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American Shale Oil, LLC <br />AUG 2 ti 200$ <br />August 18, 2008 <br />Mr. Travis Marshall <br />Colorado Division of Reclamation Mining & Safety <br />101 South 3' Street, Suite 301 <br />Grand Junction, CO 81501 <br />American Shale OR, LLC - Phase I NOI No. 82008-046 <br />Response to Notice of Deficiency <br />Dear Mr. Marshall: <br />RECEIVED <br />AUG 18 2008 <br />GRAND JUNCTION FIELD OFFICE <br />DIVISION OF <br />RECLAMATION MINING & SAFETY <br />American Shale Oil, LLC (AMSO) is submitting this response to the Colorado Division of <br />Reclamation, Mining and Safety (DRMS) Notice of Deficiency dated August 4, 2008, for HMSO's <br />Phase I NOI No. P-2008-046 application. Each deficiency noted by DRMS in the August 4, 2008, <br />letter is presented in italics below followed by AMSO's response to the deficiency. <br />1. The NOI states that hydrologic testing may include straddle packer testing within the corehole <br />and long-term aquifer testing within holes TM-1 through TM-4. Please indicate what criteria <br />will determine whether packer or long-term aquifer testing will be done? <br />AMSO Response: <br />AMSO intends to conduct the Phase I site characterization and baseline program in a focused, <br />step-wise manner whereby initial characterization findings are used to guide subsequent <br />characterization actions. Corehole CH-01 will be the first hole to be drilled during Phase I. <br />The primary objective of CH-0 1 is to provide detailed information of subsurface geologic <br />conditions beneath the Test Pad (the proposed location for Phase R oil shale testing) based on <br />core examination and interpretation/evaluation of a comprehensive suite of downhole logging <br />techniques. Because the corehole is not designed to nor will it be drilled to facilitate <br />hydrologic testing, it is uncertain whether the hole can be used to yield reliable hydrologic <br />pump test information. Drilling mud will be used during drilling, and a head of drilling mud <br />will be maintained until downhole logging is completed. In any case, drill hole reconstruction <br />or reconditioning would be required to support hydrologic testing. The hydrologic <br />characterization component of AMSO's Phase I program focuses on the water-bearing strata <br />immediately above, within, and immediately below the illite-rich target zone. Packer besting <br />will be considered only if (1) it is determined that the hole can be thoroughly cleaned at a <br />reasonable cost and (2) hydrostratigraphic characteristics of the water-bearing strata of concern <br />(inferred from information gathered during drilling, core examination, and downhole log <br />interpretation) suggest that single-hole hydrologic pump testing would provide reliable and <br />usable results. Regardless of whether packer testing is performed in the corehole, AMSO <br />110 East 3 Street, Suite 201 P.O. Box 1470; Rifle, CO 81650 Phone: 970-625-4324 Facsimile: 970-6254318