Environmental Assessment for Drilling Soda Lake Well 41B-33

ENVIRONMENTAL ASSESSMENT District Stillwater Field Magma Energy Soda Lake Well 41B-33 State goes here DOI-BLM-NV-C010-2009-0018-EA

Office

, Carson City

U.S. Department of the Interior Bureau of Land Management Carson City District STILLWATER FIELD OFFICE 5665 Morgan Mill Road Carson City, NV 89701 775-885-6000

July/2009 1

1. INTRODUCTION/PURPOSE AND NEED

Magma Energy (US) Corp. (MEC) proposes to drill a directional production well (41B-33) to a depth of 9,500 feet within the boundaries of the approved Soda Lake Geothermal Unit (NVN- 013204X) located in Churchill County, Nevada. The well has been permitted by the Nevada Division of Minerals, API Number 27-001-90396, approved April 7, 2009 and drilling has already started as this well is situated on private fee land. The well will be drilled directionally to the west where it would intersect the subsurface of geothermal lease, NVN-53372, managed by the Bureau of Land Management, Stillwater Field Office (BLM). BLM manages the subsurface geothermal resources and the Bureau of Reclamation, Lahontan Area Basin (Reclamation) is the surface management agency. The objective of this well is to access high-temperature geothermal resource believed to be circulating in fractured rock related to subsurface faults. Any production fluid recovered from the well would be directed through existing pipeline infrastructure to the Soda Lake power plants.

At the present time there are four wells in the Soda Lake Geothermal Unit (SLU) that produce geothermal fluids (41A-33, 32-33, 81A-33, and 81B-33), four wells that are used for injection (45-28, 77-29, 87-29, 81-33) and two power plants generating electricity, all on privately held leases and all authorized by the appropriate Nevada State agencies and local county ordinances. MEC recently completed a new production-type well, designated 45A-33 located approximately 300 yards south of the Soda Lake II power plant. It is intended that this well will provide additional geothermal fluids to permit total utilization of currently installed generation capacity.

The purpose of the proposed action is to develop the geothermal resource within the Soda Lake Geothermal Unit area. The need for the proposed action is to increase the electrical generation capacity of the geothermal power plant and to respond to EO 13212, which directs the BLM to process geothermal leases in a timely manner in order to support efforts to increase energy production from federal mineral, while preserving the health of public lands.

Land Use Plan Conformance The proposed action and alternative described below are consistent with the Carson City Consolidated Resource Management Plan (CRMP) (BLM 2001). The CRMP includes national policy for mineral and energy development on page MIN-1, which “…encourages the development of federal mineral resources and reclamation of disturbed lands.”

Relationships to Statues, Regulations, and Other Plans The proposed action is consistent with the National Energy Policy which encourages the development of energy resources including geothermal resources on federally managed lands. The proposed project is also consistent with State of Nevada and Churchill County ordinances, policies and plans.

2. PROPOSED ACTION The project area is located in Churchill County, Nevada, on a checkerboard of private fee and public lands managed by Bureau of Reclamation (Reclamation) and leased for geothermal resources administered by the BLM. The geothermal drilling site is located in Township 20N, Range 28E, Section 33, Mount Diablo Meridian. This site is part of the SLU (see Figure 1), which encompasses 5,117 acres of private fee land and BLM federal leases. Since 1987, this area has been producing geothermal fluids used for geothermal electricity generation. More than twenty- 2

nine temperature gradient, slim holes, and production wells have been drilled within this area over the course of the nearly 30-year history of exploration and power production. These holes range in depth from 300 feet to more than 8,400 feet.

MEC proposes to drill a directional production well into the subsurface of geothermal lease NVN- 53372, to a depth of 9,500 feet within the boundaries of the approved SLU, and located in the adjoining section 32 to the west. The objective of the project is to encounter and test a deep geothermal resource in the SLU. There would be no new surface disturbance to private or public lands. The well would be drilled and constructed with appropriate drilling procedures including casing, cementing, and mud programs designed to prevent formation damage within the geothermal reservoir as well as the shallower zones above the resource. The operations plan (Appendix A) further elaborates the detail of the proposed project. If geothermal fluids are not produced from the federal lease area, that portion of the well may be abandoned. The entire well could be abandoned and closed in accordance with state, and county policies.

Surface Management The surface location of the well pad is owned by Truckee-Carson Irrigation District (TCID) and is leased to MEC. This proposed project would directionally drill to the federal mineral estate of Section 32. Under this situation the BLM does not have an obligation to ensure that disturbances of the surface are reasonable and necessary. The obligation for protecting the private surface, environment, and the interest of the surface owner in this case remains with the surface owner, the lessee, and the state. The analysis discusses the environmental effects of the downhole operation to be approved, such as protection of aquifers and other subsurface resources.

This environmental assessment (EA) analyzes the proposed project pursuant to the national Reclamation / BLM Interagency Agreement, December 1982. The environmental analysis is not required to consider a range of alternatives in citing surface facilities because the actual location is not based on the federal geothermal lease. Because the land status is Reclamation managed land, they do not have a migratory bird list, no sensitive species are indentified, or address of state listed species, therefore BLM, to be consistent with Reclamation policy, will not address these potential resources.

No Action Alternative Under the No Action Alternative, the proposed project would not be developed. No geothermal drilling or development of the resource would occur.

3. AFFECTED ENVIRONMENT This chapter identifies and describes the current condition and trend of elements or resources in the human environment which may be affected by the Proposed Action or Alternative.

Scoping and Issue Identification The proposed action was internally scoped to the Stillwater Field Office staff July 27, 2009, and the resources identified for analysis are identified in the tables below. The Fallon-Paiute Shoshone Tribe is being notified of the project as they have requested to be apprised of all future geothermal projects for which BLM has oversight.

Proposed Action General Setting The project area is located five miles northwest of Fallon, Nevada, in the west-central part of the Carson Desert, at an elevation of approximately 3,960 feet above mean sea level. The Carson 3

Desert is a broad, flat, northeastward trending intermontane basin approximately 60 miles long and ranging from 8 to 30 miles wide. It is bounded on the east by the Lahontan and Stillwater Mountains, on the west by Hot Springs and the West Humboldt Ranges, and on the south by the Dead Camel, Desert, Blow Sand, and Cocoon Mountains. The well pad site is located within the former lakebed of ancient Lake Lahontan. Local topography is characterized as relatively flat with some small undulating hills rising no more than about 10 feet in most areas.

Supplemental Authorities Appendix 1 of BLM’s NEPA Handbook (H-1790-1) identifies Supplemental Authorities that are subject to requirements specified by statute or executive order and must be considered in all BLM environmental documents. The table below lists the Supplemental Authorities and their status in the project area. Supplemental Authorities that may be affected by the Proposed Action are further described in this EA. Supplemental Not Present/Not Present/May Rationale and/ or Reference Section Authority* Present Affected Be ** Affected*** Air Quality  Areas of Critical  Environmental Concern Cultural  No new surface disturbance is proposed; therefore, there is no affect Resources to cultural resources. Environmental  Justice Farm Lands  (prime or unique) Forests and  rangelands (HFRA Projects Only) Human Health  and Safety ( Herbicide Projects) Floodplains  Invasive,  Nonnative and Noxious Species Migratory Birds  Should future projects of this type be located on public lands managed by BLM, then BLM sensitive species, Migratory Bird List of Concern, and game species would need to be addressed. These wildlife resources will not be carried forward in this EA since surface management belongs to Reclamation. Native American  No new surface disturbance is proposed; therefore, there is no affect Religious to Native American Religious concerns. Concerns Threatened and/or  A review of the U.S. Fish and Wildlife Service electronic listing of Endangered federally listed threatened, endangered, proposed for listing, and Species candidate species was made to determine what species may be found in the project area (U.S. Fish and Wildlife Service, 2007). None of the species listed are found in the project area. Wastes,  Hazardous or Solid Water Quality  Carried forward in EA. 4

(Surface/Ground) Wetlands/Riparian  Zones Wild and Scenic  Rivers Wilderness  . *See H-1790-1(January 2009) Appendix 1 Supplemental Authorities to be Considered. **Supplemental Authorities determined to be Not Present or Present/Not Affected need not be carried forward or discussed further in the document. ***Supplemental Authorities determined to be Present/May Be Affected must be carried forward in the document.

Resources or Uses Other Than Supplemental Authorities The following resources or uses, which are not Supplemental Authorities as defined by BLM’s Handbook H-1790-1, are present in the area. BLM specialists have evaluated the potential impact of the Proposed Action on these resources and documented their findings in the table below. Resources or uses that may be affected by the Proposed Action are further described in this EA.

Resource or Issue Present/Not Present/May Rationale Affected# Be Affected## Wildlife  Should future projects of this type be located on public lands managed by BLM, then BLM sensitive species, Migratory Bird List of Concern, and game species would need to be addressed. These wildlife resources will not be carried forward in this EA since surface management belongs to Reclamation. #Resources or uses determined to be Present/Not Affected need not be carried forward or discussed further in the document. ##Resources or uses determined to be Present/May Be Affected must be carried forward in the document.

Resources Present and Brought Forward for Analysis (All Resources) The following resources are present in the area and may be affected by the Proposed Action.

Water Quality (Ground) Principal groundwater aquifers in Nevada are basin-fill aquifers, carbonate-rock aquifers, volcanic rock aquifers, and sedimentary rock aquifers. The most common are basin-fill aquifers, which are composed primarily of alluvial, colluvial, and lacustrine deposits. Virtually all major groundwater development in the state has been in the upper 500 feet of basin-fill aquifers. Aquifer recharge is provided by precipitation in the mountain ranges. Water infiltrates alluvial slopes and underflows in poorly sorted, unconsolidated sediments (Glancy and Katzer, 1975).

The Fallon area (including the proposed project area) has been grouped into the following general hydrologic systems (Glancy, 1981): Shallow alluvial aquifer from the surface to 50 feet below ground surface (bgs) Intermediate alluvial aquifer from 50 feet to 500-1,000 feet bgs Deep alluvial aquifer from greater than 500 feet to 1000 feet bgs Basalt aquifer from 200 feet to 1,000 feet bgs, that has intruded into the sediments of the alluvial aquifers

The Nevada Division of Water Resources conserves, protects, manages and enhances the State's water resources through the appropriation and reallocation of the public waters. The proposed

project falls within the Carson Desert Hydrographic area. This region encompasses an area of 2022 square miles. The Nevada Division of Minerals and the Division of Environmental Protection authorizes geothermal production and injection wells and issue the necessary permits and conditions of approval for all geothermal projects. The U.S. EPA has delegated to the state of Nevada the responsibility for regulating the quality of water within its borders. In Nevada, the State Environmental Commission and the Nevada Division of Environmental Protection regulates water quality. The state also has anti-degradation policies that stipulate that water bodies having quality that is better than the standards must generally maintain its higher quality. BLM authority for this drilling project pertains to the subsurface resources underlying the federal geothermal lease.

The aquifers and aquifer levels in the project area are evidenced in well logs for domestic use in the area. Some deeper wells (in the range of about 100 feet deep) had artesian flows. Most wells encountered a static water level (the shallow aquifer) at depths less than 12 feet. Water quality was unknown except in one shallow well, where it was deemed “good” in the well drillers logs (Nevada Division of Water Resources, 2008a).

Domestic water demands for the greater Fallon area are met through individual domestic wells. Most domestic wells in the project area tap into the shallow and intermediate aquifers, while NAS Fallon taps into the basaltic aquifer (Glancy and Katzer, 1975). The nearest domestic wells to the PA are located about 2 miles from the southern boundary of the SLU. The Nevada State Engineer, who designates the perennial yield that can be withdrawn from the hydrologic basin, has allocated 2,500 acre-feet/year for the Carson Desert.

The Carson Desert Groundwater Basin is the final discharge area for the Carson River hydrologic system and has become the final receiving area for soluble chemicals transported by the water (Glancy and Katzer, 1975). The basin has an abundance of water, but most of the water is of poor to very poor quality.

Water Quality (Surface) A notable feature of the area is the occurrence of Big and Little Soda Lakes. Water quality in the Soda Lakes is considered to be mildly brackish. Kharaka, et al. (1984), report that the water in the Soda Lakes is the result of seepage from nearby agricultural irrigation. Absent that irrigation, there would be no water in either of the Soda Lakes.

4. ENVIRONMENTAL CONSEQUENCES This chapter describes the potential direct/indirect/residual/cumulative impacts to resources that may result from the Proposed Action or Alternative as well as identifies the potential mitigation measures and monitoring needs associated with the specific resources.

Water Quality (Ground) Extracting and reinjection geothermal fluids involves a closed loop system that is not expected to result in significant impacts on groundwater or surface water resources. Ideally the extracted geothermal fluid is reinjected into the subsurface to perpetuate the system. Geothermal fluids produced to the power plant will be returned to the subsurface via injection wells that are regulated by Underground Injection Control permits issued by the Nevada Division of Environmental Protection. The Soda Lake facility already has permits for its injection wells.

Adverse impacts to groundwater or surface water quality are not expected.

Water Quality (Surface) The water in the Soda Lakes is the result of seepage form nearby agricultural irrigation. Absent that irrigation, there would be no water in either of the Soda Lakes.

No Action Alternative The No Action Alternative would result in no action being taken. There would be no impacts to any resources. However, this alternative could preclude geothermal power generation at the site, which is a cleaner alternative to coal and fossil fuel burning. Loss of potential alternative energy sources has a negative impact on air quality. The No Action Alternative could result in additional fossil fuel combustion emissions at another location.

Cumulative Impacts The likely outcome of the proposed action will be to provide additional geothermal resources to the existing power plant for the purpose of utilizing existing idle generating capacity. However, if geothermal fluids are not produced from the federal lease, the well may be properly abandoned in accordance with BLM, state, and county policies. Cumulatively, this one additional well, if sufficient to produce geothermal fluids, plus the existing geothermal power producing facility will add an undetermined number of new megawatts of clean renewable electricity to the grid that will displace the need for power generated using hydrocarbons.

Resource specific cumulative impacts are evaluated in Chapter 4. There would be no adverse cumulative impacts from the proposed action.

MONITORING The monitoring proposed in the Proposed Action would be adequate to identify impacts associated with the project. No additional monitoring would be required.

5.0 PERSONS, GROUPS, AND AGENCIES CONSULTED

LIST OF PREPARERS Bureau of Land Management Carla James, Geologist John Wilson, Wildlife Biologist Gabriel Venegas, Hydrogeologist Desna Young, Planning/Environmental Coordinator Susan McCabe, Archeologist Terri Knutson, Stillwater Field Manager

PERSONS, GROUPS, OR AGENCIES CONSULTED Kenneth Parr, Lahontan Basin Area Manager, Bureau of Reclamation Lowell Price, Oil, Gas, and Geothermal Program Manager, Nevada Division of Minerals

VI. APPENDICES OR ATTACHMENTS References Benoit, W.R., Hiner, J.E., and Forest, R.T., 1982, Discovery and geology of the Desert Peak geothermal field: A case history; Nevada Bureau of Mines and Geology, Bulletin 97, 82p, plus 14 plates.

Benson, L. V. and Thompson, R. S., 1987, Lake-Level Variations in the Lahontan Basin for the Past 50,000 Years; Quaternary Research 28:69-85.

Churchill County, 2007, Water Conservation Plan. Website: http://www.churchillcounty.org/water/ conservation/ccwaterconsv-0207.pdf.

Desert Research Institute, 2007, Website: http://www.wrcc.dri.edu/narratives/NEVADA.htm.

Glancy, P.A., 1981, Geohydrology of the Basalt and Unconsolidated Sedimentary Aquifers in the Fallon Area, Churhcill County, Nevada. USGS Report 80-2042.

Glancy, P.A. and Katzer, T.L., 1975, Water Resources Reconnaissance Series Report 59, Water Resources Appraisal of the Carson River Basin, Western Nevada. Prepared by USGS for the Nevada Division of Water Resources.

Kharaka, Y.K., Robinson, S.W., Law, L.M., and Carothers, W.W., 1984, Hydrogeochemistry of Big Soda Lake, Nevada: An alkaline meromictic desert lake; Geochimica et Cosmochimica Acta, v.48, p.823-835.

Layman, E.B. and Lipinski, 1979, Regional stratigraphy of the southern Carson Sink and the Soda Lake geothermal prospect; San Francisco Chevron Resources Company, internal report, 57 pages.

Maurer, D.K. and Welch, A.H., 2001, Hydrogeology and geochemistry of the Fallon basalt and adjacent aquifers, and potential sources of basalt recharge in Churchill County, NV; U.S. Geological Survey, Water Resources Investigation 01-4130, 72p, plus 2 plates.

Morgan, D. S., 1982, Hydrogeology of the Stillwater Geothermal Area, Churchill County, Nevada. U.S. Geological Survey Open-File Report 82-345.

Morrison, R.B., 1964, Lake Lahontan: Geology of the southern Carson Desert, NV; U.S. Geological Survey Professional Paper 401, 156p, 12 plates in pouch.

Nevada Bureau of Water Quality Planning, 2002, Nevada’s 2002 303(d) Impaired Waters List. October 2002. Website: http://ndep.nv.gov/BWQP/303list.pdf.

Nevada Division of Water Resources, 2008a, Well Log Database. Website: http://water.nv.gov/engineering/wlog/wlog.cfm.

Nevada Division of Water Resources, 2008b, Hydrographic Area Summary for Hydrographic Area 101. Website: http://water.nv.gov/WaterPlanning/UGactive/index.cfm. Stewart, J.H., and J.E. Carlson, 1977, Million-scale Geologic Map of Nevada, Nevada Bureau of Mines and Geology, Map 57. Reno.

Stewart, J. H., 1980, Geology of Nevada, A discussion to accompany the Geologic Map of Nevada; Nevada Bureau of Mines and Geology, Special Publication 4.

Stine, S. 1990, Late Holocene Fluctuations of Mono Lake, Eastern California; Palaeogeography, Palaeoclimatology, Palaeoecology, 78:333-381. 9

Stine, S. 1994, Extreme and Persistent Drought in California and Patagonia during Medieval Time; Nature 369:546-549.

U.S. Bureau of Land Management, 1974. Regional Environmental Analysis Record, Geothermal/Oil and Gas Leasing in the Fort-Churchill, Clan-Alpine Area, BLM Carson City Field Office.

U.S. Bureau of Land Management, Consolidated Resource Management Plan, BLM Carson City Field Office. May 2001.

U.S. Bureau of Land Management, 2006, Environmental Assessment for Leasing of Geothermal Resources Managed by the Bureau of Land Management Carson City Field Office, July 2002.

U.S. Bureau of Land Management, 2003, Nevada BLM Sensitive Species List. Unpublished document.

U.S. Census Bureau, 2007, United States Census, Website: http://www.census.gov/.

U.S. Department of Agriculture, 2006, Soils Survey Data for Churchill County, National Resource Conservation Service.

U.S. Environmental Protection Agency, 1993, 40 CFR Part 261, Clarification of the Regulatory Determination for Waste from the Exploration, Development and production of Crude Oil, Natural Gas and Geothermal Energy. 58 FR 15284. March 22, 1993.

U.S. Environmental Protection Agency, 1996, Website: http://www.epa.gov/ttn/chief/ ap42/ch03/final/c03s04.pdf.

U.S. Environmental Protection Agency, 2001, Website:http://www.epa.gov/ttn/naaqs/ozone/areas//state/tier3/s32001t3.htm.

U.S. Environmental Protection Agency, 2002, Guidance for Evaluation of Federal Agency Demonstrations that Remedial Actions are Operating Properly and Successfully Under CERCLA Section 120(h)(3). http://www.epa.gov/swerffr/doc/896mm.htm#intro.

U.S. Environmental Protection Agency, 2004, Section 303(d) List Fact Sheet for Nevada. Website: http://oaspub.epa. gov/waters/state_rept.control?p_state=NV.

U.S. Federal Emergency Management Agency, 1999, 100-year Floodplain Map for Churchill County, NV, January 6, 1999.

U.S. Geological Survey, 2004, Dust Studies by the U.S. Geologic Survey. Website:http://geology.wr.usgs.gov/MojaveEco/dustweb/dusthome.html.

APPENDIX A Magma Energy Plan of Operations 18 pages