ATTCH_2_-_Environmental_Assessments.pdf

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FINDING OF NO SIGNIFICANT IMPACT & DECISION RECORD

FOR

Lance Oil & Gas, Inc.

Coal Gulch/Highland Unit

ENVIRONMENTAL ASSESSMENT –WY-070-04-161

DECISION: It is my decision to approve Alternative C as described in the attached Environmental Assessment (EA) and authorize the Lance Oil & Gas, Inc.’s Coal Gulch/Highland Unit Coal Bed Natural Gas (CBNG) POD comprised of the following 19 Applications for Permit to Drill (APDs), as follows:

Name Number TWP RNG SEC QTR Lease Number

Highland Unit Fed. 12-22 51N 78W 22 SWNW WYW149364 Highland Unit Fed. 14-22 51N 78W 22 SWSW WYW149364 Highland Unit Fed. 21-22 51N 78W 22 NENW WYW149364 Highland Unit Fed. 23-22 51N 78W 22 NESW WYW149364 Highland Unit Fed. 24-22 51N 78W 22 SESW WYW149364 Highland Unit Fed. 32-22 51N 78W 22 SWNE WYW149364 Highland Unit Fed. 41-22 51N 78W 22 NENE WYW149364 Highland Unit Fed. 43-22 51N 78W 22 NESE WYW149364 Highland Unit Fed. 12-23 51N 78W 23 SWNW WYW149364 Highland Unit Fed. 14-23 51N 78W 23 SWSW WYW149364 Coal Gulch Fed. 12-26 51N 78W 26 SWNW WYW148215 Coal Gulch Fed. 14-26 51N 78W 26 SWSW WYW148215 Coal Gulch Fed. 12-27 51N 78W 27 SWNW WYW146349 Coal Gulch Fed. 13-27 51N 78W 27 NWSW WYW146349 Coal Gulch Fed. 21-27 51N 78W 27 NENW WYW146349 Coal Gulch Fed. 32-27 51N 78W 27 SWNE WYW153355 Coal Gulch Fed. 34-27 51N 78W 27 SWSE WYW153355 Coal Gulch Fed. 41-27 51N 78W 27 NENE WYW153355 Coal Gulch Fed. 43-27 51N 78W 27 NESE WYW153355

This approval is subject to adherence with all of the operating plans and mitigation measures contained in the Master Surface Use Plan of Operations, Drilling Plan, Water Management Plan, and information in individual APDs. This approval is also subject to operator compliance with all mitigation and monitoring requirements contained within the Powder River Oil and Gas Project Environmental Impact Statement and Resource Management Plan Amendment (PRB FEIS) approved April 30, 2003.

RATIONALE: The decision to authorize Alternative C, as described in the attached Environmental Assessment (EA), is based on the following:

• The Operator, in their Plan of Development, has committed to:

o Comply with all applicable Federal, State and Local laws and regulations.

o Obtain the necessary permits from other agencies for the drilling, completion and production of these wells including water rights appropriations, the installation of water management facilities, water discharge permits, and relevant air quality permits.

o Provide water well agreements to the owners of record for permitted water wells within the area of influence of the action.

o Provide water analysis from a designated reference well in each coal zone.

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• Alternative C will not result in any undue or unnecessary environmental degradation.

• It is in the public interest to approve these wells, as the leases are being drained of federal gas, resulting in a loss of revenue for the government.

• Mitigation measures applied by the BLM will alleviate or minimize environmental impacts.

• Alternative C is the environmentally-preferred Alternative.

• The proposed action is in conformance with the PRB FEIS and the Approved Resource

Management Plan for the Public Lands Administered by the Bureau of Land Management (BLM), Buffalo Field Office, April 2001.

• Based on current information, we determined that no significant impacts in the spread of WNV would occur from the implementation of this project.

FINDING OF NO SIGNIFICANT IMPACT: Based on the analysis of the potential environmental impacts of the proposed action in the attached environmental assessment, I have determined that NO significant impacts are expected and, therefore, an environmental impact statement is not required.

ADMINISTRATIVE REVIEW AND APPEAL: Under BLM regulations, this decision is subject to administrative review in accordance with 43 CFR 3165. Any request for administrative review of this decision must include information required under 43 CFR 3165.3(b) (State Director Review), including all supporting documentation. Such a request must be filed in writing with the State Director, Bureau of Land Management, P.O. Box 1828, Cheyenne, Wyoming 82003, no later than 20 business days after this Decision Record is received or considered to have been received.

Any party who is adversely affected by the State Director’s decision may appeal that decision to the Interior Board of Land Appeals, as provided in 43 CFR 3165.4.

/s/ Dennis R. Stenger 7/30/2004 Field Manager: _______________________________________ Date: _________________________

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BUREAU OF LAND MANAGEMENT

BUFFALO FIELD OFFICE

ENVIRONMENTAL ASSESSMENT (EA)

FOR

Lance Oil & Gas, Inc.

Coal Gulch/Highland Unit

PLAN OF DEVELOPMENT

WY-070-04-161

INTRODUCTION

This site-specific analysis tiers into and incorporates by reference the information and analysis contained in the Powder River Basin Oil and Gas Project Environmental Impact Statement and Resource Management Plan Amendment (PRB FEIS), #WY-070-02-065 (approved April 30, 2003), pursuant to 40 CFR 1508.28 and

1502.21. This document is available for review at the Buffalo Field Office. This project EA addresses site-specific resources and/or impacts that are not covered within the PRB FEIS.

1 PURPOSE AND NEED

The purpose for the proposal is to define and produce coal bed natural gas (CBNG) on one or more valid federal oil and gas mineral leases issued to the applicant by the BLM. Analysis has determined that federal CBNG is being drained from the federal leases by surrounding fee or state mineral well development. The need exists because without approval of the Applications for Permit to Drill (APDs), federal lease royalties will be lost and the lessee will be deprived of the federal gas they have the rights to develop.

1.1 Conformance with Applicable Land Use Plan and Other Environmental Assessments:

The proposed action is in conformance with the terms and the conditions of the Approved Resource Management Plan for the Public Lands Administered by the Bureau of Land Management, Buffalo Field Office (BFO), April 2001 and the PRB FEIS, as required by 43 CFR 1610.5

2 ALTERNATIVES INCLUDING THE PROPOSED ACTION

2.1 Alternative A - No Action

A No Action Alternative was considered in the PRB FEIS Volume 1, pages 2-54 through 2-62. This alternative would consist of no new federal wells. An oil and gas lease grants the lessee the “right and privilege to drill for, mine, extract, remove, and dispose of all oil and gas deposits” in the lease lands, “subject to the terms and conditions incorporated in the lease.” Thus, under this alternative, the operator’s proposal would be denied.

2.2 Alternative B Proposed Action

Description of the Proposed Action: The main, existing two-track access road is proposed to be upgraded to an improved road (including utility corridor) and is approximately 4.35 miles in length (15.82 acres, 30’ width).

The approximate amount of proposed two-track access roads including utilities is 2.73 miles (4.63 acres, 14’ width). There are no existing or proposed screw compressors.

Proposed Action Title/Type: Lance Oil & Gas, Inc.‘s Coal Gulch/Highland Unit Plan of Development (POD) for 19 coal bed natural gas well APD`s and associated infrastructure.

Proposed Well Information: There are 19 wells proposed within this POD, as follows:

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Name Number TWP RNG SEC QTR Lease Number Highland Unit Fed. 12-22 51N 78W 22 SWNW WYW149364 Highland Unit Fed. 14-22 51N 78W 22 SWSW WYW149364 Highland Unit Fed. 21-22 51N 78W 22 NENW WYW149364 Highland Unit Fed. 23-22 51N 78W 22 NESW WYW149364 Highland Unit Fed. 24-22 51N 78W 22 SESW WYW149364 Highland Unit Fed. 32-22 51N 78W 22 SWNE WYW149364 Highland Unit Fed. 41-22 51N 78W 22 NENE WYW149364 Highland Unit Fed. 43-22 51N 78W 22 NESE WYW149364 Highland Unit Fed. 12-23 51N 78W 23 SWNW WYW149364 Highland Unit Fed. 14-23 51N 78W 23 SWSW WYW149364 Coal Gulch Fed. 12-26 51N 78W 26 SWNW WYW148215 Coal Gulch Fed. 14-26 51N 78W 26 SWSW WYW148215 Coal Gulch Fed. 12-27 51N 78W 27 SWNW WYW146349 Coal Gulch Fed. 13-27 51N 78W 27 NWSW WYW146349 Coal Gulch Fed. 21-27 51N 78W 27 NENW WYW146349 Coal Gulch Fed. 32-27 51N 78W 27 SWNE WYW153355 Coal Gulch Fed. 34-27 51N 78W 27 SWSE WYW153355 Coal Gulch Fed. 41-27 51N 78W 27 NENE WYW153355 Coal Gulch Fed. 43-27 51N 78W 27 NESE WYW153355

County: Johnson

Applicant: Lance Oil & Gas, Inc.

Surface Owners: BLM The proposed action involves the development of the project, which includes the following:

- Drilling of 19 total federal CBM wells in Fort Union coal zone to depths of approximately 1,900 feet.

- Development of a cluster of groundwater monitor wells in SESE 25, T51N, R78W. See section F.

Monitor Well Drilling Guidelines; 7/13/04, page 12, in the Conditions of Approval.

- An unimproved and improved road network.

- A water management plan that involves the following infrastructure and strategy: Treatment and discharge of produced water to the mainstem of the Upper Powder River. Treatment facility located at an existing reservoir site in Section 36, T51N, R78W.

- A buried gas, water and power line network, and no central gathering/metering facilities or compression facilities.

For a detailed description of design features, construction practices and water management strategies associated with the proposed action, refer to the Master Surface Use Plan, Drilling Plan and Water Management Plan in the Plan of Development (POD) and individual APDs. Also see the subject POD and/or APDs for maps showing the proposed well locations and associated facilities described above. More information on CBNG well drilling, production and standard practices is also available in the PRB FEIS, Volume 1, pages 2-9 through 2-40 (January 2003).

Implementation of committed mitigation measures contained in the Master Surface Use Plan, Drilling Program and Water Management Plan, in addition to the Standard Conditions of Approval contained in the PRB FEIS Record of Decision Appendix A, are incorporated and analyzed in this alternative.

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Additionally, the Operator, in their Plan of Development, has committed to:

• Comply with all applicable Federal, State and Local laws and regulations.

• Obtain the necessary permits for the drilling, completion and production of these wells including water rights appropriations, the installation of water management facilities, water discharge permits, and relevant air quality permits.

• Provide water well agreements to the owners of record for permitted water wells within the area of influence of the action.

• Provide water analysis from a designated reference well in each coal zone.

2.3 Alternative C – Environmentally Preferred

Modifications, or alternatives, to the original proposal received from the operator, were identified as the result of the pre-approval onsite inspection. At the on-site, all areas of proposed surface disturbance were inspected to ensure that potential impacts to natural resources would be minimized. In some cases, access roads were re-routed, and well locations, pipelines, discharge points and other water management control structures were moved, modified, mitigated or dropped from further consideration to alleviate or minimize environmental impacts. Alternatives to the different aspects of the proposed action are always considered and applied as pre-approval changes, site specific mitigation and/or Conditions of Approval (COAs), if they will alleviate or minimize environmental effects of the operator’s proposal. The specific changes identified for the Coal Gulch/Highland Unit POD are listed below under 2.3.1:

2.3.1 Changes as a result of the on-site

1. Highland Unit Federal 12-22-5178: For safety concerns, spot upgrades will be done to the two-track access road and to reserve sage grouse habitat, the location will be brush hogged.

2. Highland Unit Federal 14-22-5178: Due to the close proximity of a drainage, the pit will be lined.

An 18” culvert will be installed in the drainage of the proposed access road. Culvert will be installed to BLM standards and specifications.

1. Highland Unit Federal 21-22-5178: Pad will be designed and the pit will be lined. Expedient reclamation will be done on the location area following completion of the drilling of the well.

2. Highland Unit Federal 24-22-5178: Due to the close proximity of a drainage, the pit will be lined.

3. Highland Unit Federal 32-22-5178: Due to the close proximity of a drainage area, the well was moved southeasterly approximately 100 feet. A vehicle turnout will be incorporated into the proposed location.

4. Highland Unit Federal 41-22-5178: Spot upgrades will be done on the proposed access road.

5. Highland Unit Federal 43-22-5178: Proposed two-track access road will be brush hogged.

6. Highland Unit Federal 14-23-5178: To reduce surface disturbance, the proposed location was moved approximately 450 feet northerly to a wider and flatter area. Pit will be lined.

7. Coal Gulch Unit Federal 12-26-5178: Pit will be lined.

8. Coal Gulch Federal 13-27-5178: Due to the close proximity of a drainage, the pit will be lined.

9. Coal Gulch Federal 21-27-5178: Existing two-track road, going past the proposed well location in a northerly direction-to the top of the hill, will be reclaimed.

10. Coal Gulch Unit Federal 23-27-5178: Due to Wildlife concerns, there will be no approval for drilling, installation of any infrastructure for production equipment or facilities, or any proposed access to this proposed well location.

11. Coal Gulch Unit Federal 34-27-5178: Proposed access will have some spot upgrades and the hilltop area will be reclaimed.

12. Coal Gulch Unit Federal 41-27-5178: Proposed two-track access road will have some spot upgrades and the access will be brush hogged to temporarily remove the vegetation.

2.3.2 Programmatic mitigation measures identified in the PRB FEIS ROD

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Programmatic mitigation measures are those, determined through analysis, which may be appropriate to apply at the time of APD approval if site specific conditions warrant. These mitigation measures can be applied by BLM, as determined necessary at the site-specific NEPA APD stage, as Conditions of Approval (COAs) and will be in addition to stipulations applied at the time of lease issuance and any standard conditions of approval.

1. All stock tanks will be equipped with BLM approved wildlife escape ramps in order to reduce wildlife loss.

2. During construction, emissions of particulate matter from well pad and resource road construction will be minimized by application of water, or other dust suppressants, with at least 50 percent control efficiency. Roads and well locations constructed on soils susceptible to wind erosion could be appropriately surfaced or otherwise stabilized to reduce the amount of fugitive dust generated by traffic or other activities, and dust inhibitors (surfacing materials, non-saline dust suppressants, and water) could be used as necessary on unpaved collector, local and resource roads that present a fugitive dust problem. The use of chemical dust suppressants on BLM surface will require prior approval form the BLM authorized officer.

3. Wildlife species are dynamic and new individuals may have moved into the Highland and Coal

Gulch project area after the initial wildlife surveys were completed. The Record of Decision for the PRB FEIS includes a programmatic mitigation measure that states, “The companies will conduct clearance surveys for threatened and endangered or other special-concern species at the optimum time”. The measure requires companies to coordinate with the BLM before November 1 annually to review the potential for disturbance and to agree on inventory parameters. Should this project not be completed by January 15, and surface disturbance is planned for that year, Lance will coordinate with the BLM to determine if additional surveys will be required.

2.3.3 Site specific mitigation measures

1. A monitor well will be drilled in SESE 25, T51N, R78W. Please see monitor well drilling guidelines (Section F, page 11) in the Conditions of Approval.

2. Prior to commencement of any construction activities; all proposed access routes, pipelines, culvert placements, spot upgrades, etc., will be staked.

3. To prevent unneeded surface disturbance, such as excessive rutting, no access or surface disturbing activities will be authorized during wet conditions. All operations will cease until more favorable conditions occur.

4. No surface disturbing activity shall occur within ½ mile of all identified raptor nests from

February 1 through July 31, annually, prior to a raptor nest occupancy survey for the current breeding season.

5. If an undocumented raptor nest is located during project construction or operation, the Buffalo

Field Office (307-684-1100) shall be notified within 24 hours.

6. Power lines will be built to standards identified by the Avian Power Line Interaction Committee (1996) and additional USFWS specifications to minimize electrocution potential (T&C6).

7. Creation of raptor hunting perches will be avoided within 0.5-mile of a documented sage grouse lek site. Perch inhibitors will be installed to deter avian predators from preying on sage grouse.

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8. No surface disturbing activities are permitted within 2 miles of the sage grouse lek located in

Section 27, T51N, R78W, between March 1 and June 15, prior to completion of a greater sage grouse lek survey. This condition will be implemented on an annual basis for the duration of surface disturbing activities.

a. If an active lek is identified during the survey, the 2 mile timing restriction (March 1-June 15) will be applied and surface disturbing activities will not be permitted until after the nesting season. If surveys indicate that the identified lek is inactive during the current breeding season, surface disturbing activities may be permitted within the 2 mile buffer until the following breeding season (March 1). The required sage grouse survey will be conducted by a BLM approved biologist following WGFD protocol. All survey results shall be submitted in writing to a Buffalo BLM biologist and approved prior to surface disturbing activities.

9. Noise from industrial development shall not exceed 49 decibels at identified sage grouse lek sites.

10. Well metering, maintenance and other site visits within 0.5 miles of a documented sage grouse lek site shall be minimized as much as possible during the breeding season (March 1– June 15), and restricted to between 0900 and 1500 hours. This stipulation applies to the construction traffic on the proposed improved road within 1/4 mile of the lek site.

11. No discharge of federally produced water is permitted to the reservoir currently sited in section 36, T51N, R78W.

12. The final brine pond that holds the effluent waste stream from the treatment facility must be netted to protect wildlife.

13. No discharge of federal water from this POD is approved without submitting an approved NPDES permit to the authorized officer.

14. This analysis is for treat and discharge only: Any changes to the approved water management strategy will require sundries and additional submittals to BLM/BFO.

15. All disturbances associated with and above the ordinary high water line of the treatment facility reservoir must be revegetated before October 15 of 2004.

16. The treated water discharge point on the Powder River must be sited above the 25 year flood high water line, and the discharge water carried non-erosively to the Powder River.

17. All off channel pits must be bonded, including the treatment pits.

18. Springs in the POD area must be monitored yearly, and the water quality and flow data submitted to the BLM authorized officer

19. The reservoir that is located in section 36, T51N, R78W must be fenced to protect wildlife.

The above changes and mitigation measures to the proposed action resulting from the on-site will be analyzed in ALTERNATIVE C.

Implementation of committed mitigation measures contained in the Master Surface Use Plan, Drilling Program and Water Management Plan, in addition to the Standard Conditions of Approval contained in the PRB FEIS Record of Decision Appendix A, are incorporated and analyzed in this alternative. All permanent above-

- 8 -ground structures (e.g., production equipment, tanks, etc.) not subject to safety requirements will be painted to blend with the natural color of the landscape. The paint used will be a color which simulates “Standard Environmental Colors.” The color selected for the Coal Gulch/Highland POD is Carlsbad Canyon, 2.5Y 6/2.

Please contact David G. Seward, Natural Resource Specialist, @ (307) 684-1043, Bureau of Land Management, Buffalo, if there are any questions concerning these surface use COAs.

2.4 Alternatives considered but not analyzed in detail

The operator (Lance Oil and Gas) submitted an alternative water management strategy that involved the storage and retention of produced water in new reservoirs. At the time of the review, sufficient detail was lacking to assess the consequences of this strategy. If the treat and discharge scenario for this POD is not realized, the operator will have to provide additional details for the reservoirs and NPDES permits before discharge of federal water, and the onsite review of the reservoirs.

3 DESCRIPTION OF AFFECTED ENVIRONMENT

Applications to drill were received on March 8, 2004. Field inspections of the proposed Coal Gulch/Highland Unit CBM project were conducted on 5/11/2004 by Mark Sydnor, Tim Kalus, John Bartow, LD Gilbert, Arlene Kosic, Bill Ostheimer, Ken Peacock, Steve Janzen, and David G. Seward.

This section describes the affected environment that would be affected by implementation of the Alternatives described in Section 2. Aspects of the affected environments described in this section focus on the relevant major issues. Certain critical environmental components require analysis under BLM policy. These items are presented below in Table 3.1.

Table 3.1 - Critical elements requiring mandatory evaluation are presented below.

Mandatory Item Potentially Impacted

No Impact Not Present On Site

BLM Evaluator

Threatened and Endangered

Species

X

Kosic

Floodplains X Ken Peacock Wilderness Values X David G. Seward

ACECs X David G. Seward Water Resources X Ken Peacock

Air Quality X David G. Seward Cultural or

Historical Values X Robert C. Wilson

Prime or Unique Farmlands

X David G. Seward

Wild & Scenic Rivers

X David G. Seward

Wetland/Riparian X Ken Peacock Native American

Religious Concerns

X Robert C. Wilson

Hazardous Wastes or Solids

X David G. Seward

Invasive, Nonnative Species

X David G. Seward

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Mandatory Item Potentially Impacted

No Impact Not Present On Site

BLM Evaluator

Environmental Justice

X David G. Seward

3.1 Topographic Characteristics of Project Area

The proposed Coal Gulch/Highland Unit POD is east of the City of Buffalo, Wyoming in Johnson County.

Access is through the Kennedy Ranch, off the Lower Powder River Road, approximately 10.3 miles north of Interstate 90. The topography is typical of the Powder River Breaks with numerous draws and prominent ridgelines, with elevations ranging from approximately 4,200 to 4,600 feet above sea level. The area has a wide variety of uses, including habitat for the many species of wildlife inhabiting the area, but the development taking place of Coal Bed Natural Gas, conventional oil and gas, and ranching.

3.2 Vegetation & Soils

Species typical of short grass prairie comprise the project area flora. Specific species observed throughout the project area include Sagebrush, Fringed sagewort, Bluebunch, Prairie Junegrass, Treadleaf sedge, Needle and thread, and some cheatgrass. Differences in dominant species within the project area vary with soil type, aspect and topography.

Using the Natural Resource Conservation Service, (NRCS, USDA), Technical Guides for the Major Land Resource Area 58B Northern Rolling High Plains, in the 10-14” Northern Plains precipitation zone, the landforms and the soils of this site vary little throughout the proposed POD area, with some Sandy and Sandy Loam areas, but the dominant soil is Loamy. Soils differ with topographic location, slope and elevation.

Topsoil depths to be salvaged for reclamation range from 4 to 8 inches on ridges 8 to 12 inches in bottomland.

Erosion potential varies from slight to moderate depending on the soil type, vegetative cover and slope.

Reclamation potential of soils also varies throughout the project area but the NRCS technical guide rates this area as fair.

The Loamy soils of this site are deep to moderately deep (greater than 20" to bedrock), well drained & moderately permeable. Layers of the soil most influential to the plant community varies from 3 to 6 inches thick. These layers consist of the A horizon with very fine sandy loam, loam, or silt loam texture and may also include the upper few inches of the B horizon with sandy clay loam, silty clay loam or clay loam texture

Due to the higher elevations, some areas have a Shallow-Loamy type of soil classification, the soils of this site are shallow (less than 20”to bedrock) well-drained soils formed in alluvium over residuum or residuum. These soils have moderate permeability and may occur on all slopes. The bedrock may be any kind which is virtually impenetrable to plant roots, except igneous. The surface soil will have one or more of the following textures:

very fine sandy loam, loam, silt loam, sandy clay loam, silty clay loam, and clay loam. Thin ineffectual layers of other textures are disregarded. Layers of the soil most influential to the plant community vary from 3 to 6 inches thick.

3.2.1 Wetlands/Riparian/Floodplains

The Powder River is a main tributary to the Missouri River via the Yellowstone River. It is an interstate river that drains millions of acres with a widely varying flow regime. At the hydrograph peak, the Powder often flows greater than 10,000 cfs at Arvada, Wyoming. Low peak flows at the same gage are in the 100’s of cfs.

This reflects a highly variable stream with large areas of floodplain inundation and potential for wetland and riparian development.

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Wetland and riparian systems on the main stem of the Powder River may be affected by direct discharge of treated water. The Powder River System is so large and extensive that wetlands and riparian communities are common, extensive and adapted to the natural range of flow and water quality conditions of the Powder River.

3.2.2 Invasive Species

No state-listed noxious weeds and invasive/exotic plant infestations were discovered by a search of inventory maps and/or databases or during subsequent field investigation by the proposed project proponent.

3.3 Wildlife

The topography throughout the Highland and Coal Gulch project area is classic Powder River breaks, cut by numerous draws with prominent ridgelines. Elevation ranges from 4,200 to 4,570 feet above sea level. The major vegetation community in the survey area is sagebrush and native grasses. The most common tree in the project area is juniper. Current land uses within the project area include livestock grazing (Maechtle 2003).

Wildlife species common to prairie and sagebrush habitats are identified in the Final Environmental Impact Statement and Proposed Plan Amendment for the Powder River Basin Oil and Gas Project (PRB FEIS 3-114).

The habitat types within the Highland and Coal Gulch Unit project area are of importance to many wildlife species. Prior to project approval several resources were consulted to identify wildlife species that may occur in the proposed project area. Resources that were consulted include the wildlife database compiled and managed by the BLM Buffalo Field Office (BFO) wildlife biologists, the PRB FEIS, the Wyoming Game and Fish Department (WGFD) big game and sage grouse maps, the Wyoming Natural Diversity Database (WYNDD), and a wildlife survey report prepared by Big Horn Environmental Consultants (Big Horn). A Biological Assessment (Kosic and Bills 2004) was completed by a BLM biologist prior to project approval.

The Biological Assessment was submitted to the USFWS for formal consultation. Species that have been identified in the project area or that have been noted as being of special importance are described below.

3.3.1 Big Game

Big game species expected to be within the project area include pronghorn, mule deer, and elk. The WGFD has determined the entire project area to be Yearlong range for pronghorn and Winter/Yearlong for mule deer.

Yearlong use is when a substantial portion of a population makes general use of the habitat on a year-round basis. Winter/Yearlong use is when a population of animals make general use of suitable habitat sites within a range on a year-round basis. During the winter months there is a significant influx of additional animals into the area from other seasonal ranges.

Elk were observed in the project area in May of 2004. The proposed project area is located less than three miles west of Fortification Creek. There are approximately 122,931 acres of elk ranges within Fortification Creek. Crucial winter, parturition, winter yearlong, and yearlong ranges occur with varying degrees of overlap in the Fortification Creek area. In Wyoming elk occur throughout the state in a variety of habitats. Elk rely on a combination of browse, grasses and forbs, depending on their availability throughout the seasons. Elk are migratory, moving between summer and winter ranges. Extensive on going and future CBNG development were noted in the PRB FEIS as a potential management concern for the Fortification Creek elk herd unit. Big game range maps are available in the PRB FEIS (3-119-143), the project file, and from the WGFD.

3.3.2 Aquatics

The Highland and Coal Gulch POD is located within the Kinney Draw and N. Fork Coal Gulch watersheds.

The Highland and Coal Gulch POD proposes 7 reservoirs and 6 discharge points. The discharge for all produced CBNG water will be piped to an existing off-channel treatment unit in Section 36, T51N, R78W.

Treated water will then be discharged into two on-channel units for subsequent discharge to Deer Gulch.

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Kinney Draw and N. Fork Coal Gulch are intermittent to ephemeral drainages flowing mostly in response to rainfall and snowmelt (CBM Associates 2004). The Wyoming Department of Environmental Quality (DEQ) regulates effluent discharge through the National Pollution Discharge Elimination System in compliance with the Federal Water Pollution Control Act and the Wyoming Environmental Quality Act. The Wyoming DEQ established effluent limits for the protection of game and non game, aquatic life other than fish, wildlife, and other water uses. Impact to any downstream fish species will likely be minimal. Fisheries will not be discussed any further in this document.

3.3.3 Migratory Birds

A wide variety of migratory birds may be found in the proposed project area at some point throughout the year.

Migratory birds are those that migrate for the purpose of breeding and foraging at some point in the calendar year. Migratory bird species of management concern that may occur in the project area are listed in the PRB

FEIS (3-151).

3.3.4 Raptors

No raptor nests were located within the project area by Big Horn and no historical records of raptors have been recorded in the BLM database.

3.3.5 Threatened and Endangered Species and Sensitive Species:

3.3.5.1 Threatened and Endangered Species

Within the BLM Buffalo Field Office there are five species that are Threatened, Endangered, or Candidate for listing under the Endangered Species Act. Threatened and Endangered Species that are known to occur in the proposed project area are discussed below.

3.3.5.1.1 Black-Footed Ferret

The black-footed ferret is an endangered species that is closely associated with prairie dogs. A black-footed ferret requires at least 80 acres of black-tailed prairie dog colony for survival. Big Horn did not identify prairie dog towns within the project area. As no prairie dog towns exist, there will be no effect to black-footed ferrets.

Additionally, the Wyoming Game and Fish Department believes the combined effects of poisoning and sylvatic plague on black-tailed prairie dogs have greatly reduced the likelihood of a black-footed ferret population persisting east of the Big Horn Mountains (Grenier 2003). The USFWS have also concluded that black-tailed prairie dog colonies within Wyoming are unlikely to be inhabited by black-footed ferrets (Kelly 2004). The black-footed ferret will not be discussed further in this document.

3.3.5.1.2 Bald Eagle

The U.S. Fish and Wildlife Service lists bald eagles as threatened through out Wyoming. Eagles typically build nests in the crown of large mature trees such as cottonwoods or conifers that are close to a reliable aquatic prey source. Fish and waterfowl are the primary prey for nesting eagles; however prairie dogs, big game and livestock carrion may also be part of their diet, particularly in winter. Winter roosts are typically associated with cottonwood galleries or coniferous trees. Although many roosts are near water bodies, upland ponderosa pine stands are also important as they provide thermal cover (Anderson and Patterson, 1988).

The Highland and Coal Gulch project area is marginally suited for bald eagle roosting and nesting. Few scattered cottonwoods are found throughout the project area and a significant water body with a reliable prey base is present. The Highland and Coal Gulch POD is located approximately two miles from the Powder River. Bald eagle surveys conducted by Big Horn in 2003 and 2004 have not documented bald eagle roost or

- 12 -nest sites within the project area. Additionally, aerial surveys conducted by the BLM in December of 2003 and January of 2004 have not documented bald eagle roost sites in the project area. The majority of the Powder River was frozen at the time of the surveys, only individual birds were observed. There are also no bald eagle nests or roosts in the project vicinity documented in the BLM database, WGFD records, or published literature (Patterson and Anderson, 1985; Jenkins et al., 1980).

3.3.5.1.3 Canada Lynx

Canada lynx is a threatened species in Wyoming which occurs primarily in spruce-fir and lodgepole pine forests with 8-12 degree slopes at elevations between 7,995-9,636 feet (Ruggiero et al., 1999). Conifer forests are not present and elevations within the Highland and Coal Gulch project area range between 4,200 to 4,570 feet. Suitable Canada lynx habitat is not present within the project area. The Canada lynx will not be discussed any further in this document.

3.3.5.1.4 Ute Ladies’-Tresses Orchid

Ute ladies’-tresses orchid is a threatened species that occurs primarily on moist, sub-irrigated or seasonally flooded soils in valley bottoms, gravel bars, old oxbows, or floodplains bordering springs, lakes, rivers, or perennial streams at elevations between 1, 780 and 6, 800 feet (PRB FEIS 3-177). The orchids are known to occur in Converse County along a tributary of Antelope Creek. Wetland habitat for Ute ladies’-tresses orchid does not exist within the project area (Maechtle 2004). No roads or ancillary facilities are proposed in potential Ute ladies’ tresses orchid habitat. CBNG discharges may disrupt surface activities as normally dry ephemeral drainages become perennially wet due to constant discharge of CBNG water. Kinney Draw and N.

Fork Coal Gulch are intermittent to ephemeral drainages flowing mostly in response to precipitation and snowmelt. There will be no effect to Ute ladies-tress’ orchids. This species will not be discussed further in this document.

3.3.5.1.5 Black-Tailed Prairie Dog

The black-tailed prairie dog is a candidate species. Candidate species are those species for which the USFWS has sufficient information on biological vulnerability and threats to warrant issuance of a proposed rule for listing, but for which publication of a proposed rule is precluded by other higher priority listing actions (PRB FEIS 3-172). Big Horn did not identify prairie dog towns within the project area. Prairie dogs will not be discussed further in this document.

3.3.5.2 Sensitive Species

The Wyoming USDI - Bureau of Land Management (BLM) has prepared a list of sensitive species to focus species management efforts toward maintaining habitats under a multiple use mandate. The authority for this policy and guidance comes from the Endangered Species Act of 1973, as amended; Title II of the Sikes Act, as amended; the Federal Land Policy and Management Act (FLPMA) of 1976; and Department of Interior Manual 235.1.1A. Sensitive species that are known to occur in the proposed project area are discussed below.

3.3.5.2.1 Greater Sage Grouse

Greater sage grouse are found in prairie, sagebrush shrublands, other shrublands, wet meadows, and agricultural areas; they depend upon substantial sagebrush stands for nesting and winter survival (PRB FEIS 3- 194-196). The project area is comprised of prairie and sagebrush communities. BLM biologists identified sage grouse droppings in Section 27, T51N, R78W during the onsite visit. The droppings were found in a relatively flat and heavily grazed area. Big Horn also observed two male sage grouse strutting in Section 27 during the surveys conducted in 2004 (Maechtle verbal communication). The area was determined to be an active lek site. The 23-27 well and its associated infrastructure are proposed within ¼ mile of the lek site.

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3.3.5.2.2 Mountain Plover

Mountain plovers are a common breeding resident within the Powder River Basin. This species uses high, dry, short grass prairie with vegetation typically shorter than 4 inches tall. Plover nest sites are associated with heavily grazed short-grass vegetation with slopes less than 5 percent, typically found in prairie dog colonies (PRB FEIS 3-178). Mountain plover habitat does not exist within the Highland and Coal Gulch project area.

All of the terrain within the project area is sloped greater than 10 percent. The grassland component is well established and averaging greater than 8 inches with minimal bare ground. Additionally, no prairie dog towns are located within the project area (Maechtle 2003). A map modeling habitat suitability is available at the Buffalo Field Office.

3.4 West Nile Virus

West Nile virus (WNV) is a mosquito-borne disease that can cause encephalitis or brain infection. Mosquitoes spread this virus after they feed on infected birds and then bite people, other birds, and animals. WNV is not spread by person-to-person contact, and there is no evidence that people can get the virus by handling infected animals.

Since its discovery in 1999 in New York, WNV has been firmly established in the United States and has continued to spread west. Birds are the natural vector/host and serve not only to amplify the virus, but spread it rapidly throughout the country; they are the only known animal to infect mosquitoes. Though less than 1% of mosquitoes are infected with WNV, they still are very effective in transmitting the virus to humans, horses, and wildlife. The Culex genus appears to be the most important mosquito group that vector, WNV.

The human health issues related to WNV are well documented and may continue to escalate as the virus moves west. In Wyoming, 392 human cases, with 8 deaths, were attributed to the WNV in 2003. Human cases of WNV in Wyoming occur primarily in the late summer or early fall. There is some evidence that the incidence of WNV tapers off over several years after a peak following initial outbreak (Litzel and Mooney, personal conversations). If this is the case, occurrences in Wyoming are likely to increase over the next few years, followed by a gradual decline in the number of reported cases.

Although most of the attention has been focused on human health issues, WNV has had an impact on vertebrate wildlife populations. At a recent conference at the Smithsonian Environmental Research Center, scientists disclosed WNV had been detected in 157 bird species, horses, 16 other mammals, and alligators (Marra et al 2003). In the eastern US, avian populations have incurred very high mortality, particularly crows, jays and related species. Raptor species also appear to be highly susceptible to WNV. During 2003, 36 raptors were documented to have died from WNV in Wyoming including Golden eagle, red-tailed hawk, ferruginous hawk, American kestrel, Cooper’s hawk, northern Goshawk, great-horned owl, prairie falcon, and Swainson’s hawk (Cornish et al. 2003). Actual mortality is likely to be greater. Population impacts of WNV on raptors are unknown at present. The Wyoming State Vet Lab determined 22 sage-grouse in one study project (90% of the study birds), succumbed to WNV in the PRB in 2003. While birds infected with WNV have many of the same symptoms as infected humans, they appear to be more sensitive to the virus (Rinkes 2003).

Mosquitoes can potentially breed in any standing water that lasts more than 4 days. In the Powder River Basin, there is generally increased surface water availability associated with CBNG development. This increase in potential mosquito breeding habitat provides opportunities for mosquito populations to increase.

Preliminary research conducted in the Powder River Basin indicates WNV mosquito vectors were notably more abundant on a developed CBNG site than two similar undeveloped sites (Walker et al. 2003). Reducing the population of mosquitoes, especially species that are apparently involved with bird-to-bird transmission of WNV, such as some Culex species, can help to reduce or eliminate the presence of virus in a given geographical area (APHIS 2002). The most important step any property owner can take to control such

- 14 -mosquito populations is to remove all potential man-made sources of standing water in which mosquitoes might breed (APHIS 2002).

The most common pesticide treatment is to place larvacidal briquettes in small standing water pools along drainages or every 100 feet along the shoreline of reservoirs and ponds. It is generally accepted that it is not necessary to place the briquettes in the main water body because wave action prevents this environment from being optimum mosquito breeding habitat. Follow-up treatment of adult mosquitoes with Malathion may be needed every 3 to 4 days to control adults following application of larvacide (Mooney, personal conversation).

These treatment methods seem to be effective when focused on specific target areas, especially near communities, however they have not been applied over large areas nor have they been used to treat a wide range of potential mosquito breeding habitat such as that associated with CBNG development.

The WDEQ and the Wyoming Department of Health sent a letter to CBNG operators on June 30, 2004. The letter encouraged people employed in occupations that require extended periods of outdoor labor, to be provided educational material by their employers about WNV to reduce the risk of WNV transmission. The letter encouraged companies to contact either local Weed and Pest Districts or the Wyoming Department of Health for surface water treatment options.

3.5 Water Resources

The Coal Gulch project area is within the Upper Powder River 4th order watershed. The Upper Powder River watershed contains the main stem of the Powder River from near the confluence of the North, Middle and South forks of the Powder River on the south to near the Montana state line on the north. The watershed boundary to the north simply divides the mainstem Powder River into an Upper and Middle sections to limit watershed size. The Powder River leaves the State of Wyoming, flowing into Montana, near Moorhead, MT.

At the time of the onsite inspections, live surface water within the POD boundary was limited to the channel of the Powder River. Coal Gulch and Deer Gulch are dry ephemeral channels; Lance has constructed a large reservoir in the upper reaches of Deer Gulch that is used as a full containment structure for CBNG discharges, and as the focus of their water treatment strategy.

The primary use of channelized surface water in the Powder River Basin is flood irrigation. The majority of the irrigation water rights are along streams, such as the Powder River, due to wider floodplains, more irrigable land, and perennial stream flow, although some irrigation rights do exist on intermittent streams. Impounded water in upland areas is primarily permitted with livestock watering as the beneficial use.

3.5.1 Groundwater

3.5.1.1 Groundwater Quality

Produced water chemical analysis utilizing an existing nearby well was submitted with the POD application.

Produced groundwater should have a similar water quality signature to the sample provided. For the irrigation water quality parameters of EC, SAR and TDS, the sample indicates that an EC of 3950 umhos/cm, SAR of 37 and TDS of 2590 mg/l may be expected. Wyoming Department of Environmental Quality (WDEQ) water quality parameters for groundwater classifications (Chapter 8 – Quality Standards for Wyoming Groundwater) specifies the following limits for the same parameters: 500 mg/l TDS for drinking water (Class I), 2000 mg/l for Agricultural Use and 5000 mg/l for Livestock Use; a site specific SAR ranging from 8 to 10; with no quantitative limit for EC.

Two springs in the area were also sampled, from strata estimated to outcrop at 4300 ft above msl. The elevation of the springs is most likely from water bearing zones above the Big George coal. The water quality from both spring samples indicates that the water is highly mineralized with TDS and EC above the Livestock standard. Sulfate, Iron, Magnesium and Aluminum are also elevated well above the expected water quality of

- 15 -water pumped from the coal. This zone could potentially be affected by infiltration of water produced from the coal impounded on the surface.

3.5.1.2 Groundwater Quantity

A search of the Wyoming State Engineers Office Ground Water Rights Database for this area showed 7 registered stock and domestic water wells within the POD boundary with total depth ranging from flowing at the surface (spring) to 875 feet below the surface. All existing wells are at depths over 500 feet above the target coal zone in the POD area. The intervening strata are generally of low permeability (0.13 to 1.33 ft/day), given the fine, interbedded nature of the Wasatch sediments (WWRC, 1997).

For additional information on water, please refer to the PRB FEIS (January 2003), Chapter 3, Affected Environment pages 3-1 through 3-36 (groundwater) and 3-36 through 3-56 (surface water).

3.5.2 Surface Water

The project area is within the North Fork Coal Gulch and Deer Gulch which are tributaries to the Upper Powder River 4th Order drainage system. Most of the drainages in the area are ephemeral (flowing only in response to a precipitation event or snow melt) to intermittent (flowing only at certain times of the year when it receives water from alluvial groundwater, springs, or other surface source – PRB FEIS Chapter 9 Glossary).

The channels are variable, ranging from incised, eroding channels in the breaks in the west of the POD area to well vegetated grassy swales, often lacking defined bed and bank, nearer the Powder River.

The PRB FEIS presents the historic mean Electrical Conductivity (EC, in μmhos/cm) and Sodium Adsorption Ratio (SAR) by watershed at selected United States Geological Survey (USGS) Gauging Stations in Table 3-

11. (PRB FEIS page 3-49). These water quality parameters “illustrate the variability in ambient EC and SAR in streams within the Project Area. The representative stream water quality is used in the impact analysis presented in Chapter 4 as the baseline for evaluating potential impacts to water quality and existing uses from future discharges of CBM produced water of varying chemical composition to surface drainages within the Project Area” (PRB FEIS page 3-48). For the Upper Powder River Watershed, the EC ranges from 1800 umhos/cm at maximum monthly flow to 3400 umhos/cm at low monthly flow; the SAR ranges from 4.76 at maximum monthly flow to 7.83 at low monthly flow. These values were determined at the USGS station located at Arvada, Wyoming (PRB FEIS page 3-49).

The operator has identified two natural springs within this POD boundary at T51N, R78W, Sections 16 and

29. The estimated flow of the springs is 5 gpm each, with a water quality of 6095 μmhos/cm conductivity, 6370 mg/l total dissolved solids and a sodium adsorption ratio (SAR) of 3 for the spring in section 16, and 5410 EC, 5590 TDS and 2.8 SAR for the Section 29 spring.

For more information regarding surface water, please refer to the PRB FEIS Chapter 3 Affected Environment pages 3-36 through 3-56.

3.6 Cultural Resources

Class III cultural resource inventories were conducted for the Coal Gulch/Highland Unit project prior to on-the-ground project work (BFO project no. CRT-04-037). Two new and no previously identified cultural properties were identified. Site JO2375 will be affected by the proposed undertaking but has been determined not eligible for the NRHP. Identification efforts have determined that the proposed undertaking will have no effect to historic properties. These items are presented below in Table 3.2.

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Table 3.2 – Cultural Resource Inventories of Historical Properties are presented below.

Site Number

Site Type

Eligibility

Criteria

Affect?

Concurrence?

48JO1896 Historic Depression not eligible

No

48CA2375 Prehistoric lithic scatter not eligible Yes

3.7 Other Mineral Resources

There are no other mineral resources that will be adversely impacted by the proposal.

4. ENVIRONMENTAL CONSEQUENCES

The changes to the proposed action plan of development, which resulted in development of Alternative C as the preferred alternative, have reduced the potential impact to the environment which will result from this action. The environmental consequences of Alternative C are described below.

4.1 Vegetation & Soils Direct and Indirect Effects

Overall impacts to vegetation and soils from surface disturbance should be minor, based on the operator’s plans and BLM applied mitigation.