Oil Conservation Division

Environmental Bureau

Brine Well Collapse Evaluation Report

June 18, 2009Brine Well Collapse Evaluation Report June 18, 2009

P age 1 EXECUTIVE SUMMARY

In 2008, New Mexico experienced two sudden and catastrophic brine well cavern collapses within a four-month period that led to the formation of massive sinkholes. The first, at Jim’s Water Service, occurred on July 16, 2008. The second, at Loco Hills Water Disposal Company, occurred on November 3, 2008.

On November 14, 2008, Secretary Joanna Prukop of the Energy, Minerals and Natural Resources Department (EMNRD) ordered the Oil Conservation Division (OCD) to examine the causes of the brine well collapses and to provide a report with recommendations for a safe path forward (See Appendix 1 - November 14, 2008 Press Release). Secretary Prukop directed OCD to work

with t he Environmental Protection Agency, other states, technical experts, and oil and gas industry representatives.

OCD formed an Underground Injection Control (UIC) Class III Brine Well Evaluation Work Group (Work Group). The Work Group included OCD staff, representatives from the Bureau of Land Management, the State Land Office, the New Mexico Bureau of Geology and Mineral Resources, the Environmental Protection Agency, the Sandia National Laboratory, the National Cave and Karst Research Institute, the Solution Mining Research Institute, and industry representatives. OCD staff met with the Work Group in Santa Fe for a two-day session March

26 -27, 2009. Other experts who could not attend the meeting submitted comments via email, including participants from Texas, Louisiana, New York, and Kansas (see Appendix 2 ). The Work Group examined the available data on the two collapses and examined data on other brine wells in New Mexico to evaluate their collapse potential. During the course of its review OCD and the Work Group identified an existing brine well located within the city limits of Carlsbad

that sha res features with the two wells that collapsed and that is itself in serious danger of collapse. OCD hired RESPEC, Inc., a company with expertise in brine wells, to provide technical assistance in evaluating the status of the Carlsbad brine well and to propose mitigation strategies.

OCD is continuing to review the two collapses that occurred last year and to evaluate existing brine wells for subsidence and collapse potential. OCD sent out a Brine Well Information Request form to all brine well operators on August 1, 2008, that required operators to provide OCD with general information, siting information, well construction information, operations history, monitoring information, an estimate of the total volume of brine produced, and the

volume of the cavern.

A brine well will collapse when the cavern created by the brine production becomes too large to support the roof. In 2008, a study on subsidence, sinkholes, and craters above salt caverns quantified this concept, concluding that a salt cavern generally w ill not collapse if the ratio between the cavern diameter and the cavern depth (d/h) is significantly smaller than 2/3.

B ased on the information available at this time, OCD has concluded that the following factors may have contributed to the two collapses that occurred in 2008 by creating a brine well cavern

that c ould not support its roof:Brine Well Collapse Evaluation Report June 18, 2009

P age 2 Operation of brine wells in shallow salt zones; Placement of the casing shoe near the top of the salt zone; Use of the “reverse” circulation configuration; and, Overproduction of brine, creating a large cavern.

OCD r ecommends taking the following actions:

OCD should complete its review of all existing brine wells, including plugged and abandoned wells, shut- in wells, and operational wells, in light of the 2/3 ratio and

pr ioritize the wells in terms of collapse potential. Based on its findings, OCD may require appropriate corrective actions. This may include changes in operation requirements, closure of active wells, monitoring of

sit es, and/or site remediation measures. OCD should re-evaluate existing permit terms, including: use of “reverse”

circulation ; use of a diesel oil blanket or pad to prevent dissolution from occurring at the top of the brine well cavern; plug and abandonment requirements; and

f inancial assurance requirements. OCD should evaluate siting, drilling, construction, operation, monitoring, and closure requirements for new brine wells.

1 INTRODUCTION

1.1 Geology

Much of southeast New Mexico is underlain by bedded salt. The principal salt-bearing formation is the Salado Formation, which is part of the late Permian Ochoan Series (approximately 251 - 260 million years ago). Other formations, including the Rustler and the

C astile Formations, also contain bedded salt, but the Salado Formation is the thickest and most widespread of the salt-bearing formations. The Salado Formation is the geologic formation into which nuclear waste is disposed at the Waste Isolation Pilot Project (WIPP). The Salado Formation ranges in thickness from zero feet at the western edge of the Delaware Basin to approximately 2,400 feet in thickness in the central part of the basin. The Salado Formation is

late rally continuous throughout much of southeast New Mexico and operators must drill through

it to reach oil and gas producing zones. Drilling through the Salado Formation using a fresh water mud system is problematic because the fresh water mud will dissolve the salt zone and cause the operator to lose circulation. Operators drill through the Salado and other salt bearing formations using a saturated brine mud that will not dissolve the salt.

1.2 Brine Well Operations in New Mexico

A UIC Class III injection well (brine well) is a solution mining operation in which fresh water is inj ected into the salt zone, dissolving the salt, thus creating highly saturated brine. The brine is produced from the brine well and sold for use in oil and gas drilling operations. Over time, the

sa lt zone dissolves, resulting in an underground cavern.Brine Well Collapse Evaluation Report June 18, 2009

P age 3 New Mexico has permitted 43 brine wells at 32 brine well facilities. Ten brine wells are

pr esently active; four were never installed; one was completed but never operated; 26 are presently plugged, and two have collapsed. All are located in Eddy and Lea Counties (see Figure

3 ).

Brine well operators employ solution mining techniques to generate the saturated brine that it sells to the oil and gas operators. Either a new well is drilled for brine operations, or an old oil and gas well which has been abandoned and which the operator deems to be salvageable for brine well operations is reentered. Casing is most often set near the top of the salt, usually the Salado Formation, the drill hole is advanced to near the bottom of the salt, and tubing is set near

the bottom of the hole. Several wellbore configurations have been utilized, including: single well, single tubing; single well, dual tubing; dual well; and, cased-hole, single tubing systems (see Figure 4). In a single well system using either a single tubing or dual tubing configuration,

fr esh water is pumped into the well bore and brine is extracted. In a dual well system, fresh water is injected down the tubing in one well and brine is extracted from the tubing in a second

well.

Two circulation methods may be used in dual tubing configurations. In the “normal” circulation method, fresh water is injected down the tubing and brine is extracted through the annulus, or outer tubing. In the “reverse” circulation method, fresh water is injected down the annulus and the brine is extracted through the tubing. The reverse circulation method is more protective of any fresh water zones above the Salado Formation because in the event of a casing leak, fresh

wa ter would leak into the fresh water zone rather than brine.

The configuration and circulation method used affect the shape of the cavern created by the brine

we ll operation. A single well system will create a single cavern. A dual well system will generally create two, linked caverns. Generally, normal circulation leads to a cylindrical cavern,

whe reas reverse circulation leads to a cavern that is broad at the top and narrow at the bottom of the cavern: an inherently weaker structure (see Figure 4)

.

1.3 Regulatory Overview

Brine wells are classified as “Class III injection wells” by the federal Environmental Protection Agency (EPA), which has established minimum federal requirements for state and tribal underground injection control (UIC) programs under the Safe Drinking Water Act (see 42 U.S. C.

300f et seq

. ). States and tribes may apply to EPA for primacy to administer the UIC program. To obtain primacy, they must demonstrate that their regulations meet or exceed federal requirements (see 42 U.S. C. 300g-2 ).

In 1983, EPA granted primacy over Class III brine wells in New Mexico (except for those on Indian land) to the Water Quality Control Commission (WQCC), the Environmental Improvement Division (now the New Mexico Environment Department), and OCD (see 40 CF R 147.1601). In granting New Mexico primacy, EPA specifically referenced New Mexico’s Water Quality Act (Chapter 74, Article 6 NMSA 1978). EPA reviews New Mexico’s UIC programs annually.Brine Well Collapse Evaluation Report June 18, 2009

P age 4 New Mexico’s regulations addressing UIC Class III brine wells specified at 20.6.2.5000 et seq. NMAC, were promulgated pursuant to the Water Quality Act, which gives broad powers to the WQCC to adopt regulations to prevent or abate water pollution, specifically including regulations requiring persons to obtain permits for the discharge of any water contaminant. The WQCC has delegated regulatory authority over Class III brine wells to OCD.

EPA’s primary concern under the Safe Drinking Water Act is the protection of underground sources of drinking water. The federal requirements for injection wells, including brine wells, focus on “pathways of contamination” - specifically, ways in which fluids can escape the well or injection horizon and enter underground sources of drinking water. EPA’s UIC program

p rovides standards, technical assistance and grants to state governments to regulate injection wells in order to prevent them from contaminating drinking water resources. In general, EPA requires the operators of Class III wells, including brine wells, to:

Site the well in a location that is free of faults and other geological hazards; Drill to a depth that allows the injection into formations that do not contain water that can potentially be used as a source of drinking water and that are isolated from any formation that may contain water that may potentially be used as a source of drinking water; Case and cement brine wells to prevent the migration of fluids into an underground drinking water source; Never inject fluid between the outer-most casing and the well bore; and Test the well casing for integrity at the time of completion and every five years thereafter; and, Monitor to assure the integrity of the well.

2 BRINE WELL COLLAPSES

2.1 Jim’s Water Services (BW-005)

The Jim’s Water Services brine well (BW-005) collapsed on July 16, 2008 (See Figure 4). An employee driving to the well to perform a site check observed a dust cloud in the area of the well. When he got out of his truck he noticed a surface crack open and progress toward him. He immediately left the site as the cavern began collapsing. The initial sinkhole was approximately 40 feet wide. By that afternoon, the surface collapse was approximately 180 feet in diameter. As of April 2009, the sinkhole was approximately 400 feet across and 120 feet deep. The sinkhole continues to grow.

BW -005 is located on state trust land approximately 17.3 miles southeast of Artesia in Eddy County. It is sited about 400 feet north of Hagerman Road (CR 217) and 2.4 miles southwest of State Highway 360. BW

- 005 was originally drilled as an oil and gas exploration and production

well in 1955 with cable tools to a total depth of 3909 feet. The well was plugged and abandoned

in 1955. The well was reentered and re completed as a brine well in 1978.

The Salado Formation was encountered at approximately 397 feet below ground surface (BGS).

BW

- 005 was operated as a single well system with a single tubing configuration using normalBrine Well Collapse Evaluation Report June 18, 2009

P age 5 circulation until 1986, when it was switched to reverse circulation. No sonar surveys were ever run to map the cavern. Based on incomplete production data, OCD estimates that the total brine production at BW-005 was approximately 8 million barrels and that the cavern volume was approximately 1.3 million barrels.

BW -005 had passed an EPA 5-Year Mechanical Integrity Test (MIT) of the casing in 2007 and

had passed an annual formation MIT of the cavern in 2008. The operator had not noticed any surficial cracks or fractures before the collapse. The well was active at the time of the collapse.

After the collapse, OCD contacted New Mexico Tech to determine if their seismic array had picke d up signs of the collapse. A seismograph (TA126), located approximately 8 miles southeast of BW-005, recorded seismic activity approximately six hours before the surface

c ollapse occurred. The seismic signals are believed to be associated with subsurface spalling and upward stoping of the brine well cavern roof.

2.2 Loco Hills Water Disposal Service (BW-021)

The Loco Hills Water Disposal Service (BW-021) brine well collapsed on November 3, 2008 (see Figure 5). Workers noticed surficial cracking or fracturing near the well at about 11:30 AM and immediately prevented access to the area. The collapse occurred at approximately 1:30 PM. The operator reported that the initial sinkhole was approximately 50 feet across and

ap proximately 30 feet deep. As of May 2009, the sinkhole was approximately 291 feet across

a nd as much as 200 feet deep.

BW -021 is located on state trust land 150 feet east of County Road 217 near Loco Hills, approximately 25 miles east of Artesia in Eddy County. BW -021was originally drilled as an oil and gas exploration and production well and was converted into a brine production well approximately 25 years ago. It was operated as a single well system with a single tubing configuration using reverse circulation. The casing shoe was set at 415 feet BGS above the salt

whic h occurs at 470 feet BGS. (It is not clear whether the salt was part of the Rustler or Salado

F ormation, or both). The production tubing was set at 900 feet BGS. The last sonar log of the

we ll was completed on February 7, 2001. Based on incomplete production information, OCD

e stimates that the total brine production at BW-021 was approximately 8 million barrels and that the cavern volume was approximately 750,000 barrels.

BW -021 wa s plugged and abandoned at the time of the collapse and was being visually

monitored for subsidence. The well had failed an annual formation MIT on June 18, 2008 and

OCD had ordered the operator to plug and abandon the well. The well had previously passed a

5 -year MIT of the casing in 2006.

After the collapse of BW-021, OCD again contacted New Mexico Tech to determine if their seismic array had picked up signs of the collapse. The same seismograph (TA126), located approximately 14 miles south-southwest of BW-021, did not detect any seismic activity before

the well collapsed.Brine Well Collapse Evaluation Report June 18, 2009

P age 6 3 FACTORS CONTRIBUTING TO COLLAPSE

3.1 General

A brine well cavern will collapse when the cavern becomes too large to support the roof. This

c an be expressed in terms of a ratio between the cavern diameter and the thickness of the overburden or roof. Cratering does not occur when the relation between cavern diameter and the thickness of the roof is significantly smaller than 2/3 (See Karimi-Jafari, M., P. Berest, and B.

B rouard, 2008, “Subsidence, Sinkholes and Craters above Salt Caverns,” Solution Mining Institute (SMRI) Spring 2008 Technical Conference, Porto, Portugal).

3.2 Cavern Size

Sonar should be used to map the actual cavern size and location. Where sonar mapping is unavailable, or impractical, approximate cavern size may be calculated by determining how

much of the salt zone had to be dissolved to create the brine produced by the well. A well with a long productive life is more likely to have a large cavern than a well with a short productive life.

3.3 Weak Overburden

Shallow salt zone: The salt bearing formations in the Delaware Basin of southeastern New Mexico occur at very shallow depths (less than 250 feet BGS) at the western edge of the basin

a nd dip toward the east in the central part of the basin where the salt occurs at depths of more

2000 feet BGS. Brine production techniques that dissolve the upper portion of the salt zone, such as “reverse” circulation, result in a thinner, weaker overburden.

Placement of the casing shoe: In the two brine wells that collapsed, the casing shoe was set near the top of the salt zone, rather than being advanced into the salt by a certain amount, such as 100

feet into the salt.

“Reverse” circulation: The two brine wells that collapsed employed “reverse” circulation using

a single tubing configuration. Injection of fresh water down the annulus generally creates a

c avern that is broad on top and narrow at the bottom, an inherently weak configuration. Injection of the fresh water into the upper part of the cavern, rather than near the bottom of the cavern, will laterally dissolve the salt, aggressively increasing the size of the roof of the brine well cavern. Using “reverse” circulation in a well where the casing shoe is placed near the top of the salt zone, especially where the salt zone is shallow, tends to create a broad, thin, weak overburden.

3.4 Additional Concerns

Lack of Warning: The two cavern collapses in 2008 occurred with little or no advance warning.

Well Siting: The two cavern collapses were located in remote areas. No injuries or loss of life occurred in the collapses. If a well is located in a populated or developed area, a collapse will have greater potential for injury, loss of life, and property damage.Brine Well Collapse Evaluation Report June 18, 2009

P age 7 Remediation: OCD is continuing to work with its consultant on what can be done to prevent collapses from occurring in wells that are at risk for collapse and what corrective measures will be required from operators.

4. RECOMMENDATIONS

OCD recommends the following actions, based on its evaluation of brine well operations in New Mexico, the two brine well collapses in 2008 and the information gained during the Brine Well Work Group sessions.

4.1 OCD should complete its review of all existing brine wells, including plugged and

a bandoned wells, shut-in wells, and operational wells, in light of the 2/3 ratio and prioritize the wells in terms of collapse potential.

4.2 OCD should evaluate existing information on all brine wells in order to determine cavern

siz e, shape, and depth, and then prioritize the wells in terms of collapse potential. OCD should require additional information from operators to complete this study, either through existing permit terms or by modifying permits to add the following requirements:

Operators should conduct sonar testing through the full extent of the cavity from top to bottom within six months of permit modification to document the size and configuration of the cavern. Operators should submit comprehensive historical injection and production

r eports with monthly and annual production totals and estimate the volume of the

c avern within six months of permit modification to compare with the sonar

surveys. Operators should propose criteria that will enable them to determine the

“ Maturity” of their brine operations to determine when they must stop production

a nd either modify or terminate their permit. Operators should precisely monitor the actual injection volume of fresh water versus brine produced on a daily basis and notify OCD if the differential exceeds an amount to be determined to complement the annual MITs and to help identify a potential leak in the system.

4.3 Require Corrective Actions on Wells

OCD will examine e ach brine well on a case- by -case basis to determine if corrective action is required. Corrective action may include changes in operation, closure of active wells, monitoring of sites, and/or site remediation measures.

OCD should require operators to cease operations if they cannot demonstrate that the brine well has a certain width to overburden thickness ratio; for example, less than or equal to 0.50 at any

ti me during the operation of the well. For example, the cavern associated with a well with its casing shoe set at 1000 feet BGS, shall not exceed a diameter of 500 feet. In addition, OCD

should not allow the maximum cavern roof diameter to exceed 200 feet.Brine Well Collapse Evaluation Report June 18, 2009

P age 8 OCD has already taken action on one brine well, which it determined posed the greatest risk of collapse, located within the city limits of Carlsbad. After the first collapse, OCD convinced the

ope rator to cease it brine well operations on July 22, 2008. On April 22, 2009, the Carlsbad operator ceased its trucking operations at the site after discussions with OCD. OCD and its

c ontractor are in the process of installing a subsidence monitoring system and early warning system and are investigating methods for mapping the cavern and possible remediation.

4.4 Re -evaluate Existing Permit Terms

OCD may consider modifying existing permits. Possible modifications include:

Requiring “normal” circulation. OCD has already contacted operators using “reverse” circulation and requested that they switch to “normal” circulation. Specifying technical standards to prevent dissolution from occurring at the top of

the br ine well cavern, such as cavern configuration, casing, tubing, and requiring a diesel oil blanket or pad. At time of closure, OCD may require operator to keep the cavern full of brine

fluid and to monitor the pressure head for anomalous pressure changes. OCD may require operators to implement a post-closure subsidence monitoring program. OCD will examine its previous plugging and abandonment

re quirements in light of the research conducted by the Solution Mining Research

Institute. Increase financial assurance requirements to better address monitoring and

re mediation issues.

4.5 Consider Siting, Drilling, Construction, Operation, Monitoring and Closure Requirements for New Brine Wells.

Operational issues that would impact new brine wells include:

Siting and setbacks; Area of review to assess the potential for “thief” zones and the potential for accidental de-watering; Establishing minimum depth to top of salt; Establish minimum depth for setting the casing shoe; Specify maximum brine production volume and life-of-well limits; and,

Establish minimum distance between brine well caverns.

5.0 CONCLUSIONS

The UIC program which regulates brine wells is designed to protect underground sources of drinking water. Th e issue of subsidence and/or collapse of a br ine well cavern has not been recognized by OCD or EPA as a major problem. Therefore, OCD must change its focus and address issues for which it does not yet have answers. For example, with the situation that exists in Carlsbad, OCD finds itself confronted with a major challenge that the UIC program does not

a ddress. First, and most importantly, OCD must attempt to mitigate any catastrophic collaps e atBrine Well Collapse Evaluation Report June 18, 2009

P age 9 the Carlsbad brine well facility to protect human life and property. OCD should also identify

other brine well facilities that pose a risk for catastrophic subsidence or collapse and address

these sites individually.

In the future, OCD must evaluate the dual issues presented by permitting brine wells so as to protect ground water quality as required by the UIC program while preventing brine well

subsi dence and/or collapse. To move forward, OCD must strike an appropriate balance between protecting wa ter quality and ensuring that brine well operations do not pose a risk to human life and property.Brine Well Collapse Evaluation Report June 18, 2009

P age 10 

# APPENDIX 1

PRESS RELEASESBill Richardson chardson

Governor Governor

Joanna Prukop Cabinet Secretary

Reese Fullerton Deputy Cabinet Secretary Mark Fesmire

Division Director
Oil Conservation Division

November 14, 2008 

### NEWS RELEASE

Contact: Jodi McGinnis Porter,

Public Information Officer 505.476.3226



### Energy, Minerals and Natural Resources Cabinet Secretary Prukop Orders a Six

Month Moratorium on New Brine Wells Oil Conservation Division to Investigate Brin e Well Collapses and Provide Recommendations

SANTA FE, NM – Secretary Joanna Prukop today ordered the Oil Conser vation Division to place a six month moratorium on any new bri ne well applications located in geologically sensitive areas. Secretary Prukop’s action comes fo llowing the second brine well collaps e in less than four months in southeastern New Mexico. The Secretary has also di rected the Oil Conservation Division to work with the Environmental Protection Ag ency, other states, technical experts and oil and gas industry representatives to examine the causes of recent collapses, and provide a report with recommendations to the Oil Conservation Commission for a safe path forward. The report should be completed by May 1, 2009.

“I am deeply concerned by these two serious incidents and we are taking action to ensure the safety of our citizens and to protect the environment,” stated Secretary Prukop.

Brine wells are an essential part of the oil and gas drilling industry, particularly in the southeastern part of the state. Oil and gas oper ators use brine water in the drilling proc ess. Brine is saturated salt water which can be more salty than sea wate r. Brine is created by injecting fresh water into salt formations, allowing the water to absor b the salt and then pumping it out of the well. This method creates an underground cavity.

“The moratorium will provide time to properly evaluat e the causes of the recent collapses and to discuss the development of new rules or guidelines to ensure the safety and stability of brine well systems,” added Secretary Prukop.

The moratorium will only affect new wells and will not impact existing wells and facilities.

Below are photograph s of the two recent collapses:November 14, 2008 Page 2

Loco Hills brine well collapse, morning, November 7, 2008, sinkhole with fresh water pond in foreground. Photo courtesy of Oil Conservation Division

Loco Hills brine well collapse, morning, November 7, 2008 sinkhole. Photo courtesy of Oil Conservation DivisionNovember 14, 2008 Page 3

Loco Hills brine well collapse, morning, November 7, 2008 status of fresh water pond. Photo courtesy of Oil Conservation Division

Artesia brine well collapse, morning, July 20, 2008 at 10:44 am.

Photo courtesy of National Cave and Karst Research InstituteNovember 14, 2008 Page 4

Artesia brine well collapse morning, July 22, 2008 Photo courtesy of National Cave and Karst Research Institute

#30#

The Energy, Minerals and Natural Resources Department provides resource protection and renewable energy resource development services to the public and other state agencies.

Oil Conservation Division

1220 South St. Francis Drive ▪ Santa Fe, New Mexico 87505 Phone (505) 476-3440 ▪ Fax (505) 476-3462 ▪ www.emnrd.state.nm.us/OCDBrine Well Collapse Evaluation Report June 18, 2009

P age 11 

# APPENDIX 2

OC D MEETING AGENDA

AND WORK GROUP MEMBERS

### (Updated: 3/ 31/2009)

New Mexico Oil Conservation Division
UIC Class III Brine Well Evaluation Work Group

Porter Hall (Wendell Chino Bldg.)
1220 South St. Francis Drive, Santa Fe, NM 87505

March 26

- 27, 2009 (8:00 a.m. – 5:00 p.m.)

FINAL AGENDA



### Thursday , March 26, 2009

8:00 - 8:10 a.m. Welcoming r emarks : OCD Director Mark Fesmire or EMNRD
Secretary Joanna Prukop

.

8: 10 - 8:15 a.m. NMOCD i ntroduction : OCD Environmental Bureau Jim Griswold

states p urpose and goal of the work group.

8: 1 5 - 8: 30 a.m. Wor k g roup m embers i ntroduction : Members b riefly state

interest in serving on the work group ; and what he/she hope s to bring to the table.

8: 3 0 - 8:50 a.m. Shallow g eology & h ydrology of the Delaware/Permian Basin

in SE NM (Glenn von Gonten - OCD/ Richard Beauheim - SNL )

8: 50 - 9:0 5 a.m. A history of brine well operation & regulation in NM (Jim

Griswold - OCD)

9:05 - 10:00 a.m. Recent brine well collapses in NM & c ase studies (Jim

Griswold - OCD) Jims Water Service SE of Artesia on 7/16/2008 &

Loco Hills Dis posal E of Artesia on 11/3/2008

10:00 – 10:15 a.m. Break

10:15 – 10:3 5 a.m. Federal discussion (Ray Leissner - EPA )

10:3 5– 11: 15 a.m. Potential impacts to the WIPP Site? (Chuck Byrum - EPA &

Russ Patterson - DOE) Slide show of subsurface facilities relativ eto the oil field activities in the region; associated regulatory
requirements; and any other relevant issues.

11:15 – 11:45 a.m. Sonar Testing in Bedded Salt (Jason McCartney - SOCON
Sonar Well Services, Inc.)

11: 45 - Noon Developing a r esearch p lan t o e valuate e xisting b rine w ells &

to a ssess p otential r isk of c ollapse ( George Veni (NCKRI)

Noon – 1:00 p.m. Lunch (on your own)

1:00 – 1:3 0 p.m. Potash Well Siting, Construction & Operation (Richard Miller Intrepid Potash)

1:30 – 2: 0 0 p. m. Class II Hy d rocarbon Storage Well s- Western Refining L.P. Siting, construction & operation. Should these types of wells be

considered similar to Class III brine wells for potential colla pse?

2:00 – 3:00 p.m. Current OCD discharge permit requirements for Class II HC
Storage & Class III Brine Wells (Carl Chavez - OCD)
Display of OCD discharge permits and current requirements

3:00 – 3:15 a.m. Break

3:15 – 4:00 p.m. Brine well strategy/talking points (Carl Chavez - OCD)
Brainstorming

4:00 – 4:30 p.m. Miscellaneou s (Work Group)

4:30 – 5:00 p.m. Work Group Summary

### Friday, March 27, 2009

8:00 – 9:00 a.m. Siting Criteria (Work Group)

Proximity of populated development
Proximity of public roadways
Proximity of utilities including water supply wells

Oil & gas production
Potash mining (Hugh Harvey)

Other brine wells/caverns

Easements WIPP (Chuck Byrum)

Other infrastructure
Disposition of protectable ground water
Thickness of salt ore layer
Interbedding

9:00 – 9:3 0 a.m. Construction Characteristics ( Loren Molleur )

Re

- entry of former oil and gas wells
Thickness and lithology of overburden
Borehole geophysical logging

Well Materials Casing penetration into salt
Cementation of casing

Multi

- well operation

9: 30 – 10:00 a.m. Operations ( Mark Cartwright )

Tubing placement

On

- site pumping of fresh water
Modes of fresh water injection/brine extraction
Production pressures and rates
Operational lifetime
Closure including possible backfilling of cavern with solid materials

10:00 – 10:15 a.m. Break

10:15 – 10: 45 a.m. Monitoring (Work Group)

Subsidence monitoring
Mechanical integrity testing of casing and cavern (Wayne Price)

Surface assessment
Geophysical methods for determination of cavern size and geometry (Andreas
Reitze)
Groundwater quality monitoring

10: 45 – 11 : 15 a.m. Plug & Abandonment (Work Group)

Fill brine cavern w/ brine water & cement casing to surface11:15 – Noon Collapse Response (James Rutley - BLM)

Pre

- positioning of emergency materials
Immediate public safety
Longer term restriction of access
Prope rty damage (Thaddeus Kostrubala)
Groundwater contamination (Lewis Land)
Backfilling

Noon – 1:00 p.m. Lunch (on your own)

1:00 – 1:30 p.m. NM Class III Brine Well Regulations (Carl Chavez - OCD)

WQCC 20.6.2 NMAC

1:30 – 2:00 p.m. TX Class III Brine Well Regulations (Jim Griswold - OCD)
Chapter 3: Oil a nd Gas Division, Rule 3.81

2:30 – 3:00 p.m. KS Class III Brine Well Draft Regulations (Jim Griswold - OCD)

Article 46 - Underground Injection Control Regulations

3:00 – 3:15 p.m. Break

3:15 – 3:45 p.m

. Suggestions for NM Regulations or Guidelines based on

WQCC 20.6.2 NMAC ( Work Group )

3:45 – 4 :00 p.m. Work Group Members from Industry w/ Work Group

4: 00 – 4: 15 p.m. Work Group Members from the Federal Government w/ Work
Group

4 :15 – 4: 3 0 p.m. Work Gro up Members from the State of NM w/ Work Group

4:30 – 5:00 p.m. Work Group Summary & Thank you
(Work Group members who provided e

- mail addresses will be
included on any draft electronic draft documents, regulations,

report, etc. th at may follow from our m eeting.Work Group Biographies

Richard Beauheim (WIPP): Richard Beauheim is a Distinguished Member of Technical Staff at Sandia National Laboratories, and is currently Lead Hydrologist for the Waste Isolation Pilot Plant (WIPP) in Carlsbad, New Mexico. From 1984 to 1996, he was the Principal Investigator for the hydrogeological characterization of the WIPP site. He is now coordinating and directing hydrogeologic field studies and hydrology

- related performance assessment activities related to the r ecertification of WIPP. He is an expert on the geology and hydrology of the Delaware Basin, and has several decades’ experience with drilling and testing of wells in that area.

Chuck Byrum (EPA): is an environmental scientist with the EPA Office of Radi ation

and Indoor Air in Washington, DC

. He has been involved with WIPP performance
assessment in multiple capacities, including waste characterization and WIPP technical
lead as well as conducting other general technical review s of WIPP and regulation s

de velopment since 1993. Since the WIPP certification decisio n, he has been the
Technical Lead working on WIPP performance assessment, WIPP site continued
compliance of Subpart A

, and monitoring programs and is leading the effort to prepare

for the second re

- certification in 2009. Before coming to EPA he worked for almost
fifteen years in oil exploration, first will Shell Oil and finally with Meridian Oil.

Carl Chavez (NMOCD): is an Environmental Engineer (August 2005 to present) with the Environmental Bureau, Oil Conservation Division, Energy, Mineral & Natural
Resources Department in Santa Fe, New Mexico. He graduated from New Mexico State University with a bachelor’s degree in Geological Sciences and a minor i n Economics in

1986. He attended the Califor nia State Polytechnic University in Pomona, California, in

the Mechanical Engineering

- Petroleum Option Program. He has been the permit writer
and inspector for oil & gas refineries in New Mexico. He led the NMOCD ’s primacy

initiative for the NPDES and sto rm water program

. He served as the NMOCD ’s Quality
Assurance/Quality Control Officer and as inspector f or the NMOCD UIC Program in

New Mexico. He has provided technical assistance and testified as an expert witness at

NMOCD environmental regulatory hearin gs

.

He worked as an Environmental Scientist/Specialist (March 2004 to August 2005) for
the New Mexico Environment Department, Hazardous Wa s te Bureau, Waste Isolation Pilot Plant (WIPP) Group in Santa Fe, New Mexico. He evaluated hydrogeologic and/or

gro und water detection monitoring reports from WIPP for compliance with the WIPP

Permit; EPA ground water monitoring requirements ; and RCRA hazardous waste
regulations. He lead comprehensive groundwater monitoring evaluations of field
environmental sampling p rocedures and methods; five

- year regulatory review of the

WIPP Permit and ground water monitoring program; assessments, investigations and
cleanup actions; evaluations of air ventilation monitoring reports, head space gassampling of waste drums and other technical permit related projects. He participated in

RCRA waste c haracterization audits /inspections with the USEPA and Carlsbad
Technical Assistance Group at hazar dous waste generator facilities across the U.S. to
confirm compliance with hazardous waste p rovisions of the WIPP Permit, i.e., Waste Analysis Plan, Waste Acceptance Criteria, etc.

He spent from 1989 to 2004 working for the Michigan Department of Natural

Resources

- DNR (which later became the Department of Environmental Quality

- DEQ) in
Lansing, Michigan

.

Mike Cochran (Chief Geologist for Kansas Department of Health and
Environment): has been instrumental and provided information regarding the state of

Kansas' issues with sodium brine well failures and remediation efforts.

Daniel Ferguson (DOE): Oversee s the activities related to the hydrology program at the Waste Isolation Pilot Plant (WIPP) Site. Provide s technical oversight of the hydrology program to ensure the integration and coordination of work activities of the management and operatin g contractor and Sandia National Laboratories.

Jim Griswold (NMOCD):

David Herrell (BLM): I was born in Carlsbad, NM in 1955. Graduated from Carlsbad High School in 1973

, and New Mexico State University, with a Bachelor of Geologic al
Science, in 1980

. Served in the United States Army and attended Officer's Candidate

School where he received a commission as a 2nd Lieutenant. He s erved in various staff and command positions and retired as a Lieutenant Colonel after 26 years of

service. After retireme nt from the military, he was employed by the State of New
Mexico as a patrolman with the New Mexico State Police, where he served for 8 years.
While in the New Mexico State Police, he served as an Emergency Response Officer
(ERO) and handled numerous hazar dous materials s pills and other incidents. He is
now employed by the Bureau of Land Management as the Hazardous Materials Specialist and Safety Officer for the Carlsbad Field Office. I was involved in the Incident

Command Center at both of the r ecent brine well collapses in southeast New Mexico.

He has an understanding of the basic geology of the area and the processes
associated with these collapses. Courtney Herrick (SNL): I am in the technical lead for the geotechnical / rock
mechanics group down here at Sandia National Laboratories Carlsbad Field Office, 4100 National Parks Highway, Carlsbad, NM. I have been working here at WIPP for 4
years. We are presently poking around with some rock mechanics models.Dave Hughes (Washington Regulatory and Environmental Science - WRES): has
an extensive knowledge of the Delaware Basin of New Mexico and West Texas and maintains the Geographic Information System for the Department of Energy’s Waste
Isolation Pilot Plant. Also attached is the background information for Mr. Russ Patterson

with the DOE Carlsbad Field Office.

Brad Jones: ( NMOCD) : is an environmental engineer with the Oil Conservation
Division’s Environmental Bureau since July 2006. My primary duties include the review
of permit applications, permit modifications, and closure plans under Part 17 (the pit
rule) and Part 36 (the surface waste management rule); review of ground water and hydrostatic test discharge permit applications, modifications, and renewals under the Oil
and Gas Act and Water Quality Control Commission regulations; and training and
outreach on Part 17, Part 36 and discharge permits. Currently, my focus has been in
the creation of rules and policies and training staff, operators, consultants, and the
public of the implementation of n ew environmental rules. He hold s a Bachelor of Science degree in Environmental Health Science from the University of Georgia. He

has over 10 years of environmental regulatory experience, mainly as a regulator but
also some in industry.

Prior to joining the Oil Conservation Division (OCD) he worked as an Environmental Specialist in the Solid Waste Bureau – Permit Section of the New Mexico Environment
Department for approximately four years. He was involved in the permitting of landf ills,

solid waste fa cilities. He oversaw ground water monitoring programs and investigations

for th ose facilities. Prior to that he worked as an Environmental Specialist I in the

Flori da Department of Health, where he designed, permitted, inspected and approved

on

- site sewage systems. For a s hort period, He worked as an Environmental Scientist
for Redemption Environmental, Inc., a small consultin g firm in Tampa, Florida where he
performed site investigations, remediation programs, and cleanups of underground
storage tank contamination sites

. He worked as an Environmental Health Specialist II for the Island County Health Department in Coupeville, Washington, under a state
granted funded position that involved overseeing solid waste programs, voluntary
cleanup programs, investigations of contaminated sites, and the cleanup of meth lab

sites. He worked as an Environmental Specialist I at the Florida Department of Health
where I oversaw the implementation of several environmental programs.

Ross Kirkes (DOE) : Mr. Kirkes provid es environmental consulting services, primarily
to DOE contractors and laboratories. He supports the development of compliance
demonstrations and applications and he has provided significant input to the
implementation of programs to ensure ongoing compliance with the provisions of
environmental regulatory approvals. Mr. Kirkes has over 15 years negotiatingcompliance issues with various environmental regulatory agencies for the Waste
Isolation Pilot Plant (WIPP) near Carlsbad, New Mexico. Mr. Kirkes was instrumental in
the development and production of the demonstration of compliance that led to the U.S.
Environmental Protection Agency (EPA) certification of the WIPP. Mr. Kirkes combines
his regulatory experience and knowledge of the regional petroleum industry to ensure
that future human activities such as petroleum and potash exploitation are accurately
represented in WIPP performance demonstrations and assessments.

Ray Leissner (EPA) : G raduated from Sam Houston State University with a B. S. in Ag

Bus iness in 1976. Ray entered the field of underground injection control in 1984 working for the Railroad Commission (RRC) of Texas in Austin while attending class at the University of Texas. Ray graduated with a B. S. degree in Petroleum Engineering

from t he University in 1986 and worked full time at the RRC until 1988 wherein he accepted a position with the Environmental Protection Agency, Region 6, Dallas. Initially working in the Region's direct implementation UIC program for the Osage

Mineral Reserve in Osage county Oklahoma, Ray is now senior program manager in the Region's State UIC oversight program. This position involves him with all of the state UIC programs in the Region and he directly oversees the RRC.

Lewis Land (NCKRI & New Mexico Tech.) : Is a hydrologist with the New Mexico Bureau of Geology and Mineral Resources, and the National Cave and Karst Research

I nstitute in Carlsbad, NM. He has an extensive background and publication record in

sinkhole research . He r ecently completed a manuscript documenting geophysical
records of the Loco Hills brine well collapse, which will be published later this spring in a conference proceedings volume of the Symposium on the Application of Geophysics to
Engineering and Environmental Problems. He has been conducting aerial surveys of

the t wo collapsed sinkholes and has accumulated a large number of photographs
displaying their growth over the past few months.

Richard Miller (Intrepid Potash): Has worked for Intrepid Potash in Denver with Hugh
Harvey since 2001. His duties include assisting Hugh with design, permitting, construction, and operation of 12 Class III injection wells in Moab that are used for injection/extraction of solution mining fluids.

Loren R. Molleur (Key): Grew up in Tatum, New Mexico. Graduated from high school in 1966. Attended New Mexico Junior College in Hobbs, New Mexico in 1968

- 1969. Worked for Amoco Production Company from 1970

- 81. Started with Amoco in Artesia,

New Mexic o in 1970 working in the Empire Abo Gas Plant. Transferred to Hobbs, New
Mexico in 1973 and worked for the production group until transferring to Andrews,
Texas in 1976. While in Andrews, I worked with the production group as well as the
drilling and work over group. I retired from Amoco in January of 1981 and went int o the
trucking business. Was c o- owner of L & L Tru cking Company from 1981 until it was soldin October of 1997 Work for Key Energy managing their trucking business in the
Permian Basin and New Mexico for the past 7

- 8 years.

Russ Patterson (DOE): Is the Compliance Certification Manager and works closely
with the Environmental Protection Agency and is very knowledgeable about the geology
of the Delaware Basin and also EPA’s Environmental Regulations.

Wayne Price (NMOCD): I s the Environmental Bureau Chief of the Oil Conservation

Division , Energy, Minerals & Natural Resources Department in Santa Fe, New Mexico
(1993

- present) . He earned a Bachelor of Science Degree in Electrical Engineering from
New Mexico State University in 1969. He worked in the NMO CD Hobbs District office
as an environmental eng ineer, witnessing and evaluating mechanical integrity tests (MIT’s) for EPA Class II and III wells, maintained files for discharge permits, processed

C- 141 spill reports, and C

- 138 waste management approvals. He inspected NMOCD

regulated facilities, collected soil and water samples, performed well logging, processed
APDs, analyzed lab reports, reviewed and evaluated remediation plans, and provided
training to industry on NMOCD rules, regulations and guideline s. As the Environmental
Bureau Chief, he has managed bureau staff in their duties : o versight, inspection, and permitting of the state’s oil refineries, crude oil pump stations, EPA UIC Class I (oilfield

exempt, non

- exempt non

- hazardous waste disposal wel l)

, II (hydrocarbon storage), III (brine well), and V (geothermal well), gas plants, gas compressor stations, oilfield
service companies, and the management of over 400 active remediation and abatement
plans throughout the state. He has served as a techni cal expert witness concerning
environmental and regulatory issues including evaluation and use of vadose zone and
ground water modeling. He has served in the New Mexico Water Quality Control
Commission that preside s over the state’s wat er rules and regul ations

.

He worked for Unichem International from 1983 to 1993 where he was m anager of
engineering and environmental projects for Unichem’s domestic operations. He
provided project oversight, maintained cost controls, prepared budgets and supervised

techn ical employees for engineering and environmental operations throughout the continental United States. Projects included the design, construction, start

- up of
chemical plants, abatement of contaminated sites, and environmental permitting . He
implemented en vironmental best management practices and waste management
policies for Unich em’s company

- wide operations. He also created a permit tracking system for all ground water discharge, air quality, NPDES, storm water , SPCC, RCRA,
and local permits . He also worked in the oil field as a roustabout and drilli ng rig
roughneck during summers when he was not attending college

.

James Rutley (BLM): I was born in Detroit, Michigan in 1964. G raduated from Roswell

Goddard High School in 1983 and New Mexico State University in 1989 with a Bac helorof Science in Geology. W orked two years in the Permian Basin as a mud logger before beginning a career in potash. After 15 years, resigned from Mosaic as a Surface

Production General Foreman to pursue work at the BLM. Works as a BLM geologist in the Carlsbad Field Office and am responsible for performing potash mine inspections

a nd sodium site inspections. Wrote mineral reports and permit APD's in the potash

basin. After the first sink hole on Hagerman Cutoff, Dave Herrell and I began
researching all federal sodium wells both abandoned and current - mapping their
relationship to municipal and transportation systems. I dentified several potential wells
that could have catastrophic consequences because of their proximity to both s ystems.

Dan Snow (Lotus L.L.C.): sdfc

George Veni (NCKRI): is the Executive Director of the National Cave and Karst Research Institute (NCKRI) and an internationally recognized hydrogeologist specializing in caves

and karst terrains. He received his Master’s degree from Western Kentucky University in
1985 and his Ph.D. from the Pennsylvania State University in 1994. Prior to NCKRI, he owned and served as principal investigator of George Veni and Associates for more than
20 years. Much of his work has been in Texas, but he has also conducted extensive karst research throughout the United States and in several other countries. He has served as
the Executive Secretary of the National Speleological Society’s Section of Cave Geology and Geography for 11 years and President of the Texas Speleological Survey for 13
years, and has served as a member of the governing board of the International Union of Speleology since 2002 and as Chairman of the 15 th International Congress of Speleology.
He serves as a doctoral committee advisor for geological and biological dissertations at
The University of Texas and teaches karst geoscience courses as an adjunct professor for
Western Kentucky University. Three cave

- dwelling species have been named in his honor.
He has published and presented over 170 papers, including four books, on hydrogeology,
biology, and environmental management in karst terrains.

Glenn von Gonten (NMOCD): is a Senior Hydrologist with the Environmental Bureau,

New Mexico Oil Conservation Division

, Energy , Minerals and Natural Resources Department. He has a B.S. in Geology from Texas A&M University and a M.S. in Geology from the University of Texas at Arlington. He has more than 30 years of experience as a geologist and has worked as a n environmental regulator responsible for the investigation and remediation of contamination sites for the past 14 years. His responsibilities with the NMOCD include: supervising, reviewing, and approving professional hydrogeologic investigative work plans and reports to de termine actual or potential threats to ground water from the past, current or proposed activities of oil and gas industry; supervising, reviewing, and approving remediation and abatement plans and reports; and, performing professional hydrologic, geologic, and engineering work

related to the NMOCD 's environmental protection efforts under the Oil and Gas Act and

NMOCD rules and regulations.From 1999 to 2005, he supervised staff in permitting and overseeing corrective action at

RCRA regulate d U.S. Depart ment of Defense (DOD) installations and sites in the Hazardous Waste Bureau of the New Mexico Environment Department. From 1993 to 1999, he issued RCRA permits with corrective action requirements in the Virginia Department of Environmental Quality. From 1977 to 1991, he worked in the oil and gas industry as a geologist.

Veronica Waldram was raised in Carlsbad, NM. E arned a Bachelor of Science degree in Environmental Management from College of the Southwest (now named, University
of the Southwest). Cu rrently a Regulatory Compliance Specialist for Navarro Research
and Engineering. Navarro is a technical assistance contractor to the Department of

Ener gy, Carlsbad Field Office. Review the managing and operating contractor’s
regulatory reports and documents for environmental compliance. Before Navarro,

worked as a subcontractor to Los Alamos National La boratory

- Carlsbad Operations.

W as a member of the Site Generator Interface Team that a ssisted the National TRU Program with their activities at 23 DOE facilities throughout the United States. We
assisted in certifying the characterization, treatment, packaging and transportatio n programs of TRU waste destined for disposal at WIPP.

Gary Wallace (C RI - Hobbs, NM): sdsdWork Group:

James_Rutley@blm.gov byrum.charles@epa.gov Leissner.Ray@epamail.epa.gov hugh.harvey@intrepidpotash.com lmolleur@keyenergy.com gveni@nckri.org brad.a.jones@state.nm.us carlj.chavez@state.nm.us
Glenn.vonGonten@state.nm.us jim.griswold@state.nm.us
tkostrubala@slo.state.nm.us balch@prrc.nmt.edu leo.vansambeek@respec.com rlbeauh@sandia.gov grkirke@sandia.gov
reitze@socon.com mcartwright@unitedbrine.com dave.hughes@wipp.ws
Allen.Hains@wnr.com ken.parker@wnr.com
Ron.Weaver@wnr.com Veronica.Waldram@wipp.ws RichardM@intrepidpotash.com cgherri@sandia.gov
dwsnow@lotusllc.com lyn.sockwell@basicenergyservices.com dwpowers@evaporites.com
daniel.sanchez@state.nm.usInternet Work Group:

jhand@kdhe.state.ks.us khoeffner@kdheks.gov mcochran@kdheks.gov jvoigt@solutionmining.org douglas.johnson@rrc.state.tx.us joeb@dnr.state.la.us psbriggs@gw.dec.state.ny.us david_herrell@blm.gov lland@gis.nmt.edu

d ouglas.johnson@rrc.state.tx.us gary.wallace@crihobbs.com john.hall@state.nm.us
bill.olson@state.nm.us kdavis@subsurfacegroup.com Overbay.Michael@epamail.epa.gov eric@lonquist.comBrine Well Collapse Evaluation Report June 18, 2009

P age 12 

# FIGURESBrine Well Collapse Evaluation Report June 18 , 2009

Page 13 Figure 1: Jim’s Water Services brine well (BW-005) on August 26, 2008. Photo courtesy of the National Cave and Karst Research Institute.Brine Well Collapse Evaluation Report June 18 , 2009

Page 14 Figure 2: Loco Hill’s Water Disposal Company (BW-021) on November 18, 2008. Photo courtesy of the National Cave and Karst Research Institute.Brine Well Collapse Evaluation Report June 18 , 2009

Page 15 Figure 3: Brine Wells in New Mexico sorted by depth to top of salt and length of operations.Brine Well Collapse Evaluation Report June 18 , 2009

Page 16 Figure 4: Normal vs. Reverse Circulation.