Newberry_EGS_EA

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NewberryVolcanoEnhancedGeothermalSystem(EGS)DemonstrationProject

UNITEDSTATESDEPARTMENTOFTHEINTERIORBUREAUOFLANDMANAGEMENT(BLM)DOIBLMORP00020110003EADOE/EA1897

ENVIRONMENTALASSESSMENTDECEMBER2011Location: Federal Geothermal Leases on the West Flank ofNewberry Volcano,

Deschutes County, 22miles south of Bend, OregonApplicant: Davenport Newberry Holdings LLC and

AltaRock Energy, Inc.225 NW Franklin Avenue, Suite 1

Bend, OR 97701Tel: 5413231190

Lead Agency: U.S. Department of theInterior,Bureau of Land ManagementPrineville DistrictOffice3050 NE Third StreetPrineville, OR 97754Tel: 5414166890; Fax: 5414166798

CooperatingAgencies: U.S. Department of Agriculture, ForestServiceDeschutes National Forest,BendFort RockRanger District63095 Deschutes Market Rd.

Bend, OR 97701Tel: 5413834000; FAX 5413834700U.S. Department of Energy, Golden Field Office1617 Cole BoulevardGolden, CO 80401Tel: 7203561563; Fax: 7203561560


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CONTENTSTable of Figures ........................................................................................................................................................................ 4List of Acronyms and Glossary of Terms ...................................................................................................................... 6

Chapter 1. IntroductionandPurpose&NeedfortheProposedAction....................... ........................ .......9

1.1 Introduction................................................................................................................................................................... 91.2 Summary of the Proposed Action......................................................................................................................... 91.3 Background........................................................................................................................................... ....................... 131.4 Purpose and Need for the Proposed Action ................................................................................................... 141.5 Management Direction and Conformance with Land Use Plans ........................................................... 161.6 Relationshipto Laws, Regulations, Policies, andNEPA Documents...................................................201.7 Scoping and Public Involvement......................................................................................................................... 231.8 Identification of Issues .................... ........................................................................................................................ 231.9 Decisions To Be Made.............................................................................................................................................. 30

Chapter2. AlternativesIncludingtheProposedAction.................................................................... 322.1 Introduction...................................................................................................................................................... ........... 322.2 Project Location............................................................................................................. ............................................. 322.3 Alternative AProposed Action......................................................................................................................... 322.4 Alternative B Proposed Action with Closed Pressure Vessel and Air Cooled Condensers ....492.5 Alternative C No Action Alternative ............................................................................................................... 522.6 Project Design Features .......................................................................................................................................... 522.7 Alternatives ConsideredbutEliminated fromFurther Analysis .......................................................... 682.8 Comparison of Alternatives................................................................................................................................... 68

Chapter3. AffectedEnvironment............................................................................................................. 703.1 Introduction...................................................................................................................................................... ........... 703.2 General Setting............................................... ............................................................................................................. 703.3 Resources Brought Forward for Analysis Based onKey Issues ............................................................ 713.4 Wildlife ................................................................................................................................................................... ........ 713.5 Scenic Resources.............................................. .......................................................................................................... 733.6 Water Resources .................................................................................... .................................................................... 77

NEWBERRY VOLCANO EGS D EMONSTRAT ION PRO JECT Env i ronmenta l Assessment 2


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3.7 Geologyand NaturalSeismicity........................................................................................................................... 82Chapter4. EnvironmentalEffects............................................................................................................. 86

4.1 Introduction................................................................................................................................................................. 864.2 Past, Present, and Reasonably Foreseeable Future Actions in the Project Area ...........................864.3 Alternative AProposed Action: Direct, Indirectand Cumulative Effects ........................................924.4 Alternative B Proposed Action with Closed Pressure Vessel and Air Cooled Condensers. 1434.5 Alternative C No Action .................................................................................................................................... 146

Chapter5. ConsultationandCoordination..........................................................................................147 5.1 Introduction.............................................................................................................................................................. 1475.2 Tribes, Individuals, Organizations, and Agencies Consulted ............................................................... 1475.3 List of Preparers...................................................................................................................................................... 147

APPENDIXA Induced Seismicity Mitigation Plan (AltaRock, 2011)APPENDIXB IndependentHydrologist Review (Kleinfelder, 2011)

Note: Theappendices attached to this PDF document are available online athttp://www.blm.gov/or/districts/prineville/plans/newberryegs/index.phpor by contacting the BLMPrinveville District Office.

http://www.blm.gov/or/districts/prineville/plans/newberryegs/index.phphttp://www.blm.gov/or/districts/prineville/plans/newberryegs/index.php


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TABLE OF F IGURES

Figure 1: Project Vicinity Map ..................................................................................................................... 11Figure 2: Detailed Project Location Map ................................................................................................ 18Figure 3: Project Access Routes .................................................................................................................. 19Figure 4: Typical MSA Station with Solar Panel And Telemetry Antenna ...............................35Figure 5: Stimulation of a Single Fracture Set ...................................................................................... 38Figure 6: Stimulation of Second Fracture Set After Diverter Application to First Fracture Set ................................................................................... ......................................................................................... 39Figure 7: EGS Well with MultipleFractureSets after Diverter Dissolution............................40Figure 8: Temporary Irrigation Piping Route ...................................................................................... 45Figure 9: Alt. A PadS29Circulations Test Facility Conceptual Configuration ..................48Figure 10: Cooling FansUsed in EGS Circulation Testingat Soultz, France. Shown Here Prior to Installation, These Would Be Positioned Over or Adjacent to the HeatExchangers for Operation............................................................................................................................. 50Figure 11: Alt.BCirculation Test Facility Conceptual Configuration........................................51Figure 12: Project Access Routes and Snowmobile Trails .............................................................. 53Figure 13: Final MSA, Including Borehole Installations, Shown In Relation To PlannedStimulationZone....................................................................................................................... 55Figure 14: CrossSection and MapShowing Expected EGS Reservoir Area, MSA and SMS StationLocations, Horizontal and Vertical Growth Limits, and Trigger Boundaries. ........56Figure 15: Wellhead, FlowLine, Control Valve, James Tube and Atmospheric Separator Used in a Geothermal Well Flow Test in Nevada, Similar to, but Smaller Than the Separator to be Used At Newberry........................................................................................................... 59Figure 16: Decision Tree for Triggers and Mitigation Actions ..................................................... 65Figure 17: Water Point Location Map ...................................................................................................... 81Figure 18: Historical Seismicity of the Site Region ............................................................................ 84Figure 19: Historical Seismicity in the Vicinity of theSite.............................................................. 85Figure 20: VOP 1 U.S. Highway 97 (Looking East) .......................................................................... 109Figure 21: VOP 2 Mckay Butte (Looking East) ..................................................................................109Figure 22: VOP 3 Forest Road 21 Overlook (Looking North) .................................................... 110Figure 23: VOP 4 Trail 57 Crater Rim Trail (Looking West) ................................................... 110



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Figure 24: VOP 5 Paulina Peak (Looking Northwest) .................................................................... 111Figure 25: VOP 6 Paulina Creek Trail 56 (Looking West) ............................................................ 111Figure26:MajorEventsan dDurationsofWaterUse....................................................... 118Figure 27: Water Usage ByMonth.......................................................................................................... 119Figure 28: Davenport Well NWG 5529 Well Bore and Casing Profile...................................127 Figure 29: Predicted Ground Shaking Map in Intensity................................................................ 132Figure 30: Predicted Ground Shaking Map in PGA ......................................................................... 133Figure 31: Predicted PGA Ground Shaking Map for Site Vicinity ............................................. 136Figure 32: Predicted PGA Ground Shaking Map ............................................................................... 139



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L I ST OF ACRONYMSAND GLOSSARYOF TERMS

API American Petroleum InstituteASL Above sea levelBE Biological Evaluationbgs below ground surfaceBH BoreholeBLM Bureau of Land ManagementCE CalEnergyCEQ Council on Environmental QualityCFR Code ofFederal Regulationscfs cubic feet per secondCMP Comprehensive Management Plancsg CasingDOE Department ofEnergyDOGAMI Departmentof Geology and Mineral IndustriesDOI Department ofInteriorDR Decision RecordDRC Deschutes River ConservancyEA Environmental Assessment

EGS Enhanced / Engineered Geothermal SystemsEIS Environmental Impact Statement

ESC Existing Scenic ConditionFEIS Final Environmental Impact StatementFEMA Federal Emergency ManagementAgencyFLPMA Federal Land Management and PolicyActFlashing Sudden lowering of thepressure of hot water, thus

allowing boiling

FONSI Findingof No Significant ImpactFR Forest RoadFS Forest ServiceGL Ground levelgpm Gallons per minuteGPS Global Positioning SystemHP HorsepowerIEA International Energy Agency



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ISMP

KB

kWLBNL

LiDAR

LLC

LPHSLRMPM

MmaxMA

MIS

MM

MSAMicroseismometer

MSDSMWNAIP

NEPANGC

NM

NNNNVMNWGO&GOHV

OWRDPEIS

PGAPLAPLVC

PNSNPOOPR

Induced Seismicity Mitigation Plan

Kelly bushingKilowattLawrence Berkeley National LabLight Detection and

Ranging

Limited Liability CompanyLa Pine High SchoolLand and Resource Management PlanMagnitude (seismicity)

Maximum MagnitudeManagement AreaManagement Indicator Species

Modified MercalliMicroseismic arrayAn instrument used to measure micrsoseismic events.Micro refers to the ability of the instrument to measuremicro seismic events, not the physical sizeof theinstrument itself.Material Safety Data SheetMegawattNational Agriculture Imagery Program

National Environmental Policy Act

Newberry Geothermal CompanySurface Microseismic Station

Borehole Microseismic StationNewberry National Volcanic Monument

NorthwestGeothermalOil and GasOffhighway vehicleOregon WaterResources DepartmentPreliminary Environmental Impact StatementPeak groundaccelerationPolymer of lactic acidPaulina Lake VisitorCenterPacific Northwest SeismicNetworkPlan of Operations

Partial Retention



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PSHA Probabilistic seismic hazard analysispsi pounds per square inchpsia pounds per square inch absolutepsig pounds per square inch gauge

PVC Polyvinyl chloridePW Production wellRF RossiForelRM River mileRMHA River Meadows Homeowners AssociationS&G Standards and GuidelinesSCL Scenic Condition LevelSeismic Risk The probability of loss or damagedue to seismicitySMS Scenery Management System (Scenic Resources)SMS Strong MotionSensorSPE Society of Petroleum Engineers

T&R Treadwell & Rollo Engineers

TD Total depthTG Temperature gradientTGH Temperature Gradient Hole

TM TrademarkTVD True verticaldepthU.S.C. United States CodeURS United Research ServicesUSDA U.S. Department of Agriculture

USFS U.S. Forest ServiceUSGS U.S. Geological SurveyVAC Visual Absorption CapabilityVOP Visual observation pointVQS Visual Quality System



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CHAPTER1. INTRODUCTIONANDPURPOSE&NEEDFORTHEPROPOSEDACTION1.1 INTRODUCTION

This Environmental Assessmenthas been prepared to disclose and analyzeenvironmental effects of developingand testing a geothermal reservoir created by usingenhanced geothermal system (EGS)technologies, asproposed by Davenport NewberryHoldings LLC (Davenport) and AltaRock Energy, Inc. (AltaRock). A Notice of Intent (NOI)

and Plan of Exploration, Operations Plan, and Drilling Program for the Newberry

VolcanoEGSDemonstration Project (Project, EGS Project) weresubmitted tothePrineville Office of theBureau of Land Management (BLM) in May, 2010.The proposedProject is located in central Oregon onDeschutesNational Forest landsalong thewestern flank of Newberry Volcano. Except for some seismic monitoringstations (Figure 2 and described in Section 2.3), theProject is locatedoutsidetheNewberry National Volcanic Monument (Monumentor NNVM), on federal geothermalleases administered by the BLM thatwere issued between 1982 and 2003. DavenportNewberry LLC is currently the holder of all geothermal leases identified in the NOI.

The BLM is the lead agency for this projectbecause the majority ofthe Project activitywould occur on leases issued andadministered by the BLM. The proposed Project islocatedentirely on National Forest system lands aspart of the USDAForest Service,Deschutes National Forest (Forest Service or FS).Nine (9) ofthe monitoring stationsnecessaryto implement the Seismic Mitigation Plan are within landswhere surfacedisturbance is under the authority of the Forest Service. Therefore the ForestService isacooperatingagency for the preparation of this Environmental Assessment. The EnergyPolicy Act of2005 gives the Secretary of Energy the authority to conduct aprogram ofresearch, development, demonstration,and commercial applicationfor geothermalenergy. The U.S. Department of Energy(DOE) is funding a portion of the Project;therefore DOEis also a cooperating agency in this EA.

1.2 SUMMARY OF THE PROPOSEDACTIONDavenport and AltaRock (Proponents) propose tocreate an EGS Demonstration Projectinvolving new technology, techniques, and advanced monitoring protocols forthepurpose oftesting the feasibility and viability of enhancedgeothermal systems forrenewable energy production.

The Projectwould utilize an existing well pad and existing deep geothermal well onfederal geothermal lease OR40497 held by DavenportNewberry Holdings LLC.Nearbythere would be 20 microseismic monitoring stations. All of these sites are on national

forest system lands. Eleven of the siteswouldbe on federalgeothermal leasesadministered by the BLM, and 9 would be on lands that are administered by USFS ( Table

1). If approved, drilling and installation of the downhole microseismic monitoring

stations for the Project would begin in early 2012.



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Table1: MSA Locations and Surface Management AuthorityMSASite Type Section NEPADecisionAuthorityfor

SurfaceManagementNN19 New Borehole 29 BLMNN24 New Borehole 29 BLMNN21 PreExisting Well 21 FSTG19 PreExisting Well 19 BLMNN18 PreExisting Well 21 FSNN17 New Borehole 29 BLMTG32 Existing Well 32 BLMNP03 Existing Well 6 BLMTG17 Existing Well 17 BLMTG30 Existing Well 30 BLMNM08 Surface Station 4 FSNM22 Surface Station 29 BLMNM03 Surface Station 16 BLMNM05 Surface Station 21 FSNM06 Surface Station 28 FSNM18 Surface Station 21 FSNM40 Surface Station 27 FSNM42 Surface Station 15 FSNM41 Surface Station 33 FSNM11 Surface Station 36 BLM

The proposedproject area is locatedapproximately 22 miles south of Bend and 10 milesnortheast ofLa Pine, withinthe BendFort Rock RangerDistrict of theDeschutesNational Forest. Refer to Figure 1, Project Vicinity Map.The Project is located in an areaof the Deschutes National Forest identified as appropriate for future geothermal

exploration in the 1990 Deschutes National ForestLand and Resource Management Plan(LRMP), as amended. Thisarea wasalsorecognized as being appropriate for geothermaluse in the congressional process and subsequent federal legislation thatcreatedtheNewberry National Volcanic Monument(Newberry National Volcanic Monument Act(Public Law 101522), November 1990).



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Figure 1: Project Vicinity Map



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CREATIONOFTHERESERVOIRThe proposedProject would develop and test an EGS reservoir deep underground, usingan existing10,060foot geothermal well (NWG 5529/Well 5529). This well pad (S29)was builtand the well drilled by Davenport in 2008. Data from Well 5529 shows thatthis sitehas a great deal of heat in thedeep underground rock formations (> 600 F) butit does not have sufficient natural water for a standard hydrothermal geothermalsystem.Sitessuch as this may be suitable for EGS, where water can be added to naturallyoccurring hotrock in order to createa viablegeothermal system.Creation ofthe EGS involves engineeringareservoir in suitable hot rocks where watercan circulate throughand heat up, muchlike the heat exchange processof aradiator.The reservoir is created byusing a process of well stimulation termed hydroshearing.Hydroshearing is the process of using coldwatertocreate anetwork of minute cracks inthe rocks deep underground, wherenatural fracturesand cracksalready occur. Duringthis process, water would be injected athigh pressure(estimated to range between1,160 and 2,600 psig) at the bottom of Well 5529, at depths of approximately 6,500 to

10,000 feet. Shallow groundwater wells would provide the water for the Project.

The Projectgoal is to create anetworkof pore spaces from the injected high pressurewater inafinitearea of thehot rock formation that would then serve as a heatexchanger and become the EGS reservoir.Cold water would be pumped from the surfacedown the existing well into the reservoir, where it would become heated as it circulates

through thehot rocks and then bebrought back up to the surface as hot water, via twoproduction wells.

After the reservoir has been created, twoadditional deep geothermal production wellswould be directionally drilled from the same well pad into the other end of the EGS

reservoir. The heated water would be brought back upto the surface in these wells, afterit has circulated throughthe networkofpores and cracks ofthe hotrocks between thewells. This Project would provide the Proponents the ability to create, test, and

demonstrate the EGS reservoir technology and its potential application toproduceelectricity in areas with underground heat but no natural water.

ThisProjectis for EGS reservoir demonstrationpurposes only; production of electricityis not being proposed and is notpart of this Project. If an EGS reservoirwere developedto produce electricity however, thehot water and/or steam brought to the surfacewould be used toprovide energy to turn turbines and generate electricity in a similarmanner that natural hydrothermal geothermal systems are currently used to generate

electricity in the U.S. and around the world. If a power plantwere proposed it wouldrequire further NEPA analysis.

MONITORINGTHESTIMULATIONPROCESSMinute fractures created by the injection of high pressure water during the

hydroshearing process would cause microseismicevents which would be mapped andmonitored usingstateoftheart equipment and technology. Monitoring and mapping ofthe micro fractures would be accomplished through an arrayusing small pieces ofmicroseismic monitoring equipment(microseismometers) installed either afew feet



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below ground (surface stations), or in nearby boreholes (borehole stations) drilled to a

depth of up to 1,100 feet. Of the 20 monitoring sites, 10 locations would be surface

stationsand 10 locations would be borehole stations. The equipment would bestrategically and carefully located in an array designedto effectively receive thescientific data.This microseismic array (MSA) would monitor microseismic events and thecreationoftheminutecracks in real time. Of the 10 borehole MSA locations, 3 new boreholes wouldbe drilled (Sites NN17, NN19 and NN24 shown in Figure 2), using a truckmounted

rotary drilling rig similar to those used to drill domesticwater wells. Existing well sites(temperature gradient wells, water wells and geothermal exploration wells) would be

utilized to the extent possible to minimize new surface disturbance, asa result7ofthe10 proposed borehole MSA sites would be locatedin existing wells or at sites alreadyapproved for such wells.

Site footprintsforeach of thenew MSA boreholes wouldaverage approximately 75 ft. x125 ft. (9,375 sq. ft., or 0.2 acre) in size to safely accommodate equipment, including a

drill rig and water truck. Total surface disturbance for all 3 new borehole stations wouldbe approximately 28,125 square feet, (2/3 acres) total. All proposed sites are accessiblefromexistingForest Serviceroads and no new roads would be constructed.All of the 10 surface MSA sites would be located in areas that would notrequire treeremoval. For these sites, the microseismometers would be placed in shallow holes dug a

few feet deep using hand tools.

Once the underground EGS reservoir is createdand the 2new production wells havebeen drilled, a circulation test of approximately 30 to 60 days would be conductedinorder to test the circulating system andcollect scientific data. This data would be used tocreate a detailed conceptual model ofahypothetical EGS reservoir, well field, and powerplant that could potentially be used to plan EGS projects in this area and other areas of

the United States. The decision whether to allow this EGS Project doesnotallowfor theproduction of electricity and no facilities capable of generating electric power are being

proposed.Further analysisunder NEPA would be required prior toa decision todevelopan electricproductionfacility at Newberry.The Project would be conducted over a total timeperiodof approximately 2 years.During this time, therewould be relatively constant ongoing projectrelated activitiesincludingclearing, installation, drilling, and flow testingactivities on one or more sites.Activities would be concentratedaround the existing pad S29.

1.3BACKGROUND

Geothermal energy is renewable energy derived from the heat storedin the earth,typically circulatedby water within zones of naturally occurring fracturedrockformations deep underground. At high enough temperatures the naturally occurring hot

water and/orsteam can bebrought to the surfaceand harnessedto generate electricity.After theheatis removed, the condensedsteam/geothermal fluids are then recirculatedback underground. This is the way in which a typical hydrothermal geothermal energysystem functions.



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Newberry Volcano has long been recognized by geologicandscientific communities forits geothermal potential, and anumber of exploration operations in search of a viablegeothermal resource have occurredin the area over the last three decades. Nearly twodozen exploratory wells have been drilled at depths from about 1,300 feet to nearly

12,000 feet in areas on the westflank, including 2 exploration wells drilled to 10,060and 11,600 feet by Davenport

in 2008.

Exploration activitiesand scientific studies at Newberry have verified that certain rockformations deep underground indeed contain sufficient heat, and in some cases there

have been indications of thepresence ofwater. However, the unique characteristics ofthe geothermal resource in this area haveyet to befully depicted or understood, and aviable natural hydrothermal system has yet to be discovered. The proposed

demonstration project seeks tofurther explore thepotential of new enhancedgeothermal technology thatcould potentially utilize the naturally occurring heat insuitable underground rock formations that lacka naturally existing water componentand permeability.

1.4 PURPOSEAND NEED FOR THE PROPOSEDACTION BLMThe purpose of the proposed action is to grant, grant with modifications,or deny theProponents proposal to useNational Forest lands, including National Forest landswithand without geothermal leases that have been issuedandare administered by the BLM,to develop andtestan EGS demonstration facility in compliance withBLM geothermalleasing regulations, and other applicable Federal laws. The proposed action would assist

theBLMin meeting themanagement objectives intheEnergy Policy Act of2005 (Title II,Section 211), which establish agoal for the Secretary ofthe Interior to approve 10,000MWs of electricity fromnonhydropower renewable energy projects located on publiclands. The proposed action also would further the purpose of Secretarial Order 3285(March 11, 2009) thatestablished the developmentof environmentally responsiblerenewable energy as apriority for the Department of the Interior.The need for the proposed action is for BLM to respondto a Notice of Intentand Plan ofExploration, Operations Plan, andDrilling Program for the Newberry Volcano EGSDemonstration Project (Project, EGS Project) submitted bytheProponents to developand test EGSdemonstration technologyand associatedmonitoring equipment onNational Forest lands. These lands include National Forest landswith and withoutgeothermal leases that havebeen issued and are administered by the BLM. Inaccordancewith The Geothermal Steam Act ((Geothermal SteamAct of1970 (30 U.S.C.10011025) and 43 CFR subpart3207)), BLM must respond to requests by lessees toexplore geothermal resources in accordance to lease stipulations on federal geothermal

leases.

FSAs a cooperating agency, the purpose of the proposed action as to the ForestService is toassistBLM in deciding whether togrant, grant with modifications, or deny theProponents proposal to usepublic lands managed by the BLM todevelop and testan



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EGS demonstrationfacility in compliance with applicable geothermal leasing regulationsand other Federal laws. Asecondary purpose is forthe ForestServiceto carry outfederal energy policy, orders, and objectives, including those from:

The National Energy Policy (May 2001) which includes the need to expediteprojects that will increase the production,transmission,orconservation ofenergy (Section 1, Policy and Executive Order 13212), and

The Energy Policy Actof 2005 (Public Law 10958) for promoting the leasingand developmentof geothermal resources where appropriate on public lands.

As the manager of the national forest lands on which the EGS Projectis proposed, ForestService has a need to cooperate with BLM asit evaluates projects ongeothermal leasesthat were issued with Forest Service consent. Forest Service also has a need to ensure

thatthe proposed EGS Project meets thegoals, objectives, standardsand guidelines ofthe 1990 LRMP for the Deschutes National Forest, and the Newberry National Volcanic

Monument Plan.

This project has MSA stations being proposed where the Forest Service has the decisionauthority under NEPAand asa result the ForestService has a need to make a decision toissue or not issue a permit for thesestations.DOEThe National Environmental Policy Act(42 U.S.C. 4341 etseq.; NEPA), the Council onEnvironmental Qualitys NEPA regulations (40 Code ofFederal Regulations [CFR]Parts1500 to 1508), and the DOEs NEPA implementingprocedures (10 CFR Part 1021)require that DOE consider the potential environmental impacts of a proposedactionbefore making a decision. This requirement applies to decisionsabout whether toprovide differenttypes of financial assistance to private entities.As background, in an effort to increase national energy options, reduce vulnerability todisruption and increasetheflexibility of the market tomeet U.S. needs, DOEsGeothermal Technologies Program(GTP)facilitates research, development, anddemonstration to establish geothermal energy as amajor contributor for electricitygeneration. Oneway toaccomplish this is to extract heat from hot, underground rock, anindigenous resource, and convert the heat to electricity. Enhanced Geothermal Systems

(EGS) are engineered reservoirs created to produce energy fromgeothermal resourcesdeficientin water and/or permeability.With regard to EGS, DOE is seeking to address key aspects of site selection and

characterization, reservoir creation and validation, reservoir sustainability, and plant

operation and management throughadvanced technologies. As part ofthe AmericanRecovery and Reinvestment Act of2009, DOE issued afundingopportunityannouncement DEPE3609GO99019 Enhanced Geothermal Systems Demonstrations

through which DOE sought to fund projects in a variety of geologic formations that couldquantitatively demonstrateand validatestimulation techniquesthatsuccessfully sustainsufficient fluid flow and heatextraction rates for 57 years that produce up to 50 MWeper year per project site/geothermal reservoir. The proposed EGSProject hasthepotential to advance EGS technology bydeveloping andtesting an EGS reservoir. DOE is



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proposing toauthorize the expenditureof federal funding through the GTP to AltaRockfor theproposed EGS Project. DOE has already authorized the use of a small percentageof the Federal funding forpreliminary activities and associatedanalyses.

1.5 MANAGEMENT D IRECTION AND CONFORMANCE WITH LAND USE PLANS The proposedProject is located on federal lands managed by the ForestService. LandManagement Plans (Deschutes National Forest LRMP (1990) and Newberry National

Volcanic Monument Plan (1994)) have been completed for all lands upon which

activities areproposed, both lands leased for geothermal exploration and unleasedlands.In accordance with theNationalForestManagementAct (NFMA) and theNewberry National Volcanic Monument Act, all activities onNational Forest landsmustbe consistent with theapplicable management plans.In accordancewith the Federal Land Policy and ManagementAct (FLPMA) of1976, asamended, for leased lands, BLM regulations require thatactivity on geothermal andother leases conform with the Deschutes National Forest LRMP. The Deschutes National

ForestLRMP provides statutory guidancefor all Forestmanagement activities includingthepotential for geothermal exploration and development.Forestmanagement goals reflect a visionfor all Forest resources including a goal toprovide for exploration, development, and production of energy resources on the

Forest while maintaining compatibility with other resource values. (LRMP p. 42).

According to the LRMP, the desired futurecondition for energy resources predicts thepotential importance ofthe geothermal resource and states, Large areas of the Foresthave become prime targets for the explorationand development of geothermal energy.If the supplyof electricity in the western states slips from surplus to deficit, geothermalenergy development will become increasingly attractive. (LRMP p. 46). Further

anticipating geothermal exploration and development, the desiredfuture condition alsoexplains thatgeothermal leases and permits have been issued in a timely way. Drillpads, pipelines, power plants, and electrical transmission lines, to the extent possible,

are designed and located to minimize impacts on otherresources, particularly visualquality.(LRMPp.46).Standards and guidelines (S&Gs) in the LRMP provide more detailed directiontohelpmitigate effects, minimize conflicts,and protect resource values. Forestwide standardsand guidelines provide overall Forest direction andaffirm, among other things, that thenoticesand stipulations in leases issued prior to implementation of this Plan takeprecedentover standards/guidelines developed in this Plan. These existing leases willcontinue and have prior rights. Proposals to explore develop, and produce electricity on

all leases, past and future will be evaluated through the NEPA process. To the extentpossible, consistent with existingleaserights, standards/guidelines will be followed.(LRMP p. 477)

Geothermal operations areguided bywhich management area (MA)they are located inand the S&Gs that apply to that particular MA. The proposed Project falls within two

MAs, general forest and scenic views. BothMAsallow forgeothermal uses. The goalfor general forest (MA8) isto emphasizetimber production, and the goal for scenic



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views (MA9) is to provide Forest visitors with high quality scenery. The S&Gs thataddressgeothermal andmineral activities for each MA are:

General ForestS&G M817. Geothermal leases will be issued. ConditionalSurface Use and Seasonal Restrictions Stipulations will be used to protect

wildlife habitat and recreation areas that are included in the General Forest

Area.

Scenic ViewsS&G M983. Mineral developments, utilities, and electronic sitesmaybelocatedintheseareasif the facilities and associated improvements arelocated, designed, and maintained to blend with the characteristic landscape.

Visual quality objectives may not always be metwhen the viewer is within thespecial use site itself, due to the usual large scale of these facilities. However,

when viewed from travel routes, recreation areas, and other sensitive viewer

locations, Visual Quality Objectives should be met.

Scenic ViewsS&G M984. Trees may be removed within the Scenic ViewsManagement Area where necessary to permit access to geothermal sites,

mineral development, electronic sites, utilities, and other special use sites.



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Figure2:DetailedProjectLocation

Map

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Figure3:ProjectAccessRoutes

NEWBERRYVOLCANO

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PROJECT

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1.6 RELATIONSHIP TO LAWS ,REGULATIONS ,POLICIES ,AND NEPADOCUMENTS NEWBERRY NATIONAL VOLCANIC MONUMENT ACT (PUBL IC LAW 101522) , NOVEMBER

1990. In 1990, Congress designated over 50,000 acres to become the Newberry National

Volcanic Monument through the Newberry National Volcanic Monument Act

(Monument Act).TheAct creating the Monument restricts geothermal developmentwithin the NNVM and also provides specific guidancerelatedto activities outsidethe Monument boundaries.Nothing in this Act shall be construed as authorizing or directingthe establishmentof protective perimeters or buffer zones around the Monument or Special

Management Area for the purpose of precluding activities outside the Monument

and Special Management Area boundary which wouldotherwise be permitted underapplicable law.Thefactthat activities oruses outside the Monument and SpecialManagement Area can be seen, heard, measured, or otherwise perceived from

within the Monument and Special Management Areashall not, of themselves, limit,restrict, or preclude such activities or uses up tothe boundary of the Monument andthe Special Management Area (Public Law 101522, Section 8(a)).

In addition, the Act includes a provision for: The Secretary, in cooperation with the

Secretary of Interior, shall maintain a research andmonitoring program forgeothermal resources for the purpose of identifyingand assessing the impact thatpresentand proposed geothermal developmentin the vicinity ofthe Monument andSpecial MangementArea may have on the values for which such Monument andSpecial Management Area were established (Sec. 6(b)(7)).

NEWBERRY NATIONAL VOLCANIC MONUMENT COMPREHENSIVE MANAGEMENTP LAN ,AUGUST 1994.

As mandated in the Monument Act, the ForestService prepared aComprehensiveManagement Plan (CMP) for the NNVMestablishingprogrammatic managementdirectionfor National Forest lands within the newly created Monument and for thefour specially designatedareas (Special ManagementArea, Transferal AreaAdjacent, Transferal Area, and Transferal Corridor) within the Monument boundary

that may be used for geothermal exploration and development under certain

circumstances.Consistent with the Monument Act, the CMP acknowledges there are valid

geothermal leases within the Special Areas identified within the Monument Act. The

CMPincludes a goal to manage the surface ofthe Special Management Area and oftheTransferal Area Adjacent as part of the Monument, while allowing subsurfaceexplorationfor and development of geothermal resources (CMP, page 7).

THE FEDERAL LAND POLICY AND MANAGEMENT ACT OF 1976 (FLPMA) , AS AMENDED ,OCTOBER 2001 (PUBL IC LAW 94 579) .

Among other things, FLPMA establishes public land policy; establishes guidelines for

its administration; andprovides for the management, protection, development, and



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enhancementof the public lands. FLPMAalsoestablishes the BLMs multipleusemandate to serve present and future generations and directs that on BLM leases the

managementplan in place be used for guidance. THE NATIONAL FOREST MANAGEMENTACT OF 1976 (NFMA) , AS AMENDED,1990

(PUBL IC LAW 94 588) NFMA requires that all National Forests develop Land and Resource Management

Plans to guide allowable uses and activities on National Forest System Lands,andthatall activities beconsistent with thoseplans.

PROGRAMMATIC ENVIRONMENTAL IMPACT STATEMENT FOR GEOTHERMAL LEASING IN THE WESTERN US, DECEMBER 2008.

One of the goalsofthe Programmatic Environmental Impact Statement (PEIS) is tofacilitate geothermal leasing decisionsin the western US. The PEIS was jointlyprepared by BLM and Forest Servicein cooperation with DOE, and includes acomprehensive list ofstipulations, bestmanagement practices, andprocedurestoprovide consistentguidance for geothermal exploration and development. This EAis consistent with the PEIS, and incorporatesby reference effects analyzedandaddressed in the PEIS andRecordof Decision.

NATIONAL ENERGY POLICY (MAY 2001)AND EXECUTIVE ORDER 13212ACT IONS TO EXPEDITE ENERGY RELATED PROJECTS .

The above referenced Policy and Executive Order apply to energyrelated projects

and directthe federal agencies to expedite projects that will increase theproduction, transmission, or conservation of energy, and expedite their review of

permits or take other actionas necessary to accelerate the completionof suchprojects1.

ENERGY POLICY ACT OF 2005 (PUBL IC LAW 109 58) . This Actalso applies to BLM and ForestService anddirects theagencies to promoteleasingand developmentof geothermal resources where appropriateon publiclands.

GEOTHERMAL STEAM ACT OF 1970(PUBL IC LAW 91 581) . Under the terms ofthe Geothermal SteamAct and implementing regulations, BLM isrequired to respond to proposed geothermal plans, applications, andprogramssubmitted by a lessee or the lessees designated operator.

1 FR Vol. 66, No.99, Executive Order 13212 of May 18, 2001, Actions to Expedite Energy

Related Projects, Section 1 and 2, P. 28357



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NATIONAL ENVIRONMENTAL POLICY ACT OF 1969,COUNCIL OF ENVIRONMENTALQUALITY REGULATIONS,AND THE FEDERAL LAND POLICY AND MANAGEMENT ACT OF 1976.

This EA is prepared in accordance with the NationalEnvironmental Policy Act of1969 (NEPA), the Council of Environmental Quality (CEQ) regulations (40 Code of

Federal Regulations [CFR] 15001508) implementingNEPA, and the Federal Land

Policy and ManagementAct(FLPMA) of 1976. Furthermore, this EA has beenprepared in accordance with the BLM NEPA HandbookH17901, January 2008.

994 NEWBERRY GEOTHERMAL P I LOT PROJECT F INAL EIS AND RECORD OF DEC IS ION .In 1994 the Deschutes National Forest, Prineville District BLM, and Bonneville

Power Administration analyzed potential effects of a proposed federal pilot project

for geothermal exploration, development, and production of electrical energy on

federal leases at Newberry, near the EGS project area. The pilot project was

approved byForest Service (as lead agency with BLM and Bonneville PowerAdministration as cooperatingagencies)andseveral exploration wells were drilled,but the results were inconclusive and the project was suspended in 1996. Anextensive and detailed environmental analysis was conducted forthat projectandsome of the data may be relevant to the analysis of the proposed EGS Project;

therefore, this NEPA document, and the two listed below, may becited throughoutthisdocumentwhereappropriateandareavailableat the Prineville District office.

2007 NEWBERRY GEOTHERMAL EXPLORATION PROJECT EA AND DEC IS ION RECORD (OR050 075) .

The 2007 EA and Decision Record issued by BLM are incorporated by reference in

this EA. The 2007 EA analyzed a Davenport Newberry exploration project that

involves drilling deep geothermal exploration wells (10,000 feet deep or more) on

three well pads each approximately 5 acres in size. All well pads were constructedand two wells have been drilled andcontinue to be monitored and evaluated. Onewell pad and well from this project(NWG 5529) would be used for the proposedProject.

2010 EA AND DEC IS ION RECORD FOR DRILL ING ,TEST ING ,AND MONITORING OF UP TO 12 TEMPERATURE GRADIENT /PASSIVE SE ISMIC GEOTHERMAL EXPLORATORY WELLS (DOI BLM OR P000 2010003 EA). (DAVENPORT TG PROGRAM)

This EA and subsequent Decision Record issued by BLM and the Finding of No

Significant Impacts issued by DOE arealso incorporated by reference. This 2010 EAanalyzed twelvesites forshallow small diameter wells on acre well pad sites, tobe used to

collect geologic and seismic data

to provide new information about

thegeology and potential geothermal resource in the area. Seven pads were prepared

since 2010 and 7 wells were drilled; the project will continue in 2012. Up to four of

the10borehole MSA stations proposed for the EGS Project would be located at wellsites previously analyzed and approved inthis EA, therefore these NEPA documentsmay be cited and also incorporated by reference.



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1.7 SCOPINGAND PUBLICINVOLVEMENT On October 21, 2010 BLM mailed a Scoping Notice to 462 individuals, organizations, and

agencies. Mailing listsfromPrineville BLM, DeschutesNational Forest, and Davenportwere combined to ensure obtainingthe widest coverage of people who are known tobeinterested in, or who may be interested in EGS technology and the proposed Newberry

EGS Project.Several public meetings were held to provide information about the proposed Project at

Newberry in order to informand engage the broadest possible central Oregon audience.AltaRock and Davenport made presentations, answered questions,and engaged theaudience in discussion ateach of the meetings.On July 15, 2010 ameeting was held in La Pine and was attended by 21 people, andmore than adozen people attended a similar meeting in Sunriver on August 12, 2010. Apublic meetingwas also held in Bend on September 21, 2010 and attended byapproximately 26 people. Representatives from BLM, Forest Service, and DOE

participated, AltaRock and Davenport made presentations, and audience interaction and

questions were encouraged. Various central Oregon media representatives were at all

threepublicmeetings. TheBLM with the Forest Serviceand theproponents led a fieldtour during the public scoping period on November 10, 2010, with 25 members ofthepublic participating.

In the local media, there were at least23 articles and notices published about EGS,geothermal exploration at Newberry, and theproposedEGS Project, many of which werepicked up by Internet news websites and blogs. At least6 of these were printed and 1television news storywasaired during the scoping period between October 21, 2010and November 22, 2010.

1.8IDENTIFICATION OF

ISSUES

BLM received nine comment lettersfrom the public in response to theScoping Noticeand considered these as well as comments made during the public meetings. All

commentswere considered, and substantive and relevantcomments and concernsareaddressed in the environmental analysis. The letters and the scoping analysis report are

on file and publically available at the Prineville BLM office.

Concerns and topics raised by the public, as well as those raised by specialists from the

three cooperatingagencies, were reviewed and used todevelop key issues and helpguide the EA. A decision instrument was used to identify these key issues by evaluating

the commentsandaccessing how the issues andconcerns can be met by customaryandusual methods. For example, some issues are dealt withby following the DeschutesLRMP Standards and Guidelines; other issues are resolved by following best

management practices (BMPs); and others are resolved through project design features

or mitigations. Any issues or concerns not alreadymet by these methods that arewithinthe scope of the project become keyissues. A copy of this decision instrument is onfileat the Prineville district office. Key issues describe potential effectson a specificresource thatmay be relevantto the environmental analysis and will therefore beanalyzed anddiscussed indetail in the EA.



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Following review, BLM determined that other concernssubmitted were beyond thescope ofanalysis and would not be considered.ISSUESCONSIDEREDBUTNOTBROUGHTFORWARDFORDETAILEDANALYSISD I STURBANCE OF FOREST VEGETATION AND T IMBER STANDS The proposedproject area lies within extensive areas of past,present, and futurevegetation management, thinning, and timber harvesting projects. The EGS Project

would disturba very small amount of land (2/3 acre) in comparison to these and otherforest projects. The EGS Project andothergeothermal projectshave been designed to:minimize thetypeand amount of vegetation to be removed; require as small amount ofsurface disturbance as possible; and utilize sites that are adjacent to existing roads,

clearings, and areas thathave otherwise already been disturbedand are likely to soonbe disturbedagain. All of the sites requiring ground disturbance were locatedto usenatural openings and avoidthe cuttingof largetrees. As a result, impacts to forestvegetation and timber stands would benegligible.EFFECTS TO SOCIOECONOMICS The Projectwould have a small but positive effect on socioeconomics in terms oflocalworkers hired during project implementation and each projects use of local facilities,

services, and goods purchased from businesses in the La Pine, Sunriver, and Bend

communities. As an example, drilling of the production wells would be the most labor

intensive phase of the project. The drilling of each well would be supported by two

crews (approximately 12 people in total) with each crew working 12hour days foranestimated 90 days per well. These effectswould certainly be beneficial tocertain specificbusinesses and individuals, and wouldhave a minor beneficial impact to communitiesclose to the project site (such as La Pine and Bend). Thenumber of workers involvedthough would be small, as well astemporary, and would notbe expectedtoimpactcommunity services. As a result, socioeconomics in the Projectarea would not besubstantially changed.EFFECTS TO INFRASTRUCTURE :UT IL IT IES ,ENERGY ,AND MATERIALS The Project would occur on National Forest System (NFS) land, which has limited

infrastructure that could beaffected. Project crews would useexistingroads and wouldprovide their own fuel to support vehicle and equipment use. Fuel (gasoline and diesel)

used duringthe Project would be a consumptive use of these products, but itwouldbetemporary, shortterm, and a relatively small quantity comparedto the regional market.The work force associatedwith the Project would similarly not be expectedtoaffectutilities available in local communities.

EFFECTS TO TRANSPORTATION BLM andFS determined transportation was not anissue to be considered for detailedanalysis dueto thesmall scaleand limited duration ofthe Project.A small number ofvehicles and equipment would be involved, which wouldroutinely utilize the highwaysystem to reach job sites. Once on National Forest land, existing roads would be used



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and Forest Service road maintenance standards would apply. Vehicles using the roads

would include heavy equipment, service vehicles, road maintenance equipment, fuel

trucks, and pickup trucks. Traffic may be frequent at times, such as when a number ofvehicles are needed to deliver drill rigequipment. Peakvehicle trafficwould occurduring the mobilization and setup of the drill rig. Approximately 30 truckloads of

equipmentwould mobilize over a 7day period. After that, typical traffic would consist of

afuel truck approximately 2 times a week, adaily water truckfor dust abatement duringdry months, and approximately 10 pickup truckstotransportthe drilling crew each dayduring the planned drilling period of 180 days (two discrete 90 day periods

approximately 4 months apart). The access routes proposed use FS roads that are

designed to handle large vehicles. The Proponent, in coordination with FS, would post

signs notifying thepublic ofindustrial trafficand will meetManual for Uniform TrafficControl Devices standards. Project vehicles would use CB radios to alert others of

ingress and egress. Road signs reminding vehicles to use CB radios arealreadypostedon the main access road to the site (FS road 9735). During the Project, some FSroadswould be closed to the public. These roads (roads 600, 680, 558, 550, 510) have been

closed as part ofthe Newberry Geothermal Exploration project approved in 2007. Roadsigns clearly indicatethat theroad isclosed at thelocked gate. Because of the limitedscaleandduration,and implementation of theproject and design features mentionedabove, the project would be expected to have minimal effectson transportation.ENVIRONMENTAL JUSTICE Executive Order 12898, FederalActionstoAddressEnvironmentalJusticeinMinorityPopulationsandLowIncomePopulations,directs federal agencies to addressenvironmental and human conditions in minority and lowincome communities. The

evaluation of impacts to environmental justice isdependent on demonstrating thatsignificant, adverse impactsfromtheproposedEGS Project arenot disproportionatelyborne by any lowincome or minoritygroups in the affected community. The Projectlocation is onNFS land and the proposed actions would have very limited potential fordirect effectson communities that border the NFS land. As such, analyses in theEA donot indicate apotential formore than minimal adverse impactto the human population.MANAGEMENT OF HEALTH ,SAFETY AND HAZARDOUS MATERIALS The Proponentwould use best managementpractices to address the general and propermanagementof wasteto beused ontheProject. At certain times hazardousmaterialsmay need to be used. These would be transported, handled, utilized, and disposed of

properly andaccording to federal and state requirements for each product. Safety,including the safe and proper handling of waste and hazardousmaterials, would be anintegral part of Project implementation. Material Safety Data Sheets (MSDS) for allhazardous chemicals are on file at the Prineville BLM office.EFFECT TO CULTURAL RESOURCES Surveys for cultural resources are conducted for each project that occurson the Forest,including theEGS Project. Cultural resource surveys have been conducted on allproposed areas where new surface disturbancewould occur. No cultural resources wereidentifiedduring theintensivepedestrian survey of MSA locations. No historic



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structures, historic districts,or traditional cultural properties were identified during therecords search.2

As with all projects onNFS land, if any cultural resources are uncovered during Projectoperations,work would immediately stop at the site where artifacts were uncovered,the FS archaeologist would be notifiedand work wouldnotresume until appropriatetreatment recommendations were obtained from a qualified archaeologist. The Cultural

Resources Inventory Report is on file at the Prineville BLM office. As a result ofthenegative findings inthe cultural resourcessurveys andthe appropriate mitigation stepsshould any cultural artifactsbe found, there would be no impact to cultural resources.D I STURBANCE TO THREATENED ,ENDANGEREDAND SENSIT IVE P LANTS A Biological Evaluation (BE) ofthe ProjectArea was completed in July of 2011 forThreatened, Endangered and Sensitive Plants. The evaluationconcludedthat theproposed action would have no impacton Proposed, Endangered, Threatened, orSensitive plantspecies. This BE is on file at the Prineville office of the BLM.EFFECTS TO NOISE LEVELS Noise from equipment, vehicles, and machinery are customary for geothermal and

timber projects andwould be most evident at close range within each project site. Soundlevels from drilling deep geothermal wells are estimated to be up to 45 Aweighted

decibels (dBA) at a distance of 0.5 miles.3 This sound level is consistent with that of alibrary or a quiet room in a residence. The closest potentially sensitive receptor to the

Pad S29 site where the majority of project activity will occur is the Peter Skene Ogden

Trail (TR 56), which is 0.75 milestothe south and the closest noise sensitive property isthePaulina Lake Campground and Lodge located 2.3 miles to the east. Anynoisefromthe drill rig at these two locations would be less than 45 dBA and within Oregonnoisecontrol limits. Additionally, during the drilling of well NWG 5529 in the summer of

2008 there were no reports of noise complaints to the FS. The project would have

minimal noiseeffectsduetothe shortterm nature of theactivities and the remotelocation with respectto noise sensitive locations.EFFECTS TO A I R QUALITY Emissionsfrom the Project would include fugitive dustemissionsfrom road use andconstruction equipmentand diesel engine exhaustfrom the stimulation and drilling ofthetwo production wells. Ventedsteamfrom theproductionwells may containhydrogen sulfide and other noncondensable gases.

2 Cultural Resources Inventory and Monitoring Program, Newberry Volcano EGS

Demonstration ProjectMSALocation Study, Basin andRangeHeritageConsultants,LLC,November 2011.3 Newberry Geothermal Pilot ProjectFinal EIS, June 1994, p. 469.



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Given the small size of areasneedingearthwork(2/3 acre) and the small fleet ofvehiclesroutinely needed for stimulation anddrilling operations (lessthan 20), fugitive dustemissions would be minimal. The Proponents would use water trucks for dust

abatement, as per FS requirements, on the most traveled access roads during dry

months. This would further reduce dust generation. Fugitive dust emissions from the

project are notexpected to have an

adverse impact on

air quality.

Venting steamfrom production wells during shortterm flow tests and the longer 60daycirculation test may containhydrogen sulfide(H2S), a noncondensable gas commonlyencountered in geothermal activities. Because the vented steam would be heated

groundwater injectedfrom thesurface and not naturally occurring geothermal steamtraditionally found in conventional hydrothermal geothermal systems, it is anticipated

H2S concentrationswouldbe minimal (1 ppm or less) if detectable at all. Nonetheless,H2S monitoring and abatement equipment would be onsite and used during well testing.Continuous abatement of H2S emissions would be applied if measured concentrations

and flow rates indicatean emission rate greater than 5 lb/hr, an industry standardH2Semission limit.

Diesel combustion emissions wouldbe emitted from well stimulation and drillingequipmentand vehicles used to access the project site. Air quality impacts from asimilar, but much larger proposed geothermal pilotproject in 1994, were analyzed indetail. The analysis determined that these emissionswould not add substantially tothelevels that exist in the region from other sources such ashighway travel, forestrypractices, andrecreational activities.4To the extent that some of the present and future actions could occur at thesametimeasthe proposed EGS Project,there would be an addition ofsmall quantities of air emissionsfrom equipment, vehicles, and dust from each of the projects, but cumulative totals

would not beexpected to have

measurable effects on regional air quality.

EFFECTS TO LAND USE The proposedproject is on National Forest System lands andwill conformto existingland management direction.

EFFECTS TO W I LDERNESS AREAS ,POTENTIAL W I LDERNESS AREAS , INVENTORIED ROADLESS AREAS ,W I LD AND SCENIC R IVERS There are no Congressionally designated wilderness areas in or near theProject area.Aportion of Paulina Creek is identified as beingeligible as a wild and scenic river but it isnot designated as wild andscenic; neither Paulina Creek nor anyof its featureswould beaffected by this Project.

4 Newberry Geothermal Pilot ProjectFinal EIS, June 1994, p. 417.



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MSA Site NM40 is within theNorth Paulina Inventoried RoadlessArea (IRA), but the2001 Roadless Area Conservation Rule does not apply to activities that dont include

road building or tree cutting. The IRA meets the criteria for Potential Wilderness, but the

activity proposed at MSA NM40(surfaceinstallation of monitoring equipment) will notaffect orchange the wilderness character of thearea.IMPACT ON W INTER RECREATION Preparation and drilling ofthe downhole MSA sites could occurduring the wintermonths and some ofthe access roads are on FS roads that are used bysnowmobilesduring the winter. A detailed discussion of proposed access routes in relation to

snowmobile trails, and project design features incorporated to reduce impacts is

discussed in Section 2.6. These project design features would allow simultaneous use of

the roads by both snowmobiles and Projectequipment, therefore impacts from theProjecton winter recreation is anticipated to beminimal.IRREVERSIBLE AND IRRETRIEVABLE COMMITMENT OF RESOURCES The irreversible commitment of resources is described as the loss of future options. Itapplies primarily to nonrenewable resources, such as culturalresources, orresourcesthat are renewable after a regenerationperiod, such as soil productivity. Theterm mayalso apply to the loss of anexperience asan indirect effect of a permanent change inthenature or character of the land. Anirretrievablecommitmentof resources is definedas the loss ofproduction, harvest,or use of natural resources. The amount of productionforegone is irretrievable, but the action is not irreversible. No irreversible and

irretrievablecommitment of resources is expected.INTENTIONAL DESTRUCTIVE ACTS In December 2006, the DOE Office of General Counsel issued interim guidance

stipulating that NEPA documents completed forDOE actionsand projectsshouldexplicitly consider intentional destructive acts (i.e., acts of sabotage or terrorism). Theproposed EGS project would not involve the transportation, storage, or use of

radioactive, explosive, or toxic materials. Consequently, it is highly unlikely that

constructionor operation of the geothermal project would be viewed as apotentialtarget by saboteurs orterrorists. The project location is not near any national defenseinfrastructure or in the immediate vicinityof a major inland port, container terminal,freighttrains, or nuclear power plants. The ProposedAction would not offer anytargetsof opportunity for terrorists or saboteurs toinflict adverse impacts to humanlife, health,or safety.



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KEYISSUESTOBECARRIEDFORWARD,ADDRESSED,ANDANALYZEDINDETAILKey issues are those that represent a concern thatrequires more detailed analysis and aconsideration of the tradeoffs involved in choosingone alternative over another.Chapters 3and 4 of this EA providethedescription andanalysis of the key issuesidentified by BLM, FS and DOE.

W I LDL IFE KEY ISSUE Preparing and clearing the vegetation for the three borehole MSA stations havethepotential to removehabitat on these sitesfor somespecies. Drilling activities, testingand stimulation activities, and an increasein human disturbance also have the potentialto disturb nesting sites up to mile during the breedingseason or temporarily displacesome wildlife species.

The Deschutes LRMP Wildlife Standardsand Guidelines that support these issuestatements include: WL1 5, 11, 12, 19, 20, 28, 29, 31, 33, 34, 56, 72, and 73.

o UNITS OF MEASURE : Distance between drill sites and nesting sites. Area of habitat removed.

SCENIC RESOURCES KEY ISSUE Removal of vegetationon the microseismic monitoring sites has thepotential to causeup to 3 areas of approximately 9,375 square feet (0.2 acre) each or a total of28,125 feet(2/3acres)to notmeet the ForestPlan standards forvisual quality as seen fromselected viewpoints. The Deschutes LRMPStandards and Guidelines that supports thisissue statementis M819. The venting of steam during the short andlong termcirculation tests mayalsocreate a steam plume thatcould potentially be visible at timesfrom certain selected viewpoints. The drill rig and circulation testing facilities may be

visible at times from some key viewer locationsduring the anticipated2year durationof the Project.

o UNITS OF MEASURE : Number of sites and size in acresofareasthat would have vegetation

removed sufficient to be seen fromkey viewer locations. The distance from selected viewpoints and ability to be seen by Forest

visitors.GROUNDWATER QUANTITY KEY ISSUE Withdrawal ofgroundwater from water wells for the developmentand testingofabelowground EGS reservoirhas the potential to reduce the quantity of water availablefor other uses within the Deschutes drainage basin.

o UNITS OF MEASURE : Total amount of groundwater to bewithdrawn in millions ofgallons and

rateofgroundwater to bewithdrawn in millions of gallons perday.



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GROUNDWATER QUALITY KEY ISSUE Thedevelopment and testing ofa belowground EGS reservoir hasthepotential tonegatively impact groundwater quality within theaquifer.

o UNITS OF MEASURE : Amount, type of additivesand depth at which they are to be injected.

Injection and production well design features to prevent contamination of

thegroundwater aquifer.INDUCED SE ISMIC ITY KEY ISSUE The developmentof a belowground EGS reservoir by hydroshearinghas thepotential toproduce induced seismicity and increasedseismic riskthatcould affect historicstructures, resorts, and other recreation sites within the NNVM, could increase

avalancherisk, could increase risk to above and below ground geologicfeatures, andcould result in property damage in nearby populationcenters.

oUNITS

OF

MEASURE :

Probability of exceedingpeak ground acceleration (PGA) above 0.028 g5,

due to EGS activities, calculated at well pad 5529, Paulina and East Lake

Resorts and campgrounds,Lava Lands VisitorCenter, avalancheprone siteson North Paulina Peak andPaulina Peak, and thenearest population centersof La Pine, Sunriver, and Bend.

1.9 DECISIONS TOBEMADE BLMLEADAGENCYThe District Manager ofthe Prineville DistrictBLM will make the decision whether toapprove, approve with conditions, or deny the Proponents proposed Plan of

Exploration, Operations Plan, andDrilling Program.This EA provides analysis used by BLM to determine whether itcan issue a Finding of NoSignificant Impact (FONSI) or whether it is necessary to prepare an Environmental

Impact Statement (EIS). Significance isdefined by NEPA and in regulation 40 CFR1508.27. Ifthe District Manager determines that this Projectdoes not presentasubstantial question as to whether it may have significant effects based on the

environmental analysis documented in this EA, a Decision Record (DR) will be issued

approvinga selected alternative, whether it is the Proposed Action or anotheralternative. A DR and FONSIstatement document the reasons forthe selected

5 1 g is the acceleration due to gravity. A PGA of0.028 gis perceived as lightshaking byUSGS standards.



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alternative, why it would not result in significant environmental impacts, and how itmeets the Purpose and Need from Section 1.4 of an EA.

FORESTSERVICEANDDOECOOPERATINGAGENCIESThe Forest Service is involved in the environmental analysis under the terms of a

cooperative agreementbetween BLM and ForestService. The Forest Service will make aseparate NEPA decision and issue aFONSI, or declare the need topreparean EIS, onthose 9 MSA stations thatare noton geothermal leases administered by BLM,As a cooperating federal agency, DOE will make the decision whetheror not to authorizethe expenditure of federal fundsfor the proposed EGS project.DOE will make a separateNEPA decision and either issue a FONSI or declare the need to prepare an EIS.



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CHAPTER2. ALTERNATIVESINCLUDINGTHEPROPOSEDACTION2.1 INTRODUCTION

This chapter describes three alternatives analyzed for the purpose of thisEA:Alternative A, the Proposed Action; Alternative B, developed to address concerns raised

during the scoping processover water usageandvisual impact;and AlternativeC, theNo Action Alternative. A brief discussion of alternatives considered, but eliminated fromfurther analysis, is also included.

2.2 PROJECTLOCATIONThe proposedproject area is locatedapproximately 22 miles south of Bend and 10 milesnortheast ofLa Pineon National Forest system lands within the BendFort Rock RangerDistrict of the Deschutes National Forest (Figure 1: Project Vicinity Map), in Deschutes

County, Oregon.

Theprimaryproject activities would occuron an existing well pad, S29, completed byDavenportin 2008. S29 is approximately 5 acres in size, and is located on federalgeothermal lease OR40497 held by DavenportNewberry LLC in Section 29, Township21 South, Range 12 East. Nearby there would be 20 microseismic monitoring stations.

All of the MSA stations would be located on National Forest system lands. Eleven (11) of

thesiteswould be on federal geothermal leases, whereNEPAdecisions for surfacedisturbance is under the jurisdiction of the BLM, andnine 9 stations would be on landswhere FS will make the NEPA decision for surface disturbance (Table 1).

2.3 ALTERNATIVE APROPOSEDACTIONThis alternative is basedon the Notice of Intenttoconduct geothermal resourceexploration operations submittedby the proponents andthe associated Plan ofExploration, Operations Plan and Drilling Program. The description ofthis proposedaction will includea brief overview ofthe objectives, intent, and a simplified summarydescription ofthe processes involved. This will be followed by a detailed descriptionofthe key parts of the project:

Phase II6

Drilling three new MSA boreholes Installation and calibration ofthefinal microseismicarray Stimulation and testing of the injection well Drilling, stimulation, and testing oftwo productionwells Longterm circulation test

6 Phase I, was permitting, public outreach and collectionof baseline seismic data.



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PROJECTOVERVIEWThe proposedproject would create and test an EGS reservoir beneath an existinggeothermal well pad (S29) thatDavenportconstructed in 2008. Creation of thebelowground EGS reservoirwould be accomplished by using a process ofwellstimulation termed hydroshearing. Hydroshearing is the process of opening minute

cracks in the subsurface rock formationsalong existing natural fractures. In theproposed Project this wouldbe accomplished by injecting groundwater deep (at depthsof approximately 6,500 to 10,000 ft) into the existinggeothermal well, NWG 5529,locatedon pad S29. Shallow groundwater wells (approximately 600 to 800 ft deep)locatedatand near thesitewould be used to provide water for the project.The desiredoutcome of thisphase of the projectistoestablishan underground networkofinterconnected fractures in thehot rockthatwouldserveas aheat exchanger. Whencoldwater is pumped from the surface it becomes heated as it flows through thesesubsurface fracture systems. Once this is accomplished, heated water within the

reservoir would be returned to the surface by directionally drilling two additional deep

geothermal wells on the same well pad that would intercept the EGS reservoir and allow

the naturally heated water to be circulated between the wells.

Minute fractures created during thehydroshearing process would be mapped andcarefully controlled and monitored. Monitoring andmapping wouldbe accomplishedwith an array of microseismic monitoringequipment (microseismometers) installedeither just below ground (surface stations), or in boreholes (borehole stations)drilled toadepth of up to 1,100 feet. Ten (10) locations would be surface stations and 10 wouldbe borehole stations(Figure2). The microseismic array(MSA) stations would bestrategically and carefully distributed to provide the highestdegree of seismicsensitivity and accuracy. This MSA would monitor the hydroshearingprocess in realtime.

Of the 10 MSAborehole locations, 3 new boreholes would be drilled using atruckmounted rotary drilling rigsimilar to those used todrill domestic water wells. Existingwell sites, or sites already approved for such wells, would be utilized for 7 of the 10 proposed borehole MSA stations needed to support the required monitoringfor theproject. Each site for the MSA boreholes would average approximately 75 ft x 125 ft

(9,375 square feet or 0.2 acre) to safely accommodate equipment, includingadrill rigand water truck. Total surfacedisturbancefor all 3newborehole stations would beapproximately 28,125 square feet (2/3 acres). All sites are accessible from existing

ForestService roads and no new roads would be constructed.Once the underground EGS reservoir is successfully created, and twoadditional deepgeothermal wells are drilledandtested, along term circulation test ofapproximately 3060 days would be conducted to test reservoir performance. This datawould be used tocreate a conceptual model of how a hypothetical EGS wellfield and power plant might

function. Thetest system would notusegeothermal energy toproduce electricity and apower plant is not proposedat this time.



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INSTALLATIONOFMICROSEISMICARRAY(MSA)Final installation of the microseismic array would require:

Preparing the new borehole and surface MSA sites for the monitoringequipment

Placingdownhole seismometers Calibrating the borehole and surface MSA sites Installing a centralized data relay station

The potential MSA borehole sites are shown in Figure 2. The steps involved in drilling

and completingthese MSA boreholes are described below:FOR THE THREE NEW BOREHOLES :1. Prepare sites for drill rigaccess. The three new sites are accessible from existingFS

roads; no newroads would be necessary. Road clearing, grading, andbrushing maybe necessary on the roads shown in

2. Figure 3. The sites are all relatively flat. Only minor grading (no cut and fillnecessary), if any, would be required at each site to accommodate the rigandassociated equipment. The three new proposed borehole sites arelocated onsitesthat have previous disturbance. Vegetation that will need to becleared is made up ofimmature lodgepole pinewith someponderosa, approximately 620 feet in height.Trees needing to be cutat the new borehole MSA sites would be left onthegroundor piled within the immediate areato provide downwoody debris. This wouldprovide habitatfor prey species for raptors, woodpeckers, or martens. Live greentrees orsnagsgreater than15inches dbh (diameter at breast height) would not becut without prior FS approval.

3. Drill 614inch outside diameter boreholes to approximately 1,100 feet using atruckmounted rotary rig. Surface casingwould be necessary to preventnearsurface collapse or filingin ofthe newly created wellbore in poorly consolidatedsurface materials. The holes would be cased with 4inchdiameter PVC or steelclosedend casing and cemented from the bottom to the surface. Water for drilling

would be trucked in from existing groundwater wells on pads S16 and S29 or from

off site water sources in LaPine. The water would be delivered to the drilling sitesby up to two 3,5004,500 gallon water trucks. Water usage would be 2,0003,000

gallons per day for the approximately 14 days of drilling time anticipated per well.

Average water delivery is expected to be lessthan one water truck per dayfor eachwell. No sumps would be constructed on the pad site. All mud and cuttings would becontained in free standing tanksand disposed ofat approved receiving sites inaccordance with BLM requirements.

FOR ALL OF THE SELECTED BOREHOLE S ITES :4. Install microseismic monitoring equipment downhole and place aweatherproof

housing (approximately 3 feet by 3 feet) on the surface at each site. Install adjacent

solar panel and telemetry antenna. Solar panels and telemetry antennas at some

sites could be as much as 300 feet from the seismic station. It is anticipated that in

mostcases, thetelemetry equipment would be attached to a nearby tall tree.



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However, in the eventit is notfeasible to attach the antenna to a tree, a 1040 foottelescopingpole would be used to hold the antenna. The pole would be connected tothe borehole surface equipment by hard wire. Depending on the heightof the pole, ahole would bedug with a shovel to about 2 feet deep, then a posthole digger wouldbe usedto go another approximately 2 feet (for the taller poles) andthe pole wouldbe cemented into place. In addition to the

hard wire

to connect

the pole to the

borehole equipment, taller poles require wires that are secured into the ground.

Installation would take 11 weeks for all stations, followed by calibration and testingfor approximately 2weeks.Figure 4 shows a typical MSA station.

Figure4: Typical MSAStation with Solar PanelAnd Telemetry AntennaFO R SU R FAC E MSA ST AT I ONS :

The 10 Surface MSA stations would be identical to the borehole MSAstations exceptthat the seismometer would be placed in a shallow hole 1 to 4 feet deep and less

than 2 feet in diameter. Theseholes would be hand dug.5. To determine the optimum seismometer arraydeployment, the response of each

potential station location to seismic energy releasedin the reservoir must becalibrated. Calibration can be accomplishedby producingaseismic signal at each of

N E W B E R R Y V O L C A N O E G S D E M O N S T R A T I O N P R O J E C T E n v i r on me n t a l Asse ssme n t 35


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the stations and deploying a seismometer deep in the target well (NWG 5529) or a

suitable alternative location, tomonitorresponse (surface calibration).SurfaceCalibration In the surface calibration method, seismic energy is producedusing explosive charges deployed into shallow calibration holes (shot holes), 1530

feet in depth. These calibration shot holeswould be located onthe same sites as theMSA locationsandwould not require additional surface disturbance. The procedureis as follows:

Drill shot holes (34 inches wide, 1530 feet deep) with a small truck mountedrotary drill.

Line shot holes with PVC casing and installcap flush with theground surface. Load shothole with Pentolite explosive. Backfill and tamp native soil into the PVC casing and shot hole. Cover shot holewith rubber mat, 3ft x 3ft x 1inch thick highdensity aluminum

plate,and sand bags. Fire shot andrecordsignal on theseismographs. Once the calibration is successfully completed theshot holeswould be filled

with dirt and the shot hole location restored tothe satisfaction of the FS.6. Upon completion of activities related to the project (anticipated duringthe summer

of 2014), the boreholes would be plugged and abandoned according to BLM

specifications.The MSA equipment, including all associated wires, telemetry polesand cement footings, solar panels and batteries would be removed, and the sites

would be restored to a vegetatedcondition capable of growing forestlandscapessimilar to those in place prior to disturbance in accordance with Forest ServiceandBLM specifications. This will include recontouring anygradedpads to matchsurrounding topography, spreading stockpiled top soil/overburden, and replanting

vegetation.Surface MSA stations would be identical to the borehole MSA stations except that

theseismometer wouldbeplacedin a shallow hole 1 to 4 feet deep and less than 2feet in diameter. These holes would be hand dug.

INSTALL REPEATER STAT ION( S) :In order to relay the datatoa central location, up to twotelemetry repeater stationswould be installed. These stations would consist of an antenna, solarpanel andbattery. The antennaswould be placed high upin a treenear the repeater stationand would be visually inconspicuous. Onetelemetry repeater may be located inSection16, just north of S16, and the second one may be located in Section 21, justsouth of S16.

STIMULATEANDTESTINJECTIONWELLDevelopment of the EGS system involves the creation of an artificial reservoir in suitable

hot rocks where water cancirculatethrough and heat up, muchlike the heat exchangeprocess of a radiator. During this process, water wouldbe injected at high pressure



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(estimated to range between 1,160 and 2,600 psig) into well NWG 5529, to depths of

approximately 6,500 to 10,000 feet below ground.

To create a network of optimum fracture width, fracture density and overall dimension,

hydroshearing stimulation would beconducted at multiplelevels or fracture sets in thetarget well. The advantagesof stimulating at multiple levels include:

Creating a larger reservoir volume, thereby doubling or tripling availableheatexchange area.

Enhancingsystem permeability and connectivity to allow for higher productionrates and lower injection pressures, thereby increasing the economic viability of

any future project.

Establishing a singlewell productiontotalmass production rate of 75 Kg/s.A formation injection test would be conducted to determine the upper constraints for a

hydroshearing treatment design by definingthe magnitude of the minimum horizontalprincipal stress. This will identify the tensile failure pressure of a specificformationresulting

from high pressure, low volume injection, so

that

formation breakdown

pressure is notexceededduring themainstimulation treatments. This stressmagnitudeis a critical componentof volcanic stressregime and can only be identified throughformation injection test analysis.

The objective of stimulation is to create up to three separateand stacked fracture sets.Stimulation would be accomplished by pumping groundwater into the injection well at

relatively high pressure (but at a pressure low enough toprevent tensile failure andformation breakdown)to hydroshear the shallowestpreexisting wellbore fracturesbelow the casing shoe. Diverter materials,discussed below, are used to direct thestimulation fluid to specificareasof preexistingfractures, previously identified by aborehole televiewer survey.

USEANDAPPLICATIONOFDIVERTERSThe creation of EGS reservoirs has historically involved the stimulation of a single

fracture set aroundanexistingwell bore. This is because during stimulation the existingfracture with thelowest hydroshearing pressure will open when water is pumped fromthe surface and pressure is applied in the injection well. The other existing fractures,

that require a higher shear pressure, are typically not affected (Figure 5).



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LegendFractures:

Figure5: Stimulation of a Single Fracture Set

Thestimulation ofmultiplefracture sets in a single injection well will increase EGSefficiency. Creation of multiple fracture sets in a single well requires hydraulic isolation

of eachfracture network after it has beenstimulated. Toprovide hydraulic isolation forthecreation of multiple fractures, a diverter material can be used (Figure 6). After thestimulation of the first fractureset, a diverter material is applied to temporarily seal thefracture network from accepting additional fluid. Additional pressure is then applied to

the well andasecond set offractures is stimulated. After multiplefractures arecreatedinjection is discontinued and the well bore is allowed to reheat to the original well

temperature. This causes the diverter material to dissolve, leaving all fracturesopen forcirculation and flow during the operation of the EGS system (Figure 7).



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LegendFractures:

Figure 6: Stimulation ofSecond FractureSet After DiverterApplication to FirstFracture Set



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LegendFractures:

Figure 7: EGS Well withMultiple FractureSets after Diverter DissolutionProprietary diverters7, primarily developed by AltaRock, would be used between

pumping of the stimulation treatments for each fracture set. Diverter materials are

selected to be environmentally benign andto have

benign breakdown products. The

diverters would be selected from twoclasses of materials: biodegradable plastics andnaturally occurring minerals.Biodegradable plasticsareplastics thatwill decompose in natural aerobic (composting)and anaerobic(landfill) environments. They may be composed of either bioplastics,which are plastics with components derived from re

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