Page 1 Copyright © ALL Consulting, All Rights Reserved January 3, 2003ALL Consulting Overview of Coal Bed Natural Gas Best Practices and Mitigation Techniques Using Geospatial Techniques Thomas P. Richmond Montana Board of Oil & Gas Conservation (Billings, Montana) J. Daniel Arthur, P.E. ALL Consulting ALL Consulting (Tulsa, Oklahoma) API Water Forum April 2004

Page 2 Copyright © ALL Consulting, All Rights Reserved January 3, 2003ALL Consulting Project Funding and Cooperators “Funding for this project was primarily sponsored by the DOE’s Office of Fossil Energy – Tulsa, part of the National Energy Technology Laboratory and the National Petroleum Technology Office; the Montana Board of Oil & Gas Conservation; and ALL Consulting. A broad array of cooperators participated in various aspects of the project, without which the research would not have been possible.” Fidelity Exploration & Production Company An MDU Resources Group, Inc. Company Fidelity Exploration & Production Company An MDU Resources Group, Inc. Company And Others…

Page 3 Copyright © ALL Consulting, All Rights Reserved January 3, 2003ALL Consulting Study Area Background Geology Hydrology Climate Air Quality Cultural/Paleontological Resources Indian Trust Assets/Native American Issues Livestock Grazing Soils Solid and Hazardous Waste Vegetation Visual Resource Management Wildlife Land disposition Montana Powder River Basin CBNG Development Likelihood and Water Use

Page 4 Copyright © ALL Consulting, All Rights Reserved January 3, 2003ALL Consulting Project Planning Elements Project Plans may include:  Water Management Plan  Groundwater Monitoring Plan  Wildlife Monitoring and Protection Plan  Provisions specific to leasing arrangements  Siting requirements  And include a section of BMPs that will be implemented by the operator to address site specific issues Project planning consideration include:  Land ownership requirements (federal lands guidance)  Lease stipulations  Controlled groundwater Area  Monitoring Plans  Regulatory Environment (including federal, state, and local regulations)

Page 5 Copyright © ALL Consulting, All Rights Reserved January 3, 2003ALL Consulting Best Management Practices What are Best Management Practices (BMPs) ?  BMPs are a suite of techniques, procedures, measures or practices which are site specific, economically feasible and are used to guide, or may be applied to, management actions to aid in achieving desired outcomes.  BMPs do not constitute a standard, specification, or regulation.

Page 6 Copyright © ALL Consulting, All Rights Reserved January 3, 2003ALL Consulting BMP Practice Areas BMPs were organized according to three operational areas:  Coal Bed Methane Exploration  Development and Operations of CBM  Abandonment and Restoration of CBM Facilities

Page 7 Copyright © ALL Consulting, All Rights Reserved January 3, 2003ALL Consulting Exploration BMPs  Surface conflicts  Special operating procedures  Issues which would require additional reclamation  Wildlife habitat  Visual impacts  Erosion potential  Landowners/surface lessee’s future plans for the area  Surrounding environment (rural or urban setting) Site Location Site Location – In addition to the regulatory requirements, lease stipulations, location of coal seams, and successful geologic testing there are other siting considerations:

Page 8 Copyright © ALL Consulting, All Rights Reserved January 3, 2003ALL Consulting Exploration BMPs Background Studies Background Studies – Define the existing conditions to determine what action needs to be taken during operation and post operation activities to meet:  Landowner mitigation agreements  Site reclamation/restoration activities  Reduce public concern  Identify potential beneficial uses

Page 9 Copyright © ALL Consulting, All Rights Reserved January 3, 2003ALL Consulting Exploration BMPs  Develop Health and Safety Plans which address site specific conditions and hazards.  Develop Fire Prevention Plans on a site by site basis and include the local fire departments to insure onsite fire protection is adequate.  Offer defensive driving courses to employees.  Avoid traffic during school bus pick- up and drop-off times.  Have work crews and rig hands car-pool to the job site to reduce traffic. Health and Safety Practices - Health and Safety Practices - Develop work place practices to minimize accidents and ensure the safety of the work force and local community such as:

Page 10 Copyright © ALL Consulting, All Rights Reserved January 3, 2003ALL Consulting Development and Operational BMPs  Dust Control  Irrigation  Livestock Watering  Industrial Use  Impoundments  Aquifer Storage and Recovery  Landowner Use  Potable Water use  Aquifer Recharge  Injection  Other Use Water Management – Beneficial Use Evaluate the baseline data to determine what beneficial use options are best suited to site specific conditions. Depending on the quality of the produced water, potential beneficial uses may include:

Page 11 Copyright © ALL Consulting, All Rights Reserved January 3, 2003ALL Consulting Development and Operational BMPs Water Management – Disposal Options Beyond the typical beneficial uses of produced water, water management options should be carefully evaluated to minimize the potential for adverse impacts to the environment. Some of these options for produced water management include:  Deep Injection  Direct Discharge to Surface Water  Flow based discharge  Rate based discharge  Discharge to the Land Surface  Impoundments  Other

Page 12 Copyright © ALL Consulting, All Rights Reserved January 3, 2003ALL Consulting Development and Operational BMPs Miscellaneous Facilities Facilities – The planning of operation facilities prior to construction can help to minimize impacts and help to reduce public concern. Project Plans could be used to address the following areas of concern:  Surface Disturbances  Aesthetics  Emissions  Pumps  Other

Page 13 Copyright © ALL Consulting, All Rights Reserved January 3, 2003ALL Consulting Wildlife Related BMPs Miscellaneous Wildlife Wildlife - Some Examples of Wildlife BMPs include:  The use of raptor-safe power poles for above ground utilities.  Use of underground power lines whenever possible.  One-way-in/One-way-out roads for access to well sites.  Drilling wells in pods as opposed to single well pads.  Locating wells and well pods away from Threatened & Endangered species habitat when possible.

Page 14 Copyright © ALL Consulting, All Rights Reserved January 3, 2003ALL Consulting Miscellaneous BMPs Miscellaneous Various Various - A variety of miscellaneous BMPs can be used with regard to development and production of CBM:  Carpooling of workers  Eliminating construction related traffic during school bus pick-up and drop-off hours  Training onsite workers in fire safety  Onsite workers could receive work activity related health and safety training including CPR and Emergency Response training.

Page 15 Copyright © ALL Consulting, All Rights Reserved January 3, 2003ALL Consulting Abandonment and Restoration BMPs Miscellaneous Abandonment CBM abandonment and restoration refers to controlled or managed restoration efforts to minimize permanent impairments to the land or area resources. BMPs are used for:  Well Abandonment  Native Flora Restoration  Habitat Restoration  Soil Restoration  Removal of Infrastructure and Utilities

Page 16 Copyright © ALL Consulting, All Rights Reserved January 3, 2003ALL Consulting Combining BMPs with GIS Project Planning Initiated Analysis of available BMP and Mitigation Alternatives. Handbook provides options and considerations Assessment of alternatives and selection of mitigation strategy and best management practices (POD Preparation) Utilize Geospatial analysis for data evaluation, including soils, land disposition, surface waters, land use, roads, development history, etc.

Page 17 Copyright © ALL Consulting, All Rights Reserved January 3, 2003ALL Consulting Geospatial Analyses: WebMapper The WebMapper application was developed as a custom ArcIMS application using the Spatial Data Engine (SDE). WebMapper is updated on a real-time basis directly to the MBOGC’s Risk Based Data Management System (RBDMS).

Page 18 Copyright © ALL Consulting, All Rights Reserved January 3, 2003ALL Consulting Geospatial Analyses: WebMapper Internet GIS tools can be used to visually assess planning conditions, such as Indian reservations, soil types, waterways, roads, land ownership disposition, existing and anticipated development situations, etc.

Page 19 Copyright © ALL Consulting, All Rights Reserved January 3, 2003ALL Consulting Geospatial Analyses: WebMapper WebMapper allows users to access well locations for CBM wells, conventional oil & gas wells statewide, and other well types within the study area.