January 4, 2013 Billy Staton Terra Renewal, LLC 201 South Denver, Suite B Russellville, AR 72811 RE: AFIN: 15-00605 PERMIT NO.: 0751-WG-SW-4 FACILITY: Squires SWD Facility/Jessica 1-4 SWDW COUNTY: Conway Co. Mr. Staton: On December 13, 2012 I performed an inspection of the surface facilities associated with a disposal system for injection of saltwater & other oil/gas wastes in accordance with the provisions of the Arkansas Water and Air Pollution Control Act, and the regulations promulgated thereunder. At the time of the inspection, no violations were observed. Please refer to the comments section of the inspection form for any notes regarding any areas of concern that may have been observed at the above referenced site. Furthermore, I have met with Levi Ketcherside while onsite in regards to below mentioned issues concerning this site. If I can be of any further assistance, please contact me at 479-968-7339 x17 or via email at digiacomo@adeq.state.ar.us Thank you for your time, Stephen DiGiacomo Oil & Gas Field Inspector Water Division 479-968-7339 x17 digiacomo@adeq.state.ar.us cc: Water Division Permits Branch
ARKANSAS DEPARTMENT OF ENVIRONMENTAL QUALITY NO DISCHARGE INDUSTRIAL PERMIT INSPECTION FORM AFIN: 15-00605 Log No.: Permit No.: 0751-WG-SW-4 (AOGC# 33518) Inspection Date: December 13, 2012 Media: WATER Inspector: Stephen DiGiacomo Compliance Status: IN / OUT 1A. Name of Facility: Terra Renewal Squires SWD Facility and Jessica 1-4 SWDW Squires Transfer Facility - 1029 Arkansas 124, Hattieville, AR 72063 Jessica 1-4 Disposal Well lease road entrance (35.367850-92.822995) Address: Jessica 1-4 Disposal Well Site (35.367607-92.815821) County: Conway Co. 2A. Name of On-Site Representative: Levi Ketcherside 3A. Name of Responsible Official: Levi Ketcherside/Billy Staton 1029 AR Hwy 124 Address: Hattieville, AR 72063 Telephone: (479)-264-3169 4A. Parent Company: Terra Renewal, LLC Address: 201 South Denver, Suite B Russellville, AR 72811 Telephone: (479) 498-0500 5A. Description of Process (including type of industry, materials produced, and major by- This commercial facility stores, filters, and disposes of produced water & oil/gas fluid wastes from the surrounding production area. There is also a de-watering facility at the transfer station, which dries and removes the solids from the water. The solids are taken to the Yell County landfill and the filtered fluids are piped approximately 1.5 miles products): West to the disposal well, where they are injected. 6A. Any complaints registered against this permitted facility? Yes No If yes, give date and description of complaint: 7A. Are there any additions, modifications, or corrections to the facility since the last inspection? Yes No The Operator has completed the modifications detailed in the most If yes, explain: recent NOI (0751-WG-SW-4). No Discharge Industrial Report Page 2
1B. Furnish a simplified flow diagram of the treatment system and include main components, flow sequence through plant, and calculated or estimated flows. Trucks transfer produced water via gravity feed to the pit. Water is filtered (25 µm), a biocide agent is added, and then it is pumped to the cascade tank, which traps remaining solids. From there it flows over to the remaining holding tanks and is piped to the injection well. Need Improvements COMPLETED DE-WATERING FACILITY (MODIFICATION) Need Improvements Vac-trucks transfer sludge water to exterior holding tanks; water is filtered (1 µm) and piped to the reserve pit. Solids are completely dried and transported to the rolloff container, which is stored outside with a rain cover. Need Improvements OUTFALL 001 Ephemeral Streams The Injection well has 2 above ground tanks along with the pumps contained within a heavy duty secondary containment berm. No Discharge Industrial Report Page 3
2B. Nearest Stream: The Squires transfer facility is located near two unnamed, intermittent tributaries, one feeding Cedar Branch and another feeding West Fork Point Remove Creek. Several small ephemeral streams following the topography transport stormwater from the area to the southern tributary, and in the event of an incident occurring under stormwater conditions, this tributary could be impacted. The Jessica 1-4 disposal well is also near an unnamed, intermittent tributary of West Fork Point Remove Creek. 3B. Does wastewater from this facility cause adverse effect on the waters of the State: Yes No The discharge of any saltwater or other oil/gasfield wastes, including contaminated precipitation runoff, to the land or waters of the State is prohibited at all times. No wastewater is discharged If yes, describe: from the site. 4B. Are operating records kept as required by permit? Yes No N/A If no, explain: 5B. Are maintenance records kept as required by permit? Yes No N/A If no, explain: 6B. Are Samples routinely taken? Yes No N/A 7B. Does the sampling program meet the requirements of the permit? Yes No N/A The Operator samples each tanker truck received per AOGC rules If no, explain: (not required by ADEQ); samples taken at transfer station. 8B. What laboratory does the facility use? N/A; handheld Conductivity & ph meters Address: Telephone: 1C. Do laboratory procedures and records meet the requirements of the permit? Yes No N/A If no, explain: 2C. Is contaminated runoff a problem? Yes No N/A Based on the 2011 Annual Report for the operator s Industrial Stormwater Permit, several of the DMRs have exceeded EPA benchmarks at both locations, including TSS and O&G. 2012 records viewed onsite also showed that several benchmarks were If yes, explain: exceeded as well, including TSS and O&G. No Discharge Industrial Report Page 4
3C. Is sludge disposal required? Yes No N/A Sludge is controlled through settling in the pit and a cascade tank, which can then be emptied back into the pit. Periodically, the sludge buildup in the pit is transferred to the onsite dewatering facility. Commercial sludge is delivered directly to the separate dewatering facility, which filters out and dries solids larger than 1 µm. Solids are If yes, describe (including final destination): then sent to the Yell County Landfill. 4C. Is the treatment system being properly operated and maintained as required by permit? Yes No N/A If no, explain SUMMARY OF FINDINGS/COMMENTS Secondary containment structures were in excellent condition and are well engineered. Some improvements could be made in establishing vegetation or providing cover to bare soil. More importantly, improvements are needed to better control contaminated runoff from the site, specifically at points where stormwater collects at points along the South property line, and along the South side of the entrance road (per Standard Condition 10 found in Section B of the general permit). Other than these minor issues, the site is well maintained, and no discharges were observed from the facility equipment or secondary containment during the time of the inspection. Modifications under the current permit have been completed. There was an open 5-gallon bucket of oily water as well as a barrel of used oil stored near the guard shack at the disposal well which did not have secondary containment. The operator made plans onsite to remediate the issue in the near term. The Operator has an Industrial Stormwater permit (ARR000621). PDS# 069427 Inspector Signature: Date of Report: December 14, 2012 Signature of Reviewer: Date of Review: December 20, 2012 No Discharge Industrial Report Page 5
Water Division No Discharge Industrial Photographic Evidence Sheet Location: Squires SWD Transfer Facility 3.2 miles SE of Jerusalem, AR on Hwy 124 Photo # 1 of 7 Date: 12-13-12 Time: 0921 Description: Site identification Photo # 2 of 7 Date: 12-13-12 Time: 1050 Description: Reserve pit below freeboard. No Discharge Industrial Report Page 6
Photo # 3 of 7 Date: 12-13-12 Time: 1056 Description: Above ground storage with electrostatic dissipation and secondary containment installed. Photo # 4 of 7 Date: 12-13-12 Time: 1059 Description: Completed de-watering facility along South property line, bare soil is lightly packed and contained by a silt fence with wire backing along with a vegetated buffer. No Discharge Industrial Report Page 7
Photo # 5 of 7 Date: 12-13-12 Time: 1056 Description: Storage tanks for sludge water, with secondary containment installed. No holes found in the liner (40 mil liner over a steel frame). No containment necessary for compressor skid. Location: The Jessica 1-4 Saltwater Disposal Well Photo # 6 of 7 Date: 12-13-12 Time: 1143 Description: Above ground storage and pumps within secondary containment, some bare soil but surrounding area is well vegetated. No discharges visible at wellhead or inside berm. No Discharge Industrial Report Page 8
Photo # 7 of 7 Date: 12-13-12 Time: 1147 Description: Open 5 gallon bucket of oily water, and 1 barrel of used oil without secondary containment. No Discharge Industrial Report Page 9
Oil & Gas Violation Summary Sheet No Violations Noted Placing Waste Permitting Issues Spills & Leaks Turbidity (Regulation #2 Violations) Stormwater/Erosion Issues Notification/Reporting Violations Unpermitted Discharges Record Keeping/Paperwork Violations Trash/Unauthorized Fluids in Pits Improper Closure of Pit Insufficient Freeboard Poor Pit Construction Other (Describe): No Discharge Industrial Report Page 10