STATE OF ALASKA
ALASKA OIL AND GAS CONSERVATION COMMISSION
333 West 7th Avenue, Suite 100
Anchorage Alaska 99501

ADMINISTRATIVE APPROVAL NO. DIO 16.001

Mr. Bob Elder
HSE Manager
Forest Oil Corporation
310 K Street, Suite 700
Anchorage, AK 99501

Re: Request for Disposal of Mixture of Class II fluids and Non-hazardous Commingled Wastes

Dear Mr. Elder:

By letter dated October 14, 2004, Forest Oil Corporation (“Forest”) requested authorization to dispose of non-hazardous wastes, other than those wastes returned from downhole, into West McArthur River Unit (WMRU) 4D, a Class II disposal well. Additional clarification was provided by electronic mail dated October 15, 2004. This well is located at the WMRU production facility, and is used in conjunction with a Disposal Waste Management Area for the disposal of wastes associated with exploration, development and production. The specific wastes identified by Forest are a combination of used drilling mud and cuttings from the West Foreland No. 2 well currently being drilled by Forest, and fluids from a nearby well plug and abandonment operated by Pelican Hill, including unused brine solution, rig floor wash, cellar water, and cement water (cement returns and potable mix water). Total volume of the commingled fluids is approximately 650 barrels.

The brine solution consists of potassium chloride and possibly a small amount of sodium chloride. Both chlorides are not hazardous as defined in 40 CFR 261. Forest provided the Material Safety Data Sheet (MSDS) for potassium chloride. Likewise, potable water used for mixing cement does not exhibit hazardous characteristics. The remaining wastes are exempt from Resource Conservation and Recovery Act Subtitle C hazardous waste regulations, and are eligible for injection into the Class II well.

The fluids noted in Forest’s request are generated in primary field operations directly associated with oil and gas exploration, development and production activities, and the proper abandonment of wells that have no future utility. The fluids are consistent in composition with materials already authorized under Disposal Injection Order No. 16 and pose no risk of fluid movement into an underground source of drinking water. The underground injection into the Class II disposal well WMRU 4D represents the environmentally preferable option for managing the noted non-hazardous waste stream. The Alaska Oil and Gas Commission (“Commission”) also agrees with Forest’s interpretation that under guidance provided by the Environmental Protection Agency, a non-hazardous waste commingled with an exempt waste renders the entire waste mixture exempt. The Commission believes that exempt wastes are eligible for disposal into a Class II well.

The Commission determines that the mixture of fluids within the WMRU Disposal Waste Management Area, as represented in Forest’s request for administrative approval, namely unused brine solution, floor wash, cellar water, cement water, and used drilling mud and cuttings, are suitable for disposal in the WMRU 4D as proposed. Approval applies only to this specific request and is not intended to provide for a blanket authorization to inject these or similar non-hazardous fluids down other Class II disposal wells.

As part of this administrative approval, the Commission requires Forest to provide, in writing, the procedural changes that will improve the waste management practices employed at the WMRU Disposal Waste Management Area.

DONE at Anchorage, Alaska and dated October 15, 2004.

The Alaska Oil and Gas Conservation Commission

John K. Norman, Chair
Commissioner

Daniel T. Seamount, Jr.
Commissioner

Disposal Injection Order Index