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Surface Water Resources -The project area is lies within the upper Yampa River watershed, and both the Yampa and Williams Fork Rivers flow through the area. The Williams Fork River, which originates in the western portion of the Dunkley and Beaver Flattops to the south, flows northward through the property, joining the Yampa River on the property at the southern margin of Big Bottom. The Yampa River originates in the eastern portion of the Dunkley Flattops and flows north toward Steamboat, west through Steamboat and Craig, and then turns south, through the property before again turning west toward its confluence with the Green River near Dinosaur, Colorado. Both the Williams Fork and Yampa Rivers are dominated by flows from snowmelt runoff within the upper reaches of their watersheds. Several small unnamed ephemeral watersheds within the project area, which typically flow only in response to spring snowmelt and thunderstorm runoff, are tributary to either the Williams Fork or the Yampa Rivers. The proposed exploration drilling will be conducted so as not to adversely impact any of the potentially affected drainages. Ground Water Resources -Groundwater occurrence within the project area is associated with the sandstones and coal units of the Iles and Williams Fork formations and the alluvial/colluvial deposits of the Williams Fork and Yampa Rivers. Permeabilities and water yields may vary significantly depending on localized conditions, however, they are generally low for both the bedrock and alluviaUcolluvial units unless influenced by secondary permeabilities associated with faulting and fracturing. Groundwater recharge occurs in the uplands of the Williams Fork Mountains to the south. Groundwater movement is generally down-dip to the north-northwest along the plunge of the Williams Fork Anticline and Big Bottom Syncline. The proposed exploration activities will avoid area drainage channels, and so will not affect alluvial/colluvial aquifers. BTU-EC anticipates that exploration activities may encounter some groundwater and will address potential discharge through appropriate operational controls during drilling and effective plugging and sealing on completion of drilling and sampling activities. Soils -Soils within the project area are formed primarily from weathered fine-grained sandstone, sihstone, and shale. The dominant soils are shallow to moderately-deep, well-drained, and have a textural classification of loam to fine-sandy-loam. Some areas of potentially unstable soils exist. Vegetation -The project area is dominated by disturbed and reclaimed lands, which have been reclaimed as rangeland for grazing use. Reclaimed vegetation is primarily a mixed grass community composed mainly of native grass species, with some non-native grasses and both planted and volunteer shrubs. Other disturbed lands are utilized as improved pastureland and cropland, with mixed wheat grasses for livestock grazing and dryland hay. Undisturbed areas are typically either a big sagebrush community (uplands) or a cottonwood willow community (drainage lowlands). No TES plant species have been identified as occurring within the proposed project area. Access and locations for the proposed exploration activities have been layed-out to utilize existing access roads and two-tracks and previously disturbed areas to the extent feasible, therefore, the proposed exploration activities should not significantly impact existing vegetation communities. Temporary impacts to cropping or grazing activities may occur and will be addressed, to the extent feasible, by coordinated scheduling and surface damage agreements with surface lessees. Wildlife - Pinon juniper-sagebrush in the general project vicinity provide good year-round habitat for deer, elk, and other large mammals. Within the project and immediately adjacent areas, significant wildlife habitation and use are limited primarily to mule deer, although some elk and pronghorn antelope are occasionally sighted as they move through and use the area on a temporary basis. The dominant sandstone cliffs provide nest sites for raptors and other birds, and migratory birds are seasonal residents of the nearby Big Bottom area. No TES animal species are known to occur in the project area. As part of the required consultation process, BTU-EC has contacted the Colorado Division of Wildlife (CDOW) for wildlife review, and the CDOW will review this exploration plan and provide necessary clearances. It is not anticipated that the proposed exploration activities will negatively impact existing wildlife species or populations. C:\Documents and Settings\jrb\Local Settings\Temporary Interne[ Files\OLK259\2006 Empire NOI Appl Forth R Ldoc Page 9 of 15