Water Resources Summary for BLM August 2012 Lease Sale

North Fork Watershed

February 5, 2012 Prepared by the NFRIA-WSERC Conservation Center

North Fork River looking at Mt. Lamborn, Mt. Landsend, and parcel 6197.

Hydrologic and Geologic Setting ................................................................................................ 3 Water Features ........................................................................................................................ 4 Water Quantity ........................................................................................................................ 7 Agricultural Water Uses ............................................................................................................................ 7 Municipal Water Use................................................................................................................................. 7 Environmental and Recreational Water Use.............................................................................................. 8 Dams and Reservoirs ................................................................................................................ 8 Water Rights ........................................................................................................................... 9 Water Quality ......................................................................................................................... 9 Conclusion ........................................................................................................................... 10 Tables.................................................................................................................................. 11 Figures ................................................................................................................................ 49 Table 1. Matrix of Geology, Landscape, and Water Factors for BLM Parcels in the North Fork River Valley ........................................................................................................................................................... 12 Table 2. Surface Water Features within One Mile of the Nominated Gas Leases........................................ 21 Table 3. Public Water Supply Entities and Sources in the North Fork Valley Area .................................... 25 Table 4. Water resources by distance from oil and gas lease parcel............................................................. 27 Table 5. Domestic Wells within 1 Mile of Nominated Parcels .................................................................... 29 Table 6. Natural Lake Level Rights in the North Fork Valley Area............................................................. 32 Table 7. In-stream Flow Rights in the North Fork Valley Area ................................................................... 33 Table 8. Environmental Attributes in the North Fork Valley Area .............................................................. 34 Table 9. Recreation Attributes in the North Fork Valley Area..................................................................... 34 Table 10. Decreed Surface Water Rights within 1 mile of the 22 Nominated Parcels ................................. 35 Figure 1. Water Resources and Parcel 6189................................................................................................. 50 Figure 2. Water Resources and Parcel 6190................................................................................................. 51 Figure 3. Water Resources and Parcel 6191................................................................................................. 52 Figure 4. Water Resources and Parcel 6192................................................................................................. 53 Figure 5. Water Resources and Parcel 6193................................................................................................. 54 Figure 6. Water Resources and Parcel 6194................................................................................................. 55 Figure 7. Water Resources and Parcel 6195................................................................................................. 56 Figure 8. Water Resources and Parcel 6196................................................................................................. 57 Figure 9. Water Resources and Parcel 6197................................................................................................. 58 Figure 10. Water Resources and Parcel 6198 ............................................................................................... 59 Figure 11. Water Resources and Parcel 6199 ............................................................................................... 60 Figure 12. Water Resources and Parcel 6200 ............................................................................................... 61 Figure 13. Water Resources and Parcel 6201 ............................................................................................... 62 Figure 14. Water Resources and Parcel 6202 ............................................................................................... 63 Figure 15. Water Resources and Parcel 6203 ............................................................................................... 64 Figure 16. Water Resources and Parcel 6205 ............................................................................................... 65 Figure 17. Water Resources and Parcel 6206 ............................................................................................... 66 Figure 18. Water Resources and Parcel 6207 ............................................................................................... 67 Figure 19. Water Resources and Parcel 6211 ............................................................................................... 68 Figure 20. Water Resources and Parcel 6215 ............................................................................................... 69 Figure 21. Water Resources and Parcel 6216 ............................................................................................... 70 Figure 22. Water Resources and Parcel 6217 ............................................................................................... 71 Figure 23. Irrigated Land and Ditch Network in Proximity to 22 Nominated Parcels ................................. 72 Figure 24. Domestic Service Areas & Sources in Proximity to 22 Nominated Parcels ............................... 73 Figure 25. Location of Drinking Water Wells in Proximity to 22 Nominated Parcels................................. 74 Figure 26. Major Environmental and Recreational attributes in the North Fork .......................................... 75 Figure 27. Selenium Loading Potential in the North Fork Valley ................................................................ 76

Hydrologic and Geologic Setting

The hydrologic setting in the vicinity of the 22 nominated parcels for oil & gas leasing in the North Fork Valley is dominated by snowpack atop the Grand Mesa and West Elk Mountains. The rivers, tributaries, ditches, and drinking water springs in the vicinity are dependent on surface runoff from snowmelt. Contamination or disturbances to the water supply would be devastating to the valley. Although the target gas producing zones have not been identified in the nomination information, it seems that the carbonaceous marine shales of the Mancos Shale are a likely target. The Mancos Shale is reported to have a maximum thickness of 4,000 feet in this area (Hail 1972). The Mancos Shale is exposed at the surface throughout much of the North Fork Valley, particularly below elevations of about 7,000 to 7,400 feet north of the valley and about 8,000 feet south of the valley (above Paonia). The Mancos is nearly flat lying with a slight dip to the north. As a result of erosion, the Mancos thins to the south where it is in contact with the underlying Dakota Sandstone near the town of Crawford. Because the Mancos is exposed at the surface and subject to erosion, the maximum thickness available for exploration in the nominated parcels would be less than 4,000 feet, thinning to zero thickness near the town of Crawford. This suggests that any exploration/development in the nominated parcels where the Mancos Shale is exposed at the surface would require drilling less than 4,000 feet, which is relatively shallow for oil and gas development. There would be very little horizontal and vertical separation between activities on these nominated parcels and the existing domestic water supplies, placing the water supplies at considerable and immediate risk should there be a loss of control of any fluids associated with oil and gas exploration and development. As stated previously, residents who depend on these sources of water likely have no alternatives other than to haul water, should their water supplies be affected by oil and gas activities on the nominated parcels. The shallow exploration/development depth combined with the relatively steep topography between the nominated parcels and the valley suggests that the potential flow path of any uncontrolled fluids from drill locations to domestic water sources would be relatively short, increasing the risk for contamination of existing domestic water supplies. See the attached Hydrogeologic Summary of the North Fork Valley Area with Respect to Potential Oil and Gas Exploration/Development for a more detailed explanation of ground water risks that must be taken into account in the BLM Environmental Assessment. Table 1 includes a matrix of all geology, landscape, and water constraint factors concerning the parcels nominated for the August 2012 lease sale in the North Fork Valley. There are a number of natural factors that would make it nearly impossible to develop a resource that is marginal at best. BLM must consider all geologic, landscape and water constraint hazards in the Environmental Assessment.

Water Features

The potential oil and gas exploration and development in the valley poses considerable risk to the valleys water resources and current domestic water systems. This risk from oil and gas development may not be categorically true for all geographic areas in Colorado, but the geology and geography of the North Fork Valley presents a situation where any uncontrolled loss of exploration or development related fluids could affect the already limited domestic water supply sources. Other oil and gas-related impacts are also of concern with respect to the local hydrology, such as increased erosion and sediment loading to stream channels due to inadequate storm water management and loss of fluids via pits and ponds. Most of the nominated tracts are located both uphill and hydraulically up gradient from numerous domestic water supply sources. Any loss of fluids, either from spills, faulty casing construction, or hydraulic fracturing would move towards the existing sources of water. Table 2 summarizes water features within one mile of each nominated parcel. Figures 122 illustrate the water resources within 1 mile of each parcel. BLM should consider the impacts of gas development on all the rivers, tributaries, ditches, laterals, lakes, reservoirs, springs, and dams identified in Table 2. The Little Snake Bureau of Land Management field offices 2010 Resource Management Plan calls for no surface occupancy (NSO) stipulations for oil and gas operations within a quarter-mile of perennial water sources. Below are waterways inside of nominated parcels and within a quarter mile of parcel boundaries. 6189 Drainages: Bear Creek, Dry Fork Waterways within parcel: Bear Creek Waterways within mile: 4 (North Fork Gunnison River, Dry Fork, Fire Mountain Canal, Sweezy Turner Ditch) 6190 Drainage: Minnesota Creek, North Fork Gunnison River Waterways within parcel: 2 (Sweezy Turner Ditch, Stewart Ditch) Waterways within mile: 3 (Minnesota Creek, Dry Fork, Stewart Ditch) 6191 Drainages: Roatcap Creek, Jay Creek Waterways within parcel: 2 (Roatcap Creek, Jay Creek) Waterways within mile: 2 (Love Gulch, Oak Mesa Ditch) 6195 Drainage: Jay Creek, Short Draw Waterways within Parcel: 5 (Jay Creek, Short Draw, Love Gulch, Fire Mountain Canal, Farmers Ditch) Waterways within mile: Same

6196 Drainage: Jay Creek, Short Draw, Love Gulch Waterways within parcel: 3 (Jay Creek, Short Draw, Fire Mountain Canal) Waterways within mile: Same 6192 Drainage: Minnesota Creek Waterways within parcel: 3 (Minnesota Creek and tributaries Sams Creek, Lake Fork) Waterways within mile: 5 (Sweezy Turner Ditch (inside 1000), Hardin Kerns Ditch (in 1000), Fort Hoodoo Creek, South Fork, Dry Fork) 6193 Drainage: Minnesota Creek Waterways within parcel: 1 (Turner Ditch) Waterways within mile: 5 (Miller Creek, Minnesota Creek, Clark Wade Ditch, Stewart Ditch, Minnesota Ditch) 6194 Drainage: Minnesota Creek, Miller Creek, Sams Creek Waterways within parcel: 5 (Minnesota Creek, Lone Cabin Ditch, Turner Ditch, Sams Creek) Waterways within mile: 3 (Minnesota Canal, Miller Creek, Lone Cabin Reservoir) 6197 Drainage: Bell Creek, Reynolds Creek, German Creek Waterways within parcel: 4 (Reynolds Creek, Lone Cabin Ditch, McDonald Creek, Lucas Cline Ditch point) Waterways within mile: 3 (German Creek, Roeber Reservoir, Bell Creek) 6198 Drainage: Cottonwood Creek, McDonald Creek, North Fork Gunnison River Waterways within parcel: 1 (Short Ditch) Waterways within mile: 5 (Smith McKnight Ditch, Stewart Ditch, Drake Cottonwood Ditch, Balch No. 2 Ditch, Clipper Ditch) 6199 Drainage: McDonald Creek, Cottonwood Creek Waterways within parcel: 1 (McDonald Creek) Waterways within mile: 0 6200 Drainage: Smith Fork Waterways within parcel: 2 (Smith Fork, Saddle Mountain Ditch) Waterways within mile: 1 (Clipper Ditch)

6201 Drainage: Smith Fork, Cottonwood Creek, Alum Gulch Waterways within parcel: 2 (Clipper Ditch, Aspen Ditch) Waterways within mile: 2 (Little Needle Rock Ditch, Alum Gulch) 6202 Drainage: Alum Gulch, Smith Fork, North Fork Gunnison River, Cottonwood Creek Waterways within parcel: 1 (Short Ditch) Waterways within mile: 3 (Smith Fork, Clipper Ditch, Alum Gulch) 6203 Drainage: McDonald Creek, Cottonwood Creek Waterways within parcel: 2 (McDonald Creek, Cottonwood Creek) Waterways within mile: 1 (Clipper Ditch) 6205 Drainage: North Fork Gunnison River Waterways within parcel: 2 (North Fork Gunnison River, Stewart Ditch) Waterways within mile: Same as above 6206 Drainages: North Fork Gunnison, Anthracite Creek Waterways within parcel: 4 (Paonia Reservoir, North Fork Gunnison River, Anthracite Creek, Thompson Creek) Other waterways within mile: 3 (Snowshoe Creek, Berg Ditch, Big Rock) 6207 Drainages: Stevens Gulch, Terror Creek, North Fork Gunnison River, Hubbard Creek Waterways within parcel: 6 (Terror Ditch, Wade Ditch, Terror Creek, North Fork Gunnison River, Stewart Ditch, Fire Mountain Canal) Other waterways within mile: 2 (Stevens Gulch, Hubbard Creek) 6215 Drainages: Deep Creek, Williams Creek, Muddy Creek, Paonia Reservoir/NF Gunnison Waterways within parcel: 2 (Deep Creek, Williams Creek) Other waterways within mile: 2 (Muddy Creek, Paonia Reservoir) 6216 Drainages: Paonia Reservoir/North Fork Gunnison River Waterways within parcel: 0 Other waterways within mile: 1 (Paonia Reservoir) 6217 Drainages: Cottonwood Creek Waterways within parcel: 0 Waterways within mile: 1 (Clipper Ditch)

Water Quantity
River flows are highly variable depending on the season. Average flows are highest during the spring snowmelt runoff months of May and June. Major flooding also occurs during spring runoff months when rapid melting snow is augmented by rain. Snowmelt flooding is characterized by moderate peak flows, large volume of runoff, and long flow duration. Flooding from rainfall is characterized by high peak flows of moderate duration. Early summer rain events are known to cause major flooding. Stormwater management for extreme events is a serious concern that must be addressed. The average annual rainfall in Paonia is approximately 15 inches. Due to an arid climate and irrigation withdrawals, some tributaries and reaches of the North Fork River may go dry or nearly dry in late summer. Water supplies in the North Fork Valley are extremely limited. Huge volumes of water are needed to extract gas using modern fracking and drilling techniques. According to the Statewide Water Supply Initiative, the Gunnison basin currently has a 128,000 acre-ft-year shortage in agricultural water (SWSI Chapter 4, 2010). Water demands for gas development would likely be filled by drying up agricultural land. Additional water withdrawals for gas development would tax an already over-appropriated river system. BLM must consider the impacts of significant water withdrawals on all consumptive and nonconsumptive water uses in the North Fork Valley.

Agricultural Water Uses

There are an estimated 800 irrigation diversions in the North Fork Watershed. Many of the ditches are earthen canals that were cut into the side of the Mancos Shale. The integrity of many of the 100+ year old ditches is questionable, and some of the ditches have been compromised by landslides. The BLM must consider the impacts of gas development (traffic, new road construction, vibrations from drilling) on our extensive ditch infrastructure. Over 280 ditches depend on the North Fork as a water source (CDSS 2008). These ditches provide water to thousands of acres of agricultural land throughout the valley. Five percent of the land in the North Fork Watershed is used for crop land and nearly 98% of all water withdrawals in Delta County are used for irrigation. Figure 23 shows the irrigated land and irrigation network. The BLM must consider how gas development will impact water quality and quantity needed to support already established irrigated agriculture.

Municipal Water Use

Domestic water is typically provided by municipal water suppliers or community groundwater systems. Rural areas often depend on self-supplied water from wells or surface water sources, such as springs. There are approximately 50 public water supply entities in the North Fork Valley. Several parcels encompass or abut sourcewater springs. Figure 24 shows the location of each domestic service area and the springs used to supply each service area. Table 3 identifies the size of each public water supply entity and the # of taps. Gas development could easily jeopardize our local municipal water supplies.

BLM must also consider the impacts that gas development would have on municipal water treatment systems. Earth moving activities could increase the amount of sediment and organic material in treatment influent, which can cause elevated levels of Haleoacetic Acids after chlorine treatment. Haleoacetic acid is reoccurring problem for Paonia and Hotchkiss treatment plants. EPA has not yet set national standards for disposal of "fracking" wastewater. BLM must consider the risk of contamination from produced water or fracking fluids on local water systems Individuals not on public supply systems use self-supplied water systems that withdrawal from groundwater or surface-water sources rather than being obtained from a public supply. There are hundreds of groundwater wells in the North Fork Valley. Figure 25 shows the location of domestic water wells and springs. Table 4 identifies the number of wells in close proximity of each nominated parcel. Table 5 illustrates the domestic well permits within 1 mile of the nominated parcels. Gas development could easily jeopardize the quality of local wells. Whereas municipal supplies must conform to state drinking water standards and are required to do regular water monitoring, individual well owners are not subject to the same controls. Well owners may not engage in routing water monitoring. BLM must guarantee baseline water monitoring is conducted of all domestic water supplies that could be impacted by gas development.

Environmental and Recreational Water Use

In Colorado Water Conservation Board (CWCB) has established minimum in-stream flows and natural lake levels to preserve or improve the natural environment to a reasonable degree. There are 26 in-stream flow rights and ten natural lake level filings in the North Fork watershed. Tables 6 and 7 show the watersheds in-stream flow and natural lake level water rights. Water demands for gas development could impact instream flows and natural lake levels in the North Fork Valley. The Gunnison Basin Roundtables non-consumptive needs assessment (NCNA) developed a list of major stream and lake segments with flow-dependent environmental values (CDM 2009). Table 8 and Figure 26 shows the major environmental attributes assigned to stream and lake segments in the North Fork watershed. The Gunnison Basin NCNA also includes a list of major stream and lake segments with flow-dependent recreational values. Table 9 shows the recreational attributes assigned to stream and lake segments in the North Fork watershed. Recreational attributes in the watershed include fishing, wildlife viewing and waterfowl hunting, boating, and high recreation areas. Gas development could negatively impact the environmental and recreation attributes identified by the Gunnison Basin NCNA.

Dams and Reservoirs

The parcels nominated for the August 2012 Lease Sale are in close proximity to a number of dams. The Paonia Dam is included in Parcel 6205, and the following Reservoirs & dams are within 1 mile from a nominated parcel: Minnesota Reservoir, Lone Cabin Reservoir, Baxter Reservoir, Todd Reservoir, and Roeber Reservoir. The proximity of 8

parcels to dams in the North Fork Valley are listed in Table 2. The reservoirs store valuable irrigation water, provide flood protection, recreation and wildlife habitat. Activities associated with gas development could have significant impacts on dam stability. The U.S. Bureau of Reclamation (BOR) completed construction of Paonia Dam and Reservoir, located on Muddy Creek just above the confluence with Anthracite Creek, in January 1962. The reservoirs primary purpose is to store irrigation water for the Fire Mountain Canal and Reservoir Company and the Ragged Mountain Water Users Association. The reservoir also provides recreational and wildlife benefits as well as supplemental flood control by reserving storage space through forecasts of snowmelt runoff and regulation of flood flows. When originally constructed, Paonia Reservoir had a capacity of 20,950 acre-feet. Subsequent sediment deposition has consumed substantial storage capacity, resulting in a total present capacity of approximately 15,000 acre feet. The projected rate of capacity loss from sedimentation is approximately 124 acre feet per year. There are three parcels that directly border Paonia Reservoir. The BLM must consider the impacts of gas development on the water quality in Paonia Reservoir, including sediment and chemical contamination.

Water Rights
The BLM should consider the impacts of gas development on all existing surface water rights and beneficial uses in the North Fork Watershed. This data is available via the Colorado Decision Support System (CDSS) database. Table 10 summarizes all the surface water rights within one mile of the 22 nominated parcels.

Water Quality
Water quality in the North Fork Valley is reflective of the surrounding geology and land use practices. The North Fork is naturally high in salts (calcium/magnesium) and metals (iron, arsenic and selenium) and low in nutrients (phosphorus and nitrogen). For over 10 years, volunteers from the NFRIA-WSERC Conservation Center (formerly NFRIA) have collected baseline water quality data on the North Fork and its tributaries as part of the River Watch Program. In addition to the River Watch monitoring program, the NFRIA-WSERC Conservation Center has a gas water monitoring program. In 2010, the Conservation Center collected surface and groundwater samples around existing gas wells in order to establish a baseline. The report tested for VOCs, BTEX and many other constituents. The data indicate that the sites tested are free from contamination. BLM should consider the Conservation Center baseline data as part of their analysis of water resources. BLM should identify all existing water quality data in the North Fork Valley. The following entities should be contacted to provide water quality data for the environmental assessment: 9

USGS Piceance Basin Water-Quality Data Repository Gunnison Energy Corporation multiple baseline studies on the Grand Mesa and North Fork Valley All domestic water company water quality reports (i.e. consumer confidence reports) The most pressing water quality concern is selenium. Several segments in the North Fork watershed are listed for selenium impairments. In 2010, the WQCD developed a TMDL for selenium in the Lower Gunnison watershed, including the North Fork. In 2011, the Gunnison Basin Selenium Task Force developed a draft watershed management plan. Both documents were developed to identify ways to reduce selenium loading. Recommended Best Management Practices (BMPs) for selenium reduction include lining ponds, piping or lining ditches, and conversion from flood and furrow irrigation to overhead sprinkler irrigation. Many selenium BMPs are funded by the federal government. Figure 27 shows areas that are rich in selenium loading potential. The BLM must consider the selenium loading potential from gas development, especially earth-moving activities and water use.

In the arid west, water is the greatest resource concern. The BLM must carefully consider all potential impacts of gas development on our scarce resources. No matter how many regulations are in place, a single accident could render our drinking water and irrigation water unusable.

Conclusion

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