Onshore Oil & Gas Order # 1

An Overview of the Application For Permit To Drill Process

>> T. Spisak:
Now let's go to our segment with Jennifer where she has prepared us some
remarks every Surface Use Plan of Operations of or SUPOs.

>> J. Spegon:
The Surface Use Plan of Operations or SUPO is the fourth component of a
complete APD. The SUPO is changed from a 13-point plan in the old order to a
12-point plan in the revised order. The operator certification was taken out and
is now a standalone requirement. I'll be discussing it later in detail further in
the program. As I cover the 12 items in the SUPO, keep in mind the last
component of an APD package, the onsite inspection. The onsite inspection is
used to go out to the ground and look at all these items staked. I'll cover the
onsite and staking in the onsite portion of this program later on. The goal of
this portion of the program is to inform you of some of the planning and details
that help drive the efficiency of the process. When operators know up front the
detail required for their type of project, BLM gets a better proposal, operators
get faster approvals and the surface owners are satisfied with the results. As
an overview, first I'm going to cover some of the general information listed in
this portion of onshore order #1. Then I'm going to go over the 12 points as
required in the SUPO. In general, the purpose of the SUPO is to adequately
describe the proposed project in the native as well as on maps and diagrams.
The maps and the narrative define the entire project, provide directions to the
well, details of the well pad, construction and roads, methods of safe operation
and waste disposal and details, surface protection and reclamation. Maps
illustrate information listed in the SUPO. Information can be shown on a single
map or may need to be on separate maps, depending on the complexity of the
project. Diagrams are submitted for constructed well pads and engineered
roads. The SUPO describes Best Management Practices and includes
certification of surface use agreement or provides an adequate bond if the
surface is on split estate. The 12 points lined out in the SUPO are required for
all APDs. The detail of information that's necessary depends on the complexity
of the proposal. Bryce Barlan will talk later in the program about master
development programs but yet this is a good time to compare the difference in
complexity of a SUPO for an application to drill one exploratory well to a master
SUPO that would be necessary to describe a project that contained multiple
wells such as coal bed methane projects with multiple leases, a number of
different surface owners, multiple coal zones, gas, water and electric line
corridors, overhead power, compressor stations, well discharge points, stock
watering tanks or on channel or off channel impoundments, along with land
application disposal of water, water treatment facilities and all the different
types of roads that would be required depending on the average daily traffic as
required in the gold book. The fourth edition of the gold book, the surface
operating standards for oil and gas exploration and development, includes
improved practices for expediting the APD process. The gold book defines road
types by average daily traffic and introduces drawings, photographs and road
diagrams. There are 12 points listed in the SUPO. They are listed A through L.
For those of who can't get past the letter D without using our fingers and toes
to count, the letter L is 10 fingers and 2 toes. It doesn't mat for you use letters,
numbers, fingers or toes, if you follow the 12 points there shouldn't be anything
missing from your SUPO. We will tine compare and contrast the difference
between a single exploratory well and multiple well projects throughout each of
these 12 points. In the first point of the SUPO, existing roads, the operator is to
include a map that shows the access route from the proposed well site to a
locatable public access point such as a county road. In this section the operator
describes what type of existing roads are planned, such as crowned and
ditched roads or primitive two-track roads, and states how they plan to
maintain the existing roads. In point two, new and reconstructed access roads.
The operator defines all the temporary and permanent access roads and
proposed structures such as culverts and water crossings. The operator is
required to design new and upgraded roads to applicable road standards,
which is often a difficult balance between traffic volumes, environmental -- and
environmental concerns. I'd like to refer back to the example with multiple
wells. The average daily traffic during the construction phase will differ greatly
from the future traffic which consists only of well maintenance. After all, the
construction is complete. Yet the construction phase, when people are working
with time constraints, is when safety is of the utmost concern. Road standards
such as road width, maximum grade, turn-out, crown and ditch design are all
listed in the gold book and in manual 9113 road standards for BLM. Item 3C,
location of existing wells, can be submitted either on a map or a table and
should include all existing wells within one mile -- within a one-mile radius of
the proposed location. That means production wells, water wells and plugged
and abandoned wells. In our master SUPO example a map would work better
than a table for multiple proposed well locations. In the fourth item, D, location
of existing and proposed production facilities, it's apparent the detail required
for a single well would be extremely different than that would be required for
multiple well projects. A single well, if the proposal was detailed enough, could
be used as a site facility diagram, or it may just state that a sundry notice form
31 60-5 will follow for production facilities if the well becomes a producer.
Compare this to the detail mentioned earlier in the master SUPO with the
complex web of facilities that are needed to accommodate multiple well
production. In the fifth item, E, location and types of water supply, the operator
identifies the source of water used for drilling, such as a pond, lake or
municipal water source, and the route it will be brought in on. Will it be trucked
in or will it be piped in? The operator may attach a map or provide specific
details as long as the route can be analyzed. Item F, for those of you using your
finger and toe method, this is the first finger on the secondhand. The 6th item
speaks to what is to be hauled in or taken off lease during construction of the
roads, pads and facilities. Item G, methods for handling waste. This 7th item is
where methods of safe containment and disposal of waste material are
described. This is also the place to describe construction and lining of the pits.
Number 8, the ancillary facilities, provides an area in the SUPO to describe
additional or supporting facilities such as staging areas. Information on staging
areas should describe the construction size and materials to be stored on
location. Ancillary facilities are to be identified on the map and staked for the
onsite. The 9th is the well site layout. It's also called the pad diagram or
constructed pad diagram. Well site layouts requiring cuts and fills are designed
on a site specific basis by a licensed professional engineer. This schematic
diagram of the well site illustrates the orientation of the drilling rig, bore hole,
reserve pit, BLOOIE line and flare pit. All of this is laid out on the drill pad with
pad dimensions, cut and fill depths, topographic fee features, topsoil, spoil piles
and access onto the pad is shown with any necessary ditches and culverts. In
H2S areas the well site layout will identify emergency escape routes. On the
opposite side of the spectrum would be some of those coal bed methane wells
in flat topography. These shallow wells may use smaller rigs and therefore
require no constructed pad. In cases like this, all that's needed is a general pad
diagram with dimensions of surface disturbance, orientation of the reserve pit,
BLOOIE line and the drilling rig layout in reference to the bore hole location.
The 10th item J, is the plan for reclamation. Plans for surface reclamation are
often the most in depth portion of the APD package. The operator states a plan
of how they're going to reclaim and stabilize all the areas of disturbance. Each
reclamation plan is site specific and addresses interim as well as final
reclamation. Interim and final reclamation are going to be covered in more
detail by Bryce Barlan further in the program. Finger and toe counters, take off
your shoes. Item K is surface ownership. It's the 11th item where the operator
provides contact information for each of the private surface owners. Not only
those at the well location, but also the contact information for all lands crossed
by proposed roads that the operator plans to construct or upgrade. This is
where the new requirement comes in. The operator needs to certify that
they've provided a copy of the SUPO to the private surface owner of the land at
the well site location. Due to some SUPOs being complex documents, there's a
high probably changes will be made to the SUPO during the permitting process.
Therefore, BLM leaves the timing of delivery of the SUPO up to the Field Office,
the operator and the private surface owner. The onshore order requires the
operator certify they have made a good-faith effort to provide a SUPO to the
private surface owner of the land at the well site before the APD will be
approved. The final item provides a place for other information such as an
integrated place management plan or as in our master SUPO example a water
management plan, and any additional maps that would be necessary to
describe the proposal. In summary, if you follow the 12 points we just covered,
there shouldn't be anything missing from your SUPO. All of us working together
to preplan an approvable project is what drives the efficiency of the permitting
process. Operators get faster approvals. The BLM gets clear-cut proposals. And
the private surface owners end up with something they can live with.

>> T. Spisak:
Jennifer, in your presentation you discussed the potential need for differing
road standards for initial drilling and in the production phase. Are you saying
that we need to design the road differently, not until we know whether it's a
producer or not?

>> J. Spegon:
Sometimes. Sometimes the opposite can be true. Sometimes we need to
design a better road so that we can get the drilling rig in there. The important
thing is to remember not to build roads greater than the standards necessary.
If you take a look at the gold book and use that to plan your SUPO, that should
help.

>> T. Spisak:
Very good. Thank you.