DWQ-2024-003408

DraftUTAH WATER QUALITY BOARDCLASS III AREAPERMITUNDERGROUND INJECTION CONTROL (UIC) PROGRAMUIC Permit Number: UTU-27-AP-718D759Major Permit ModificationMillard County, UtahIssued to:ACES
Delta Solution Mining, LLC3165 East Millrock Drive, Suite 330Holladay, Utah 84121
TABLE OF CONTENTSAttachment A -General Location Map of the MagnumStorage Project, Millard County.Attachment B -Map of the MagnumStorage Project Area of Review (AOR) including the Class
III Solution Mining Injection Wells and the PermitArea Attachment C -Corrective Action Plan for Artificial Penetrations into Injection Zone within Area of ReviewAttachment D -Construction
and Cavern Development PlanAttachment E -Monitoring, Recording, and Reporting PlanAttachment F -Well and Cavern Closure and Abandonment PlanAttachment G -Financial Responsibility
AUTHORIZATION TO CONSTRUCT AND INJECT
Pursuant to the Underground Injection Control (UIC) Program Regulations of the Utah Water Quality Board (UWQB) codified in the Utah Administrative Code (UAC) R317-7,
ACES Delta Solution Mining, LLC
3165 East Millrock Drive, Suite 330
Holladay, Utah 84121
is hereby authorized, for the sole purpose of constructing storage caverns, to construct and operate Class III solution mining injection wells in a Project Area centered approximately
at UTM Northing: 205364015 (NAD 83, UTM 12, Meters) and UTM Easting: 500135.217 (NAD 83, UTM 12, Meters), located in Millard County, Utah. A general location map is included as Attachment
A.
The intent of the solution mining activity to be conducted under this permit is to construct underground storage caverns in a thick salt body.This permit does not cover the operation
and maintenance of the injection wells and caverns forthe storage of product after each individual injection well and cavern system has been released from this Class III UIC permit.
In cases where product storage falls under the authority of the Utah Division of Oil, Gas and Mining (DOGM) and the Utah Board of Oil, Gas and Mining (BOGM), a special order issued
by BOGM is required before any storage of product may occur and will govern any authorized operation of the well/cavern systems for product storage. In cases where product storage does
not fall under the authority of DOGM or BOGM, DWQ will require a separate UIC Class V permit, which will govern the operational phase for product storage, before any storage of product
may occur. Several sections and subsections in Part III of this permit refer to compliance with DOGM rules and BOGM orders. This compliance only applies in cases where DOGM and BOGM
have regulatory authority for the point in question.
This permit implements requirementsfor constructing the wells and caverns, includingpre-operation logging and testing of the wells; establishing and maintaining mechanical integrity
of the wells and caverns prior to storage of product; pre-operationand monitoring, recording and reporting; and cavern expansion in excess of capacity lost due to salt creep during operations
through the use of freshwater displacement. This permit also implements requirements for well and cavern closure and abandonment and financial assurance to cover closure in the event
such closure is not regulated by DOGM.
DWQ and DOGM shall have concurrent regulatory authority during construction of the wells and also during any cavern expansion during operations through the use of freshwater product
displacement to create cavern capacity through solution mining in excess of capacity lost due to salt creep. Freshwater injection to prevent salt precipitation in the tubing strings
and to reclaim cavern capacity lost to salt creep are considered solely maintenance activities and, as such, are subject only to the regulatory authority of DOGM, or DWQ if DOGM determines
they do not have jurisdiction.
To the extent DOGM has obtained regulatory authority over any individual well/cavern system by its release from this permit, the regulations of DOGM and orders of BOGM shall govern all
activities related to operation, maintenance and testing.Part III (G)of this permit details the process for releasing an individual well/cavern system from this permit and for readmitting
an individual well/cavern system back into the permit for additional solution mining of the cavern.The Project Area, defined in the permit application, is located west of the intersection
of Highway 174, also known as Brush-Wellman Road, and Jones Road; approximately 3 ½ miles east-northeast of Sugarville, Utah and 9 miles north of Delta, Utah.
The legal description of the Project Area within which the construction of Class III solution mining wells may occur is included in Attachment B along with maps showing the facility
property boundary, the Project Area, and the Area of Review.This permit does not convey any mineral rights nor does it convey any contractual rights that may be necessary to construct
the caverns and/or to store product(s) in the caverns subject to this permit.All references to UAC R315-2-3, UAC R317-7, and to Title 40 of the Code of Federal Regulations (40 CFR) are
to all regulations that are in effect on the date this permit modification becomes effective. The following are incorporated as enforceable attachments to this permit:Attachment A -General
Location Map of the Magnum Storage Project, Millard County.Attachment B -Map of the Magnum Storage Project Area of Review including the Class III Solution Mining Injection Wells and
the PermitArea Attachment C -Corrective Action Plan for Artificial Penetrations into Injection Zone within Area of ReviewAttachment D -Construction and Cavern Development PlanAttachment
E -Monitoring, Recording, and Reporting PlanAttachment F -Well and Cavern Closure and Abandonment PlanAttachment G -Financial ResponsibilityThis modification of the permit is based
upon representations made by the permittee and other information contained in the administrative record. It is the responsibility of the permittee to read and understand all provisions
of this permit.Any person who violates the Utah Water Quality Act (UWQA), or any permit, rule, or order adopted under it, is subject to the provisionsofsection UCA 19-5-115 of the UWQA
governing violations.
This permit shall become effective***.
This permit and the authorization to inject shall be issued for the life of the project as described in Part III A – Duration of Permit of this permit unless terminated.Signed this****._____________________________John
K. Mackey, PEInterim DirectorUtah Division of Water QualityDWQ-2019-020265
GENERAL PERMIT CONDITIONS
EFFECT OF PERMIT
The permittee is allowed to engage in underground injection in accordance with the conditions of this permit. The permittee, authorized by this permit, shall not construct, operate,
maintain, convert, plug, abandon or conduct any other injection activity in a manner that allows the movement of fluid containing any contaminant into underground sources of drinking
water (USDW), if the presence of that contaminant may cause a violation of any primary drinking water standard under the Utah Public Drinking Water Administrative Rules, UAC R309-200
and 40 CFR Part 141, or may otherwise adversely affect the health of persons. Any underground injection activity not specifically authorized in this permit is prohibited unless otherwise
authorized-by-rule or by another UIC permit. Compliance with this permit does not constitute a defense to any action brought under the Utah Water Quality Act (UWQA) Title 19, Chapter
5 Utah Code Annotated 1953, or any other common or statutory law or regulation. Issuance of this permit does not authorize any injury to persons or property, any invasion of other private
rights, or any infringement of State or local law or regulations. Nothing in this permit shall be construed to relieve the permittee of any duties under applicable regulations.
SEVERABILITY
The provisions of this permit are severable. If any provision of this permit or the application of any provision of this permit to any circumstance is held to be invalid, the application
of such provision to other circumstances and the remainder of this permit shall not be affected thereby.
CONFIDENTIALITY
In accordance with Utah Code 19-1-306 (Records of the Department of Environmental Quality), Utah Code 63G-2-309 (Confidentiality Claims), and Utah Code 19-5-113 (DWQ Records and Reports
Required by Owners/Operators) any information deemed by the permittee to be entitled to trade secret protection submitted to the UWQB pursuant to this permit may be claimed as confidential

by the submitter. Any such claim must be asserted at the time of submission by stamping the words "Confidential Business Information" on each page containing such information. If no
claim is made at the time of submission, the UWQB may make the information available to the public without further notice. Claims of confidentiality may be denied by the UWQB according
to the procedures detailed in Utah Code 63G-2 and the federal Freedom of Information Act (FOIA). Claims of confidentiality for the following information will be denied as per UAC R317-7-9.7:1.
The name and address of the permittee. 2. Information that deals with the existence, absence or level of contaminants in drinking water.
CONDITIONS APPLICABLE TO ALL UIC PERMITS (40CFR144.51)
The following conditions are required for all Class III permits. Specific requirements for implementing these conditions are included in Part III of this permit, as necessary.
Duty to Comply (40CFR144.51(a))
The permittee shall comply with all conditions of this permit. Any permit noncompliance constitutes a violation of the Safe Drinking Water Act and the UWQA and is grounds for enforcement
action, permit termination, revocation and re-issuance, modification; or for denial of a permit renewal application; except that the permittee need not comply with the provisions of
this permit to the extent and for the duration such noncompliance is authorized in an emergency permit issued in accordance with UAC R317-7-8 (40 CFR 144.34). Such noncompliance may
also be grounds for enforcement action under the Utah Solid and Hazardous Waste Act (USHWA), Title 19, Chapter 6, Utah Code Annotated 1979.
Duty to Reapply (40CFR144.51(b))
If the permittee wishes to continue an activity regulated by this permit after the expiration date of this permit, the permittee must apply for and obtain a new permit. The permittee
shall submit a complete permit renewal application at least 180 days before this permit expires. While Class III permits are typically issued for the life of the project, unforeseen
circumstances may require the permittee to reapply for a permit. Class III well permits shall be reviewed by the Director at least once every five years to determine whether it should
be modified, revoked and reissued, or terminated.
Need to Halt or Reduce Activity Not a Defense (40CFR144.51(c))
It shall not be a defense for a permittee in an enforcement action that it would have been necessary to halt or reduce the permitted activity in order to maintain compliance with the
conditions of this permit.
Duty to Mitigate (40CFR144.51(d))
The permittee shall take all reasonable steps to minimize or correct any adverse impact on the environment resulting from noncompliance with this permit.
Proper Operation and Maintenance (40CFR144.51(e))
The permittee shall at all times properly operate and maintain all facilities and systems of treatment and control (and related appurtenances) which are installed or used by the permittee
to achieve compliance with the conditions of this permit. Proper operation and maintenance includes effective performance, adequate funding, adequate operator staffing and training,
and adequate laboratory and process controls, including appropriate quality assurance procedures. This provision requires the operation of back-up or auxiliary facilities or similar
systems only when necessary to achieve compliance with the conditions of this permit.
Permit Actions
(40CFR144.51(f), 40 CFR 124.5, 40 CFR 144.38, 40 CFR 144.39, 40 CFR 144.40, 40 CFR 144.41)
This permit may be modified, revoked and reissued, or terminated either at the request of any interested person (including the permittee) or upon the Director's initiative. However,
permits may only be modified, revoked and reissued, or terminated for the reasons specified in sections a) and b) below. All requests shall be in writing and shall contain facts or reasons
supporting the request.The filing of a request for a permit modification, revocation and re-issuance, or termination on the part of the permittee, does not stay any permit condition.This
permit may be transferred according to the procedures given in section d).
Modify or Revoke and Re-Issue Permits
When the Director of the Utah Division of Water Quality (hereafter referred to as ‘the Director’) receives any information (for example, inspects the facility, receives information submitted
by the permittee as required in the permit, receives a request for modification or revocation and reissuance, or conducts a review of the permit file), the Director may determine whether
or not one or more of the causes listed in paragraphs (1) and (2) of this section for modification or revocation and reissuance or both exist. If cause exists, the Director may modify
or revoke and reissue the permit accordingly, subject to the limitations of paragraph (3) of this section, and may request an updated application if necessary. When a permit is modified,
only the conditions subject to modification are reopened. If a permit is revoked and reissued, the entire permit is reopened and subject to revision and the permit is reissued for a
new term. If cause does not exist under this section a) or under section c) for minor modifications, the Director shall not modify or revoke and reissue the permit. If a permit modification
satisfies the criteria for minor modifications in section c) the permit may be modified without a draft permit or public review. Otherwise, a draft permit must be prepared and other
procedures in 40 CFR 124, incorporated by reference into the Utah UIC Program rules (hereafter referred to as ’40 CFR 124’), must be followed.
Causes for modification. For Class III wells the following may be causes for revocation and reissuance as well as modification.
Alterations. There are material and substantial alterations or additions to the permitted facility or activity which occurred after permit issuance which justify the application of permit
conditions that are different or absent in the existing permit.
Information. The Director has received information. For UIC area permits, this cause shall include any information indicating that cumulative effects on the environment are unacceptable.
New regulations. The standards or regulations on which the permit was based have been changed by promulgation of new or amended standards or regulations or by judicial decision after
the permit was issued.
Compliance schedules. The Director determines good cause exists for modification of a compliance schedule, such as an act of God, strike, flood, or materials shortage or other events
over which the permittee has little or no control and for which there is no reasonably available remedy. See also paragraph (3) under section c) – Minor Modification of Permit).
Causes for modification or revocation and reissuance. The following are causes to modify or, alternatively, revoke and reissue a permit:
Cause exists for termination under section b), and the Director determines that modification or revocation and reissuance is appropriate.
The Director has received notification (as required in the permit, see paragraph (4) under section c) – Minor Modification of Permit) of a proposed transfer of the permit. A permit also
may be modified to reflect a transfer after the effective date of an automatic transfer (see paragraph (2) of section d) – Transfer of Permit) but will not be revoked and reissued after
the effective date of the transfer except upon the request of the new permittee.
A determination that the waste being injected is a hazardous waste as defined in 40 CFR 261.3 either because the definition has been revised, or because a previous determination has
been changed.
Facility siting. Suitability of the facility location will not be considered at the time of permit modification or revocation and reissuance unless new information or standards indicate
that a threat to human health or the environment exists which was unknown at the time of permit issuance.
Termination of Permit
The Director may terminate a permit during its term, or deny a permit renewal application for the following causes:

Noncompliance by the permittee with any condition of the permit;
The permittee's failure in the application or during the permit issuance process to disclose fully all relevant facts, or the permittee's misrepresentation of any relevant facts at any
time; or
A determination that the permitted activity endangers human health or the environment and can only be regulated to acceptable levels by permit modification or termination;
The Director shall follow the applicable procedures in 40 CFR 124in terminating any permit under this section.
Minor Modification of Permit
Upon the consent of the permittee, the Director may modify a permit to make the corrections or allowances for changes in the permitted activity listed in this section, without following
the procedures of 40 CFR 124. Any permit modification not processed as a minor modification under this section must be made for cause and with 40 CFR 124 draft permit and public notice
as required in section a). Minor modifications may only:
Correct typographical errors;
Require more frequent monitoring or reporting by the permittee;
Change an interim compliance date in a schedule of compliance, provided the new date is not more than 120 days after the date specified in the existing permit and does not interfere
with attainment of the final compliance date requirement; or
Allow for a change in ownership or operational control of a facility where the Director determines that no other change in the permit is necessary, provided that a written agreement
containing a specific date for transfer of permit responsibility, coverage, and liability between the current and new permittees has been submitted to the Director.
Change quantities or types of fluids injected which are within the capacity of the facility as permitted and, in the judgment of the Director, would not interfere with the operation
of the facility or its ability to meet conditions described in the permit and would not change its classification.
Change construction requirements approved by the Director pursuant to 40 CFR 144.52(a)(1) (establishing UIC permit conditions), provided that any such alteration shall comply with the
requirements of 40 CFR 144 and 40 CFR 146.
Amend a plugging and abandonment plan which has been updated.
Transfer of Permit
Transfers by Modification. Except as provided in paragraph (2) of this section, a permit may be transferred by the permittee to a new owner or operator only if the permit has been modified
or revoked and reissued (under paragraph (2)(ii) under section a)), or a minor modification made (under paragraph (4) of section c)) to identify the new permittee and incorporate such
other requirements as may be necessary under the Safe Drinking Water Act.
Automatic Transfers. As an alternative to transfers under paragraph (1) of this section, any UIC permit for a well not injecting hazardous waste or injecting carbon dioxide for geologic
sequestration may be automatically transferred to a new permittee if:
The current permittee notifies the Director at least 30 days in advance of the proposed transfer date referred to in paragraph (2)(ii) of this section;
The notice includes a written agreement between the existing and new permittees containing a specific date for transfer of permit responsibility, coverage, and liability between them,
and the notice demonstrates that the following financial responsibility requirements of 40 CFR 144.52(a)(7) will be met by the new permittee:
The permittee, including the transferor of a permit, is required to demonstrate and maintain financial responsibility and resources to close, plug, and abandon the underground injection
operation in a manner prescribed by the Director until:
(A) The well has been plugged and abandoned in accordance with an approved plugging and abandonment plan and submitted a plugging and abandonment report; or
(B) The well has been converted; or
(C) The transferor of a permit has received notice from the Director that the owner or operator receiving transfer of the permit, the new permittee, has demonstrated financial responsibility
for the well.
The permittee shall show evidence of such financial responsibility to the Director by the submission of a surety bond, or other adequate assurance, such as a financial statement or other
materials acceptable to the Director.
The Director does not notify the existing permittee and the proposed new permittee of intent to modify or revoke and reissue the permit. A modification under this paragraph may also
be a minor modification under section c) – Minor Modification of Permit. If this notice is not received, the transfer is effective on the date specified in the agreement mentioned in
paragraph (2)(ii) of this section.
Property Rights (40CFR144.51(g))
This permit does not convey any property rights of any sort, or any exclusive privilege.
Duty to Provide Information (40CFR144.51(h))
The permittee shall furnish to the Director within a time specified, any information which the Director may request to determine whether cause exists for modifying, revoking and re-issuing,
or terminating this permit, or to determine compliance with this permit. The permittee shall also furnish to the Director upon request, copies of records required to be kept by this
permit.
Inspection and Entry (40CFR144.51(i))
The permittee shall allow the Director, or an authorized representative, upon the presentation of credentials and other documents as may be required by the law, to:
Enter upon the permittees premises where a regulated facility or activity is located or conducted, or where records must be kept under the conditions of this permit;
Have access to and copy, at reasonable times, any records that are kept under the conditions of this permit;
Inspect at reasonable times any facilities, equipment (including monitoring and control equipment), practices, or operations regulated or required under this permit; and
Sample or monitor at reasonable times, for the purposes of assuring permit compliance or as otherwise authorized by the SDWA and / or UWQA any substances or parameters at any location.
Monitoring and Records (40CFR144.51(j))
Samples and measurements taken for the purpose of monitoring shall be representative of the monitored activity.
The permittee shall retain records of all monitoring information, including the following:
Calibration and maintenance records and all original strip chart recordings for continuous monitoring instrumentation, copies of all reports required by this permit, and records of all
data used to complete the application for this permit, for a period of at least 3 years from the date of the sample, measurement, report, or application. This period may be extended
by request of the Director at any time; and
The nature and composition of all injected fluids until three years after the completion of any plugging and abandonment as appropriate. The Director may require the owner or operator
to deliver the records to the Director at the conclusion of the retention period.

Records of monitoring information shall include:
The date, exact place, and time of sampling or measurements;
The individual(s) who performed the sampling or measurements;
The date(s) analyses were performed;
The names of individual(s) who performed the analyses;
The analytical techniques or methods used; and
The results of such analyses.
Signatory Requirements (40CFR144.51(k))All reports or other information, submitted as required by this permit or requested by the Director, shall be signed and certified as follows:
Applications. All permit applicationsshall be signed as follows:
For a corporation: by a responsible corporate officer. For the purpose of this section, a responsible corporate officer means; A president, secretary, treasurer, or vice president of
the corporation in charge of a principal business function, or any other person who performs similar policy- or decision-making functions for the corporation, or the manager of one or
more manufacturing, production, or operating facilities employing more than 250 persons or having gross annual sales or expenditures exceeding $25 million (in second-quarter 1980 dollars),
if authority to sign documents has been assigned or delegated to the manager in accordance with corporate procedures.Note:DEQ does not require specific assignments or delegations of
authority to responsible corporate officers identified in 40 CFR 144.32(a)(1)(i). DEQ will presume that these responsible corporate officers have the requisite authority to sign permit
applications unless the corporation has notified the Director to the contrary. Corporate procedures governing authority to sign permit applications may provide for assignment or delegation
to applicable corporate positions under 40 CFR 144.32(a)(1)(ii) rather than to specific individuals.
For a partnership or sole proprietorship: by a general partner or the proprietor, respectively; or
For a municipality, State, Federal, or other public agency: by either a principal executive officer or ranking elected official. For purposes of this section, a principal executive officer
of a Federal agency includes: (i) The chief executive officer of the agency, or (ii) a senior executive officer having responsibility for the overall operations of a principal geographic
unit of the agency (e.g., Regional Administrators of EPA).
Reports. All reports required by permits and other information requested by the Directorshall be signed by a person described in section a), or by a duly authorized representative of
that person. A person is a duly authorized representative only if:
The authorization is made in writing by a person described in paragraph a) of this section;
The authorization specifies either an individual or a position having responsibility for the overall operation of the regulated facility or activity, such as the position of plant manager,
operator of a well or a well field, superintendent, or position of equivalent responsibility. (A duly authorized representative may thus be either a named individual or any individual
occupying a named position); and
The written authorization is submitted to the Director.
Changes to authorization. If an authorization under sectionb) is no longer accurate because a different individual or position has responsibility for the overall operation of the facility,
a new authorization satisfying the requirements of sectionb) must be submitted to the Director prior to or together with any reports, information, or applications to be signed by an
authorized representative.
Certification.Any person signing a document under section a) or b) shall make the following certification:“I certify under penalty of law that this document and all attachments were
prepared under my direction or supervision in accordance with a system designed to assure that qualified personnel properly gather and evaluate the information submitted based on my
inquiry of the person or persons who manage the system, of those persons directly responsible for gathering the information, the information submitted is, to the best of my knowledge
and belief, true, accurate, and complete. I am aware that there are significant penalties for submitting false information, including the possibility of fine and imprisonment for knowing
violations.”
Reporting Requirements (40CFR144.51(l))
Specific requirements for reporting the following items are included in Part III of the permit.
Planned Changes
The permittee shall give written notice to the Director, as soon as possible, of any planned physical alterations or additions to the UIC-permitted facility. Notification of planned
changes on the part of the permittee, does not stay any permit condition.
Anticipated Noncompliance
The permittee shall give advance notice to the Director of any planned changes in the permitted facility or activity that may result in noncompliance with permit requirements. Notification
of anticipated noncompliance on the part of the permittee, does not stay any permit condition.
Permit Transfers
This permit is not transferable to any person except in accordance with section d) of Permit Actions – Transfer of Permit. The Director may require modification or revocation and re-issuance
of the permit to change the name of the permittee and incorporate such other requirements as may be necessary under the Safe Drinking Water Act and / or the UWQA.
MonitoringMonitoring results shall be reported at the intervals specified in Part III of this permit.
Compliance Schedule Reports
Reports of compliance or noncompliance with, or any progress reports on, interim and final requirements contained in any compliance schedule specified in Part III B of this permit shall
be submitted no later than 30 days following each schedule date.
Endangering Noncompliance
The permittee shall report to the Director any noncompliance that may endanger health or the environment, as follows:
Twenty-four Hour Reporting
Endangering noncompliance information shall be provided orally within 24 hours from the time the permittee becomes aware of the circumstances. Such reports shall include, but not be
limited to, the following information:Any monitoring or other information that indicates any contaminant may cause an endangerment to a USDW, orAny noncompliance with a permit condition,
or malfunction of the injection system, which may cause fluid migration into or between USDWs.
Five-day Reporting
A written submission shall be provided within five days of the time the permittee becomes aware of the circumstances of the endangering noncompliance. The written submission shall contain
a description of the noncompliance and its cause, the period of noncompliance, including exact dates and times, and if the noncompliance has not been corrected, the anticipated time
it is expected to continue; and steps taken or planned to reduce, eliminate, and prevent recurrence of the noncompliance.

Other Noncompliance
The permittee shall report all instances of noncompliance not reported under 12d) (Monitoring Reports), 12e) (Compliance Schedule Reports), or 12f) (Endangering Noncompliance Monitoring)
of this section in the next Monitoring Report. The reports shall contain a description of the noncompliance and its cause, the period of noncompliance, including exact dates and times,
and if the noncompliance has not been corrected, the anticipated time it is expected to continue; and steps taken or planned to reduce, eliminate, and prevent recurrence of the noncompliance.
Other Information
When the permittee becomes aware of a failure to submit any relevant facts in the permit application or submitted incorrect information in a permit application or in any report to the
Director, the permittee shall submit such facts or information within 10 days after becoming aware of the failure to submit relevant facts.
Requirements Prior to Commencing Injection (40CFR144.51(m))For new injection well authorized by individual permit, a new injection well may not commence injection until construction
is complete, and
The permittee has submitted notice of completion of construction to the Director; and
Either of the following:
The Director has inspected or otherwise reviewed the new injection well and finds it is in compliance with the conditions of the permit; or
The permittee has not received notice from the Director of his or her intent to inspect or otherwise review the new injection well within 13 days of the dateof the notice in section
a), in which case prior inspection or review is waived and the permittee may commence injection. The Director shall include in his notice a reasonable time period in which he shall
inspect the well.
For new injection wells authorized by an area permit under UAC R317-7-7 (40 CFR 144.33), requirements prior to commencing injection shall be specified in Part III of the permit.
Notification Prior to Conversion or Abandonment. (40CFR144.51(n))The permittee shall notify the Director at such times as the permit requires before conversion or abandonment of the
well or in the case of area permits before closure of the projects.
Plugging and Abandonment Requirements. (40CFR144.51(o))A Class III permit shall include, conditions for developing a plugging and abandonment plan that meets the applicable requirements
of UAC R317-7 to ensure that plugging and abandonment of the well will not allow the movement of fluids into or between USDWs. If the plan meets the plugging and abandonment requirements
of UAC R317-7, the Director shall incorporate it into the permit as a permit condition. Where the review of the plan submitted in the permit application indicates the plan is inadequate,
the Director may require the applicant to revise the plan, prescribe conditions meeting the requirements of this paragraph, or deny the permit. For purposes of this paragraph, temporary
or intermittent cessation of injection operations is not abandonment. Requirements for implementing the approved plugging and abandonment plan are specified in Part III of this permit.
Plugging and Abandonment Report. (40CFR144.51(p))Requirements for submitting a plugging and abandonment report are specified in Part III of this permit.
Duty to Establish and Maintain Mechanical Integrity. (40CFR144.51(q))
The owner or operator of a Class III well shall establish prior to commencing injection or on a schedule determined by the Director, and thereafter maintain mechanical integrity as defined
in 40CFR146.8.
When the Director determines that a Class III well lacks mechanical integrity pursuant to 40CFR146.8, written notice of this determination shall be given to the owner or operator. Unless
the Director requires immediate cessation, the owner or operator shall cease injection into the well within 48 hours of receipt of the Director's determination. The Director may allow
plugging of the well pursuant to the requirements of UAC R317-7 or require the permittee to perform such additional construction, operation, monitoring, reporting and corrective action
as is necessary to prevent the movement of fluid into or between USDWs caused by the lack of mechanical integrity. The owner or operator may resume injection upon written notification
from the Director that the owner or operator has demonstrated mechanical integrity pursuant to 40CFR146.8.
The Director may allow the owner/operator of a well which lacks internal mechanical integrity pursuant to 40CFR146.8(a)(1) to continue or resume injection, if the owner or operator has
made a satisfactory demonstration that there is no movement of fluid into or between USDWs.
SPECIFIC PERMIT CONDITIONS
DURATION OF PERMIT
(R317-7-9.5 and 40CFR144.36)
This UIC Class III Solution Mining permit shall be issued for a period to include that time required to:
1. complete solution mining of each underground storage cavern, and
2. demonstrate mechanical integrity of the well/cavern system, and
3. either to:
a) effect the transfer of control from the Utah Division of Water Quality (DWQ) to the Utah Division of Oil, Gas and Mining (DOGM) for regulatory oversight of the operation and maintenance
of those well/cavern systems that will be used for storing products for which DOGM has regulatory authority, as detailed in Part III (G), or
b) obtain a UIC Class V permit from DWQ for authority to store products outside of DOGM’s regulatory authority.
Once regulatory authority over an individual well/cavern system has been transferred to either DOGM or DWQ under a Class V permit, that particular well/cavern system shall be released
from this permit.
The Director of the Division of Water Quality (hereafter ‘the Director’) shall review this permit once every five (5) years to determine whether it should be modified, revoked and re-issued,
terminated, or undergo minor modification according to the conditions of Part II (D)(6) of this permit.
COMPLIANCE SCHEDULE
(40CFR144.53)
Magnummust address each of the following conditions within the time period indicated for each item. Failure to do so may result in the termination of the permit according toPart II(D)(6)(b)
of this permit.
Construction and Cavern Development Plan
Attachment D of the permit includes a conceptual Construction and Cavern Development Plan (CCDP) that outlines the steps to be taken in developing CCDPs specific to one of the following
cavern categories anticipated to be developed at the facility: liquid hydrocarbon storage with brine displacement, liquid hydrocarbon storage with overlying vapor space, gas storage,
or compressed air energy storage. CCDPs shall ensure that caverns are constructed in such a way as to allow mechanical integrity testing appropriate for the category of cavern.All CCDPs
shall be submitted to and approved by the Director prior to receiving authorization to drill from DWQ and DOGM. All CCDPs must meet the permit conditions contained herein.
Monitoring, Recording and Reporting Plan
Attachment E of the permit includes a conceptual Monitoring, Recording, and Reporting Plan (MRRP) that outlines the steps to be taken in developing MRRPs specific to one of the following
cavern categories anticipated to be developed at the facility: liquid hydrocarbon storage with brine displacement, liquid hydrocarbon storage with overlying vapor space, gas storage,

or compressed air energy storage. All MRRPs shall be submitted to and approved by the Director prior to receiving authorization to drill by DWQ and DOGM. All MRRPs must meet the permit
conditions contained herein.
Financial ResponsibilityPrior to drilling any cavern wells for storage of product for which DOGM has or will assume regulatory oversight, Magnumshall submit proof of adequate financial
assurance naming DWQ as a beneficiary. Magnum may either add DWQ as a party required to approve release of financial responsibility under the existing financial assurance instrument
approved by DOGM, or may secure additional, separate financial assurance acceptable to the Directorto implement the approved closure and abandonment plan required by this permit.Prior
to drilling any cavern wells for storage of products for which DOGM will not assume regulatory oversight during the operational phase, Magnum shall submit financial assurance acceptable
to the Director to implement the approved closure and abandonment plan required by this permit.
CORRECTIVE ACTION
(40CFR144.52(2). 40CFR144.55, 40CFR146.7)
As of the effective date of this permit modification no wells have been identified within the area of review for the MagnumStorage Project that require corrective action.
CONSTRUCTION AND CAVERN DEVELOPMENT REQUIREMENTS
(R317-7-10.1(B) and 40CFR146.32)
Well Construction and Cavern Development StandardsEach well shall be constructed and each cavern developed according to the requirements for Class III injection wells as set forth in
R317-7-10.1(B) and 40CFR146.32.The following references apply to the underground storage of hydrocarbons in solution-mined caverns, in general. They were used to inform the development
of the permit conditions contained herein where they apply to the construction and development of brine-compensated and pressurized gas caverns particularly in regards to cavern integrity
and stability.Common Practices – Gas Cavern Site Characterization, Design, Construction, Maintenance, and Operation, SMRI Research Report RR2012-03Design and Operation of Solution-Mined
Salt Caverns Used for Liquid Hydrocarbon Storage – API Recommended Practice 1115 (2nd Edition), API,November 2018Design and Operation of Solution-mined Salt Caverns Used for Natural
Gas Storage – API Recommended Practice 1170, API, July 2015Canadian Standard Association, CWA Z341 Series 14 – Storage of hydrocarbons in underground formations, April 2014Additionally,
the requirements in the approved Application for a Permit to Drill (APD) issued by DOGMfor underground hydrocarbon storage caverns must be met, if applicable as explained in Part I of
this permit.If DOGM does not issue an APD, state well construction standards as set forth in R649-3 must be followed in addition to the requirements for Class III injection wells.
Construction and Cavern Development Plan
The conceptual Construction and Cavern Development Plan (CCDP)is included as Attachment D of this permit.Prior to receiving authorization to commence drilling, Magnum shall submit a
CCDP for each cavern category for review and approval by the Director. Each approved CCDP shall become an enforceable amendment to Attachment Dof the permit.
Each CCDP shall include:
a maximum design capacity (Open Cavern Volume) for the specific cavern category;
the Required Pillar Width based on geomechanical analysis.
If the design criteria for the hydrocarbon CCDPs are significantly different than the design assumptions used in preparing the original geomechanical analysis dated September 2010, a
new geomechanical analysis must be performed that reflects the intended design. A new geomechanical analysis must be performed for caverns developed to store any productother than the
product for which the original geomechanical analysis was performed, unless a statement is provided from an expert knowledgeable in the evaluation of geomechanical analyses of caverns
and cavern fields stating that the original geomechanical analysis performed for the storage of natural gas is applicable to the newly proposed product. The geomechanical analysis must
support each CCDP.
Each CCDP must include a detailed plan for cavern enlargement if product storage will commence before completion of cavern development to its permitted volume. The plan must address
all modes of cavern enlargement.
Changes to the Construction and Cavern Development Plan
Changes to the approved CCDPs must be approved by the Director as a minor modification of the permit according to Part II (D)(6)(c)(6) of this permit. No such changes may be physically
incorporated into construction of the well or the development of the cavern prior to approval of the modification by the Director. All changes must comply with UAC R317-7 and those
sections of 40CFR144 and 40CFR146 incorporated by reference in the state rule. To facilitate the minor modification of the permit to incorporate changes to the CCDP, Magnum will ensure
that DWQ receives courtesy copies of all sundry notices sent to DOGMand notice of all related filings before the BOGM.
Casing and CementAll new Class III wells shall be cased and cemented to prevent the migration of fluids into or between underground sources of drinking water. The Director may waive
the cementing requirement for new wells in existing projects or portions of existing projects where there is substantial evidence that no contamination of underground sources of drinking
water would result. It is the permittee’s responsibility to provide such evidence to the Director. The casing and cement used in the construction of each newly drilled well shall be
designed for the life expectancy of the well. The permittee shall consider the following factors in designing a casing and cementing program for the well:
(1) Depth to the injection zone;
(2) Injection pressure, external pressure, internal pressure, axial loading, etc.;
(3) Hole size;
(4) Size and grade of all casing strings (wall thickness, diameter, nominal weight, length, joint specification, and construction material);
(5) Corrosiveness of injected fluids and formation fluids;
(6) Lithology of injection and confining zones; and
(7) Type and grade of cement.The following requirements pertaining to the cement and casing shall apply:Only new casing shall be installed.Surface and intermediate casing strings shall
be used to protect USDWs above the salt structure.All casings shall be cemented to surface.A minimum of one cemented casing shall be set across all non-salt formations.A minimum of two
cemented casing strings shall be set in the salt body.Appropriate cement shall be used for cementing across salt formations.Centralizers shall be used on all cemented casing strings
and shall be placed to optimize the placement of cement in the casing/borehole annulus.Boreholes shall be conditioned prior to running cement.Joints of last cemented casing shall be
gas tight to prevent leakage of gaseous product and/or gaseous blanket material.
Logging and TestingAppropriate logs and other tests shall be conducted during the drilling and construction of new Class III wells. A descriptive report interpreting the results of
such logs and tests shall be prepared by a knowledgeable log analyst and submitted to the Director. The logs and tests appropriate to each type of Class III well shall be determined
based on the intended function, depth, construction and other characteristics of the well, availability of similar data in the area of the drilling site and the need for additional information
that may arise from time to time as the construction of the well progresses. Deviation checks shall be conducted on all holes where pilot holes and reaming are used, unless the hole
will be cased and cemented by circulating cement to the surface. Where deviation checks are necessary they shall be conducted at sufficiently frequent intervals to assure that vertical
avenues for fluid migration in the form of diverging holes are not created during drillings.The following geophysical logs and tests must be performed during construction of each well/cavern
system:Cement Evaluation Log shall be run according to Part III (H) of this permit.Casing Inspection Log (ultrasonic or electromagnetic flux) shall be run on last cemented casing, from

casing seat to surface, before installing leaching strings.Hydrostatic pressure and nitrogen/brine interface tests according to the methods and schedule in Part III (H) of this permit.Inclination
and directional surveys starting at 500’ taken 500’ thereafter. Deviation control shall be implemented to maintain the verticality of the well to a maximum of 1.5 degrees average inclination
from the vertical at the top of the salt, with no more than 2 degrees or less at any depth.
Injection Zone CharacterizationWhere the injection zone is a formation which is naturally water-bearing the following information concerning the injection zone shall be determined or
calculated for new Class III wells or projects:Fluid pressure;Fracture pressure (determined on MH-1); and Physical and chemical characteristics of the formation fluids.Where the injection
formation is not a water-bearing formation, only the fracture pressure must be submitted.Magnum shall include in each CCDP a description of the method for determining the top of the
salt body.Magnum shall submit for Director’s approval a Formation Testing Program to determine the fracture pressure of the salt at the last cemented casing seat. The approved and enforceable
Formation Testing Program is included in the CCDPin Attachment D of this permit.
Magnumshall include in the Formation Testing Program of the CCDP in Attachment D a detailed description of the methodologies to be employed to characterize anomalous zones during the
drilling of new cavern wells. The location of these anomalous zones may be interpolated / extrapolated from corresponding anomalous zones in adjacent cavern wells.
Well Stimulation Program
If the operator intends to stimulate the well to clean the well bore, enlarge channels, and increase pore space in the interval to be injected thereby enhancing the injectivity of the
well, a Well Stimulation Program must be prepared for the Director’s approval and included in the CCDP in Attachment D of this permit.
Monitoring Wells
No monitoring wells are required by this permit.However, ground water monitoring will be addressed in an approved Operating Plan enforceable under the product specificBOGM Order.
DWQ will issue a UIC Class V permit for regulatory oversight of the operation and maintenance of those well/cavern systems that will be used for storing products for which DOGM does
not have regulatory authority. Requirements, if any, for monitoring wells will be addressed in the UIC Class V permit.
Leaching String
Magnum shall select an appropriate blanket/brine interface tool and appropriate leaching string pair such that the depth of the blanket/brine interface can be confirmed periodically
during solution mining of the cavern and such that a sonar survey can be obtained through both leaching strings to monitor the development of the cavern. If Magnum is unable to obtain
sonar surveys through both leaching strings, the inner leaching string shall be removed so that a sonar survey can be obtained to ensure a clear image of the full roof is obtained.The
joints of the outer hanging leaching string shall be gas tight so as to prevent the loss of the gaseous blanket material or gaseous product.
Cavern Configuration, Spacing,and Standoff Requirements
Each cavern shall be developed and spaced with sufficient salt back (salt above the roof of the cavern), standoff (set back from the boundary of the salt body) and set back from the
permit area boundary to maintain mechanical integrity of the caverns, the salt web (the in-situ mass separating adjacent underground caverns and caverns and the edge of the salt body),
and the overburden during all modes of cavern development, operation and abandonment for the lifetime of the facility.
ACESshall maintain at all times, including but not limited to, cavern siting, development, expansion, and operation, a salt back thickness equal to a minimum of 4.0 cavern diameters
above the cavern, a minimum spacing between all hydrocarbon caverns of a two-to-one (2:1) pillar-to-diameter ratio (P:D), which is the equivalent of a three-to-one (3:1) center-to-center
or S:D ratio, where S is the distance between the centers of two caverns or between a cavern and the edge of the salt body, D is the average of the maximum diameter of the two caverns,
and P is the minimum pillar thickness between adjacent caverns (the “Required Pillar Width”).
The Required Pillar Width for the storage cavern field shall be defined by a geomechanical analysis required by Part III.D.2, above.
The maximum design capacities, or volumes, for each cavern will be included in each CCDP as submitted and approved.
If Magnum proposes to construct caverns near the flanks of the salt body, eachCCDP shall be amended to include a plan for assessing and defining the edge of salt and determining an adequate
standoff so as to maintain the mechanical integrity of the cavern and surrounding salt.
Requirements Prior to Solution Mining
In accordance with Part II (D)(13) of this permit, the following requirements must be met prior to commencing injection (solution mining):
Well Completion Data / Report
The operator shall submit to DOGM, if applicable as explained in Part I of this permit, and for the DWQ Director’s review, an injection well completion report consisting of:
All available logging and testing data on the well;
Primary cement calculations and evidence of cement returns to surface;
Results of satisfactory demonstration of mechanical integrity;
Actual maximum injection pressure and injection flow rate;
Results of the formation testing program, if applicable;
Actual solution mining procedures;
Status of all wells requiring corrective action within the area of review, if applicable;
Detailed ‘As-Built’ Well Schematic including:
Casing details including size, weight, grade and setting depths,
Cement details including type, special formulations, calculated volumes, actual pumped volumes, and yield (cubic feet / sack),
Formation horizons,
Ground water horizons,
Pilot hole.
DWQ Director’s Approval to Commence Solution Mining
Within 7 days after receipt of the well completion report, the Director shall provide written notice denying or granting approval to commence injection.
Compliance with DOGM Requirements and BOGM Orders
Magnum shall comply with all DOGM administrative requirements and BOGM orders, if applicable as explained in Part I of this permit.
Cavern Development
The CCDPs (Attachment D) shall address all modes of cavern development ACES intends to implement. This includes cavern development before initial product storage and various scenarios
of re-leaching of existing caverns. Maintaining the geomechanical stability of the cavern network must be the first priority in developing and implementing an operating plan for cavern
development. Cavern shape shall be controlled by maintaining the blanket material, controlling the water injection rate, controlling the locations of the water injection and brine removal,
and controlling the salinity of injected water. Control of cavern development shall be facilitated by the use of computer simulations appropriate to the mode of cavern development.

The following conditions shall apply:
Pressurized caverns, if any, are generally expected to be completed within 5 years after the commencement of cavern solution mining. All caverns specific to natural gas, if any,shallbe
completely solution mined before product storage commences, and
Hanging strings shall be removed after each solution mining phase, and
Sonar surveys of the cavern, cavern floor and cavern roof shall be conducted after each solution mining phase and before commencement / re-commencement of product storage, and
Nitrogen/brine interface MIT shall be conducted according to Part III (H) after each solution mining phase and before commencement / re-commencement of product storage, and
Submittal of well/cavern completion report required by Part III (G)(1) after each solution mining phase and before commencement / re-commencement of product storage, and
Written approval from the Director of DWQ to commence / re-commence product storage shall be required.
Approval from the Director of DOGMto commence / re-commence product storage shall be required, if applicableas explained in Part I of this permit.
If no APD has been issued by DOGM, DWQ may issue a Notice to Proceed once a bond has been issued and the construction reporting requirements listed in the CCDP has been received.
Maximum Allowable Operating Pressure Gradient (MaxAOPG)
Except during well stimulation,the maximum allowable operating pressure gradient (MaxAOPG) shall be calculated to assure that pressure in the injection zone during injection does not
initiate new fractures or propagate existing fractures in the injection zone. In no case shall the injection pressure initiate fractures in the confining zone or cause the migration
of injection or formation fluids into an USDW.
Based on the geomechanical analysis of the salt formation in the MH-1 exploratory well, the upper limit of operating pressures is 0.92 psi/ft of depth to the last cemented casing seat.However,
Magnum shall provide additional protection by operating at pressure gradients below 0.92 psi/ft of depth as follows:
The typical operating pressure gradient of a cavern will be 0.55 psi/ft of depth to the last cemented casing seat.
The maximum allowable operating pressure gradient (MaxAOPG) will not be greater than 0.80 psi/ft of depth to the last cemented casing seat, unless Magnum submits for approval a geomechanical
analysis providing justification for a higher MaxAOPG and providing a safety factor. A higher MaxAOPG shall not be implemented without written approval from the Director. At no time
will the caverns be subjected to pressures above the approved MaxAOPG including pressure pulsations and during abnormal operating conditions.
The maximum allowable test pressure gradient will not exceed 0.85 psi/ft of depth to the last cemented casing seat.
Minimum Allowable Operating Pressure Gradient (MinAOPG)
The permittee shall maintain a minimum operating pressure gradient during the creation and operation of each cavern that is protective of the integrity of the wells, caverns, salt web,
and overburden. Magnum shall maintain a MinAOPG of 0.25 psi/ft of depth based on the geomechanical analysis of the salt formation.
Borehole – Casing Annulus Injection Prohibited
Injection between the outermost casing protecting USDW's and the well bore is prohibited.
MONITORING AND RECORDING REQUIREMENTS
(R317-7-10.3(B),40CFR144.54, and 40CFR146.34)
Well and Cavern Monitoring and Recording Standards
Monitoring and recording requirements for the drilling and solution mining of each well/cavernare set forth in R317-7-10.3(B) and 40CFR144.54.The following references apply to the underground
storage of hydrocarbons in solution-mined caverns, in general. They were used to inform the development of the permit conditions contained herein where they apply to the monitoring
of brine-compensated and pressurized gas caverns particularly in regards to cavern integrity and stability.Common Practices – Gas Cavern Site Characterization, Design, Construction,
Maintenance, and Operation, SMRI Research Report RR2012-03Design and Operation of Solution-Mined Salt Caverns Used for Liquid Hydrocarbon Storage – API Recommended Practice 1115 (2nd
Edition), API, November 2018Design and Operation of Solution-mined Salt Caverns Used for Natural Gas Storage – API Recommended Practice 1170, API, July 2015Canadian Standard Association,
CWA Z341 Series 14 – Storage of hydrocarbons in underground formations, April 2014
Additionally, the monitoring and recording requirements for the drilling of each well in the approved Application for a Permit to Drill (APD) issued by DOGM must be met, if applicable
as explained in Part I of this permit. Monitoring and recording requirements for hydrocarbon storage shall be set by DOGM once the well / cavern system has been released from the Class
III UIC permit according to Part III (G) of this permit.
Monitoring, Recording and Reporting Plan
The conceptual MRRP required by Part III (B) (2) of this permitisincluded as Attachment E of this permit. Prior to receiving authorization to commence drilling, Magnum shall submit
an MRRP for each cavern category for review and approval by the Director. Each approved MRRP shall become an enforceable amendment to Attachment Eof the permit.
Monitoring Equipment and Methods
All monitoring equipment shall be properly selected, installed, used, and maintained according to the manufacturer’s specifications so as to yield data which are representative of the
monitored activity. All monitoring methods shall be properly selected and implemented at appropriate intervals and frequency so as to yield data which are representative of the monitored
activity. Documentation verifying, if applicable, the proper selection, installation, use, and maintenance of monitoring equipment and the proper implementation of monitoring methods
shall be made available to the Director upon request.
Injectate Characterization
The permittee shall monitor the nature of injected fluids with sufficient frequency to yield representative data on its characteristics. The permittee shall provide qualitative analysis
and ranges in concentrations of all constituents of injected fluids.Whenever the injection fluid is modified to the extent that this analysis is incorrect or incomplete, a new analysis
shall be provided to the Director.The applicant may request confidentiality in accordance with Part II C of this permit. If the information is proprietary an applicant may, in lieu of
the ranges in concentrations, choose to submit maximum concentrations which shall not be exceeded. In such a case the applicant shall retain records of the undisclosed concentrations
and provide them upon request to the Director as part of any enforcement investigation.
Magnum shall submit a complete chemical analysis of the solution mining media (injectate) every two years. The sample shall be taken during a period of active solution mining.
Mechanical Integrity Testing (MIT)
Mechanical integrity testing shall be conducted according to the methods and schedule inPart III (H) of this permit.
Cavern Development Monitoring
The following must be monitored during cavern development:
Magnum shall monitor the shape of the cavern, by sonar surveys, during development to ensure a stable shape and configuration is achieved, and to ensure the Required Pillar Width is
maintained.
Magnum shall maintain the location of the blanket/brine interface. It is not sufficient to estimate the depth of the interface from the volume of blanket material injected. Magnum

shall perform periodic wireline surveys to confirm the location of the blanket/brine interface with increased frequency when the solution mining mode is switched from direct to reverse.
If the interface cannot be confirmed by wireline surveys, solution mining must stop immediately until the interface can be re-established and confirmed.
Magnum shall conduct daily monitoring of flow rate of injected water, saturation level of injected water, pressure of injected water, temperature of injected water, flow rate of produced
brine, saturation level of produced brine, pressure of produced brine, temperature of produced brine, pressure of blanket, volume of blanket, temperature of blanket.
Weekly Brine Analysis
Magnum shall conduct weekly or more frequently as needed, analysis of the produced brine for at least magnesium (Mg) and potassium (K) to identify zones of highly soluble salts. If
highly soluble zones are identified, adjustment of the solution mining process may be necessary.
REPORTING REQUIREMENTS
(R317-7-10.4(B) and 40 CFR 144.54)
Quarterly Monitoring Reports
Schedule for Submitting Quarterly Monitoring Report
QuarterReport Due On:
1st QuarterJan 1 – Mar 31Apr 15
2nd QuarterApr 1 – Jun 30July 15
3rd QuarterJul 1 – Sep 30Oct 15
4th QuarterOct 1 – Dec 31Jan 15
Content of Quarterly Monitoring Reports
Monitoring data for the following shall be included in the quarterly monitoring reports:
Periodic Injectate Characterization
Daily cavern development monitoring data
Weekly Brine Analysis
Wireline logs for all blanket/brine interface confirmations
Sonar surveys for all cavern shape and configuration verification
Noncompliance Not Previously Reported – Such reports shall contain a description of the noncompliance and its cause, the period of noncompliance, including exact dates and times, and
if the noncompliance has not been corrected, the anticipated time it is expected to continue; and steps taken or planned to reduce, eliminate, and prevent recurrence of the noncompliance.
4th Quarterly Monitoring Report shall include a tabulation of the pillar thickness (P) between adjacent caverns and between caverns and the permit area boundaries at 200’ depth intervals
beginning at the depth of the last cemented casing.The data for this tabulation is available from the most recent sonar surveys of each cavern and its adjacent caverns.
Other Required Monitoring
Drilling Reporting
If DOGM does not issue an APD/Permit to Drill, ACES shall report drilling requirements to DWQ for review. These requirements are found in the CCDP, as well as in R649-3-4 and R649-3-6.
In addition to the Well Completion Report, ACES will provide the following reports during the drilling of Individual cavern wells:
24-hour Spud Notice via email;
Entity Action Form reported on DOGM Form 6 within 5-days of sending the spud notice;
Encounters with fresh water sand reported on DOGM Form 7;
Report of Water Encountered During Drilling reported on DOGM Form 8;
Monthly status report reported on DOGM Form 9 submitted by the 5th day of the following calendar month:
Changes to the approved Drilling Program reported on DOGM Sundry Notice Form;
Formation testing reports for individual caverns within 30 days of completion
Notices
ACES will submit the following 24-hour advanced notices to DWQ to provide the ability to witness logging and testing activities on-site during the drilling of individual cavern wells:
Casing Cementing;
Casing Pressure testing;
Cement bond logging; and
Mechanical Integrity Testing
Endangering Noncompliance Reporting
The permittee shall report to the Director any noncompliance that may endanger health or the environment, as follows:
Twenty-four Hour Reporting
Endangering noncompliance information shall be provided orally within 24 hours from the time the permittee becomes aware of the circumstances. Such reports shall include, but not be
limited to, the following information:Any monitoring or other information that indicates any contaminant may cause an endangerment to a USDW, orAny noncompliance with a permit condition,
or malfunction of the injection system, which may cause fluid migration into or between USDWs.
Five-day Reporting
A written submission shall be provided within five days of the time the permittee becomes aware of the circumstances of the endangering noncompliance. The written submission shall contain
a description of the noncompliance and its cause, the period of noncompliance, including exact dates and times, and if the noncompliance has not been corrected, the anticipated time
it is expected to continue; and steps taken or planned to reduce, eliminate, and prevent recurrence of the noncompliance.
Planned Changes
The permittee shall give written notice to the Director, as soon as possible, of any planned physical alterations or additions to the UIC-permitted facility. Notification of planned
changes on the part of the permittee, does not stay any permit condition.
Anticipated Noncompliance
The permittee shall give advance notice to the Director of any planned changes in the permitted facility or activity that may result in noncompliance with permit requirements. Notification
of anticipated noncompliance on the part of the permittee, does not stay any permit condition.

Permit Transfers
This permit is not transferable to any person except in accordance with Part II (D)(6)(d) of this permit. The current permittee shall notify the Director at least 30 days in advance
of the proposed transfer date. Notification shall comply with the requirements in Part II(D)(6)(d) of this permit.
Compliance Schedule Reporting
Reports of compliance or noncompliance with, or any progress reports on, interim and final requirements contained in any compliance schedule specified in Part III B of this permit shall
be submitted no later than 30 days following each schedule date.
Mechanical Integrity Reporting
Mechanical Integrity Demonstration –Except where it is required to commence or re-commence product storage, the permittee shall submit the results of any MI demonstration within 60 days
after completion of the test. The permittee shall include in the report, a detailed description of the tests and the methods used to demonstrate MI. In the case of MI failure, the
permittee shall also describe in detail what and when steps were taken to reestablish MI.Loss of Mechanical Integrity – In the event of a mechanical integrity failure which may potentially
endanger an USDW, report to the Director verbally within 24 hours followed by submission of a written report within 5 days.Within 14 days after loss of MI, submit to the Director a schedule
indicating what will be done to restore MI to the well, or if it will be plugged.
Closure and Abandonment (“As-Plugged”) Report
If a well/cavern system is required to be closed and abandoned prior to being released from the UIC Class III permit for regulatory oversight by DOGM, DWQ will assume regulatory oversight
of the closure and the following requirements shall apply:
Within 60 days after permanently or temporarily plugging and abandoning a well, the permittee shall submit a Closure and Abandonment Report to the Director. The report shall be certified
as accurate by the person who performed the closure and abandonment operation, and shall consist of either:
A statement that the well was plugged in accordance with the Well and Cavern Closure and Abandonment Plan(Attachment F), required by Part III (I) of this permit,previously submitted
to, and all conditions of approval provided by, the Director; or
If the actual closure and abandonment differed from the approved plan(s), a statement and diagrams defining the actual closure and abandonment and why the Director should approve such
deviation. Any deviation from the previously approved individual plans required by this permit which may endanger waters of the State of Utah, including USDWs, is cause for the Director
to require the operator to re-plug the well.
Permit Review ReportWithin 30 days after receipt of this permit, the permittee shall report to the Director that the person(s) responsible for implementing this permit has read and is
personally familiar with all terms and conditions of this permit.
Electronic Reporting
In addition to submittal of the hard copy data, the permittee shall submit the required monitoring data in the electronic format specified by the Director.
PROCEDURES FOR RELEASING AND READMITTING WELL/CAVERN SYSTEMS
Release Individual Well/Cavern System from Permit
Requirements for requesting and obtaining a release of an individual well/cavern system from this permit for sole regulatory oversight by DOGM and BOGM are as follows:
Request for Release
Thirty (30) days prior to commencing product storage,ACES shall submit a letter to DWQ requesting its release from the permit.
Well / Cavern Completion Report
ACES shall submit to DOGM, if applicable as explained in Part I of this permit, and to the DWQ Director, for review a well / cavern completion report at the end of each solution mining
phase consisting of:
All available logging and testing data on the well/cavern system not previously submitted with the well completion report;
Results of mechanical integrity testing for well/cavern system;
Detailed ‘As-Built’ well/cavern schematic including any changes made to the original well ‘As-Built’ schematic;
Sonar survey of the cavern including floor and roof surveys;
Director's Approval to Release Well / Cavern System from Permit
Within 7 days after receiving all components of the Well/Cavern Completion Report required by b) above, the Director shall provide written notice denying or granting approval to release
the individual well/cavern system from the permit.
Compliance with DOGM Requirements and BOGM Orders
ACES shall comply with all DOGM administrative requirements and BOGM orders prior to the commencement of product storage, if applicable as explained in Part I of this permit.
Readmit Individual Well/Cavern System to Permit for Solution Mining
Requirements for requesting and obtaining re-admittance of an individual well/cavern system back into this permit to actively solution mine the cavern under the sole regulatory authority
of DWQ for conventional solution mining without product displacement or under concurrent regulatory authority for freshwater displacement of product as described in the Concurrent DWQ
and DOGM/BOGM Regulatory Authority section below are as follows:
Sixty (60) days prior to re-commencing solution mining, ACES shall submit a letter, with attachments, to DWQ requesting that an individual well/cavern system be readmitted to this permit.
The letter shall include, as attachments:
A history of the product recovery method used for brine-compensated caverns during the time the cavern was released from this permit. Including the type of displacement media, fresh
water or brine, and the length of time each media was used for product recovery.
A chronology of all geophysical surveys/tests conducted during the time the cavern was released from this permit including a brief summary of the results.
Reports of any nitrogen brine interface mechanical integrity tests and sonar surveys that were conducted during the time the cavern was released from this permit.
An updated, current tabulation of the information required in Part III (F)(1)(b)(7) of this permit
A request for a variance from the other requirements in this section.
ACES shall conduct and submit a report of a sonar survey of the entire individual well/cavern system from the last cemented casing to the cavern floor.
DWQ shall review all information required in this section including any requests for variance. The Director shall provide written notice denying or granting approval to readmit the
individual well/cavern system back into this permit within the 60 day period indicated in a) above.
Concurrent DWQ and DOGM/BOGM Regulatory Authority
Instances in which DWQ and DOGM/BOGM share regulatory authority are described in detail in Part I of this permit.

If freshwater injection during product storage operation is performed to create additional cavern capacity over and above that which is necessary to reclaim capacity lostdue to salt
creep, a maintenance activity,DWQ and DOGM/BOGM shall have concurrent jurisdiction over the cavern, with DWQ regulating the growth of the cavern and DOGM/BOGM regulating the product
storage operations of the cavern, such that the regulatory requirements of both DWQ, as detailed in this permit, and DOGM/BOGM shall apply.
MECHANICAL INTEGRITY
(R317-7-10.3(B) and 40CFR146.8)
Class III Injection Well Mechanical Integrity Standards
Mechanical integrity testing requirements for each Class III well are set forth in R317-7-10.3(B) and 40CFR146.8. Additionally, the mechanical integrity requirements for each well in
the approved Application for a Permit to Drill (APD) issued by DOGM must be met, if applicable as explained in Part I of this permit.
All injection wells shall have and maintain mechanical integrity (MI) consistent with the requirements of 40 CFR 146.8. An injection well has MI if there is:
No significant leak in casing, tubing, or packer (internal MI), and
No significant fluid movement into an USDW through vertical channels adjacent to the injection well bore (external MI).
Mechanical Integrity Testing (MIT) Methods
Unless and until an individual well/cavern system has been released from the UIC Class III permit for regulatory oversight by DOGM, the following testing methods shall be employed to
demonstrate MI of the well / cavern system:
Internal MI
Hydrostatic Pressure Test
The hydrostatic pressure test shall be conducted according to R649-3-7.4 – Well Control, Pressure Tests as follows:
Last two cemented casings in salt at the time of construction
Casing seat of last cemented casing after drilling 20’ into salt
Nitrogen/Brine Interface Test
The nitrogen/brine interface test shall be conducted according to UIC Guidances UIC-3-14, 15, 16, and 17 as follows:
Last cemented casing string before commissioning the cavern
Last cemented casing string after workover involving last cemented casing
Last cemented casing string every 5 years after initial test
External MI
Nitrogen/Brine Interface Test
Well/pilot hole before solution mining of cavern commences
Well/cavern before commissioning the cavern
Well/cavern every 5 years after initial test
Cement Records
Primary cement records for each cemented casing string obtained during construction of each well.
Cement Evaluation Logs
Conducted on surface, all intermediate and production casings after WOC of 72 hours and after attaining a compressive strength of 500 psi unless an appropriate cement evaluation tool
is not available for the larger diameter casings in which case an alternative logging program shall be proposed by the permittee.
Mechanical Integrity Demonstration Plan
The permittee shall prepare a detailed plan to demonstrate MI to be included in the approved and enforceable Monitoring, Recording and Reporting Plan in Attachment E of the permit.
In preparing a plan, which includes MI tests or demonstration methods allowed by the Director, the permittee shall apply methods and standards generally accepted in the industry for
conducting and evaluating the tests (40CFR146.8(e)).
Prohibition Without Demonstration
The permittee shall not commence injection operation of any new well without:Prior demonstration of MI, andReceipt of Director written approval of the MI demonstration.
Loss of Mechanical Integrity
If the permittee or the Director determines that a well fails to demonstrate MI the permittee shall: Cease operation of the well immediately, andTake steps to prevent losses of brine
into USDWs, andWithin 90 days after loss of MI, restore MI or plug and abandon the well in accordance with a plugging and abandonment plan approved by the Director. The permittee may
resume operation of the well after demonstration of MI and receiving written approval from the Director.
Mechanical Integrity Demonstration Requests
With just cause, the Director may at any time require, by written notice, the permittee to demonstrate MI of a well.
Mechanical Integrity Demonstration Inspections
The permittee shall allow the Director, or his representative, to observe any or all MI demonstrations. The permittee shall notify the Director, in writing, of its intent to demonstrate
MI, no less than 14 days prior to the intended demonstration.
WELL AND CAVERN CLOSURE AND ABANDONMENT
(40CFR146.10 and R317-7-10.5)
If a well or well/cavern system is required to be plugged and abandoned before it has been transferred to DOGM for regulatory oversight for operation and maintenance, ACES shall submit
for the Director’s approval a comprehensive plan for cavern evacuation, decommissioning and well abandonment that meets the requirements that are generally held to be closure and abandonment
standards by the underground hydrocarbon storage industry. The document entitled "Cavern Well Abandonment Techniques Guidelines Manual" issued by the Solution Mining Research Institute
(SMRI) provides guidance in the preparation of an appropriate Well and Cavern Closure Plan. At a minimum, the plan shall include monitoring of the cavern pressure and cavern volume
during the waiting period required for the brine and cavern to reach static equilibrium before plugging and abandoning the well. The plan shall also include continued subsidence monitoring
of the cavern for 10 years after the plugging and abandonment of the cavern well. The approved Well and Cavern Closure and Abandonment Plan shall become an enforceable attachment (Attachment
F) to this permit.
FINANCIAL RESPONSIBILITY
(R317-7-9.1(24) and 40CFR144.52)

Demonstration of Financial Responsibility
The permittee is required to maintain financial responsibility and resources to close, plug, and abandon all wells and well/cavern systems. This requirement is demonstrated by submission
of financial assurance instrument(s) acceptable to the Director and, if applicable, to the Director of DOGM to implement the approved Well and Cavern Closure andAbandonment Plan (Attachment
F) required by this permit. Evidence of adequate financial assurance is included in Attachment G of this permit.
In cases where DWQ and DOGM shareregulatory authority as explained in Part I of this permit, ACESshall maintain adequate financial assurance with both agencies as named beneficiaries,
requiring approval from both agencies before release of financial responsibility, either as one shared financial assurance instrument or two separate financial assurance instruments.
Additionally, ACES shall provide evidence of adequate financial assurance to cover the pressure and cavern capacity monitoring during the waiting period required for the cavern and brine
to reach static equilibrium before the well is plugged and abandoned and to cover the post-closure subsidence monitoring.
Renewal of Financial Responsibility
Every five (5) years, the permittee shall demonstrate the adequacy of the financial assurance instrument to close, plug and abandon all well/cavern systems not permanently closed and
abandoned by the permittee in compliance with the closure and abandonment requirements of this permit.
Alternate Financial Responsibility
The permittee must submit an alternate demonstration of financial responsibility acceptable to the Director within 60 days after any of the following events occurs:
The institution issuing the financial assurance instrument files for bankruptcy; or
The authority of the institution issuing the financial assurance instrument is suspended or revoked; or
In the case a Certificate of Deposit (CD) is used to demonstrate financial responsibility, the CD is determined to be insufficient to cover well closure, plugging and abandonment; or
In the case a Certificate of Deposit (CD) is used to demonstrate financial responsibility, the CD is suspended or revoked.
ADDITIONAL CONDITIONS
(40CFR144.52)
Geomechanical Analysis and Reassessment
Establishing and maintaining the stability of the caverns and adjacent salt pillars (salt web) is required. The initial geomechanical analysis is based on existing data and the proposed
cavern mining plans. If new data is acquired that is significantly different than that used or assumed in the original analysis and/or if solution mining of the caverns deviates significantly
from the original solution mining plan, a new geomechanical analysis and reassessment may be required to determine cavern and salt web stability in light of the new data and conditions.

Upon receiving written notification of significant deviations by the Director, ACES shall perform a geomechanical analysis and reassessment of the cavern field to verify the geomechanical
stability of the caverns, salt web and overburden when any of the following occurs:
When spacing between any caverns is less than the Required Pillar Width,
When there is evidence of a roof fall and / or sidewall spalling,
When there is irregular mining of the cavern that deviates from the solution mining plan which create conditions that may compromise the stability of the cavern such as a flat roof,
sharp corners,
When, due to unforeseen or unplanned circumstances, the open cavern volume of any cavern exceeds the permitted cavern capacity by 15%,
Any anomalous behavior that may present a concern for cavern stability.
ACES shall be required to take appropriate action if the results of the analysis indicate such action is necessary.
Change in Permit Area Boundary
Changes in the permit area boundary may be made through a minor modification of the permit according to Part II (D)(6)(c)(4) of this permit.