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Cramer, Johanna
<br />From: Mathews, Dan
<br />Sent: Friday, April 20, 2007 5:58 PM
<br />To: Brown, Sandy
<br />Cc: Jim Stover Qestover@bresnan.net); Tonya Hammond (tonya.snowcap@bresnan.net);
<br /> Cramer, Johanna
<br />Subject: Snowcap Unit Train Loadout
<br />Sandy:
<br />I met today with Jim Stover and Tonya Hammond, along with Halliburton representatives Wayne Brookshire and Jim
<br />Mcginty, and Brian Hansen, a consultant with NewFields, working for Halliburton. As I think you are aware, we approved
<br />TR-48 in January 2006, to allow for use of the Roadside Unit Train Loadout for loading of bulk materials off rail cars onto
<br />trucks, and for storage of bagged bentonite and pipe, within designated locations. The TR also allowed for installation of a
<br />new rail switch and site grading in a portion of the area to fill in the sewage lagoon impoundments to facilitate the use. The
<br />truck loading and storage operations would be carried out by Haliburton under a lease arrangement with Snowcap. The
<br />use has not yet been implemented, but likely will be shortly.
<br />The reason for today's meeting is that Halliburton has much bigger plans for the site, and it appears that sale of the
<br />property to Halliburton will be finalized within the next couple months. Halliburton would use the site long term as a sand
<br />storage plant, utilizing large storage silos and various associated loading, maintenance, staging, storage, parking, and
<br />road facilities. The initial thinking of the various parties when the meeting began, is that most likely Snowcap would submit
<br />a technical revision application addressing the detailed plans for the sand storage plant industrial facility, followed at some
<br />point by a postmining land use change/ reclamation plan change permit revision application. Under that scenario, we of
<br />course would have to require submittal of additional bond to cover cost of removal of any proposed additional facilities.
<br />By the end of the meeting, the thinking had changed. The parties now are leaning toward having Snowcap prepare and
<br />submit the land use change permit revision application as soon as practicable, the thinking being that Halliburton could
<br />delay implementation of their plant facilities construction until after the land use change application is approved (assuming
<br />the approval could be issued within approximately 6 months of submittal). What I think this means is that, within a
<br />relatively short time frame, Snowcap will submit a PR application to change the PMLU for the UTL rail loop area, access
<br />road, and adjacent conveyor corridor between the public road and the loadout from "Wildlife Habitat" to "Industrial or
<br />Commercial". The application will include a revised reclamation plan that will be directed toward preparing the site for
<br />development of the industrial plant site envisioned by Halliburton. I think a general site plan for what Halliburton plans to
<br />construct would need to be provided as supplemental information, but the actual reclamation plan that Snowcap would be
<br />responsible for under the alternative land use plan would be limited largely to clean up and disposal of cooly material and
<br />debris, demolition and removal of structures and facilities that will not be used in association with the sand storage plant,
<br />and site grading to accommodate subsequent facility siting and construction activity. Any current structures and facilities
<br />that will be retained for the industrial postmining use would need to be identified, delineated on final reclamation plan
<br />map(s), and their specific postmining use described. Any lands within the current disturbance boundary that are included
<br />within the Industrial or Commercial Postmining Land Use Area, but would not be subject to active industrial use very
<br />shortly following revision approval, would be subject to the vegetation cover requirement of Rule 4.15.10(2). Any such
<br />areas subject to 4.15.10(2) provisions would need to be described and delineated on the alternative PMLU final
<br />reclamation map, and justification for inclusion in the alternative land use area would need to be provided.
<br />It is pretty clear that Halliburton's interest in this project is "real", and Snowcap should be able to provide the necessary
<br />documentation in that regard. Also, it sounds to me like Halliburton will likely be chomping at the bit to get going with plant
<br />construction activity as soon as the permit revision is approved, so it would be in everyone's (Snowcap, Halliburton,
<br />DRMS) interest that a bond release application be submitted to allow for removal of the industrial plant site from the permit
<br />area as soon as practicable following approval of the permit revision. Bond release for the site could be granted "upon
<br />demonstration that the alternative land use has substantially commenced and is likely to be achieved", pursuant to Rule
<br />3.02.2(2)©.
<br />I think that Jim and Tonya have been through this drill enough now, that they are pretty familiar with the process and
<br />necessary demonstrations, although there are always some site and situation specific wrinkles to it. I think there are fewer
<br />complicating technical, regulatory, and landowner issues in this instance, than has been the case with the land use change
<br />revision for the South Portal area. I have a fairly thick stack of correspondence on file related to the general issue of land
<br />use change revisions that have been contemplated for Roadside, some of it specifically focused on the UTL area, and they
<br />have this correspondence to refer to also, so I am not planning on adding to it at this time with another formal letter. My
<br />letter of June 2, 2004 to Tonya covers the issues pretty thoroughly I think, along with attachments to that letter which
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