). Drop tool to an appropriate depth below the slug, reset (reduce) the GR sensitivity to that used for logging (same setting as Log Pass #l), and record a log pass up to the packer. Repeat this logging process until the tracer slug is gone or has completely stopped. Then reset (increase) the GR sensitivity back to the base log setting and make a final logging pass from the injection zone to at least 500 feet above the injection zone (or at least 200 feet above the top of the confining zone). This final pass should show a close similarity to the pre·test base log response. NOTE: More than one pass may be shown on a log segment as long as each separate GR curve with its corresponding collar locator are distinguishable, otherwise record each pass on a separate log segment. Drop and set the tool at the depth where the bottom detector is just above the uppermost perforation and inject a slug of tracer (the tool remains stationary for this logging record). As the slug moves past the bottom detector, the log trace should show an increase in the GR response. Hold the tool at this depth while pumping at the equilibrium pressure and rate. SUBMITTING THE RESULTS: An interpretation of the logging results must be supplied when submitting the data for EPA approval. The interpretation must include a fluid loss profile across the perforations, in increments of at least 253 Include a schematic diagram of the well construction on or with the log. The diagram should show the casing diameters and depths, tubing diameter and depth, perforated interval, any open hole interva Is, tot depth or plugged back total depth, and the location of the tool when the slug was injected. Also, indicate with arrows the pathway(s) the tracer slug appears to have gone. APPENDIX G (GUIDANCE FOR CONDUCTING A PRESSURE TEST TO DETERMINE IF A WELL HAS LEAKS IN THE TUBING, CASING OR PACKER) EPA Final Permit No. CO 10932-04664 Page 63 of 77 .. .. UNllEu41tA1ES ENVIRONMEN1AL FF-01E-ON AGENCY REGION VIII H9 itth S1REET • SUllE ~00 DENVER, COLORADO 60202-2466 EUEJLCT: G~Olll'ID WATER EECTJON GUJDJ..NCE NO. 39 Pressure testing injection wells for Fart 1 (internal) Mechanical Integrity FROM: Tom Pike, Chief UlC Direct Implementation Section TO: All Section Staff Montana Operations Office Jntroduction The Underground Jnjection Control (UlC) regulations require that an injection well have mechanical integrity at all times (40 cFR 14~.2E (f) (2) and 40 CFR 144.51 (g) (1)). A well has mechanical integrity (40 CFR 146.8) if: (1) There is no significant leak in the tubing, casing or packer; and (2) There is no significant fluid movement into an underground source of drinking water (USDW) through vertical channels adjacent to the injection wellbore. Definition: Mechanical Integrity Pressure Test for Part I. A pressure test used to determine the integrity of all the ciownhole components of an injection well, usually tubing, casing and packer. lt is also used to test tubing cemented in the hole by using a tubing plug or retrievable packer. Pressure tests must be run at least once every five years. lf for any reason the tubing/packer is pulled, the injection well is required to pass another mechanical integrity test of the tubing casing and packer prior to recommencing injection regardless of when the last tei;t was conducted. Tests run by operators in the absence of an EPA inspector must be conducted according to these procedures and recorded on either the attached form or an equivalent form containing the nece.ssary information. A pressure reccrdi ng chart docun1enting the actual annul us test pressures must be attached to the form. This guidance addresses making a determination of Part I of Mechanical lntegrity (no leaks in the tubing, casing or packer). The Reoion's policy is: 1! to determine if there are sionificant leaks in the tubing, casino or packer; 2) to assure that the casino can withstand pressure similar to that which . . •• •• would be ;opplied if the tubino or Decker fcil::o; 3) to make the Feoian'E teEt procedure conEiEtent with the procedures utilized by other Feaion VJJJ Primacy proarcms; end 41 to provide a procedure which ccn be EeEilv cdminiEtered end iE appliceble to ell clcES J end IJ wells. Althouoh there are Eeveral methods ;ollowed for determining mechcnicci integrity, the principal method involves running a pressure test of the tubing/casing ;onnulus. Region VJII's procedure for running a pressure test is intended to aid UJC field inspectors who witness pressure tests for the purpose of demonstrcting that a well has.Part l of Mechcnical Integrity. The guidance is also intended as a means of informing operators of the procedures required for conducting the test in the absence of an EPA inspector. Pressure Test Description Test Freauency The mechanical integrity of an injection well must be maintained at all times. Mechanical integrity pressure tests are required at least every five (5) years. lf for any reason the tubing/packer is pulled, however, the injection well is required to :i:.ass ;;nether mechccni cal i ntE-gri ty test prior to recomrnenci ng injection regardless of when the l;;st test ~~s conducted. The Fegional UJC proar;;m must be notified of the workover and the proposed d;;te of the pressure test. The well 's test cycle would then start from the d;;te of the new test if the well passes the test ;;nd documE-ntation is ;;dequ;;te. Tests m;;y be required on a mare frequent basis depending on the nature of the injectate and the construction of the well (see Section guidance on MlTs for wells with cemented tubing and regulations for Class l wells). Region Vlll's criteria for well testing frequency is as follows: 1. Class J hazardous waste injection wells; initially [40 CFR 146.68 (d) (1) J and annually thereafter; 2. Class l non-hazardous waste injection wells; initially and every two (2) years thereafter, except for old permits (Euch as the disposal wells at carbon dioxide extraction plants which require a test at least every five years); 3. Class JI wells with tubing, casing and packer; initially and at least every five (~) years thereafter; 4. Class ll wells with tubing cemented in the hole; initially and every one (1) or ~wo (2) years thereafter @ Pn"nted on P.ttycl~d F•per .. • depending on well specific conditions (See Region VIII UlC Section Guidance ~36); 5. Class 11 wells which have been ten.porarily ;;bandoned (TAd) must be pressure tested after being shut-in for two years; and 6. Class Ill uranium extraction wells; initially. Test Pressure To assure that the test pressure will detect significant leaks and that the casing is subjected to pressure similar to that which would be applied if the tubing or packer fails, the tubing/casing annulus should be tested at a pressure equal to the maxi mum a J J cwed j n jecU en pres sure or J 000 psi g whichever i 6 Jess. The annular test pressure must, hcwever, have a difference of at )east 200 psjg ejther greater or Jess than the injection tubing pressure. Wells which inject at pressures of less than :=oo pdg must teEt at a minimum pressure of 300 psig. and the pressure difference between the annulus and the jnjection tubing must be at least 200 psi. Test Criteria 1. The duration of the pressure test is 30 minutes. 2. Eoth the annulus and tubino pressures should be monitored and recorded every five (5) minutes, 3. If there is a pressure change of 10 percent or more from the initial test pressure during the 30 minute duration, the well has failed to demonstrate mechanical integrity and should be shut-in until it is repaired or plugged. 4. A pressure change of 10 percent or more is corisidered significant. If there is no significant pressure change in 30 minutes from the time that the pressure source is disconnected from the annulus, the test may be completed as passed. Recordkeeping and Reporting The test results must be recorded on the attached form. The annulus pressure should be recorded at five (5) minute intervals. Tests run by operators in the absence of an EPA inspector must be conducted according to these procedures ;;nd recorded on the attached form or an equivalent form and a pressure recording @ Pn"nrtHJ on A~cycl~d P•pe1 • • well is shut-in, the reported information on the actual maximum operating pressure should be used to determine test pressures. 7. Read pressure on the casing/tubing annulus and record value on the form. lf there is pressure on the annulus, it should be bled off prior to the test. If the pressure will not bleed-off, the guidance on well failures (J\egion VIII UlC Section Guidance 1135) should be followed. 6. Ask the operator for the date of the last workover and the volume of fluid added to the annulus prior to this test and record information on the form. 9. Hook-up well to pressure source and apply pressure until test value is reached.· 10. Jmmedic;tely disconnect pressure source and start test time (If there has been a significant drop in pressure during the process of disconnection, the test may have to be restarted). The pressure gages used to monitor injection tubing pressure and annulus pressure should hc;ve a pressure range which will allow the test pressure to be near the mid-r;:;nge of the gage. Additionally, the gage must be of sufficient accuracy and scale to allow an accurate reading of a 10 percent chc;nge to be read. For instance, a test pressure of 600 psi should be monitored with a 0 to 1000 psi gage. The scale should be incremented in 20 psi.increments. 11. J\ecord tubing and annulus pressure values every five (5) minutes. 12. At the end of the test, record the final tubing pressure. 13. If the test fails, check the valves, bull plugs and casing head close up for possible leaks. The well should be retested. 14. If the second test indicates a well failure, the Region should be informed of the failure within 24 hours by the operator, and the well should be shut-in within 40 hours per Headquarters guidance 1176. A follow-up letter should be prepared by the operator which outlines the cause of the MIT failure and proposes a potential course of action. This report should be submitted to EPA within five days. •• •• chart docu:rnenting the actual annulus test pressures must be attached to the submittal. The tubing pressure at the beginning and end of each test must be recorded. The volume of the annulus fluid bled back at the surf ace after the test should be measured and recorded on the form. This can be done by bleeding the annulus pressure off and discharging the associated fluid into a five gallon container. The volume infom.ation can be used to verify the approximate location of the packer. Frocedures for Pressure Test 1. Scheduling the test should be done at least two (2) weeks in advance. ~-Jnformation on the well completion (location of the picker, location of perforations, previous cement work on the casing, size of casing and tubing, etc.) and the results of the previous MlT test should be reviewed by the field inspector in advance of the test. Regional UlC Guidance ~35 should also be reviewed. Information relating to the previous MIT and any well workovers should be reviewed and taken into the field for verification purposes. 3. All Class l wells and Class 11 SWD wells should be shut-in prior to the test. A 12 to 24-hour shut-in is preferable to assure that the temperature of the fluid in the wellbore is stable. 4. Class II enhanced recovery wells may be operating during the test, but it is recommended that the well be shut-in if possible. 5. The operator should fill the casing/tubing annulus with inhibited fluid at least 24 hours in advance, if possible. Filling the annulus should be undertaken through one valve with the second valve open to allow air to escape. After the operator has filled the annulus, a check should be made to assure that the annulus will remain full. If the annulus can not maintain a full column of fluid, the operator should notify the Director and begin a rework. The operator should measure and report the volume of fluid added to the annulus. If not already the case, the casing/tubing valves should be closed, at least, 24 hours prior to the pressure test. Following steps are at the well: 6. Read tubing pressure and record on the form. If the . .. •• •• 15. Eleed off well into a bucket, if pcssible, to obtain a vol\JJT\e estirr,ate. This should be ccmpared to the calculated value obtained using the casing/tubing annului; volume and fluid ccmprei;::ibility values. 16. Return to office and prepare follow-up. Alternative Test Option While it is expected that the test procedure outlined above will be applic.oble to most wells, the potential does exist that unique circ\JJT\stances m.oy exist for a given well that precludes or make:: unsafe the application of this test procedure. Jn the event that the::e exceptional or extraordinary conditions are encountered, the operator has the option to propose an alternative test or monitoring procedures. The request must be submitted by the operator in writing and must be approved in writing by the UlC-lmpJementation Section Chief or equivalent level of management. Attachment @ Pn•ntH on Rrcyckd f•per • • Mechanical Integrity Test Casing or Armulus Pressure l\1echanica1 Integrity Test U.S. [nvironme:ntal Frotrrlion Atenr:t Undnfround lnjt<1ion Con\rol froirillm, UIC Direct lmplemcntrUon Frorram SF·W·GN 999 lB"" SUHt, Sui1.e &>O Denyer, CO 80202·2466 EPAW-rtness: ------~--~--~­ Tertconductedby: ------------~--~-------Others present: ________________________ _ Well Name: ------------Type: ER SWD Status: AC TA UC Fie Id:. ___________ _ Location: Sec: __ T _NI S R_E /W County: ______ Stau::_ Operator:. ____________ ~------ Last MIT: I I Maximum Allowable Pre~~ure: PSIG ls this a regularly scheduled test? ) Yes ( ) No Initial test for pennit? ( ) Yes ) No Test after well rework? ) Yes. ( ) No Well injecting during test? l ] Yes ] No JfYes, rate: bpd Pre-iest casing/tubing annulus r=sure: psig MlTDATA TABLE Test #1 Test #2 Test #3 TUBING PRESSURE Initial Presrure psi I! PSil! 'Cn..l n.ftoM ~•O<<ilrP nc;in T'\c;! .... CASING I TUBING Al\'l,lULUS PRESSURE 0 minutes PSilt nsil! 5 minutes PSil! nsil! JO minutes nsiR nsi2 15 minutes nsil! nsil! 20 minutes nsi1t nsisz . 25 minutes nsisz nsi11 30 minutes nsil! osi11. minutes nsia nsio r1c:n ~.:ft osi11 __ ,_ osil! nsio osie nsie nsi~ nsi11 nsi11 nsio __ ,_ RESULT .f .l Pass .f U<:a ii I l Pass .J )Fail . I l Pass I !Fail Does the annulus pressure build back up after the test 7 ( J Yes ( ) No lover\ APPENDIXH (GUIDANCE FOR CONDUCTING A STEP-RATE TEST) EPA Final Permit No. CO 10932-04664 Page 71 of 77 UNll E.D 5t1ES £:NVIFIONMEN1AL Ffl01EC& AGENC'f REGION VIII ~H Hth S1REET. SUl1E ~00 DlNVER, COLORADO ~0•02-•A66 SlEP·RAlE lEST PROCEDURE JGnuary 12, 1999 PURPOSE; The purpose of this document is to provide a guideline for the acquisition of a Step Rate Test (SRT). These procedures are comistent with acceptable oilfield practices. Test results may be used by the E.PA to determine a Mc.ximum Surface Injection Pressure (MSIP) to provide for the protection of the underground sources of drinking weter c.t en injection well having mechanical integrity. Attached is a form that you may copy and use to record step rate test data. Step re:te test results must be documented with strvice compe:ny or other appropriate (accepte:ble) records c-nd/or che:rts, ond the test should be witnessed by an EPA inspector. Arre:ngernents may be made by contacting the E.PA F.egion 8 Underground lr1jection Control (UIC) offices using the E.PA tol\.free number Hi00·227·E917 (csk for EXtension 6137 or 6155). 51[P·RA1£ TEST FROCEDURE: l). 2) The well should be shut in long rnough prior lo tHting such that the bottom hole pressures approximate shut· in formGtion prHsures. It the shut·in well flows to the surface, the wellhead injection string should be equipped with a g<ouge and the static surface pressure read and recorded. A series of succeHively higher injection rates are determined using guidelines below, and the elapsed time and presrnre values are read and recorded for each rate and time step. Each rate step should last exactly as long as the preceding rate. If stabilized pressure values are not obtained within the rate steps suggested below, the test results may be inconclusive. Fo1m2tion Permeability Cmd) s 5 md 2 10 md Total time per rate.step Cmin) 60 min 30min 3) Suggested injection rates: 4) 5%) 10% 20% 40% Of Anticipated Maximum Injection Rate 60% 80% 100%) Injection rc;tes should be controlled with a constant flow regulator that has been tested prior to use. A throttling device is not sufficient. -z c... m 0 -I ... -0 z ::a > -I m -C" tT --~. :J . .._., '\ INJECTION PRESSURE (PSI) (ThouanndQj O O o O O O 0 D --• ~ -~ -~ w ~ ~ ~ ~ ~ ~ -~ ~ w ~ ~·~ '\ '\ ~ \ '\ l\ \ "' "' '\ \ \ \ \ \ \ -·' .. . ·---·· '-----·· -.. . .. ... ' -·· . .. . . -.... . .. .. ~ I•~ ~ ~1) ~ ~ ~ ··--· ' : . ,,,: UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION 8 999 18'" STREET -SUITE 300 DENVER, CO 80202-2466 Phone 800-227-8917 http://www.epa.gov/region08 Ref: SP-W-GW CONTACT: COMPANY: FINAL STATEMENT OF BASIS GETTY No.1-7LW DISPOSAL WELL AMERICAN SODA, L.L.P. YANKEE GULCH SODIUM MINERAL PROJECT CLASS I NON-HAZARDOUS DISPOSAL WELL GARFIELD COUNTY, COLORADO EPA PERMIT NUMBER: CO 10932-04664 Mr. Paul S. Osborne (SP-W-GW) U.S. Environmental Protection Agency 999 18th Street, Suite 300 Denver, Colorado 80202-2466 Telephone: (303) 312-6125 Mr. Charlie Yates General Manager American Soda, L.L.P. 2717 County Road 215 Parachute, Colorado 81635 DESCRIPTION OF FACILITY AND BACKGROUND INFORMATION: On December 11, 2001, American Soda, L.L.P. (American Soda), made application for a Class I non-hazardous underground injection control (UIC) permit for the Getty No. I-7LW injection well located on private property in Garfield County, Colorado. The Getty injection well is located about 3 miles northwest of De Beque, Colorado and about 11.5 miles southwest of American Soda's soda ash processing plant in nearby Parachute, Colorado. The Getty No. 1-7LW is presently a shut-in Class II injected well under Permit from the Colorado Oil and Gas Final Statement of Basis for EPA Permit No. CO 10932-04664 "" \.'1 Printed on Recycled Paper Conservation Commission (COGCC). When the Pennit is issued to convert the Getty well to Class I status, the Getty No. 1-71 W will be an integral part of the company's soda ash facility, and will be used to dispose of reject brine fluids from the processing of sodium carbonate fluids. The sodium carbonate fluids are being produced as a result of the in-situ mining ofNahcolite (NaHC03) in the Piceance Creek Basin at the Yankee Gulch Sodium Lease. This fluid is transported to the Parachute processing facility by buried pipeline where sodium carbonate is extracted and processed into soda ash and sodium bicarbonate. Much of the remaining barren fluid is transported back to the mine site for reinjection into the solution mine cavities, but a portion of the fluid containing impurities is removed during the processing. This waste brine fluid is presently placed in lined and netted surface impoundments. American Soda proposes to utilize this injection well for the disposal of much of the reject brine presently going to the impoundments located at the facility. This Permit was issued for public comment on February 25, 2002 and the proposed action was public noticed in the Rifle Citizen Telegram on March 7, 2002, and the Glenwood Post Independent on March 8, 2002. The public comment period ended on April 8, 2002, and there were no comments from either the general public or the land owners who may be affected by the proposed action. We also did not receive any comments from the applicant concerning the Permit language. Because of the absence of comments, the Permit is being issued as proposed and is effective immediately. This Pennit is for the conversion of an existing Class II (oil and gas related wastes) salt water injection well to a Class I Non-Hazardous well for the disposal of partially saturated to saturated brine fluids into the Cozzette and Corcoran Sandstones. The waste brine will be transported by truck from the soda ash facility to the well site and will be stored in on-site tanks prior to injection. Only reject brine containing mainly sodium carbonate from the soda ash facility will be accepted for disposal. No on-site off specification chemicals or solvents generated at the soda ash plant or waste from any offsite facility will be accepted for disposal. The average injection pressure is anticipated to be 800 pounds per square inch gauge (psig) with average injection temperatures between 40°F and 80°F. The maximum injection pressure will be limited to 930 psig. The top of the injection zone, the Cozzete Member of the Iles Formation, is located at a depth of about 3,864 feet below ground surface (BGS). The lower portion of the injection zone is the Corcoran Member of the Iles Formation whose top is 4,076 BGS. The perforated portion of the Cozzette Sand interval is from 3,911 to 3,927 feet BGS and the perforated interval of the Corcoran Sand interval is from 4,077 to 4,241 feet BGS. The Mancos Shale underlies the Corcoran at approximately 4,280 feet BGS. The injection zone is isolated from the overlying porous intervals (Rollins Sandstone Member of the Iles Formation) by a tongue of the Mancos Shale that is approximately 54 feet thick. Final Statement of Basis for EPA Permit No. CO 10932-04664 Page 2 of 19 The facility covered by the application is in the south-west portion of the Roan Creek Drainage that is a part of the Piceance Creek Basin. The legal location is: Proposed Class I Disposal Well Getty No. 1-7LW NE 1/4 of the NE 1/4 1282 feet from north line and 356 feet from the east line Section 7, Township 8 South-Range 97 West, 61h PM. Garfield County, Colorado The applicant has notified all surface landowners within one-quarter (1/4) mile of the disposal well of their intent to apply for a Class I nonhazardous Permit for an existing Class II facility. Regional Geology and Stratigraphy: Information on the subsurface stratigraphy, structure resources, and ground-water hydrology of the project area was supplied by the permittee. The Piceance Creek Basin is a structural as well as a topographic basin, with the following structural features forming the boundaries of the basin: the Douglas Creek Arch to the west, the eastern Uinta Mountains and the Axial Basin Anticline to the north, the White River Uplift to the east, and the Uncompahgre Uplift to the south. The basin is asymmetric and is structurally deepest in the northwest where crystalline basement rocks are estimated to be 24,000 feet below the surface. Four major drainages have developed in the basin: 1) the Piceance Creek and the Yellow Creek drainages discharging north to the White River; and 2) the Parachute Creek and the Roan Creek drainages discharging to the south into the Colorado River. The Getty# l- 7L W is located in the downstream end of the Roan Creek drainage. The geologic unit immediately underlying the wellsite is the Wasatch Formation. The Roan Creek alluvium appears to absent at the well site which is located on a hill. The Ohio Creek Conglomerate underlies the Wasatch at a depth of about 1,050 feet BGS, and is a 110 foot thick unit that is a highly weathered, pebbly, kaolinite rich conglomerate. The Ohio Creek Conglomerate marks the transition with the Williams Fork Formation that is the top of the Mesaverde Group at approximately 1,160 feet BGS. The Williams Fork Formation at the Getty well is made up of 2,610 feet of coastal, fluvial, and paludal sediments containing both lenticular and blanket sand deposits. The paludal interval makes up the bottom 860 feet of the Williams Fork Formation and contains mudstones, siltstones, sand lenses and coal layers (the Cameo Coal). The Rollins Sandstone Member of the Iles Formation underlies the paludal interval of the Williams Fork at approximately 3,660 feet BGS and is about 190 feet thick. It appears to be a fine grained to course grained sandstone reservoir with quartz and calcite cementing. The Rollins is underlain by a tongue of Mancos shale at about 3,810 feet. The Mancos is an interbedded mudstone and marine shale (with occasional sand lenses) which overlies and underlies the Cozzette and Corcoran Sandstones and acts as the principal confining mechanism. The top of the upper injection zone, the Cozzette Member of the Iles Formation, is at approximately 3,864 feet BGS. The Cozzette is about 212 feet thick, and is perforated from 3,911 Statement of Basis for EPA Permit No. CO 10932-04664 Page 3 of 19 to 3,927 feet BGS in the Getty# 1-7LW. The lower part of the Cozzette is a series of shale layers. The lower injection zone is the underlying Corcoran Member of the Iles Formation. The Corcoran top is at 4,076 feet and it is approximately 205 feet thick with perforations from 4,077 feet to 4,241 feet. The Formation underlying the Corcoran Sandstone at about 4,280 feet BGS is the Mancos Shale Hydrogeology: Underground sources of drinking water (USDWs) are defined in 40 CFR § 144.3 as: (1) an aquifer or its portion; (2) (i) which supplies any public water system; or (ii) which contains a sufficient quantity of groundwater to supply a public water system; and (A) currently supplies drinking water for human consumption; or (B) contains fewer than I 0,000 mg/I total dissolved solids; and which is not an exempt aquifer. In this area, the principal aquifer system used for public and domestic and other uses is the alluvial aquifer. The alluvial aquifers are mainly located in the valley flood plains along the Colorado River, Parachute Creek, Roan Creek and other streams and tributaries. The Wasatch Formation also contains water bearing units which are defined as USDWs. Some of the shallow sand units in the Wasatch are used for domestic and stock watering supplies. There are also records from deep test wells in the basin that contain water with a TDS of around 7 ,000 mg! liter making these units USDWs. Although the chemical quality of ground water varies within and between the various aquifers, EPA considers the aquifers that overlie the Mesaverde group to be USDWs in this area. The upper confining zone is a tongue of the Mancos shale approximately 54 feet thick layer with a top at about 3,810 feet BGS. The main part of the Mancos underlies the Corcoran Sandstone at about 4,280 feet BGS. The Mancos is an interbedded mudstone and marine shale with some sand zones. Several geologic studies, mainly related to the potential production of oil and gas from various geologic units, have been carried out in the basin. Papers summarizing the results of these studies were submitted by American Soda as part of their application and are part of the administrative record. These papers have been reviewed by EPA, and they indicate that the Mancos is a very effective confining zone. Injection Zone: The proposed injection zone is composed of two sandstone intervals that are separated by a shale interval: the Cozzette and Corcoran Members of the Iles Fonnation. The top of the perforations is located at a depth of3,91 I feet BGS. The Cozzette Sand interval is perforated from 3,91 I to 3,927 feet and the Corcoran Sand interval is perforated from 4,077 to 4,241 feet. The Cozzette sandstone is underlain by a shale interval that makes up the lower portion of the Cozzette Member. A pressure falloff test was run on the Getty well to assess reservoir suitability for injection starting on May 1I,2001, and ending on May 21, 2001. The test Statement of Basis for EPA Permit No. CO 10932-04664 Page 4 of 19 indicated that the injection zone has good penneability (1-2 millidarcies) and has no boundaries or limits within the present area of influence (300 feet) of the well. As indicated above, the disposal of the reject solution mining fluid will be into the Cozzette and Corcoran Sandstones that do not meet the definition of a USDW. The Getty No. l- 7LW was sampled and analyzed (2117 /83) prior to conversion to a Class II injection well and the reservoir fluid contained about 20,000 mg/liter total dissolved solids (TDS). Samples from adjacent Corcoran-Cozzette producers contained fluids with a TDS generally ranging from 16,000 to 29,000 mg/liter with a low outlier of 10,020 mg/liter (Well USA 1-1 LW) and two wells with analyses greater than 30,000 mg/liter. Although the USA 1-1 LW well is located nearby, a review of all available data by EPA indicates that the sample from this well is probably not representative of the Cozzette and Corcoran sands as the well is also perforated into the overlying Rollins Member and into sand zones of the Williams Fork Formation. In any case, the TDS value of fluids from the USA 1-1 LW is also indicative of a non-USDW. American Soda has submitted all required information and data necessary for pem1it issuance in accordance with 40 CFR Parts 124, 144, 146, and 147, and a Final Pem1it has been prepared. The Permit will be issued for a period of te11 (10) years; no reapplication will be necessary during this period, unless the permit is terminated for reasonable cause (40 CFR 144.39, 144.40 and 144.41). However, the permit will be reviewed after five years of operation, and the results of the review will be used to determine if changes in the permit are needed. This Statement of Basis (SOB) gives the derivation of the site-specific permit conditions and reasons for them. The referenced sections and conditions correspond to the sections and conditions in EPA Permit COl 0932-04664. The general permit conditions for which the content is mandatory and not subject to site specific differences (based on 40 CFR Parts 124, 144, 146 and 147), are not included in the discussion. Part II, Section A WELL CONSTRUCTION REQUIREMENTS Casing and Cementing (Condition 1) All casing and cementing details were submitted with the permit application and are incorporated into this permit as part of Appendix A which graphically displays the details of the injection well under consideration. The Getty No. 1-7LW is an existing Class II injection well that and is presently regulated by the Colorado Oil and Gas Conservation Commission. The permittee intends to convert the injection well to a Class I non-hazardous disposal well in the following manner: (a) SURFACE CASING (8-5/8 inch) is set in a 12-1/4 inch diameter hole to a depth of 311 feet into bedrock. The casing is secured with cement which has been circulated to the surface with 300 sacks of cement, isolating the casing from the wellbore. Statement of Basis for EPA Permit No. CO 10932-04664 Page 5 of 19 (b) LONG STRING CASING (4-1/2 inch) has been set in a 7-7/8 inch diameter hole to a depth of approximately 4,364 feet KB and cemented from TD to approximately 3,240 with 350 sacks of65/35 Posmix. An EPA review of the of the original cement bond log indicates that there is cement from about 3,240 to TD, but the 1981 log lacks sufficient detail to allow a detailed analysis of the cement quality and bonding. The 1981 CBL was conducted with a single receiver that is not as reliable as current methodologies. A casing leak was repaired in September 200 I by squeezing the interval from 617 feet to 682 feet with 237 sacks of cement and a casing leak was squeezed from 2,460 feet to 2,525 feet with 350 sacks in August 1989. These leaks were repaired using procedures accepted by the COGCC (the COGCC regulates Class II wells on non-Indian lands in Colorado). The well has passed a recent pressure test which indicates that the two casing repairs were successful. This test was conducted using EPA' s procedures and was witnessed by the COGCC to demonstrate compliance with Class II Permit requirements. Although the construction and cementing details of the disposal well indicate that existing and potential USDWs are protected with a combination of the surface and long string casings and cement intervals, there is an absence of good information on cement conditions adjacent to the casing. The adequacy of the cement will be verified by further mechanical integrity testing of the well prior to injection. A radioactive tracer survey must be conducted prior to injection. This will be followed up by a temperature survey after 4 to 6 months of operation. (c) Tubing and packer: Approximately 3,891 feet of2-3/8 inch tubing will be run in the hole with a 4-1/2 inch tension packer. The packer will be set no more than I 00 feet above the top most perforation at 3,911 feet. Tubing and Packer Specifications (Condition 2) All Class I injection wells, except those municipal wells injecting non-corrosive wastes, shall inject fluids through tubing with a packer set immediately above the injection zone, or tubing with an approved fluid seal as an alternative (40 CFR § 146.12 (c)). A retrievable tension-type packer was placed in the 4-1/2 inch casing string on 3,891 feet of2-3/8 inch J-55 tubing after the casing was repaired as part of the Class II activity. During the life of the Permit, the packer will be maintained at a location that is no more than I 00 feet above the top most perforation. Monitoring Devices (Condition 3) The primary method of monitoring shall be continuous pressure monitoring of the injection and casing tubing annulus pressure and continuous monitoring of the injection rate and volume; these devices shall be operated and maintained as long as the Permit is in effect. The instrumentation must have a sampling capability sufficient to create a continuous record. In addition, it is necessary to have a mechanism to access the wellhead and injection line to obtain manual measurements of injection and annulus pressure and a samples of the injection fluid. The Statement of Basis for EPA Permit No. CO 10932-04664 Page 6 of 19 fluid sampling point must be in the line that takes the fluid from the holding tanks, but the location should be prior to entering the injection pump system. The injection pressure monitoring point must be down gradient of the injection pump in an unobstructed portion of the injection line immediately adjacent to the wellhead. Both the injection pressure and annulus pressure points must be installed so that valid manual measurements can be taken as a means of verifying the continuous monitoring. Prior to beginning Class I non-hazardous injection operation, the operator shall install and maintain in good operating condition the following equipment: (a) Injection pressure: a continuous pressure monitoring device in the 2-3/8 tubing at the wellhead connected to an instrument with a sampling frequency of at least every 15 seconds and a one-half(l/2) inch Female Iron Pipe (FIP) fitting, isolated by plug or globe valves and located on the tubing to allow attachment ofone-half(l/2) inch Male Iron Pipe (MIP) pressure gauges or the attachments for equivalent "quick-disconnect" pressure gauges certified for ninety-five (95) percent accuracy, or better, throughout the range of permitted operation in order to verify values for injection pressure being recorded from the continuous monitoring device. (b) Wellhead pressure of the tubing/casing annular space: a continuous pressure monitoring device in the wellhead casing/tubing annulus that is connected to a device with a sampling frequency of at least every 15 seconds and a one-half(l/2) inch Female Iron Pipe (FIP) fittings, isolated by plug or globe valves, and located on the tubing/casing annulus; and the above fittings will be positioned to allow attachment of one-half (1/2) inch Male Iron Pipe (MIP) pressure gauges or the attachments for equivalent "quick-disconnect" pressure gauges certified for ninety-five (95) percent accuracy, or better, throughout the range of permitted operation in order to monitor the annulus fluid pressures. The tubing/casing annulus must be maintained full of either fresh water treated with a non-toxic corrosion inhibitor or other packer fluid as approved, in writing, by the Director. This fluid must be maintained under a positive pressure using a nitrogen gas blanket. A diesel freeze blanket or other fluid as approved, in writing, by the Director may be circulated from surface to below frost level at completion to prevent freezing and possible equipment failure during winter months. (c) Because the well will be operating under reasonably high pressures, the continuous monitoring system must have an automatic well shut down switch installed based on the following Parameters: Statement of Basis for EPA Permit No. CO 10932-04664 Page 7 of 19 (i) The surface injection (tubing) pressure shall be maintained between 200 to 930 psi. Any operation outside of this range shall result in an immediate shut down of the injection pumps; (ii) Because the gas pressure will vary as a result of fluctuation in the injectate temperature, the tubing/casing annulus pressure will not stay at a fixed value. The Permit establishes and operating range to allow for natural fluctuation. The pressure must be maintained between 20 and 80 psi. Any operation outside of this range shall result in an immediate shut down of the injection pumps. When adjusting the gas pressure, the operator shall use the target value of 50 psi; or (iii) If there is a 100 psi or greater drop in injection pressure during a one hour period, the well shall be automatically shut-in. (d) Magnetic flow meters, and continuous recording devices with a sampling frequency of at least every 15 seconds must be installed in the injection line immediately upstream of the wellhead to track and document disposal fluid flow rates, and total fluid volumes. For a given injection rate, the injection pressure will remain relatively constant. Input flow volumes will be cross checked against injection pressure records to identify any possible divergence in the injection pressure for a given flow rate. A drop in injection pressure without a corresponding reduction in input flow rate would indicate a possible casing, packer, or other failure. (e) Fluid analysis: the injection line must be equipped with sampling ports and appropriate connections to facilitate periodic collection of fluid samples representative of the injection fluids for chemical analysis. The sampling point must be in an unobstructed portion of the injection line down stream from the tanks but prior to the injection pumps. Proposed Changes and Workovers (Condition 4) The permittee shall give advance notice to the Director, as soon as possible, of any planned physical alterations or additions to the permitted well. Major alterations or workovers of the permitted well shall meet all conditions as set forth in this permit. A major alteration/workover shall be considered any work performed, which affects casing, packer( s ), or tubing. The permittee shall provide all records of well workovers, logging, or other test data to EPA as part of the quarterly report for the period in which the activity was completed. Appendix B contains samples of the appropriate reporting forms. After any workover that involves remedial Statement of Basis for EPA Permit No. CO 10932-04664 Page 8 of 19 cementing of the casing, the operator shall run a new cement bond log (with a gamma ray, travel time curve, casing collar locator, amplitude curve, and variable density log) that covers the area of the cementing to verify the adequacy of the cement placement. This log will be run following the guidelines in Appendix D. Demonstration of mechanical integrity (tubing/casing annulus pressure test) must be performed within thirty (30) days of completion ofworkovers/alterations and prior to resuming injection activities, in accordance with Part II, Section C, Condition 2. Logging and Well Testing Specifications. (Condition 5) Based on the construction and cementing details of the disposal well, it appears that all known and possible USDWs are adequately protected behind the cemented portion of the surface and long string casings; however, the existing cement bond log on the well (run in 1981) does not meet EPA' s present criteria for evaluating cement behind pipe. Although the construction and cementing details of the disposal well indicate that all known and possible USDWs are adequately protected behind the cemented portion of the surface and long string casings, there is an absence of good information on cement conditions adjacent to the casing to ensure confinement of fluids in the injection zone. The adequacy of the cement must be verified by further mechanical integrity testing of the well prior to injection. A portion of this verification has been carried out as a result of completion of a pressure test of the tubing/casing annulus. A pressure test was conducted on the Getty well on November 28, 2001, as a demonstration that this well had been returned ·to Class II compliance per the rules of the COGCC. This test was conducted using the same procedures outlined in EPA's Guidance in Appendix G and was witnessed by a COGCC inspector. The pressure test demonstrated that the well had mechanical integrity. Prior to commencing injection, a RA TS must be conducted to establish the injection profile in the perforations and demonstate that there is no fluid movement out of the injection zone. These mechanical integrity tests must be followed up by a temperature survey after 4 to 6 months of operation as a permitted Class I well. EPA believes that a static value of the reservoir pressure is needed prior to beginning Class I injection. This will provide a beginning point for analysis ofreservoir pressure buildup over time. It is also important to obtain information on the well to provide a baseline for future assessment of the condition of the well and to ensure that injected fluid is confined to the injection zone. During and following recompletion of the Getty No. 1-7LW, the following information must be obtained: (a) The operator must obtain a static downhole reservoir pressure measurement prior to commencing injection; (b) Before commencement of injection, the operator must run a radioactive tracer survey to determine where the fluid is going in the perforated interval and to verify that no fluid is moving upward from the injection zone adjacent to the casing; ( c) Before commencement of injection, the operator must run a baseline temperature survey from the base of the surface casing to TD to establish Statement of Basis for EPA Permit No. CO 10932-04664 Page 9 of 19 baseline temperature conditions adjacent to the casing for comparison with subsequent mechanical integrity testing to detect fluid flow adjacent to the casmg; (d) Within four (4) to six (6) months after initial injection, the operator must run a Temperature Jog, as outlined in the Guidance in Appendix E, to ensure that there is no upward movement of fluid behind the casing (see Appendix E for guidance); and (e) Pressure fall-off test: a pressure fall-off test is required for Class I operations [40 CFR § 146.13 (d) (l)] and must be performed on an annual basis for the purpose of monitoring pressure buildup in the injection zone in order to detect any significant loss of fluids due to fracturing in the injection and/or confining zone, and to aid in determining the lateral extent of the injection plume. The pressure fall-off tests shall involve injecting fluids at a constant rate for at least twenty-four (24) hours, or a sufficient period of time until the reservoir pressure reaches stability, followed by a shut-in period of sufficient duration to establish a valid observation of a pressure fall-off curve. This test shall be considered complete when the pressure curve becomes asymptoic to a horizontal line as the reservoir reaches ambient pressure. The initial pressure buildup must be performed with both a downhole quartz pressure gauge with an accuracy of0.01 psi. The Director may require that subsequent tests be conducted with a downhole quartz gage if deemed necessary. It is important that the initial and subsequent tests follow the same test procedure, so that valid comparisons of reservoir pressure, permeability, and porosity can be made. The permittee shall analyze test results and provide an annual report which compares the results with previous test data. Any pertinent Jogs must be accompanied with an appropriate narrative interpretation by a knowledgeable log analyst. PART II, Section B CORRECTIVE ACTION There is one deep well in the area of review, the I Federal. The 1 Federal (also called the 1 Government well) is located 1, 176 feet to the southeast of the Getty # 1-71 W. The drilling information indicates that this well did not penetrate the injection zone, with a bottom hole TD of approximately 790 feet above the top of the Cozzette perforations in the Getty well. In addition, the 1 Federal is shown to be plugged and abandoned. Although there are no known penetrations of the injection zone within the area ofreview, pressure fall-off tests are to be conducted in the injection well on an annual basis in order to monitor the pressure buildup in the injection zone and help determine the lateral extent of the injection plume. The applicant has provided an initial pressure falloff test run by the Class II operator in September 2001 to assess reservoir conditions. No problems were identified by the test results. In view of the above, no corrective action by Statement of Basis for EPA Permit No. CO 10932-04664 Page 10 of 19 the permittee is considered necessary prior to the issuance of a Class I Non-hazardous Permit. PART II, Section C WELL OPERATION Prior To Commencing Injection Condition I) Injection of Class I nonhazardous materials into the Getty No. I-71 W disposal well shall not commence until all of the following have been met and the permittee has received written authorization from the Environmental Protection Agency (EPA) as to the following: (a) The permittee shall notify the EPA that construction is complete and submit the Completion Report For Brine Disposal (EPA Form 7520-10); (b) A successfully passed mechanical integrity test (MIT) has been performed and witnessed according to the guidance found in Appendix G. Demonstration of mechanical integrity shall consist of two parts: (1) a casing/tubing annulus pressure test to verify the absence of leaks in the casing, tubing, and packer, and (2) a radioactive tracer survey (RATS) to verify that no movement of fluids exists outside the casing into an underground source of drinking water (USDW) through vertical channels adjacent to the wellbore. The permittee shall notify the EPA two (2) weeks prior to conducting these tests so that an authorized representative may be present to witness the tests; (c) The permittee has submitted the results of the downhole reservoir pressure monitoring; and (d) The permittee has submitted a copy of the RATS and temperature logs run during the conversion of the well. Along with this suite of logs, or any other pertinent logs, the permittee shall include appropriate narrative interpretations by a knowledgeable log analyst. Mechanical Integrity (Condition 2) To ensure the existing and continued mechanical integrity of the well, the operator must run an initial mechanical integrity test of the injection well that demonstrates: I) there are no leaks in the tubing, casing and packer; and 2) there is no flow into or between USDWs adjacent to the wellbore. The Permittee must also demonstrate part I and part II of mechanical integrity on a continuing basis by arranging and conducting a test at least once every five years. A tubing/casing annulus pressure test must be conducted to demonstrate Part I (no leaks in the tubing, casing or packer) at the maximum injection pressure and either a temperature log or a noise log shall be conducted to demonstrate Part II (no flow into or between USDWs adjacent to the casing). Also an MIT is to be successfully conducted after workovers (see Part II. A. 5. ). Results of the test Statement of Basis for EPA Permit No. CO 10932-04664 Page 11 of 19 shall be submitted (on EPA form found in Appendix B), with documentation, to the Director as soon as possible but no later than thirty (30) days after the test is complete. Test methods and criteria are to follow current UIC Guidance (Appendix G) for Conducting a Pressure Test to Determine if a Well has leaks in the Tubing, Casing or Packer. The absence of any flow behind casing must also be demonstrated; this shall be initially accomplished by performing a radioactive tracer survey (RA TS) prior to commencing injection. The EPA has provided a guidance procedure for running the RA TS (Appendix F). A Follow up test, for no flow behind pipe, will be done after four to six months of injection using a temperature survey. The Permittee is required to notify the UIC Director at least two (2) weeks prior to any required integrity test. The Director may allow a shorter notification period if it would be sufficient to enable the EPA to witness the mechanical integrity test (MIT). Notification may be in the form of a yearly or quarterly schedule of planned mechanical integrity tests or it may be on an individual basis. If the well fails to demonstrate mechanical integrity during a test, or a loss of mechanical integrity as defined by 40 CFR § 146.8 becomes evident during operation, the permittee shall notify the Director in accordance with Part Ill, Section E. 10. (c) of this permit. Furthermore, injection activities shall be terminated immediately; and operations shall not be resumed until the permittee has taken necessary actions to restore integrity to the well and the Director gives approval to recommence injection. lnj ection Interval (Condition 3) The proposed injection zone extends from the top of the Cozzette Member of the Iles Formation at a depth of3,864 feet BGS ( Cozzette is perforated from 3,911to3,927 feet BGS) to the base of the Corcoran Member of the Iles Formation. The Corcoran Sandstone is perforated from 4,077 to 4,241 feet BGS. These two intervals are separated by a shale interval making up the base of the Cozzette Member. The injection zone is confined by a Tongue of the Mancos on top and the main part of the Mancos underlying the injection interval. Injection Pressure Limitation (Condition 4) There have been two attempted step-rate tests on this well. Both tests are considered unreliable and may not have achieved fracture pressures. There was, however, a fracture treatment of the well that was used to estimate the fracture gradient of the injection zone. Based on the instantaneous shut-in pressure from the fracture treatment of the Getty# 1-7LW, a maximum surface injection pressure of 930 pounds per square inch gauge (psig) has been established. If a higher pressure is requested, it must be accompanied by a step-rate test (SRT) of the injection zone, using fluid normally injected, to determine both the instantaneous shut-in pressure (ISIP) and the formation breakdown pressure. The Director will determine the allowable pressure modification based upon the test results and other parameters reflecting actual injection operations. Statement of Basis for EPA Permit No. CO 10932-04664 Page 12 of 19 The permittee shall give thirty (30) days advance notice to the Director if an increase in injection pressure will be sought. Details of the proposed test shall be submitted at least seven (7) days in advance of the proposed test date so that the Director has adequate time to review and approve the test procedures. Results of all tests shall be submitted to the Director within ten (10) days of the test. Any changes in the maximum injection pressure established by this section, as dictated by the test results, will be made as a minor modification to the Permit. Injection Volume Limitation. (Condition 5) There is no limitation on the number of barrels of fluid per day (BFPD) that may be injected into the Getty No. l-7LW disposal well, or in the cumulative number of barrels injected, provided that the maximum allowable injection pressure limitation, Part II, Section C, Condition 4 of this Permit, is not exceeded. Injection Fluid Limitation. (Condition 6) This application is for a Class I Non-Hazardous Underground Injection Control (UIC) Permit for the Getty well to be used for the disposal of reject brine from the solution mining fluid processed at the Parachute soda ash plant. No off-site (site meaning the Parachute soda ash processing plant) waste or on-site solvents and off-specification chemicals will be accepted for disposal. Injection of any hazardous waste as identified by EPA under 40 CFR 261.3 is prohibited. Annular Fluid (Condition 7) Unless an alternative to a packer has been approved under 40 CFR § 146.12 (c), the annulus between the 2-3/8 inch tubing and the long string ( 4-1/2 inch) casing shall be filled with fresh water treated with a corrosion inhibitor, or other packer fluid as approved, in writing, by the UIC Director and maintained under a minimum positive pressure of 50 pounds per square inch gauge (psig). A diesel freeze blanket of approximately one barrel may be placed on the backside to prevent freezing and possible equipment failure. PART II, Section D MONITORING, RECORDKEEPING AND REPORTING OF RESULTS Disposal Well Monitoring Program. (Condition 1) EPA regulations (40 CFR Part 146.13) require continuous monitoring and recording of injection pressure, flow rate, volume, and tubing/casing annulus pressure. The permittee is also required to analyze water quality of the injected fluids. Chemical analysis must include all of the following parameters: (a) carbonate by colorimetry or other method to be determined; (b) bicarbonate by colorimetry or other method to be determined; Statement of Basis for EPA Permit No. CO 10932-04664 Page 13 of 19 (c) total dissolved solids (TDS); (d) pH; (e) specific conductivity; (t) specific gravity; (g) dissolved sodium; (h) dissolved chloride; (i) dissolved boron; (j) dissolved barium; (k) ·dissolved calcium; (1) dissolved magnesium; (m) dissolved sulfate; (n) dissolved fluoride; and (o) dissolved potassium. After the first year of injection, samples may be taken twice a year except when there is a change of source. If the data collected in the first year demonstrate that some constituents are at insignificant levels (below or close to detection level) or are at consistent levels (less than 10% variation between samples), the operator may request a minor modification to modify the sampling requirements to eliminate or reduce the sampling for specific items. For measuring fluid volume and rate, the instrumentation shall be capable of recording at least one value for each of the parameters above every one minute. Initially, recordings shall be made once every 10 minutes. Monitoring must be carried out whether or not fluids are being injected. This information shall be analyzed in the first annual report to determine if this frequency is representative of the injection activity. A minor modification to the Permit shall be made to increase the frequency of recording ifthe variability of the injection volume and rate (as warranted by the data results) affects the representative nature of the data. A minor modification to the Permit may be made to decrease the frequency of recording if the Director determines that the fluctuation of the parameters is such that less frequent data collection would not significantly affect the representative nature of the reported data. Statement of Basis for EPA Permit No. CO 10932-04664 Page 14 of 19 For continuous monitoring of the injection and tubing/casing annulus pressure, the instrumentation shall be capable ofrecording at least one value for each of the parameters above every 15 seconds. Initially, recordings should be made once every ten minutes. Monitoring must be carried out whether or not fluids are being injected. This information shall be analyzed in the first annual report to determine if this frequency is representative of the injection activity. A minor modification to the Permit shall be made to increase the frequency of recording if the variability of the injection pressure and annulus (as warranted by the data results) affects the representative nature of the data. A minor modification to the Permit may be made to decrease the frequency of recording if the Director determines that the fluctuation of the parameters is such that less frequent data collection would not significantly affect the representative nature of the reported data. Monitoring Information. (Condition 2) Records of any monitoring activity required under this permit shall include: (a) The dates, exact place, and the time interval of sampling, monitoring, or field measurements; (b) The name of the individual(s) who performed the sampling or measurements; (c) The exact sampling method(s) used to take samples; (d) The date(s) laboratory analyses were performed; (e) The name of the individual(s) wh,o performed the analyses; (f) The analytical techniques or methods used by laboratory personnel; and (g) The results of such analyses. Recordkeeping. (Condition 3) The permittee is being required to keep records concerning: (1) the nature and composition of all injected fluids until three (3) years after the completion of plugging and abandonment, which has been carried out in accordance with the Plugging and Abandonment Plan shown in Appendix C of the permit, and is consistent with 40 CFR § 146.10. (2) all monitoring information, including all calibration and maintenance records and all original strip chart recordings for continuous monitoring instrumentation and copies of all reports required by this permit for a period Statement of Basis for EPA Permit No. CO 10932-04664 Page 15 of 19 of at least five (5) years from the date of the sample, measurement, or report, throughout the operating life of the well. The permittee shall maintain copies (or originals) of all the records listed above at the office of: Reporting of Results American Soda, L.L.P. 2717 County Road 215. Parachute, Colorado (Condition 4) The Permit requires that the average, maximum and minimum monthly values of injection pressure, flow rate and volume, and annular pressure be reported quarterly, along with the data from the fluid analyses. The operator shall also provide summary graphs covering the reporting period of the injection pressure, the annulus pressure, and the iajection rate. Copies of the analytical results for the samples of injected fluids, and records of any major changes in characteristics or sources of injected fluid shall be included in the Quarterly Report. The Quarterly Reports shall include the results and associated documentation of any mechanical integrity testing, pressure falloff testing, well workover, or well logging completed during the period covered by the report. The first Quarterly Report covers the period from the effective date of the pennit through the end of that quarter. Subsequent Quarterly Reports for a year cover the periods of: January I through March 31; April 1 through June 30; July 1 through September 30; and, October 1 through December 31. Each Quarterly Report must be submitted to the Denver Office by the 15th of the following month. The Permit requires submittal of the information on Form 7520-8 with attachments as needed. PART II, Section E PLUGGING AND ABANDONMENT Notice of Plugging a:nd Abandonment (Condition l) To provide sufficient time for the Director to witness the well plugging, if deemed necessary, the Permit requires that the Director be notified forty-five (45) days before abandonment of the well. Plugging and Abandonment Plan. (Condition 2) The plugging and abandonment plan (Appendix C of the Permit) submitted by the permittee, consisted of two (2) plugs (this counts the placement of cement in the surface casing and inside of the 4-1/2 inch casing at the top of the well as one plug). This plan has been reviewed and approved by the EPA with one modification. To ensure protection ofUSDWs in the Wasatch Statement of Basis for EPA Permit No. CO 10932-04664 Page 16 of 19 from upward movement of fluids adjacent to the uncemented longstring casing, an intermediate plug will be required. The resulting composite plugging Plan required by the Permit is as follows: (a) Immediately prior to plugging and abandoning the Getty# 1-7L disposal well, the retrievable tension-type packer, the 3,891 feet of2-3/8 inch tubing will be released and removed from the wellbore; (b) The operator is required to enter the wellbore with a tubing string to the bottom of the 4-1/2 inch casing and condition the wellbore. A cast iron bridge plug (CIBP) should be set in the 4-112 inch casing at 3,875 feet BGS with a 100 foot cement plug on top of the CIBP using Class B type II neat cement or an equivalent Class G cement; ( c) The wellbore should be filled from the CIBP to 320 feet BGS with 10-pound-per- gallon calcium chloride brine containing a gelling agent to increase viscosity; ( d) An intermediate plug will be set by perforating the casing at 1, 100 feet BGS and squeezing sufficient Class B Type II or Class G cement to establish a 100 plug in the annular space adjacent to the 4-112 inch casing and inside of the casing. (e) Setting the top plug requires perforation of the 4-112 inch casing at 315 feet and squeezing either Class B Type II or Class G cement to the surface between the 4-1/2 inch casing and the 8-5/8 inch surface casing. The 4-112 inch casing must be filled with identical cement to the surface. (f) After the wellbore is plugged the Permit requires cutting off the 8-5/8 inch and 4- 1/2 inch casings 1 to 3 feet below ground surface. A steel cap dry hole marker is required to be welded on the 8-5/8 inch casing. The surface must then be restored to landowner and/or County requirements. Inactive Wells. (Condition 3) The Permit requires that after a two (2) year period of injection inactivity, the permittee must plug and abandon the well in accordance with the Plugging and Abandonment Plan, unless the permittee: (a) has provided notice to the Director; and (b) has demonstrated that the well will be used in the future; and ( c) has described actions or procedures, satisfactory to the Director, that will be taken to ensure that the well will not endanger underground sources of drinking water during the period of temporary abandonment. Statement of Basis for EPA Permit No. CO 10932-04664 Page 17 of 19 Plugging and Abandonment Report. (Condition 4) Within sixty (60) days after plugging the well, the permittee shall submit a report on Form 7520-13 to the Director. The report shall be certified as accurate by the person who performed the plugging operation and the report shall consist of either: (1) a statement that the well was plugged in accordance with the plan; or (2) where actual plugging differed from the plan, a statement that specifies the different procedures followed. PART II, Section F FINANCIAL RESPONSIBILITY Demonstration of Financial Responsibility. (Condition 1) The permittee is required to maintain continuous financial responsibility and resources to close, plug and abandon the injection well as provided in the plugging and abandonment plan. (a) American Soda has chosen to demonstrate financial responsibility through a Standby Trust Agreement and a SAFECO Insurance Company of America Surety Performance Bond (issued to American Soda, L.L.P., the well operator), in the amount sufficient to plug and abandon the well. As deemed appropriate, the Director may require the operator to provide information updating the plugging plan and associated costs. At a minimum, such a review will be made during the five year review of the Permit. The performance Bond which names EPA as beneficiary in the event of permittee default on the plugging and abandonment requirements and is hereby incorporated as part of this permit. The Standby Trust Agreement established by the permittee shall remain in effect for the duration of this permit, unless part (b ), below, has been complied with. (b) The permittee may, upon written request to EPA, change the type of financial mechanism or instrument utilized. A change in demonstration of financial responsibility must be approved by the Director. A minor permit modification will be made to reflect any change in financial mechanisms, without further opportunity for public comment. Insolvency of Financial Institution. (Condition 2) In the event that an alternate demonstration of financial responsibility has been approved under (b) above, the permittee must submit an alternate demonstration of financial responsibility acceptable to the Director within sixty (60) days after either of the following events occur: Statement of Basis for EPA Permit No. CO 10932-04664 Page 18 of 19 (a) The institution issuing the trust or financial instrument files for bankruptcy; or (b) The authority of the trustee institution to act as trustee, or the authority of the institution issuing the financial instrument, is suspended or revoked. Cancellation of Demonstration by Financial Institution. (Condition 3) The permittee must submit an alternative demonstration of financial responsibility acceptableto the Director, within sixty (60) days after the institution issuing the trust or financial instrument serves 120-daynotice to the EPA of their intent to cancel the trust or financial instrument. Statement of Basis for EPA Permit No. CO 10932-04664 Page 19 of 19 REC FlVEll SEP i ' :1Gf1 STATE OF COLOMDO Bill Owens, Governor Jane E. Norton, Executive Director Dedicated to protecting and improving the health and environment of the people of Colorado 4300 Cherry Creek Dr. S. Laboratory and Radiation Services Division Denver, Colorado 80246-1530 8100 Lowry Blvd. Phone (303) 692-2000 Denver, Colorado 80230-6928 TDD Line (303) 691-7700 (303) 692-3090 Located in Glendale, Colorado http://www.cdphe.state.co.us August 10, 2001 Kurt Nielsen, General Mgr. American Soda, L.L.P. 2717 County Road 215 Parachute, CO 81635 RE: Renewal Certification, Colorado Wastewater Discharge Permit System Permit Number: COG-600000, Facility Number: COG-600236 Garfield County Dear Mr. Nielsen: Colorado Department of Public Health and Environment Enclosed please find a copy of your renewal certification, which was issued under the Colorado Water Quality Control Act. You are legally obligated to comply with all tenns and conditions of the pennit and certifications. Please read the pem1it and if you have any questions contact me at (303) 692-3599. Sincerely, /)aJuu; {'~ Darlene Casey, Administrative Assistant Water Quality Protection Section WATER QUALITY CONTROL DIVISION Enclosure xc: Bruce Kent, Permit Team, Environmental Protection Agency (8P2W-P) (w/1-7) Regional Council of Government (w/1-7) Local County Health Department (w/1-7) Dwain Watson, D.E., Technical Services Unit, WQCD (w/1-7) Permit Fee File /de issued-renewal-cert CERTIFICATION RENEWAL AUTHORIZATION TO DISCHARGE UNDER THE CDPS INDUSTRIAL GENERAL MINIMAL DISCHARGE PERMIT Category 26, Subcategory I, General Permits, Current fee $290/Year (CRS 25-8-502) SIC Code: 8221 This pennit specifically authorizes: Anterican Soda, L.L.P. ~~;~ ~;~:~jt~~~l}rf4hlt~~r:··:.f,c;:•1 '.i'~;[:j,,.,_ Parach'ut1r·co 81635 . ·•·. "A····•}• ·· .. :> •. r9z/J/i8s:J-g500Ad± (970J 2i~,639J }; •• • ~··· ,,~::::f;_;«. -i~';:~, ,_,~j_t;: Z:S._., ., _':.L~;1~'~,·s:c~;_·_ .. ;;.~,:;_z;,, '~ :(5-£:i< ''J_ with facility contact of ;C••" IN Cooley;·•e,:,yjriininen/~{M.anager '·•··.;, }'.· Permit No. COG-600000 Facility No. COG-600236 Page I .• '1;;.~.·;. ~·t~~~J,~~;~~:~~::,~;c;f ;;i~k1t..:.:·_;r~~;t~.-·:'1B.~:~ .. ;\ .• t;:0·1·{ ... ·>. to discharge from various storage,'tiili,li.S;'.j:J/OgeSs P'zp_~i:-cry_~J,"cl!lfz_~tS::_:f lQl~_C.biihg~[S;'/ti}~t<:nJtpr~SQrs fr~m-wh/ch Hydrostatic Testing will occur on the site of the American Soda, L.L.Ji,Ya11k~e GuZGli·~~W~cCio'r';<ii~di~s~Ciioiif H.~~l!f5;•f6s, J?,96W,'q1;<(_Sei:tio11s7>and 3, T7S. R96W; Latitude: 39° 28' 32", longitude.· I 08° 05' 05 "; al27 I1.(J?ii~i}:,Ro'kd'21S, ;~J'ljfo:<t1J1eftely,8,7!1!1'1S;~O.l:f~·:fifJ.of~fi~'!chut~,_CQ_,,G~f;fiel~,County, as shown in Figure I of the permit.from various outfalls beginning>in October /999 and lasting through q<portio11.oj'(he year 200L. ';-, /;,i:,' ?'./~-:~':'.-'·::\ ,: , _,,,,,·,,,,,,_'r/' __ .;_},:-'..-'.-~-:-.'-~·-:,,:_':::~_;;;~/-':\-~'."_' =-'./:'.=¢:·-_ ''>,_. _.-.,,._: __ :·'.:·,«, :-~ii '':.::· ?'.::~:-_ :::·,\ The source water for all test~~-~l~{b~,:fq~~~hule:qleek allt1vi~l'if:.Q~f,~-?~~f-~[.;·:pfj:~~~.Y$es ,;{t1,be·d1:~€c1dd-tcj.}h;edp~i~-'s, as shown in Figure J. Outfall 001 is at Alber Ditch, a tribu/aryt~.PaJ~_chute Creek. OutfaU,go2is at thec;ii/~ra~o River. Outfall 003 i~pt/,'(ird,5,~ute Creek. As discharges occur chronologically, they will be_ designated:_by the pe_rnJitt_ee wit~:aJ~tte~. <1es_iS~.ati~_1J.:after the_ CJJ,1,tesponifing numericql outfall. For exa111ple, the first discharge to Alber Ditch wi.11,.be designated o~lfalf OQI a, th.~ s'econ4tq 0 lllqerDitcb will be'.designated outfall 001 /,I. etc. The first discharge to the Colorado River will be desimiilted PQ2a. '{hefti;st flisc~arge to Par9i:hute Creek will./>e de~igiz~te4o~tfall 003a. Ali/1.ough all discharges are one-time and short-ter1n, the pennittee_-does:·no·t knO-W a(ihi$ .. il1ne wh~i( theY.~wl/1 occur._: .. > -~-,~ .3"-1;~;;., ··:-:/·. " ,f -~/:: >.:? :",' ::· ·L __ ::::""{/ -,;;., ·:~"" ·~:·~~-;i -._:~~-\. -_.· ;'.f:)i<: _,(_/ '::_~i~1~ ----::~;), _-':;~: ;-.:_./:~-~ _)':·,t; The discharges are to Alber Ditch. (a tributa.Y,t,e Parac,bute Cree,k): tq/he Colorad9River ... ai1d t_oParachute Creel( -:fiber Ditch and Parachute Creek are within seg111e11t 4 of the Lower Colorado Riv~r S~b-bds_~1i;-:_Lo."Yer Colora4o,_Pasin,-and_th_~: Co_lorado_._River i~ withbiseg1nent 1 of the lower Colorado River sub-basin, lower Colorado basin/fqu1!d:ln;_ClaSs_ificaliO,ns dizc!-J:!_u1neric_':St_a11da~~s_:fO_r:th~ loWer Colorado R_iver Basin. Regulation No. 37 (5 CCR 1002-37); last update effective Augujt 30;}997. Sef0!ent4hcis,been c/!issifiedforihdollov;(11g uses: Recreati,oh, Class 2; Aquatic Life, Class 2 (Cold); Agriculture. Segment I has been cla~sifiedfor the following iis'es: Rep·eation, Class /;-Aquatic Life, Class} (Cold); Water Supply; Agriculture. _; ; · '··•«» -..... ' --, · ·o ,'.,:,,:., Applicable lbnitations and rnonitorin~ r~tjUlte111efitS_Gre listed in. liie-iOt!(i~di;ii'-t~ble. .• >.: ' Para1neter .. " DiscltO.ree Li11iitatio11 -·.• Frequency Sample Type 30-dilv av<! ·· 7-dav aviT .--·-Daily 1nax Flow, an1n Revi1rt · . NA . ·' Report Instantaneous Total Suspended Solids, mf!// 30 . .· :45.-· ; -J·" NA Grab Total Recoverable Iron, ml!ll Report NA Revort Once per Grab vH, su. (1ninimu1n-1naxbnu1n) NA NA 6.5-9.0 Discharge Grab Oil and Grease, nzf!ll NA NA IO Visual-See Part I.D.13. Best Management Practices, as discussed lll Part l.F.5. of the per1111t and Part V.K. of the pernut rationale, shall be followed for the duration of the discharge. A master discharge rnonitoring report (DMR) fortn is provided by the Division for the permit tee to photocopy. The permittee will need to 1nake as rnany copies as needed for all outfalls, fill in the appropriate outfall number (as described in the second paragraph on page I) and period during which discharge occurred for each hydrostatic test discharge, as 1rvell as the required 1nonitoring results. lm1nediately upon co1npletion of each DMR, it shall be sub1nitted to the Division to the attention of the per1nit writer shown at the botto1n of this page. This permit certification is issued for authorizing blanket coverage of an undeterrnined nu1nber of short-tertn discharges of a silnilar nature by one entity. The general permit under which this certification is issued is being renewed. No changes have been 1nade to the monitoring requirements. All correspondence relative to this facility should reference the specific facility no. COG-600236. EffectiveA11g11st 1, 2001 Certi[icatlou Expires July 31, 2006 Christopher L. Gates July 3 /, 200 I 0 0 <>: a: 0 ..J 0 (.) U~IW ,11111111111111111111111111111111111111111111111 ~~~837 11/03/1999 02:39P 81158 P773 M ALSDORF 1 of 3 R 0.00 D 0.00 GARFIELD COUNTY CO STATE OF COLORADO ) )ss County of Garfield ) At a regular meeting of the Board of County Commissioners for Garfield County, Colorado, held in the Council Chambers, Rifle City Hall, in Rifle, on Monday, the 1st of November, A.D. 1999, there were present: ~Jo=lm~M~a~rt=in~------------' Commissioner Chairman =L=an:y....,...~M~c~C=o~wn=------------' Commissioner ~W~a=lt~S=t=o~w~e~------------' Commissioner .. D~o~n~D~e~F~o~rd,,_ ____________ ,CountyAttorney .,M..,i..,,ld~re.,d"""'A ...... ls""d"'orf.....__ ___________ , Clerk of the Board .. E""d"'Gr""'e_..,en...._ _____________ , County Administrator when the following proceedings, among others were had and done, to-wit: RESOLUTIONNO. 99-113 A RESOLUTION CONCERNED WITH THE REVIEW OF THE PRE-APPLICATION NOTICE FOR A LAND USE PERMIT SUBJECT TO THE GARFIELD COUNTY FISCAL IMPACT MITIGATION PROGRAM REQUIREMENTS FOR AMERICAN SODA L.L.P .. WHEREAS, AMERICAN SODA L.L.P. (hereinafter "Applicant")filed a Statement of Intent with the Board of County Commissioners of Garfield County (hereinafter the "Board") for the operation of a Major Project, as defined by Section 5.08.02.08 of the Garfield County Zoning Resolution of 1978, as amended (hereinafter "Zoning Resolution"), on August 4, 1999; and WHEREAS, on September 20, 1999, the Applicant filed a Pre-Application Notice with the Board of County Commissioners for land use permit to operate the Yankee Gulch Sodium Minerals Project (hereinafter the "Project"); and WHEREAS, the Board held a public informational meeting on October 12, 1999, as required by Section 5.08.04.05 of the Zoning Resolution at Town Hall in the Town of Parachute; and WHEREAS, based on the material submitted by the applicant, the comments of the Garfield Cow1ty Planning Department and the comments by the public, this Board finds as follows: 1. That proper publication and public notice was provided as required by law for the meeting before the Board of County Commissioners. 2. That the meeting before the Board of Coooty Commissioners were extensive and complete, that all pertinent facts, matters and issues were submitted and that all interested parties were heard at that meeting. ! 11111111111111111 1111111111111111 111111111111111111111 554837 11/03/1999 02:39P 81158 P774 M ALSDORF 2 of 3 R 0.00 D 0.00 GARFIELD COUNTY CO 3. That all data, analysis, and studies have been submitted and reviewed as required by the Zoning Resolution. NOW, THEREFORE, BE IT RESOLVED that the Pre-Application meeting was concluded and the Board reached the following conclusions regarding the American Soda L. L. P. project: 1. All representations of the applicant, either within the Pre-Application Notice or stated at the public meeting before the Board shall be considered commitments by the Applicant, unless otherwise state by the Board. 2. The summary of the public comments shall be the minutes of the meeting kept on file by the Garfield County Clerk and Recorder. 3. The applicant is exempt from any further requirements of the Garfield County Fiscal Impact Mitigation Program, provided the following issues are included in the Special Use permit decision: A. A plan for housing employees for the entire project of the applicant be included in the application, which shall include employees in Rio Blanco County. B. As a part of the Special Use permit decision, the applicant submit a plan for minimizing traffic impacts to the Town of Parachute acceptable to the Board. C. The applicant enter into an agreement with the Town of Parachute to deal with possible additional calls for service in town and to Battlement Mesa as a part of a mutual aid agreement with the Garfield County Sheriff for police service. D. The applicant enter into an agreement with the City of Rifle to deal with possible additional calls for service in town and as a part of a mutual aid agreement with the Garfield County Sheriff for police service. E. The applicant reach an agreement with the Town of Parachute to mitigate any increased demand for other public services, as a result of the construction activity on the project. F. The Special Use shall provide for an ongoing housing and employment monitoring system. If the total work force exceeds the employment work force projected as a part of the application by ten percent (10%) or greater, the applicant shall be required to notify the Board of the effects of the increased work force and any additional measures needed to acconunodate the work force. The project monitoring program shall end upon the completion of the pipeline and appurtenant facilities approved by Resolution No. 99-055. I llllll lllll llllll llllll 1111111111111111111111111111111 :354837' 11/03/1999 02:39P 81158 P775 M RLSDORF 3 of 3 R 0.00 D 0.00 GARFIELD COUNTY CO Dated this 1 st day of __ N_o_v_e_m_b_e_r __ , A.D. 19__g_g_. GARFIELD COUNTY BOARD OF COMMISSIONERS, GARFIELD COUNTY, COLO RAD Chai Upon motion duly made and seconded the foregoing Resolution was adopte owing vote: COMMISSIONER CHAIRMAN JOHN F. MARTIN , Aye COMMISSIONER LARRY L. MCCOWN A , ye COMMISSIONER WALTER A. STOWE --------------------------~•Aye STATE OF COLORADO ) )ss County of Garfield ) I, , County Clerk and ex-officio Clerk of the Board of County Commissioners in and for the County and State aforesaid do hereby certify that the annexed and foregoing Resolution is truly copied from the Records of the Proceeding of the Board of County Commissioners for said Garfield County, now in my office. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of said County, at Glenwood Springs, this __ day of , A.D, 19 __ , County Clerk and ex-officio Clerk of the Board of County Commissioners ~AMERICAN .DU SooA, L.L.P. 271 7 Cou nty Road 2 15 Parachute. CO 81635 Novembe r 3, 1999 Mr. Mark Bean Building & Planning Director 1 09 8 th Street, Suite 303 Glenwood Springs, CO 81601 Dear Mark, Teleph one C970J 2 85 -6500 Toll Free 18771 SO DA-ASH Facs imile C9 7 0J 285-6393 Th e enclosed are the Labor Survey Summaries for the lower site work force for the month of October 1999. Th e data used for these monthly surveys is taken from records during the last week of the month being reported . Thi s manpower count in cludes American Soda, Williams and their Subcontractors. The newsletter wil l be com in g out to the provid ers of housing ne xt week. Ple ase ca ll if you have any question or concerns. Sin cerely, &!d-S!A Ed c~~0 ) Gen era l Se rvi ce's Manager Cc : Doug Toft Leonard Eckhart Tom Bea rd Gene Park John Lo sc hke Steven MaKee Ju an ita Satterfield RECE IV ED NOV Natural Sodium Products For a Cleaner Environment 5 1999 Kvaerner Job #306950 LABOR SURVEY CONTRACTOR: YANKEE GULCH SODIUM MINIERALS PROJECT MONTH: OCTOBER, 1999 1. Average number of employees: 183 2. Peak number of employees on Payroll 280 3. Of the above peak employees, how many were: A. Residents of Colorado 97 B. Non-residents of Colorado 183 4. Of the above peak employees, how many were: A. Local Residents (live within 50 miles of site): ___ ___;;,6..:...9 B. Non-local 211 5. Of the above local employess, list the numbers living in each community: __ __:1.:....7 Grand Junction ----'1~8 Parachute ___ ,..:_16:::.. Rifle ---=-2 Glenwood Springs ____ 8;:_ Battlement Mesa ___ ..::.2Silt ____ Cameo ----=-2 Palisade ____ ...:...1 DeBeque -----Rulison New Castle -----3 Clifton ----"- 6. Of the non-local employess, list the numbers living in each community: ___ .;:_9 Grand Junction __ __:8"'-0 Parachute ___ ..:..8Rifle ___ .::..3 Craig ___ ...:...1 Glenwood Springs __ __:7..:...7 Battlement Mesa Silt ----____ Cameo _____ Palisade ----=-2 Rangley _____ Rio Blanco ____ 1c=.2 Meeker -----'-1 DeBeque Rulison ----- -----New Castle Clifton -----18 Other -----'- 7. What kind of housing will you require during your employment on this project: Page 1 of 2 Kvaerner Job #306950 ___ ::;94::._Apartment __ ___:::3c:..1 House ___ __:;3~6 RV ___ __:4:::..9 Motel 1 Other -----'- 8. List the number of students who have been brought into the area and enrolled in school as a result of this project. GRADE PARACHUTE K 2 3 4 5 6 7 8 9 10 11 12 !'>Vei;m1,;1,;~r 1 2 2 4 2 GLENWOOD B.MESA TOTAL 1 2 1 3 5 3 1 1 1 0 0 0 2 2 0 0 Page 2 of 2 09/13/99 06=32 Management and Planning Research P.O. Box 1293 Glenwood Springs, Colorado 81602 TO: FROM: DATE: RE: MEMORANDUM VIAFAX Ford Frick & Jennifer Lakins Mello, BBC Research & Consulting Mark Bean, Garfield County Planning Director Dennis A. Stranger September 12, 1999 American Soda Project Draft Pre-Applicatio11 Notice p. 01 (970) 928-0872 I am in receipt of the draft Pre-Application Notice for the American Soda project which was faxed to me last Friday afternoon. It is understood that this is a preliminary draft with holes big enough to drive an American Soda product delivery train through. The remaining information will be included in the next iteration of the report. Nevertheless, the following comments reflect my initial impression regarding the draft report and also include some technical issues that need to be addressed further. There is no particular importance to the order ofthcse comments which more or less follow the structure of the draft report. I. Page l • reference to "full scale construction activities" beginning July 1999. This implies that the case study portion of this report will begin at that point. However, if the applicant had properly analyzed the project work force and permitted it as envisaged by the Garfield County Zoning Resolul/011, the analysis would be structured to address socioeconomic issues commencing no later than the beginning of construction (March I 999 per Page 4) and possibly earlier. Why docs the data reporting begin in July rather than March 1999 or earlier? 2. The choice of peak rather than average employment seems to be reasonable as explained on Page 4. Has American Soda prepared an average monthly employment estimate? 3. Pages 6. 7 -Employment Proj~tions. The graphical depiction of the work force (Exhibit H-7) and the table showing local and non-local worker shares by skill level (Exhibit 11-8) do not provide the level of detail J need to properly evaluate the potential impacts. It would be useful if you could provide a table showing monthly employment for both the Parachute and Piceance sites broken down by operation and construction persollllel and by local and non· local workers in each of those categories. It is not critical that the new table be included in the Pre-Application Notice, but I want it as part of my technical review data compendium submitted with the Pre-Application Notice. Page I of3 P,02 09/13/99 06:33 4. Pages 6 • 7. It is well and good that American Soda wishes to hire local residents as employees. What is the effect on the local labor supply consideling the vagaries of the regional labor market? It seems likely that workers will move in to replace those residents going to work for American Soda · particularly considering a construclion period extending over one and one-half years. The repo11 merely dismisses this with the statement on Page 7 ·that the project "may create some competition for other employers in the area" Care to speculate what the economic results are going to be? This needs to be considered more fully. 5. Pages 8 • 10 Housing Availability. Parachute town officials have indicated to me that no more apartments are available. The August 1999 American Soda employee housing survey indicated that there were 65 Parachute site employees living in the Town of Parachute. Does Table ll· 11 include those 65 workers or does it imply an additional 30 apartments? Some of the communities have noted that some temporary housing alternatives such as RV parks and motels are difficult to book at certain times of the year especially during the summer tourist season and during the various hunting seasons. This is acknowledged in the report but it is not clear how it is addressed. This detail needs to be explained a little more fully. Please document the basis for the assumptions listed on Page 9 regarding the occupancy of various types of housing by construction workers. What is the estimated number of workers occupying each type of housing unit i.e., how many apartments, motel rooms and RV spaces will be needed? RV parks may provide a housing alternative but only if construction workers have appropriate vehicles or American Soda provides the RV. Is this anticipated? The last paragraph of this section (Page I 0) stales that adequate housing capacity exists for the non-local work force. Could this be explained better and can ii be confirmed? 6. Page 11 • Employment Multiplier. The RIMS employment multiplier of 2.4 cited for the operation phase of the project is fairly consistent with industry rules of thumb. It is not noted which industrial classification was used to derive the multiplier. Please provide the multiplier to me (although including it in the report would probably add more confusion than clarity). I specifically want to know the Output, Earnings and Employment multipliers as well as any dllJllpening factors used. Which RIMS series was used and how was the regional geography defined? 7. Page 12 • Construction effects. The report states that there are not any applicable construction employment multipliers for the American Soda project. I remain to be convinced that this is the case although I understood that the support for this claim is one of the missing pieces of the draft report. Please cite chapter and verse, methodology and results. and comparison to the American Soda project. Somehow it was conclude that the construction work force will generate an additional 175 jobs. I assume this is explained in the missing section. Page 2 of3 P.03 09/13/99 06:34 8. To paraphrase Mark Twain, jobs are good, jobs are impressive but people cause the impacts. The report is practically silent on the population effects associated with the construction and operation of the American Soda project. Judging from the uncompleted tables, it appears that this aspect of the report remains to be completed. A table showing the population effects from the construction and operation oflhe project broken down by each site (and the pipeline) would be rnost useful. I have received conflicting anecdotal information on the population effects of the current construction work force. To clarify this, the e1'tent of the construction-related work force needs to be accounted for including direct and indirect workers. In addition, the associated population needs to be estimated. This is a critical point that needs to be fully discussed. 9. It is not clear what the point of Table IH-1 tax data is particularly since the introductory language indicates that is merely a list of local government jurisdictions in the vicinity of the project sites. Jn any event, the list may not be complete. There may be omitted local government e11tities in Rio Blanco County • this needs to be confirmed. What about DeBeque, Palisade, Clifton a11d Grand Junction? Explain why they are not included in the initial list. Check on the Battlement Mesa Metropolitan district which is not listed in the County Abstract (it may not be property tax funded). JO. Page 15. What is the rationale for the claim that local government entities collecting property taxes will not be impacted during the construction phase of the project when typically the converse is the case due to the fag times associated with property ta" collections and also due to the fact that significant property tax revenues will accrue to taxing authorities only after the project construction is complete? Furthennore, not all of the jurisdictions will be levying property taxes on the various project facilities. 11. Table Ill-3. It is suggested that the official fall count be used (October I ?). Please note, for me, the head count as well as FTEs for K· I 2 enrollment. It may be necessary to include the JT 49 district in the DeBeque area. 12. §5 .08.04.03(7) requires that the Pre-Applicafio11 Notice include a list of studies which the applicant intends to submit on the housing and fiscal impacts of the Major Project. This is missing from the draft. The regulations are more or less quoted on the first page of the draft in terms of what is required to be submitted but §5.08.04.03(7) requires that a list of the intended studies be provided. A summary of the Pre-Application Notice, suitable for publication, needs to be submitted with the Notice. The summary must include all the salient infonnation needed for a citizen to grasp the schedule Rnd magnitude of the project. The county needs to see the summary as soon as possible to confirm its adequacy. If the county has to write the summary or revamp it extensively, the processing of the Pre-Application Notice could be delayed. I assume you will edit the report so minor details are not addressed in these comments. Let's discuss these comments ASAP. Page 3 of3 MEMORANDUM mmrtJ TO: FROM: RE: DATE: Dennis Stranger Ford Frick and Jennifer Lakins Mello BBC Research & Consulting REsEARCH & CONSULTING Employment and Population Impacts of Yankee Gulch Project October 4, 1999 Per your request, this memorandum provides additional information on the direct and secondary employment and related population impacts that will be stimulated by American Soda's Yankee Gulch Project. Attached Exhibits 1-3 are the summary tables you requested with some additional data for each site individually and for the sites combined. For July 1999-December 2000 and for the construction and operations workforce, it provides the number of direct non- local employees, the number of direct local employees, the number of secondary employees and the related population impacts. Exhibit 4 sets forth the key multipliers used to estimate secondary employment and population impacts --these assumptions were used consistently throughout the exhibits in this memorandum. Construction Employment Multiplier 1.34 EXHIBIT 4. Employment and Population Multipliers Operations Employment Multiplier 2.39 Construction Population Multiplier 1.30 Operations Population Multiplier 2.63 3773 CHERRY CREEK NORTH DRIVE, SUITE 850 DENVER, COLORADO 80209.3827 PHONE: 303.321.2547, fAX: 303.399.0448 e-mail: bbc@bbcresearch.com Internet: www.bbcresearch.com Page 2 Construction and operations multipliers were derived from the IMPLAN Input-Output model. An attached memorandum provides additional detail about our modeling approach. The construction population multiplier, i.e., the number of spouses or children accompanying the in-migrating workforce, is based on the experience of K vaerner staff, including the experience of the American Soda project to date. It implies that every construction worker coming to the area will bring .3 additional people (spouses or children) with them. We have used a factor of 2.63 to estimate the total population impacts associated with a given operations worker. According to Colorado Dept. of Local Affairs data provided by Mark Bean, 2.63 was the average household size for Garfield County in 1998. Exhibit 5 summarizes the percentages we used to distribute local and secondary workers to different communities. These estimates are based on the experience of the Yankee Gulch Project to date, the location of the project sites, the size and amenities of nearby communities and a rough sense of housing availability. Battlement Mesa Parachute Meeker Rangely Rifie Glenwood Springs Grand Junction Craig Unincorporated or Other Garfield County EXHIBIT 5. Population Distribution Assumptions % Local Employees % Local Employees Working at Parachute Working at Piceance Site Living In Site Living in Community Community 15% 5% 30% 5% 0% 30% 0% 20% 25% 25% 5% 5% 10% 0% 5% 5% 10% 5% % Secondary Employees Living Jn Community 10% 5% 5% 10% 30% 20% 10% 5% 5% Page 3 The distribution for non-local workers, not shown in Exhibit 5, was based on our earlier work and relies heavily upon the availability of temporary housing. Secondary employees were distributed in a more widely dispersed geographic manner because of our belief that most indirect or inducted impacts will occur in areas that are already service centers such as Rifle and Glenwood Springs. Attached Exhibit 6 summarizes the maximum potential population increases by community. Percent population increase was determined using total peak employment for each community. Data on peak construction and operations employment is provided for informational purposes only. The tables used to determine peak impact by community are provided under separate cover. Please note that calculations are provided for each month during the construction process largely because each community witnesses peak impacts during a different month. EXHIBIT 1. Total Employment and Population Effects Both Sites, Yankee Gulch Project DIRECT EMPLOYMENT SECONDARY EMPLOYMENT 3 TOTAL DIRECT & SECONDARY Local Non-Local Local Non Local All Direct All Direct Construction 1 Construction 2 Operations 1 Operations 2 Construction Operations Construction Operations Construction Operations July 1999 120 68 17 2 188 19 64 25 252 44 August 84 134 19 2 218 21 74 28 292 49 September 141 142 21 2 283 23 96 31 379 54 October 139 171 21 2 310 23 105 31 415 54 November 143 183 21 2 326 23 111 31 437 54 December 247 285 21 2 532 23 181 31 713 54 January 2000 265 306 24 2 571 26 194 35 765 61 February 292 431 24 2 723 26 246 35 969 61 March 316 487 25 2 803 27 273 36 1076 63 April 242 469 29 3 711 32 242 42 953 74 M•y 220 451 31 3 671 34 228 44 899 78 June 162 478 31 3 640 34 218 44 858 78 July 134 443 40 4 577 44 196 58 773 102 August 110 392 87 10 502 97 171 126 673 223 September 60 203 96 11 263 107 89 139 352 246 October 17 87 100 12 104 112 35 145 139 257 November 0 0 100 12 0 112 0 145 0 257 December 0 0 106 12 0 118 0 153 0 271 Source: BBC Research & Consulting and American Soda. Notes: 1. Persons already residing in Garfield County prior to employment on Yankee Gulch Project. 2. Persons relocating to the area in association with employment on Yankee Gulch Project. 3. Jobs created primarily in the service and retail sectors as a result of spending by direct employees. POPULATION Construction Operations Total 327 116 443 380 128 508 493 141 634 540 141 681 568 141 709 927 141 1068 995 160 1154 1259 160 1419 1399 166 1565 1239 194 1432 1169 206 1375 1115 206 1321 1005 269 1274 874 588 1462 458 647 1105 181 675 856 0 675 675 0 712 712 EXHIBIT 2. Total Employment and Population Effects Parachute Site, Yankee Gulch Project DIRECT EMPLOYMENT SECONDARY EMPLOYMENT 3 TOTAL DIRECT & SECONDARY Local Non-Local LocaJ Non Local All Direct All Direct Construction 1 Construction 2 Operations 1 Operations 2 Construction Operations Construction Operations Construction Operations July 1999 120 68 5 1 188 6 64 7 252 13 August 84 134 6 1 218 7 74 8 292 15 September 141 142 8 1 283 9 96 11 379 20 October 139 171 8 1 310 9 105 11 415 20 November 143 183 8 1 326 9 111 11 437 20 December 142 196 8 1 338 9 115 11 453 20 January 2000 110 198 11 1 308 12 105 15 413 27 February 102 218 11 1 320 12 109 15 429 27 March 101 234 12 1 335 13 114 17 449 30 April 104 249 16 2 353 18 120 22 473 40 Moy 100 240 18 2 340 20 116 25 456 45 June 93 245 18 2 338 20 115 25 453 45 July 64 177 26 2 241 28 82 36 323 64 August 43 137 56 6 180 62 61 78 241 140 September 18 45 65 7 63 72 21 90 84 162 October 2 10 69 8 12 77 4 96 16 173 November 0 0 69 8 0 77 0 96 0 173 December 0 0 75 8 0 83 0 104 0 187 Source: BBC Research & Consulting and American Soda. Notes: 1. Persons already residing in Garlield County prior to employment on Yankee Gulch Project. 2. Persons relocating to the area in association with employment on Yankee Gulch Project. 3. Jobs created primarily in the service and retail sectors as a result of spending by direct employees. POPULATION Construction Operations Total 327 34 362 380 40 420 493 53 546 540 53 593 568 53 621 589 53 642 537 72 608 557 72 629 584 78 662 615 106 721 592 118 711 589 118 707 420 169 589 314 368 681 110 427 537 21 455 476 0 455 455 0 492 492 EXHIBIT 3. Total Employment and Population Effects Piceance Site, Yankee Gulch Project DIRECT EMPLOYMENT SECONDARY EMPLOYMENT 3 TOTAL DIRECT & SECONDARY Local Non-Local Local Non Local All Direct All Direct Construction 1 Construction 2 Operations 1 Operations 2 Construction Operations Construction Operations Construction Operations July 1999 0 0 12 1 0 13 0 18 0 31 August 0 0 13 1 0 14 0 19 0 33 September 0 0 13 1 0 14 0 19 0 33 October 0 0 13 1 0 14 0 19 0 33 November 0 0 13 1 0 14 0 19 0 33 December 105 89 13 1 194 14 66 19 260 33 January 2000 155 108 13 1 263 14 89 19 352 33 February 190 213 13 1 403 14 137 19 540 33 March 215 253 13 1 468 14 159 19 627 33 April 138 220 13 1 358 14 122 19 480 33 May 120 211 13 1 331 14 113 19 444 33 June 69 233 13 1 302 14 103 19 405 33 July 70 266 14 2 336 16 114 22 450 38 August 67 255 31 4 322 35 109 49 431 84 September 42 158 31 4 200 35 68 49 268 84 October 15 77 31 4 92 35 31 49 123 84 November 0 0 31 4 0 35 0 49 0 84 December 0 0 31 4 0 35 0 49 0 84 Source: BBC Research & Consulting and American Soda Notes: 1. Persons already residing in Garfield County prior to employment on Yankee Gulch Project. 2. Persons relocating to the area in association with employment on Yankee Gulch Project. 3. Jobs created primarily in the service and retail sectors as a result of spending by direct employees. POPULATION Construction Operations Total 0 82 82 0 88 88 0 88 88 0 88 88 0 88 88 338 88 426 458 88 546 702 88 790 815 88 903 624 88 712 577 88 665 526 88 614 585 101 686 561 220 781 348 220 568 160 220 380 0 220 220 0 220 220 Battlement Mesa Parachute Meeker Rangely Rifle Glenwood Springs Grand Junction Craig Unicorporated Garfield County Garfield County Parachute/Battlement Mesa Park & Recreation RE-2 Garfield County School District SD16 Parachute School District Garfield Emergency Communications Authority EXHIBIT 6. Potential Maximum Population Impacts Yankee Gulch Project Peak Construction Peak Operations Peak Total 1998 Percent Population Population Population Population Population Change 309 87 328 3,500 9% 149 91 183 1,153 16% 263 55 280 2,466 11% 176 57 192 2,720 7% 294 190 346 6,367 5% 92 94 130 8,202 2% 49 60 76 42,901 0% 38 34 46 9,082 1% 45 44 56 16,404 0% 873 507 987 40,299 2% 469 200 518 4,172 12% 316 212 375 9,595 4% 469 200 518 4,653 11% 873 507 987 40,299 2% Source: BBC Research & Consulting, American Soda and Colorado Dept. of Local Affairs (Estimates of Population 7-1-98 for local review). Month Total Employment Peaks April 2000 August 2000 March 2000 March 2000 August 2000 August 2000 December 2000 August 2000 August 2000 March 2000 April 2000 August 2000 April 2000 March 2000 MEMORANDUM TO: FROM: RE: DATE: Dennis Stranger Ford Frick American Soda Property Tax Receipts October 4, 1999 IDIDrl REsEARCH & CONSULTING This memo offers a projection of property tax receipts stemming from the American Soda developments in Garfield County. We have interviewed the County Assessor and county staff who have responsibility for determining commercial assessed valuation. American Soda has provided data on anticipated project investment. American Soda's assessed valuation will be determined by the value of investment in the plant, business equipment, personal property and pipeline facilities. Garfield County will tax only those portions of the project that are located within the county. The processing plant and the majority of the Garfield County share of the pipeline lie in County Taxing District 026, which in 1998 had a mill levy of 41.981 mills. It is assumed that the Parachute/Battlement Mesa Park and Recreation District, with a mill levy of 3.646 mills, will also extend its boundaries to incorporate American Soda's project. Within Garfield County, American Soda anticipates the following: • Plant property and equipment investment of $110 million (including land). • Pipeline (Garfield County share only) and personal property investment of $20 millioii. It is likely that the project, pipeline and other personal property will be valued at the initial cost of investment. Every two years, the property will be reassessed. The pipeline holding tanks and other personal property are depreciable assets. The pipeline would likely be depreciated over a 20-year schedule. Other personal property would likely depreciate over a 9-14 year schedule. This value in future years will be determined largely by an interplay of investment, inflation and depreciation. 3773 CHERRY CREEK NORTH DRIVE, SUITE 850 DENVER, COLORADO 80209.3827 PHONE: 303.321.2547, FAX: 303.399.0448 e-ma11: bbc@bberesearch.com Internet: www.bbcresearch.com ' ----·----·-------------------------·-----~--·-·- Page2 The building and lands are assessed as real property; the plant's value will be determined in part by the value of production and in part by the purchase and investment cost. Under the current construction schedule, the project will be fully operational during the Year 2001 and assessed at full value on January 1, 2002. Revenues will accrue to the county and various taxing districts based on that assessment during the Year 2003. Assuming a total commercial value of $130 million for properties within Garfield County and an assessed value of 29 percent, or $37 million, revenues will accrue during the Year 2003 as demonstrated in Exhibit 1. (Current valuation is provided in Exhibit 1 to emphasize that American Soda property within Garfield County will make up anywhere from 7to 184 percent of the total valuation of the various governmental entities and special districts.) EXHIBIT 1. Projected Property Tax Revenue Yankee Gulch Project Current Miii Forecasted Valuation Levy Revenue Garfield County General Fund $496,648,840 8.306 $307,300 Road and Bridge $496,648,840 1.393 $51,050 All Other Funds $496,648,840 5.349 $197,900 Colorado River Conservancy $496,648,840 0.309 $11,400 Colorado Mountain College $481,585,350 3.539 $130,100 SD16 Parachute $61,100,230 16.598 $613,800 Grand Valley Fire (Parachute) $61,431,500 3.267 $120,800 Bluestone Water Conservancy $61,540, 780 0.122 $4,500 Grand River Hospital $210,393,390 4.282 $158,430 Grand Valley Cemetery $61,100,230 0.209 $7,730 Parachute/Battlement Park & Rec $20,097 ,510 ~ U~1.!:1QQ Total 47.02 $1,737,910 It should be noted that under the TABOR Amendment, these jurisdictions are unlikely to receive these full revenues. Future years' mill levies will have to be reduced to ensure that revenues fall within the TABOR cap. In short, the significant assessed value stemming from the American Soda plant will not create windfall revenues for the taxing jurisdictions, but will result in reduced tax burden for all other properties within the various districts. It is possible that certain of these districts may "de-Bruce" before 2003 and, therefore, would be in a better position to collect and spend the American Soda receipts. -------------· ··-· ___ ,, _________ ___,.._ _________ ~ ·-·------~ --. MEMORANDUM mmr1 TO: FROM: RE: DATE: Dennis Stranger Ford Frick and Todd Pickton BBC Research & Consulting REsEARCH & CONSULTING IMPLAN Multiplier Discussion for American Soda's Yankee Gulch Project October 1, 1999 The IMPLAN Social Accounting Matrix (SAM) Type II Employment Multiplier for the construction of new mineral extraction facilities in Garfield County, Colorado is 1.343. The corresponding Type II employment multiplier for facility operation is 2.392. The facility operation employment multiplier is derived as the average of the coal mining multiplier (2.630) and the natural gas and crude petroleum multiplier (2.154). In our view, this mix closely approximates the attributes of the Yankee Gulch Project. These multipliers imply that approximately 34.3 additional jobs will be created per 100 full- time construction workers directly employed in facility construction and 139.2 additional jobs will be created per 100 full-time workers directly employed in facility operations. These type II multipliers, by definition, reflect both the indirect and induced employment of private and government labor. Therefore, it is the most complete measure of the impacts on Garfield County. The IMPLAN model was chosen because it offers three important refinements over the Bureau of Economic Analysis' (BEA) RIMS II model. • First, IMPLAN uses Regional Purchase Coefficients (RPC's) to estimate regional trade flows wry.le the RIMS II model uses Location Quotients (LQ's). Using LQ's will understate county-level exports and imports because this method assumes that industries and households will always purchase from local suppliers before looking elsewhere. In our view, this assumption does not reflect observed behavior and will cause project impacts to be overstated. RPC's are econometrically estimated and more accurate! y reflect regional trade flows. • Second, the IMPLAN model uses a regional estimation of the way individuals spend their money instead of the RIMS II method of using a national average. The IMPLAN method examines household consumption patterns for multiple income 3773 CHERRY CREEK NORTH DRIVE. SUITE 850 DENVER, COLORADO 80209.3827 PHONE: 303.321.2547, FAX: 303.399.0448 e-mail: bb<:@bbCresearch.com internet: www.bbCresearch.com Page2 levels. This extension recognizes that for most products the income elasticity of demand is not equal to one. Estimation of regional expenditure patterns is particularly necessary for counties where the household income levels and distribution are far from the national average. • Third, by basing their model on a SAM, IMPLAN captures flows of people (commuting) and monetary flows between institutions that the RIMS II model does not capture. Specifically, the IMPLAN multiplier accounts for taxes paid to the government (e.g., social security and payroll taxes that do not appear on the W-2 form) and employee compensation paid to trade (e.g., commuters and corporate profits paid to the enterprise sector). These leakages reduce household income and correctly dampen the traditional induced employment effect. The derived multipliers are in keeping with the values we have discussed throughout the process. Garfield County, Colorado Employment Multlpllers Direct Indirect Induced Description Effects Effects Effects Construction New Mineral Extraction Facilities 24.092 0.612 7.661 Operations Coal Mining 3.150 1.671 3.464 Natural Gas & Crude Petroleum 3.519 1.632 2.430 Yankee Gulch Operations 3.334 1.651 2.947 Note: Effects are in jobs per $1 million of additional final demand. Source: IMPLAN, October 1999 Total Type I Type II Effects Multiplier Multiplier 32.365 1.025 1.343 8.284 1.530 2.630 7.581 1.464 2.154 7.933 1.497 2.392 ., . MEMORANDUM TO: FROM: RE: DATE: Dennis Stranger, Garfield County BBC Research and Consulting Supplemental Fiscal Impact Data October 4, 1999 mmr1 REsEARCH & CONSULTING This memo offers a summary review of the likely fiscal impacts from the construction and operations of the American Soda mine and processing plant on the City of Rifle and the Town of Parachute. Town of Parachute Exhibit 1 shows the distribution of service costs for the Town of Parachute. EXHIBIT 1. Cost of Local Services1 Town of Parachute Total Percent Per Capita Service Category Expenditures of Total (1,116) General Government $119,000 27% $107 Public Safety/ Judicial 183,000 45 164 Public Works 85,000 20 76 Recreation 24,000 6 21 Other, 4,000 1 1 Total $415,000 100% $372 The town's cost of providing local government services is approximately $372 per capita with nearly half of that cost associated with the provision of public safety and judiciary 1 Local Government Financial Compendium, State Department of Local Affairs, Division of Local Government, March, 1999. Data are 1997, the most current year available. 3773 CHERRY CREEK NORTH DRIVE, SUITE 850 DENVER, COLORADO 80209.3827 PHONE: 303.321.2547, FAX: 303.399.0448 e-mail: bbc®bbcresearch.com Internet: www.bbcresearch.com Page 2 services. The town relies largely upon sales tax collections to support town operations. Approximately 55 percent of all town revenues are from sales and use tax collections. Property taxes and intergovernmental transfers represent the majority of the town's remaining revenue sources. Retail sales in Parachute are derived from both residents and visitors, the later largely because of proximity to the Interstate. The town also benefits from sales to residents of Battlement Mesa. In sum, a sizable share of Parachute retail sales and related tax collections are derived form non-resident spending. At peak construction, the Town of Parachute is expected to house approximately 150 persons who have an affiliation with this project. This population includes new workers living temporarily in the area as a result of their employment directly with the mine, current residents of the town who have taken employment at the mine or processing plant, secondary workers who will move to the area to fill local service or retail jobs and affiliated family members. At full plant operation, Parachute is expected to house over 100 persons. Although the operations workforce is smaller than the construction workforce, it is anticipated that the operations workforce will be more likely to have spouses and children and therefore represent a larger population effect on a per worker basis. It should also be noted that the Town of Battlement Mesa is also expected to temporarily house over 300 persons during construction and roughly 100 persons during operations. These persons will impact Parachute, particularly to the degree Parachute collects retail sales taxes from Battlement residents. Parachute's cost of service delivery associated with Battlement Mesa growth should be limited to traffic control and perhaps modest police costs. The influx of new residents, representing approximately 16 percent of the current population during the peak month of processing plant construction, will stimulate both town costs and revenues. Temporary workers living in area apartments and hotels, along with persons traveling from other locations in the county to Parachute, will contribute to local sales taxes, primarily through the purchase of convenience goods, food and beverages. Property tax receipts are not likely to change substantially as a result of the population growth, nor are federal tax receipts. On the expenditure side, the town's administrative cost should not rise with the temporary growth in population, although police services may realize additional costs in order to manage traffic and deal with any public safety issues arising from the increased population. The town's public works budget is primarily associated with the maintenance and repair of the town's street system. Although traffic levels will rise, it is not anticipated with the short duration of the project that significant street deterioration Page 3 or increases in maintenance costs will develop. Recreation services are provided by a special district which benefits from project related property tax. At the completion of the construction stage, population levels will drop. It is estimated that as many as 100 persons may choose to reside in Parachute as the community closest to the project. Ultimately, permanent population distribution will depend upon housing availability. Full time workers represent a well paid, stable employment base and are likely to have household and demographic characteristics similar to the current residential base of the area. Their impact on Parachute should be favorable. City of Rifle The City of Rifle supports over 6,000 residents and has an annual budget in excess of $3.5 million. Exhibit 2 below shows the distribution of costs for city services by category. The per capita cost for service provision in Rifle is approximately $584. EXHIBIT 2. Cost of Local Services2 City of Rifle Total Percent Per Capita Service Category Expenditures ofTotal (6,058) General Government $584,000 17% $96 Public Safety/ Judicial 964,000 27 159 Public Works 1,102,000 31 181 Recreation 831,000 23 137 Other 58,000 2 9. Total $3,539,000 100% $584 The City of Rifle also serves as a small regional service center. It has a well-developed downtown and a competitive grocery store environment, which appears to draw customers from a wide area and thus brings dollars into the city tax base. The City of Rifle is expected to house nearly 300 persons during peak construction period at the mine. Rifle is an attractive location for mining construction workers and would probably house more workers if a larger bed base and temporary accommodations were 2 Local Government Financial Compendium, State Department of Local Affairs, Division of Local Government, March, 1999. Data are 1997, the most current year available. Page 4 available. Workers residing anywhere along the I-70 corridor are likely to pass through Rifle on their way to and from the mine operations. Rifle is a likely stop for grocery shopping on the way home or breakfast purchases on the way to the mine. Like most communities in the area, Rifle relies heavily upon sales tax for support of city operations. Temporary construction workers will contribute to the city's sales tax base but will not be a significant source of property tax revenues. It should be noted that Rifle relies very little on property tax, with reported collections of $176,000 out of a $3.5 million budget. Rifle is expected to support approximately 20 percent of the permanent workforce that will come with the project. It is likely that both permanent and temporary workers will not burden the city's general government nor recreation services, but new growth may pressure public safety costs and to a lesser degree public works expenses. The Rifle bypass is likely to mitigate the problems associated with workers commuting from the I-70 corridor to the Piceance Basin, as was its original intention when constructed. Public safety issues are expected to be limited, mostly associated with traffic control and increased police calls. Interviews with the Rifle City Administrator lead us to believe that the community has adequate capacity and a growing retail base that will allow them to maintain service levels in light of the growth projected in association with this project. MEMORANDUM TO: FROM: RE: DAIB: Dennis Stranger Management and Planning Research Ford Frick and Jennifer Lakins Mello BBC Research & Consulting Request for additional information September 28, 1999 mmt1 REsEARCH & CONSULTING In response to your conversation with Jennifer on Monday morning, we offer the following supplemental information to American Soda's Pre Application. Direct Employment The following table summarizes the total direct employment expected during the construction and operations phase of the project. The construction phase is expected to last through October 2000 with operations commencing in November 2000. The employment levels shown for December reflect expected employment levels for the duration of the operations phase. Jul-99 Augu1t Sept Oct Nov Dec Jan-GO Feb M1rch Parachulal Plant 196 225 2B3 319 335 347 320 332 318 Plpel!n. (Garilelcf) 0 0 0 0 0 0 0 0 30 SubTolll Garfield "' 225 , .. ,,. 335 347 320 332 341 PICMnce Site 13 14 14 14 14 208 277 417 417 Plpellne (Rio Blanco) 0 0 0 0 0 0 0 0 15 SubTotll Rio Blanco 13 14 14 14 14 208 277 417 412 Total 209 239 297 333 349 5S5 597 749 830 P1n1chut1 Plant Plpellnt (Grirflefd) SubTolll Garfl .. d Plce.nceSlta Plpelfne (Rio BJanoo) SubTotlil Rio B/1nco .. ril 311 60 371 329 43 372 Moy 300 60 360 300 45 345 241 110 351 238 78 311 Jul-00 Augu1t 199 178 70 64 ... 242 228 292 121 65 357 .... 105 30 135 198 37 235 Col 77 12 .. 115 12 127 Nov Dec 77 83 0 0 77 83 3S 35 0 0 35 .. _, m = ~ m1 -= ''' 1n 111 3773 CHERRY CREEK NORTH DRIVE, SUITE 850 DENVER, COLORADO 80209.3827 PHONE: 303.321.2547, FAX: 303.399.0448 e-rnaH: bbCObbcreseatth.com Internet www.bbtr9Search.com Page 4 located in Glenwood Springs, and the remainder are in Craig Rifle, Rangely or other smaller communities. We believe that the residential patterns of subcontractor employees will be very similar to the distribution of subcontractor businesses, and thus a slightly wider distribution than the anticipated residency of non-local workers. It is speculative, and in our opinion not useful, to document the residency patterns of existing contractor employees. Since most of these individuals work for local subcontractors on a variety of job sites, their employment on the Yankee Gulch Project should not have any significant impact on residency or municipal service providers. We agree that American Soda's retention of local contractors and service firms may cause these firms to expand and may indirectly create new opportunities for other local firms to successfully pursue other contracting jobs, and thus also retain additional employees. These indirect or tertiary impacts are beyond the scope of this analysis. We also agree that some local individuals will be hired by American Soda for both construction and operations and new residents may enter the community to take the jobs vacated by those individual. In our view, the individuals likely to be attracted to working at American Soda will be those currently commuting long distances to employment and anxious to reduce those commutes. We would speculate that development of a stronger local economic base in the Parachute-Rifle area will further tighten the local labor market and exacerbate problems for attracting workers to distant resort area jobs. We do not believe that the Garfield County regulations anticipate American Soda's mitigating the economic effects of hiring local contractors or individuals that already reside in the area. Indirect and Induced Employment As we estimated in the Pre Application Notice, by rough calculation, the economic stimulation of the construction phase of this project will produce 110-165 indirect and induced jobs. These are temporary positions that will be eliminated as the construction workforce is reduced. Our experience leads us to believe that some of these hypothetical jobs, because they are both temporary and dispersed, will be absorbed by part time employees and overtime, or remain unfilled resulting in lowered service levels. The induced and indirect impacts of the Yankee Gulch construction effort are likely to be dispersed over Garfield, Rio Blanco and perhaps Mesa and Moffat counties because new employment is likely to occur primarily in retail/ service centers such as Glenwood Springs, Grand Junction, Craig, Rangely and Rifle. This dispersal and temporary nature Page 5 of the effect will further limit impacts on Garfield County. A more accurate calculation of these indirect and induced effects may be achieved by a process of economic modeling(I/O analysis). In our judgment, the modest improvement in analytical accuracy that might result from this detailed analysis will provide little new actionable information for the county and is far beyond the intended scope of the Pre-Application review. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION 8 Ref: 8P-W-GW CERTIFIED MAIL RETURN RECEIPT REQUESTED Mr. Charlie Yates General Manager American Soda L.L.P. 2717 CountyRoad215 Parachute, CO 81635 Dear Mr. Yates: 999 1 Sr" STREET • SUITE 300 DENVER, CO 80202-2466 http://www.epa.gov/region08 APR I 8 2002 RE: UNDERGROUND INJECTION CONTROL (UIC) Final Permit, Getty No. l-7LW: C010932- 04664; NE NE Sec. 7 -T8S . R97W, 6th PM Garfield County, Colorado As you are aware, EPA issued a Draft Underground Injection Control (UIC) Permit for American Soda's proposed Class I non-hazardous injection well, the Getty No. 1-7LW, Garfield County, Colorado on February 25, 2002. This proposed action was public noticed in the Rifle Citizen Telegram on March 7, 2002, and the Glenwood Post Independent on March 8, 2002. The public comment period ended on April 8, 2002, and there were no comments from either the general public or the land owners who may be affected by the proposed action. We also did not receive any comments from you concerning our actions. Because of the absence of comments, the Permit is being issued as proposed and is effective immediately. Enclosed is a Final Underground Injection Control (UIC) Permit for the proposed Class I non-hazardous injection well Getty No. l • 7LW, Garfield County, Colorado. The Final Statement of Basis, which discusses development of the Permit, is also enclosed. Following construction, but prior to injection, American Soda LLP. must fulfill Permit condition Part II, Section C. I., "Prior to Commencing Injection" and have submitted to the EPA for review and approval, the following: Page 1 of 3 ()Printed on Recycled Paper 1) Before commencement of injection, the operator shall run a baseline temperature survey from the base of the surface casing to TD to establish baseline temperature conditions for comparison with subsequent mechanical integrity testing to detect fluid flow adjacent to the casing; and 2) Before commencement of injection, the operator shall run a radioactive tracer survey (RA TS) to verify that fluids are confined to the injection zone and to establish the injection profile associated with the perforations. The final portion of the temperature survey shall be run after injection has commenced (Part ll, Section A. 5(d) of the Permit). The permittee shall notify the EPA at least two (2) weeks prior to conducting these tests so that an authorized representative may be present to witness the test. The pem1ittee is required to submit the results of these tests along with a Completion Report (EPA Fonn 7520-12) and the daily drilling, casing, and completion record/narrative, along with copies of all well logs and the procedures and results for all additional tests. Please be aware that American Soda LLP. does not have authorization to begin injection into the Getty # 1-7L "' until the items listed above have been approved by the EPA and the company, has received written authorization to begin injection from the EPA It is American Soda's responsibility to be familiar with, and to comply with, all conditions contained in this Permit. If you have any questions on this action please contact Paul S. Osborne at 800.227.8917, extension 6125. Also direct all correspondence and/or reports to ATTENTION: Paul Osborne AT MAIL CODE 8P-\V-G\V. Thank you for your continued cooperation. Enclosures: Draft Permit Statement of Basis SincerelL~ e n G. Clough Assi tant Regional Administrator Office of Partnerships and Regulatory Assistance Page 2 of 3 AMERICAN SooA, L.L.P. 2717 County Road 215 Parachute, CO 81635 Mr. Mark Bean Director of Planning Garfield County Building and Planning Dept. 109 8th Street, Suite 303 Glenwood Springs, CO 81601 Telephone 1870! 285-6500 Toll Free (877J SODA-ASH Facsimile 1870! 285-6393 November 8, 1999 J.O.N. 124 JB 7, 2a, 1 Letter No. 124-766 Subject: Submittal of Final Garfield County Special Use Permit Application Product Solution and Water Return Pipelines Yankee Gulch Sodium Minerals Project American Soda, L.L.P. Dear Mr. Bean, American Soda, L.L.P. (American Soda) is pleased to enclose ten (10) copies of the Final Special use Permit Application for the Yankee Gulch Sodium Minerals Project -Product Solution and Water Return Pipelines for distribution to the various county commissioners and general public. This 'ipplication addresses the proposed development of two parallel pipelines connecting the Piceance Site Mining Operation in Rio Blanco County and the Parachute Site Processing Operation in Garfield County. The purpose of these pipelines is to transport sodium solutions mined at the Piceance Site to the Parachute Site for processing into finished products and to return process water to the Piceance Site for reuse in solution mining. A check in the amount of $400 is also enclosed for the filing fee. Assuming all other necessary permits and :ipprovals 3.re in place,.American Soda.could begin construction of the pipelines as early as January 2000. To accomplish that construction start date, American Soda stands ready to quickly respond to any questions or requests for additional information needed to assist in Garfield County's review and processing of the application. With respect to the public hearing that will be held regarding the requested Special Use Permit, American Soda will likely prepare a presentation for the Board of Commissioners. To facilitate our preparation for those hearing, please notify us of the date and time of the hearing once it is scheduled. Natural Sodium Products For a Cleaner Environment Mr. Mark Bean November 8, 1999 Page 2of2 Please direct written correspondence to: Mr. Ed Cooley, Environmental Manager American Soda, L.L.P. 2717 County Road 215 Parachute, CO 81653 If you have any questions, please contact Chris Freeman of Steigers Corporation at (303) 799-3633, or Tim Thulson of Balcomb and Green, P.C. at (970) 945-6546. Sincerely, u~ Kurt R. Nielsen General Manager Enclosures cc: Hal Copeland, Steigers Corporation 1/1 Tim Thulson, Balcomb and Green P.C. 1/1 KRN/CPF/dwm 124·766 ~AMERICAN ./.llJ SODA, LLP 2717 County Road 215 Parachute. CO 81635 Thursday, October 26, 2COJ Garfield County Commissioners Garfield County Courthouse 1 09 8th Street ,- Glenwood Springs, CO 81601 Dear Sirs : RECEIV ED OCT 3 a 2000 Ed Cooley G e n e ral Serv ices Manager Telephone (970) 285-6500 Toll Free (877) SODA-ASH Facsimile (970] 285-6393 It is my pleasure to send you this formal notification that American Soda 's mine and initial processing facility at Yankee Gulch is officially in operation. We began circulation of mining fluid on October 9, 2COJ following the EPA approval for Underground Injection of 14 solution-mining wells with additional wells scheduled. As our phased start-up progresses and the mining solution concentration increases, we will be introducing the process solution to the initial processing facility and commence accumulation of inventory for transfer via pipeline to our lower processing facility at Parachute Creek. A copy of this notification will be sent to the LEPC (local Emergency Plann ing Committee) in both Rio Blanco and Garfield County as official notice of operation start-up for both processing facilities. Sincerely, ~~ Ed Cooley General Services Manager cc: Garfield County Planning Department LEPC -Garfield County Delivering a Crystal Clear Advantage. www .americansoda.com Management and Planning Research P.O. Box 1293 Glenwood Springs, Colorado 81602 TO: FROM: DATE: RE: MEMORANDUM Garfield County Board of County Commissioners Mark Bean, Garfield County Planning Director Don Deford, Esq. Garfield County Attorney Tim Thulson, Esq. American Soda Attorney Dennis A. Stranger August 2, 1999 American Soda Project Employee Monitoring Program (970) 928-0872 I am recommending that the Board of County Commissioners establish a monitoring program for the American Soda project to ensure compliance with Garfield County Resolution 99-05 5 and to gather baseline data in the event the project is restructured in a manner that would result in the project being defined as a Major Project according to Garfield County Zoning Regulations. You will find attached the rationale for the monitoring program and some possible definitions to be used to define the term "Employee" for monitoring purposes. AMERICAN SODA PROJECT MONITORING PROGRAM PURPOSES It is recommended that an employment monitoring system be established for the construction phase of the American Soda Project. The purposes for monitoring program would be: 1. To ensure that the American Soda project remains in compliance with the provisions of Garfield County Resolution 99-055 which according to the County staff, by reference to §5.08, Fiscal Impact Mitigation Program of the Garfield County Zoning Resolution, has an implicit limit of 200 project employees; and 2. To establish baseline employment data in the event that American Soda decides to modify its project in a manner that would redefine the project as a Major Project subject to the provisions of the Fiscal Impact Mitigation Program. DEFINITION OF EMPLOYEE Definition # 1 -Current Definition in liming Regulations Section 5.08.02.02 of the Garfield County Zoning Resolution defines a project employee as follows: EMPLOYEE: Any person employed by the Applicant and its construction contractors and subcontractors who is working on a Major Project in the County. This definition is sufficiently vague to both American Soda and the County Attorney and the County staff that a somewhat more detailed alternative definition has been suggested for monitoring purposes. The following definition is based on discussions with the County Attorney and staff as well as with American Sodas legal counsel and construction management personnel. Definition # 2 -Alternative Definition For the purpose of implementing Section 5.08.02.02 in the context of the American Soda project: a. an Employee shall include any person present in Garfield County and employed by a company or other business entity whose activities in Garfield County are limited exclusively to the construction of the American Soda Project. Page 1of3 b. persons employed by companies or other entities under contract with American Soda or its contractors engaged in the American Soda Project on a nonexclusive basis shall be counted as Employees on a proportional full-time equivalent employment (FIB) basis determined as follows: Total work hours incurred on the project site toward the construction of the American Soda Project in any week .,. 40 = the number of such FfE Employees. c. persons employed by companies engaged in the delivery to the American Soda Project of non-durable goods shall not be counted as Employees. Commentary From an economic or fiscal analysis perspective, the critical variable regarding employment is the number of workers directly working on a project. Direct project employment consists of workers actually on the project site building the project facilities or operating the plant (although the immediate concern is construction workers). The secondary or indirect work force and induced workers are workers such as service workers, building supply employees, school teachers, county employees, concrete batch plant and delivery drivers, steel suppliers and delivery persons, and so on, whose work activities are economically driven by the major project. The number of indirect workers can be estimated by a variety of techniques and will be accounted for in the Fiscal Impact Analysis but are not necessarily workers that can be counted directly in a monitoring program. The monitoring program should be designed to count direct project employment since indirect employment will be derived as part of the Fiscal Impact Analysis. The above Alternative Definition alludes to the issue of persons employed by subcontractors but on the project site for less than a full-time work day or work week. It also excludes a portion of the indirect work force -specifically workers delivering non- durable goods. In practice, there is not an economic difference (wages aside) among delivery personnel whether the products delivered are non-durable goods or durable goods such as processing equipment. Persons delivering building materials (for example, concrete) are part of the indirect work force even though they may be on the project site several hours a week. The following definition is similar to the above Alternative Definition in the respect that it clearly counts workers exclusively working on the project and that it incorporates provisions for FfE employment but allows for a threshold maximum number of hours for calculating FfEs. For example, if an individual worker. works at the project site for 50 hours in a given week, then that would still be considered only as one worker. There are two principal differences between the Recommended Definition and the Alternative Definition. First, the Recommended Definition entirely excludes delivery workers from the definition of Employee. Second, incidental service workers are excluded from the definition of Employee. It should also be understood that it may be necessary to modify the definition of Employee to account for unanticipated worker classification changes or refinements. Page 2 of 3 Definition # 3 · Recommended Monitoring Program Definition For the purpose of implementing Section 5.08.02.02 in the context of the American Soda Project: a. an Employee shall include any person present in Garfield County and employed by a company or other business entity whose activities in Garfield County are limited exclusively to the construction of the American Soda Project. b. persons employed by companies or other entities under contract with American Soda or its contractors engaged in the American Soda Project on a nonexclusive basis shall be counted as Employees on a proportional full-time equivalent employment (FfE) basis provided that: such workers whose labor activities at the project site consist of at least 8 work hours in any day shall be considered as 1 FfE for that day and, likewise, such workers whose labor activities at the project site consist of at least 40 work hours in any week shall be considered as 1 FfE for that week. Workers whose labor activities at the project site do not equal 1 FfE as defined herein shall be counted as Employees on a proportional full-time equivalent employment (FfE) basis determined as follows: Total work hours incurred on the project site toward the construction of the American Soda Project in any day+ 8 = the number of such FfE Employees on a daily basis. Total work hours incurred on the project site toward the construction of the American Soda Project in any week + 40 = the number of such FfE Employees on a weekly basis. c. persons employed by companies engaged solely in the delivery to the American Soda Project site of durable or non-durable goods, including but not limited to building materials, project equipment and supplies, shall not be counted as Employees. d. persons employed by companies engaged in providing incidental services to the American Soda project site shall not be counted as Employees. e. persons representing federal or state government agencies or local government entities whose official duties require their presence on the project site shall not be counted as Employees. FREQUENCY AND DURATION OF MONITORING It is recommended that the monitoring program commence immediately and that the initial report of average weekly employment be presented to the Garfield County Board of County Commissioners on August 9, 1999. The County staff has suggested an initial reporting interval of every two weeks. It is further recommended that the monitoring program continue through the substantial completion of construction of the American Soda Project facilities located in Garfield County although the Board of County Commissioners may discontinue or suspend monitoring at any time. Page 3 of 3