re: wypdes permit renewal application, wy0038351 – mustang

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October 03, 2011 Mr. Jason Thomas Wyoming Department of Environmental Quality - Water Quality Division 122 W. 25 th Street, Herschler Bldg. 4-W Cheyenne, WY 82002 RE: WYPDES Permit Renewal Application, WY0038351 – Mustang Federal Storm Cat Energy (USA) Operating Corporation Mr. Thomas, Storm Cat Energy (USA) Operating Corporation (Storm Cat) hereby submits the enclosed WYPDES renewal application for its WY0038351 Mustang Federal coal bed natural gas (CBNG) facility. This application is being renewed as an Option 2 CBNG facility. Enclosed for your consideration are the following: WYPDES Renewal Application for CBNG Water Discharge Tables 1A and 1B: Outfall Information Table 2: Well Information Table 3: Reservoir Information Table 4: Bonding Information Flow Data Table Representative Water Quality Compliance Evaluation and Exceedance Summary Table Permit Application Map Under this permit, Storm Cat will discharge CBNG produced water from up to fifteen (15) production wells, to be completed in the Cook and Wall coal seams, through two (2) outfalls that will discharge into two (2) on-channel impoundments. CBNG effluent will be contained within the lowermost reservoir (Brush Hog) during dry operating conditions. CBNG water is not expected to overflow the lowermost reservoir with the exception of a precipitation event. For your convenience, an electronic version of this application is submitted on the enclosed CD. If you have any questions, please contact me at (307) 620-0032 or [email protected]. Sincerely, InterTech Environmental & Engineering, LLC Sara Mason Environmental Specialist /bkb Enclosures cc: Storm Cat Energy (USA) Operating Corporation – file InterTech Environmental & Engineering, LLC – file

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Page 1: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

October 03, 2011 Mr. Jason Thomas Wyoming Department of Environmental Quality - Water Quality Division 122 W. 25th Street, Herschler Bldg. 4-W Cheyenne, WY 82002 RE: WYPDES Permit Renewal Application, WY0038351 – Mustang Federal Storm Cat Energy (USA) Operating Corporation Mr. Thomas, Storm Cat Energy (USA) Operating Corporation (Storm Cat) hereby submits the enclosed WYPDES renewal application for its WY0038351 Mustang Federal coal bed natural gas (CBNG) facility. This application is being renewed as an Option 2 CBNG facility. Enclosed for your consideration are the following:

• WYPDES Renewal Application for CBNG Water Discharge • Tables 1A and 1B: Outfall Information • Table 2: Well Information • Table 3: Reservoir Information • Table 4: Bonding Information • Flow Data Table • Representative Water Quality • Compliance Evaluation and Exceedance Summary Table • Permit Application Map

Under this permit, Storm Cat will discharge CBNG produced water from up to fifteen (15) production wells, to be completed in the Cook and Wall coal seams, through two (2) outfalls that will discharge into two (2) on-channel impoundments. CBNG effluent will be contained within the lowermost reservoir (Brush Hog) during dry operating conditions. CBNG water is not expected to overflow the lowermost reservoir with the exception of a precipitation event. For your convenience, an electronic version of this application is submitted on the enclosed CD. If you have any questions, please contact me at (307) 620-0032 or [email protected]. Sincerely, InterTech Environmental & Engineering, LLC

Sara Mason Environmental Specialist /bkb Enclosures cc: Storm Cat Energy (USA) Operating Corporation – file InterTech Environmental & Engineering, LLC – file

Page 2: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

SUBMIT ONE HARD COPY AND ONE ELECTRONIC COPY

WYOMING POLLUTANT DISCHARGE ELIMINATION SYSTEM

APPLICATION FOR PERMIT TO SURFACE DISCHARGE PRODUCED WATER FROM COAL BED METHANE NEW DISCHARGES, RENEWALS, OR MAJOR

MODIFICATIONS

Revised: 06-22-06 Revised form last updated: 9-03-08 PLEASE PRINT OR TYPE (Submission of illegible materials will result in return of the application to the applicant) 1. Check the box corresponding to the type of application being applied for: New CBM permit

CBM permit renewal Permit number: WY0038351 Expiration Date: 3/31/2012

CBM permit major modification Permit number: Expiration Date: 2. Identify the river basin in which the discharge will occur:

Belle Fourche Cheyenne Powder Little Powder Tongue

Other (identify) _________________________________________

3. Select permit option(s): if more than one option is selected, the applicant must describe which option applies to which outfall.

Option 1A – Discharge is contained within an off-channel pit (class 4C) capable of containing all effluent plus up to a 50-year / 24-hour storm event. For existing permits only, Option 1A also applies to discharges that are contained within a headwater reservoir situated within a class 4 channel and capable of containing all effluent plus up to a 50-year/24-hour storm event, provided that the discharge was permitted for 50-year/24-hour containment prior to June 24th, 2008.

Option 1B – Discharge is contained within a natural closed basin or playa lake (class 3A). For existing permits only, Option 1B also applies to discharges that are contained within a headwater reservoir situated within a class 3 channel and capable of containing all effluent plus up to a 50-year/24-hour storm event, provided that the discharge was permitted for 50-year/24 hour storm containment prior to June 24th, 2008. Option 1B headwater reservoirs shall not be located within alluvial deposits or the floodplain of any perennial, intermittent or ephemeral stream. Option 1B headwater reservoirs less than 50 acre feet in capacity shall not be located within 500 feet of such features; reservoirs greater than 50 acre feet in capacity shall not be located within ¼ mile (1320 feet) of such features.

Option 2 – This option includes any on-channel discharge (including discharge into an on-channel reservoir) that does not meet the impoundment requirements specified in options 1A or 1B above. CBNG water is not expected to overflow the lowermost reservoir, Brush Hog, with the exception of a precipitation event. Storm Cat is committed to full containment of produced water within the Brush Hog reservoir during dry operating conditions

4. General Facility Location: Township(s): 54N Range(s): 74W

Immediate Receiving Stream(s): HUC 10 – 1009020209; Powder River - Spotted Horse Creek 5. Name of the facility producing the discharge (this is the facility name that will appear on the WYPDES permit) Mustang Federal

For Agency Use Only

Application Number WY00_______________

Date Received:

__________________

(mo/day/yr)

WYDPES Renewal ApplicationStorm Cat Energy (USA) Operating Corporation

Mustang Federal WY0038351 HUC 10 - 1009020209

October 3, 2011Page 1 of 18

Page 3: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

6. Company, Contact Name, mailing address, e-mail address, and telephone number of the individual or company which owns the facility producing the discharge, and the person (consultant) responsible for permit submission.

Company Contact Name Keith J. Knapstad

Consultant Contact Name Sara Mason

Company Name Storm Cat Energy (USA) Operating Corporation

Company Name InterTech Environmental & Engineering, LLC

Mailing Address 1125 17th Street, Suite 2310

Mailing Address 3821 Beech Street

City, State, and Zip Code Denver, CO 80202

City, State, and Zip Code Laramie, WY 82070

Telephone Number (303) 991-5070

Telephone Number (307) 620-0032

E-Mail Address [email protected]

E-Mail Address [email protected]

7.a. If applying for outfalls under Option 2, are any of the proposed Option 2 outfalls DIRECT DISCHARGES*that

would require the use of assimilative capacity credits for salt and sodium in the Powder River?

YES NO

CBNG water is not expected to overflow the lowermost reservoir, Brush Hog, with the exception of a precipitation event. Storm Cat is committed to full containment of produced water within the Brush Hog reservoir during dry operating conditions.

If “yes”, please complete Table 5.

*DIRECT DISCHARGE means those discharges that are not or are only partially contained within reservoirs. Discharges to reservoirs that only overtop and spill during storm events are not subject to assimilative capacity requirements. Direct discharges that can meet Powder River ambient concentrations for TDS and sodium are also not subject to assimilative capacity requirements.

7.b. If applying for outfalls under Option 2, is it possible that INTENTIONAL RESERVOIR RELEASES* will be requested for any of the reservoirs receiving CBM discharges under this permit?

YES NO

Storm Cat may intentionally release stored water, at a future time, from the lowermost on-channel reservoir Brush Hog, in accordance with the WDEQ reservoir release program to allow additional flexibility with their water management. Storm Cat is also committed to full containment of produced water within the Brush Hog reservoir during dry operating conditions.

*INTENTIONAL RESERVOIR RELEASE means purposeful and intentional reservoir releases (opening a valve or pumping out a reservoir) to provide freeboard within a reservoir. Discharges that occur solely in response to storm events are not considered intentional reservoir releases, and do not require assimilative capacity credits. Intentional reservoir releases are authorized on a case-by-case basis and require WDEQ approval above and beyond a WYPDES surface discharge permit (authorization application form available on WDEQ website).

8. If submitting a major modification or permit renewal, please describe all requested permit modifications (i.e. add 2 outfalls, add 23 wells, move outfall 001 500 feet…):

1. Updated well information per WOGCC records. 2. Updated immediate receiving stream for outfalls 002 and 005; please see Table 1A.

WYDPES Renewal ApplicationStorm Cat Energy (USA) Operating Corporation

Mustang Federal WY0038351 HUC 10 - 1009020209

October 3, 2011Page 2 of 18

Page 4: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

9. Name(s) and mailing address(es) of owner(s) of the surface rights on whose land the discharge occurs (in cases where the land is owned by the state or federal government but surface rights are leased to a private individual, provide lessee’s name and address)

Landowner Name Eric E. & Marie M. Rule Agreement Trusts ATTN: First Interstate Trust Dept. Mailing Address P.O. Box 2007 City, State, and Zip Code Sheridan, WY 82801

10a. Please provide the maximum anticipated discharge rate, in million gallons per day (MGD), from this facility:

The maximum anticipated discharge rate is 0.05 MGD. 10b. Does this facility rely on containment in reservoirs (of any type) as part of the water management strategy?

YES NO

10c. If NO is checked above, please proceed to item #11. If YES is checked above, the permittee is required to conduct an internal evaluation of the ability of the reservoir(s) at this facility to contain discharges. Based on the results of this evaluation, please describe the ability of the reservoir(s) at this facility to contain effluent and surface run-off from precipitation events. If there are multiple reservoirs at this facility which have different reservoir containment capabilities, please describe separately, identifying reservoirs using reservoir name. For example, “Reservoir A will contain all effluent and will only overtop during a storm event of any magnitude; Reservoir B will contain all effluent plus surface run-off from up to the 50 year/24 hour storm event, etc…”:

Based on the results of an internal water balance evaluation, Storm Cat anticipates full containment of CBNG effluent during dry operating conditions. Uppermost reservoir Stallion cascades to lowermost reservoir Brush Hog, which is not expected to overflow with the exception of a precipitation event.

The internal evaluation does NOT need to be submitted to the WYPDES Program as part of this application. By completing item 10b and signing this application, the permittee certifies that the reservoirs at this facility are capable of meeting the containment abilities which have been provided. The WYPDES Program will use the information provided above to determine the appropriate reservoir containment requirements that will be established in the permit. If reservoir containment requirements established in the permit are not met, this may constitute a violation of the permit, which is subject to full enforcement by the WYPDES Program.

11. Attach a description and a clear, legible, detailed topographic map of the discharging facility. Include the

following: a. A legend b. Well locations c. Ponds – Not applicable. There are no ponds associated with this facility. d. Reservoirs e. Stock tanks – Stock tanks are not pertinent to the water management strategy of this facility. f. Discharge points (outfalls) g. Immediate receiving streams h. Water quality monitoring stations i. Irrigation monitoring points j. Location of nearest downstream irrigator k. Section, Township, and Range information l. If proposing to use class 4C off-channel pits (option 1A), include footprint outline of the proposed pits. To

denote setback distance, include a distance marker from closest side of pit to the nearest water feature, floodplain, or stream alluvium. Identify latitude and longitude in decimal degrees (using a minimum of 6 decimal places) for each end point of the setback distance marker. – Off-channel pits are not being used with this facility.

WYDPES Renewal ApplicationStorm Cat Energy (USA) Operating Corporation

Mustang Federal WY0038351 HUC 10 - 1009020209

October 3, 2011Page 3 of 18

Page 5: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

m. If proposing discharge to a headwater reservoir or to a playa lake (option 1B), include footprint outline of the proposed impoundment(s). See page 1 of the application form for option 1B impoundment siting requirements. To denote setback distance from alluvial floodplain areas, include a distance marker from closest side of the impoundment to the nearest floodplain, or stream alluvium. Identify latitude and longitude in decimal degrees (using a minimum of 6 decimal places) for each end point of the setback distance marker. Headwater reservoirs and playa lakes are not being used with this facility.

Please see the attached permit renewal map.

12. Describe the control measures that will be implemented to prevent significant damage to or erosion of the

receiving water channel at the point of discharge. The outfalls have been constructed on topography that gradually slopes towards the receiving channel/impoundment structure. Erosion control such as rip-rap and geotextiles will be used as necessary.

13. Describe the control measures that will be implemented to achieve water quality standards and effluent limits. If

proposing to utilize a treatment process, provide a description of the treatment process.

No active water treatment is planned. Produced CBNG water will be discharged into and contained within on-channel reservoirs. The outfalls will be constructed in a manner that aerates CBNG water to help induce precipitation of some dissolved metals.

14. Outfall locations must be established as part of a preliminary field reconnaissance survey using GPS or

conventional survey equipment and documented in Table 1. Please document the type of equipment used, the expected accuracy of your measurements, and a brief rationale for locating the outfalls at the requested sites below.

The outfalls associated with this renewal have been constructed per the impoundment structure locations and topography. Site coordinates were obtained using a hand-held GPS unit with accuracies ranging from 20 to 60 feet. Outfalls 002 and 005 are represented in their as-built locations.

15. Complete the attached Table 1. Provide all the information requested in the table for each proposed discharge point or monitoring point. If proposing changes (a major modification) to an existing facility, clearly indicate the desired changes on the table. Additional tables may be attached. Use the format provided. Option 2 permits, except those located in the Belle Fourche or Cheyenne River Basins, must include water quality monitoring station locations. Option 1B headwater reservoir discharges (reservoirs other than playa lakes capable of 50 year, 24 hour stormwater runoff containment) must include flow monitoring station locations. Option 1A and 1B permits must include containment unit monitoring station locations. Information related to reservoirs is only required if the facility’s water management plan includes reservoir containment.

Please see attached Tables 1A and 1B: Outfall Information. 16. Complete the attached Table 2. Provide all the information requested in the table for each well associated with

this proposed discharge authorization. If proposing changes (a major modification) to an existing facility, clearly indicate the desired changes on the table. Additional tables may be attached. Use the format provided.

Please see attached Table 2: Well Information. 17. Complete the attached Table 3. Provide all the information requested in the table for each reservoir proposed for

containment of CBM produced water. Specified locations refer to the approximate center of the reservoir. If proposing changes (a major modification) to an existing facility, clearly indicate the desired changes on the table. Additional tables may be attached. Use the format provided. Information related to reservoirs is only required if the facility’s water management plan includes reservoir containment.

Please see attached Table 3: Reservoir Information.

WYDPES Renewal ApplicationStorm Cat Energy (USA) Operating Corporation

Mustang Federal WY0038351 HUC 10 - 1009020209

October 3, 2011Page 4 of 18

Page 6: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

18. Complete the attached Table 4. Provide all information requested in the table related to reservoir bonding requirements for each reservoir proposed for the containment of CBM produced water. If proposing any changes (a major modification) to an existing facility, clearly indicate the desired changes on the table. Additional tables may be attached. Use the format provided. Information related to reservoirs is only required if the facility’s water management plan includes reservoir containment.

Please see attached Table 4: Bonding Information.

19. Provide the results of water analyses for a sample collected from a location representative of the quality of the

water being proposed for discharge for all of the chemical parameters listed in the table below. The sample must be collected from well(s) or outfall(s) within a twenty mile radius of the proposed facility’s location, and from the same coal formation(s) and the same approximate depth(s) as proposed in this application. If filing an application for a permit renewal or modification, the representative sample must be collected from the facility being proposed for renewal or modification. Explain why this sample is representative of the produced water to be discharged.

Please refer to the following sample identification table and corresponding lab analysis attached for

representative water quality. The sample was taken from outfall 005 of WY0038351. Please note that an analytical result for dissolved aluminum is not included because it was not part of the required monitoring when the following sample was collected and analyzed. However, total recoverable aluminum was analyzed and was detected at 218 μg/L. Therefore, it is assumed that this sample is below the dissolved aluminum limit.

SAMPLE ID SAMPLE DATE QQ SEC TWP

(N) RNG (W) COAL SEAMS

DP_WY0038351_005_ET50 1/10/2007 SWNE 5 54 74 Cook, Wall

Samples from co-mingled coal seams are acceptable as long as the sample(s) meet the following criteria: A. all of the coal seams being proposed for development are represented in the co-mingled sample, with no

contribution from coal seams not being proposed for development at the new facility. B. the ratio of each coal seam’s contribution is approximately the same in the sample and the proposed

development, C. documentation is provided to verify the criteria listed in A. and B.

The analyses must be conducted in accordance with approved EPA test procedures (40 CFR Part 136). Include

a signed copy of your lab report that includes the following: a. detection limits b. results of each of the chemical parameters at the chemical state given below c. quarter/quarter, section, township and range of the sample collection location d. Time and date of sample collection e. Time and date of analysis for each parameter f. Analyst’s initials for each parameter g. Detection limit for each parameter as achieved by the laboratory h. WYPDES permit number and outfall number, where the sample was collected. i. Origin of produced water (coal seam and legal location of sample collection location)

If more than one coal seam is being proposed for development, the permittee must submit a lab analysis and complete information characterizing water quality from each coal seam being proposed for development. If the permittee is proposing to include discharges from a coal seam not previously developed at this facility, the permittee must submit a lab analysis and complete information characterizing water quality from the new coal seam being proposed for development. A mixing analysis may be required if the representative water quality analysis from the new coal seam indicates that the inclusion of the new effluent source may result in degradation of existing effluent quality. Analyses must be provided in the units listed below.

Parameter* (See notes following the table on chemical states)

Required Detection Limits and Required Units

Alkalinity, Total 1 mg/l as CaCO3

WYDPES Renewal ApplicationStorm Cat Energy (USA) Operating Corporation

Mustang Federal WY0038351 HUC 10 - 1009020209

October 3, 2011Page 5 of 18

Page 7: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

Parameter* (See notes following the table on chemical states)

Required Detection Limits and Required Units

Aluminum, Dissolved 50 μg/l Arsenic, Total Recoverable 1 μg/l Barium, Total Recoverable 100 μg/l Bicarbonate 10 mg/l Cadmium, Dissolved 5 μg/l Calcium, Dissolved 50 μg/l, report as mg/l Chlorides 5 mg/l Copper, Dissolved 10 μg/l Dissolved Solids, Total 5 mg/l Fluoride, Dissolved 100 µg/l Hardness, Total 10 mg/l as CaCO3

Iron, Dissolved 50 μg/l Lead, Dissolved 2 μg/l Magnesium, Dissolved 100 μg/l, report as mg/l Manganese, Dissolved 50 μg/l Mercury, Dissolved 1 μg/l pH to 0.1 pH unit Radium 226, Total Recoverable 0.2 pCi/l

Radium 228, Total Recoverable** 0.2 pCi/l

Selenium, Total Recoverable 5 μg/l Sodium Adsorption Ratio Calculated as unadjusted ratio Sodium, Dissolved 100 μg/l, report as mg/l Specific Conductance 5 micromhos/cm Sulfates 10 mg/l Zinc, Dissolved 50 μg/l

*Discharges into drainages other than the Powder River geologic basin may require analysis of additional parameters, please contact the WDEQ for a separate list.

**This parameter is only required for those discharges located within one stream mile of a class 2 water.

20. For new facilities, provide the expected (estimated) flow volume from each well in gallons per day, and provide the rationale behind the flow volume estimate. For existing facilities, provide actual flow data from all wells within the last six months.

Flow: 0.048 MGD

Rationale: Maximum actual flow from January to June 2011. Please see the attached flow data table for details.

21. For applications for new facilities, are any of the required chemical constituents in the laboratory analysis present in concentrations above Wyoming Water Quality Standards?

YES NO Not applicable. This is an existing facility.

If the answer to question # 21 is yes, answer 21.a. – 21.b below. If no, proceed to question 23.

a. Which constituents?

b. Has this constituent been addressed in the response to question 13?

WYDPES Renewal ApplicationStorm Cat Energy (USA) Operating Corporation

Mustang Federal WY0038351 HUC 10 - 1009020209

October 3, 2011Page 6 of 18

Page 8: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

22. For applications for existing facilities, has the facility ever exceeded permit limits or water quality standards? If the facility has never discharged or has not yet been constructed, please indicate below.

YES NO

If the answer to question 22 is yes, answer 22.a. – 22.c. If no, proceed to question 23.

a. Which constituents? Sodium Adsorption Ration (SAR) at ICP2.

b. Has the exceedance been addressed? Yes

c. Describe how the exceedance was addressed. Please see the attached Compliance Evaluation and Exceedance Summary Table for details.

23. Is there active irrigation in the drainage downstream of the discharge? (Please note that this response includes both artificially and naturally irrigated bottomlands as defined in the Draft Agricultural Use Protection Policy for the interpretation and implementation of Chapter 1, Section 20 of the Wyoming Water Quality Rules and Regulations ).

YES NO

Storm Cat acknowledges the presence of irrigation downstream from this CBNG facility. Please see the following report for details: “Section 20 Tributary Evaluation Spotted Horse Creek, North of Highway 14/16, Campbell County, Wyoming; Applied Hydrology Associates, Inc., September 20, 2000” submitted with the original application for WYPDES permit WY0038377 as well as the “Section 20 Compliance Demonstration, Spotted Horse Creek, Campbell County, Wyoming; Norwest Applied Hydrology and BKS Environmental Associates, Inc., August 14, 2006,” submitted with the renewal application for WYPDES permit WY0038377.

If yes, at a minimum, the WYPDES Program requires submission of the following information:

1. Location(s) of irrigation diversions and/or sub-irrigated acreage; 2. Type(s) of Crops grown under irrigation; 3. Description of Irrigation Practices 4. A topographic map showing irrigated acreage, any structures, ownership of irrigated acreage. In addition to the minimum information described above, the WYPDES Program may require additional information should the permittee request site-specific effluent limits protective of irrigation uses. Contact the WYPDES Program for more information regarding requirements for site-specific SAR, TDS, and EC limits.

24. Provide name(s) and address(es) for all downstream irrigators between the outfalls and the mainstem.

Irrigator Name Robert W. Creswell

Irrigator Name William F. and Marjorie E. West

Mailing Address 5802 North 15th Street

Mailing Address 628 SA Road

City, State, and Zip Code Arlington, VA 22205

City, State, and Zip Code Arvada, WY 82831

25. Provide a listing of all active permits or construction approvals received or applied for by the applicant for the

site described in this permit application in accordance with Chapter 2, Section 5.T. of the Wyoming Water Quality Rules and Regulations.

• Please see attached Table 2 for API numbers. • Please see attached Table 3 for WSEO numbers. • Federal POD – Mustang II.

WYDPES Renewal ApplicationStorm Cat Energy (USA) Operating Corporation

Mustang Federal WY0038351 HUC 10 - 1009020209

October 3, 2011Page 7 of 18

Page 9: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

I certify under penalty of law that this document and all attachments were prepared under my direction or supervision in accordance with a system designed to assure that qualified personnel properly gather and evaluate the information submitted. Based on my inquiry of the person or persons who manage the system, or those persons directly responsible for gathering the information, the information submitted is to the best of my knowledge and belief, true, accurate, and complete. I am aware that there are significant penalties for submitting false information, including the possibility of fine and imprisonment for knowing violations. I am requesting 2 outfalls with this application.

Printed Name of Person Signing* Keith J. Knapstad

Title President & Chief Operating Officer

Signature*

Date 10/3/2011

*All permit applications must be signed in accordance with Section 14, Chapter 2 of the Wyoming Water Quality Rules and Regulations, “for” or “by” signatures are not acceptable.

Section 35-11-901 of Wyoming Statutes provides that:

Any person who knowingly makes any false statement, representation, or certification in any application ... shall upon conviction be fined not more than $10,000 or imprisoned for not more than one year, or both. Permittees are required to retain records of all data used to complete permit applications in accordance with Chapter 2, Section 5, Part 5.V.vii of the Wyoming Water Quality Rules and Regulations.

Mail this application to:

WYPDES Permits Section Department of Environmental Quality/WQD 122 West 25th Street, Herschler Building, 4W Cheyenne, WY 82002 Permits issued under the WYDPES Program are subject to an annual $100 permit fee for as long as permit is active. The annual billing cycle is based on the calendar year. There is no need to pay the fee with the application. All permit fees are invoiced after January 1st of each year.

WYDPES Renewal ApplicationStorm Cat Energy (USA) Operating Corporation

Mustang Federal WY0038351 HUC 10 - 1009020209

October 3, 2011Page 8 of 18

Page 10: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

Desired Changes

Discharge Point

(Outfalls) #

ImmediateReceiving

Stream

Mainstem(closest

perennialwater)

Distance to Closest 2AB Channel & Mainstem

(Miles)

Qtr/Qtr Sec Twn(N)

Rng (W)

NAD 83Latitude

NAD 83Longitude County Reservoir

Name and Type

Update Immediate Receiving

Stream From

002 Tributary to Chicken Creek Draw Powder River 26.9 NENW 5 54 74 44.694100 -105.789800 Campbell Brush Hog(Option 2)

Update Immediate Receiving Stream To

002 South Chicken Draw Powder River 26.9 NENW 5 54 74 44.694100 -105.789800 Campbell Brush Hog(Option 2)

Update Immediate Receiving

Stream From

005 Tributary to Chicken Creek Draw Powder River 27.4 SWNE 5 54 74 44.691120 -105.783721 CampbellStallion

Brush Hog(Option 2)

Update Immediate Receiving Stream To

005 Stallion Draw Powder River 27.4 SWNE 5 54 74 44.691120 -105.783721 CampbellStallion

Brush Hog(Option 2)

Desired Changes

Station Name Qtr/Qtr Sec Twn

(N)Rng (W)

NAD 83Latitude

NAD 83Longitude

- DPR SENW 31 57 76 44.879646 -106.059838

- IMP1 SWNE 32 55 74 44.701373 -105.792418

- TRIB1 SWNE 7 56 76 44.846529 -106.049596

- UPR NWSW 7 56 76 44.839513 -106.061889

Please note that not all station types may be applicable for a particular facility. Additional spaces may be added if necessary. Use the format provided. Please denote reservoir type(s) - on channel, off-channel, playa, headwater Option 1B - in the appropriate column. Please note that reservoir information is not required if reservoir containment is not part of the facility's water management plan - for instance, information about existing "incidental" downstream reservoirs is not required. Please use North American Datum 1983 (NAD83) when reporting latitudes and longitudes.

Table 1A: Outfall Information Changes - WY0038351 - Mustange Federal

Station Description Notes regarding water quality monitoring station types

Downstream Mainstem Water Quality Monitoring Station

Upstream Mainstem Water Quality Monitoring Station

Irrigation Monitoring Point Outfalls 002 and 005

Tributary Water Quality Monitoring Station Spotted Horse Tributary

WYDPES Renewal ApplicationStorm Cat Energy (USA) Operating Corporation

Mustang Federal WY0038351 HUC 10 - 1009020209

October 3, 2011Page 9 of 18

Page 11: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

Discharge Point

(Outfalls) #

ImmediateReceiving

Stream

Mainstem(closest

perennialwater)

Distance to Closest 2AB Channel & Mainstem

(Miles)

Qtr/Qtr Sec Twn(N)

Rng (W)

NAD 83Latitude

NAD 83Longitude County Reservoir

Name and Type

002 South Chicken Draw Powder River 26.9 NENW 5 54 74 44.694100 -105.789800 Campbell Brush Hog(Option 2)

005 Stallion Draw Powder River 27.4 SWNE 5 54 74 44.691120 -105.783721 CampbellStallion

Brush Hog(Option 2)

Station Name Qtr/Qtr Sec Twn

(N)Rng (W)

NAD 83Latitude

NAD 83Longitude

DPR SENW 31 57 76 44.879646 -106.059838

IMP1 SWNE 32 55 74 44.701373 -105.792418

TRIB1 SWNE 7 56 76 44.846529 -106.049596

UPR NWSW 7 56 76 44.839513 -106.061889

Please note that not all station types may be applicable for a particular facility. Additional spaces may be added if necessary. Use the format provided. Please denote reservoir type(s) - on channel, off-channel, playa, headwater Option 1B - in the appropriate column. Please note that reservoir information is not required if reservoir containment is not part of the facility's water management plan - for instance, information about existing "incidental" downstream reservoirs is not required.

Table 1B: Outfall Information - WY0038351 - Mustang Federal

Notes regarding water quality monitoring station typesStation Description

Downstream Mainstem Water Quality Monitoring Station

Upstream Mainstem Water Quality Monitoring Station

Irrigation Monitoring Point Outfalls 002 and 005

Tributary Water Quality Monitoring Station Spotted Horse Creek Tributary

WYDPES Renewal ApplicationStorm Cat Energy (USA) Operating Corporation

Mustang Federal WY0038351 HUC 10 - 1009020209

October 3, 2011Page 10 of 18

Page 12: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

Change Well Name API Number Coal Seam WellDepth

Location (QQ, Section,

Township, Range)

Discharges toOutfall #*

- Mustang Federal 12-5-5474WC 49-005-52897 Cook-Wall 1119 SWNW 5-54-74 AWAO- Mustang Federal 21-5-5474WA 49-005-52042 Wall 1033 NENW 5-54-74 AWAO- Mustang Federal 21-5-5474CO 49-005-33583 Cook 700 NENW 5-54-74 AWAO- Mustang Federal 22-5-5474CO 49-005-33584 Cook 750 SENW 5-54-74 AWAO- Mustang Federal 23-5-5474CO 49-005-33576 Cook-Wall 1270 NESW 5-54-74 AWAO- Mustang Federal 31-5-5474CO 49-005-33582 Cook 835 NWNE 5-54-74 AWAO- Mustang Federal 32-5-5474WA 49-005-52040 Wall 1120 SWNE 5-54-74 AWAO- Mustang Federal 32-5-5474CO 49-005-33586 Cook 730 SWNE 5-54-74 AWAO- Mustang Federal 33-5-5474WA 49-005-33588 Wall 775 NWSE 5-54-74 AWAO- Mustang Federal 34-5-5474WC 49-005-33579 Cook-Wall 770 SWSE 5-54-74 AWAO- Mustang Federal 41-5-5474WA 49-005-52041 Wall 1229 NENE 5-54-74 AWAO- Mustang Federal 41-5-5474CO 49-005-33581 Cook 820 NENE 5-54-74 AWAO- Mustang Federal 42-5-5474CO 49-005-33585 Cook 815 SENE 5-54-74 AWAO- Mustang Federal 43-5-5474WC 49-005-33587 Wall 780 NESE 5-54-74 AWAO- Mustang Federal 44-5-5474WA 49-005-33578 Wall 795 SESE 5-54-74 AWAO

Table 2 - Well Information: WY0038351 - Mustang Federal

*AWAO - All wells are permitted to discharge to all outfalls

Total Number of Wells: 15

WYDPES Renewal ApplicationStorm Cat Energy (USA) Operating Corporation

Mustang Federal WY0038351 HUC 10 - 1009020209

October 3, 2011Page 11 of 18

Page 13: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

Qtr/Qtr Sec Twn

(N)Rng(W)

NAD 83Latitude

NAD 83Longitude

- Brush Hog 16.1 P15336S Not Available NENW 5 54 74 44.694950 -105.789134- Stallion 3.05 P15338S Not Available SWNE 5 54 74 44.690992 -105.784789

Table 3 - Reservoir Information: WY0038351 - Mustang Federal

*Geographic location for on-channel impoundments represents the approximate of Center of Dam - Center of Channel. Location for off-channel impoundments represents the approximate center of the impoundment.

Desired Changes Reservoir Name

ReservoirStorageVolume

(acre/feet)

SEO Permit # SEO Reservoir Requirements

Location Geographic Location*

WYDPES Renewal ApplicationStorm Cat Energy (USA) Operating Corporation

Mustang Federal WY0038351 HUC 10 - 1009020209

October 3, 2011Page 12 of 18

Page 14: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

Desired Changes

Reservoir Name

Reservoir Bonding Authority

Reservoir Reclamation Volume* less

than 5000 cubic yards?

Reservoir Reclamation

Volume* between 5000 and 10,000

cubic yards

Reservoir Reclamation

Volume* greater than 10,000 cubic

yards

Reservoir constructed/ upgraded**

prior to September 1, 2005

Bond Currently

posted with bonding

authority?

- Brush Hog BLM X Yes Yes- Stallion BLM X No Yes

** Reservoir constructed/upgraded information relates to the September 2005 memo in which topsoil stockpiling is required for the new construction or the upgrade of an existing reservoir, as defined by embankment enlargement or spillway excavation. The installation of a drainpipe does not require topsoil stockpiling.

A Yes response in this column represents that the reservoir has been constructed prior to September 2005, or a reservoir constructed before September 2005 that needs an upgrade that does not require the stockpiling of topsoil, e.g., drainpipe installation.

A No response in this column represents that the reservoir is not constructed, the reservoir requires upgrades which will require topsoil stockpiling on site, or the reservoir was constructed after September 1, 2005.

Table 4 - Bonding Information: WY0038351 - Mustange Federal

Please check only one "reservoir reclamation volume" box for each reservoir

* Reservoir Reclamation Volume is the volume of the reservoir embankment with topsoil. The reservoir may have been created by an embankment that is either a cross valley/draw fill or an excavation with the embankment on 3 or 4 sides. During reclamation, the embankment is usually placed in the location where earth was borrowed to create the embankment.

Please note that reservoir information is not required if reservoir containment is not part of the facility's water management plan - for instance, information about existing incidental downstream reservoirs is not required.

WYDPES Renewal ApplicationStorm Cat Energy (USA) Operating Corporation

Mustang Federal WY0038351 HUC 10 - 1009020209

October 3, 2011Page 13 of 18

Page 15: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

MonthJanuary 2011February 2011

March 2011April 2011May 2011June 2011

* Total, Average, and Maximum Facility flows are based on actual discharge from outfalls 002 and 005 during the months of January through June of 2011.

Flow Data TableWY0038351 Mustang Federal

*Average Facility Outfall Flow

*Maximum Facility Flow

*Total Facility Flow(MGD)0.0420.0380.042

0.041

0.0420.0360.048

0.048

WYDPES Renewal ApplicationStorm Cat Energy (USA) Operating Corporation

Mustang Federal WY0038351 HUC 10 - 1009020209

October 3, 2011Page 14 of 18

Page 16: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

LABORATORY ANALYTICAL REPORT

Site Name: Spotted_Horse

Client Sample ID DP_WY0038351_005_ET50

Collection Date: 01/10/07 12:55

Matrix: Aqueous

Client: Storm Cat Energy (USA) Operating Corporation

Lab ID: G07010246-001

Report Date: 01/23/07

Date Received: 01/10/07

Location: SWNE_5_54N_74W Sampled By: Manoj Patil

Samp FRQ/Type: IN_A_S1_M

Project: WYPDES

Tracking Number: 455351

Revised Date: 09/16/11

Analyses Result Units Analysis Date / ByRL MethodQualifier Result Units

Prepared by Gillette, WY Branch

FIELD PARAMETERS

01/10/07 12:55 / ***s.u.pH, field FIELD7.90 0.01

*** Performed by Sampler

MAJOR IONS, DISSOLVED

01/11/07 23:22 / mlimg/LBicarbonate as HCO3 A2320 B19.21170 5 meq/L

01/12/07 05:32 / mlimg/LChloride E300.00.4817 1 meq/L

01/12/07 05:32 / mliug/LFluoride E300.0601 100

01/12/07 05:32 / mlimg/LSulfate E300.0<0.02ND 1 meq/L

01/12/07 16:43 / eli-bmg/LCalcium E200.70.6914 1 meq/L

01/12/07 16:43 / eli-bmg/LMagnesium E200.70.638 1 meq/L

01/12/07 16:43 / eli-bmg/LSodium E200.718.3422 1 meq/L

METALS, DISSOLVED

01/16/07 03:19 / eli-bug/LCadmium E200.8ND 0.1

01/16/07 03:19 / eli-bug/LCopper E200.8ND 1

01/12/07 16:43 / eli-bug/LIron E200.787 30

01/16/07 03:19 / eli-bug/LLead E200.8ND 2

01/12/07 16:43 / eli-bug/LManganese E200.735 10

01/16/07 03:19 / eli-bug/LMercury E200.8ND 0.06

01/12/07 16:43 / eli-bug/LZinc E200.7ND 10

METALS, TOTAL RECOVERABLE

01/19/07 08:18 / eli-bug/LAluminum E200.8218 50

01/17/07 00:46 / eli-bug/LArsenic E200.8ND 0.1

01/15/07 19:59 / eli-bug/LBarium E200.7449 100

01/17/07 00:46 / eli-bug/LSelenium E200.8ND 5

NON-METALS

01/11/07 23:22 / mlimg/LAlkalinity, Total as CaCO3 A2320 B961 5

01/10/07 16:42 / mtbumhos/cmConductivity @ 25 C A2510 B1670 1.00

01/23/07 08:12 / tlcmg/LHardness as CaCO3 A2340 B66 10

01/23/07 08:12 / tlcunitlessSodium Adsorption Ratio (SAR) Calculation22.6 0.1

01/11/07 11:18 / mlimg/LSolids, Total Dissolved TDS @ 180 C A2540 C1020 10

RADIONUCLIDES - TOTAL

01/22/07 11:55 / eli-cpCi/LRadium 226 E903.0M0.8 0.2

01/22/07 11:55 / eli-cpCi/LRadium 226 precision (±) E903.0M0.2

ReportDefinitions:

RL - Analyte reporting limit. MCL - Maximum contaminant level.

QCL - Quality control limit. ND - Not detected at the reporting limit.

WYDPES Renewal ApplicationStorm Cat Energy (USA) Operating Corporation

Mustang Federal WY0038351 HUC 10 - 1009020209

October 3, 2011Page 15 of 18

Page 17: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

WYDPES Renewal ApplicationStorm Cat Energy (USA) Operating Corporation

Mustang Federal WY0038351 HUC 10 - 1009020209

October 3, 2011Page 16 of 18

Page 18: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

Storm Cat Energy (USA) Operating CorporationWYPDES Permit WY0038351, Mustang Federal: Exceedance Summary TableTable Date: 9/12/2011

Permitted StationExceedingConstituent Sample Date

Sample Result

Date Reported to

WDEQ

Compliance Attained

Y/N Information Reported to WDEQ3/10/2007 26.4 6/13/2007 No Resample to confirm.

SARWY0038351_ICP2 No compliance issues since 2007

WYDPES Renewal ApplicationStorm Cat Energy (USA) Operating Corporation

Mustang Federal WY0038351 HUC 10 - 1009020209

October 3, 2011Page 17 of 18

Page 19: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

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M:\Projects\Storm_Cat\Mustang_Fed\Projects\WY0038351_PR_20110908.mxd

Mustang FederalWYPDES

Permit Renewal WY0038351

HUC 10 - 1009020209 October 3, 2011

Ç*Ç*Ç*Ç*Ç*Ç*Ç*Ç*Ç*Ç*Ç*Ç*Ç*Ç*Ç*__

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Powder River-Spotted Horse Creek1009020209

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Spotted Horse Creek

US Hwy 14/16

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Explanation_ Outfall, Constructed

"C! Irrigation Monitor Point

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TRIB

DPR

R77W | R76W

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DetailBoundary

R75W | R74W

T55NT54N

T56NT55N

T55NT54N

R76W | R75W R75W | R74W

Page 20: RE: WYPDES Permit Renewal Application, WY0038351 – Mustang

Discharge Point

(Outfalls) #

ImmediateReceiving

Stream

Mainstem(closest

perennialwater)

Distance to Closest 2AB Channel & Mainstem

(Miles)

Qtr/Qtr Sec Twn(N)

Rng (W)

NAD 83Latitude

NAD 83Longitude County Reservoir

Name and Type

002 South Chicken Draw Powder River 26.9 NENW 5 54 74 44.694100 -105.789800 Campbell Brush Hog(Option 2)

005 Stallion Draw Powder River 27.4 SWNE 5 54 74 44.691120 -105.783721 CampbellStallion

Brush Hog(Option 2)

Station Name Qtr/Qtr Sec Twn

(N)Rng (W)

NAD 83Latitude

NAD 83Longitude

DPR SENW 31 57 76 44.879646 -106.059838

IMP1 SWNE 32 55 74 44.701373 -105.792418

TRIB1 SWNE 7 56 76 44.846529 -106.049596

UPR NWSW 7 56 76 44.839513 -106.061889Upstream Mainstem Water Quality Monitoring Station

Irrigation Monitoring Point Outfalls 002 and 005

Tributary Water Quality Monitoring Station Spotted Horse Creek Tributary

Please note that not all station types may be applicable for a particular facility. Additional spaces may be added if necessary. Use the format provided. Please denote reservoir type(s) - on channel, off-channel, playa, headwater Option 1B - in the appropriate column. Please note that reservoir information is not required if reservoir containment is not part of the facility's water management plan - for instance, information about existing "incidental" downstream reservoirs is not required.

Table 1B: Outfall Information - WY0038351 - Mustang Federal

Notes regarding water quality monitoring station typesStation Description

Downstream Mainstem Water Quality Monitoring Station