Michigan Green Law

When it comes to fracking, things seem to be going both ways

Last month, I blogged about the issue of fracking here in Michigan and how the Democrats are going one way and the Republicans another.  It remains the hottest topic around.

Michigan is the last Great Lakes state that permits rural residents to burn household waste in burn barrels, but a new law rules out the burning of some materials.  In a move to protect Michigan residents from exposure to toxic smoke, House Bill 4207 was recently signed into law banning the open burning of household waste that contains “plastic, rubber, foam, chemically treated wood, textiles, electronics, chemicals or hazardous materials.”  Rural residents still can burn yard waste such as brush and leaves, and household waste such as cardboard and paper products.

While the intent is good, there is not a lot of teeth in the new law.  A first offense results in a simple warning and offenders who violate the law four times or more face a civil fine of not more than $300.

Coming to a backyard near you?

This weekend I saw a front page article in the Saturday paper about today’s State auction of mineral (oil and gas) leases.  As the article points out, a number of the offered leases are in neighborhoods in and around Oakland County’s tony lakeshores.  This was followed by a slew of concerned emails.  So, how did this happen; what does it mean; can the property owners stop it and can this happen in your backyard?  Interestingly, the news article doesn’t really answer these questions.

The article is correct; today, Michigan will be auctioning off mineral rights in locations all over the state, including in Oakland County.  In some cases, the State retained the mineral rights when it conveyed the property; in some cases, it is tax reverted property.  Some of the leases have  the properties tagged as “for development” which means a well may go there and in others, not.

Can it happen to you?  Maybe – check your deed.  If someone (the State included) reserved the mineral rights out of your title, then yes, it can. If not, then no, it can’t happen to your property unless you agree to lease the mineral rights to someone.   That doesn’t mean you may not see an oil or gas well in your neighbor’s yard.

Can the property owners stop it?  Maybe – temporarily.  Many property owners are at least talking about trying to out-bid the oil and gas companies at the auction.  Emails flying around say one might be able to bid $10 to buy the rights.  The problems are that the leases only last 5 years, require a bond of at least $10,000 (which the emails make no mention of), and if one can buy them for $10, how likely was it that someone in the industry thought they were worthwhile? Another approach would be to seek to enjoin the drilling but there are many problems with such an approach to stop something that is legal and arguably can be done safely and for which monetary damages would certainly be available.  The owner’s rights to bring a suit (standing) would also be at issue although recent case law should favor them.  However, local  judges might be swayed by local sentiment.

What does it mean?  Well, it doesn’t necessarily mean a well in someone’s backyard.  People are often stunned to find out that, legally, the owner of the minerals (in this case, the State) is actually the dominant estate and has rights to use the surface even though it doesn’t own the surface.  However, the lessee will need to get a  drilling permit from the MDEQ Supervisor of Wells.  Further, the lease terms themselves require:

• The Lessee to pay for all damages or losses (including any loss of the use of all or part of the surface), caused directly or indirectly by their operations.
• Before a drilling permit application is submitted, notification to enter the land must be provided to the surface owner, and that either voluntary agreement or stipulated settlement relative to surface use and damages has been reached.  When a  mutual agreement cannot be reached, after a 30 day cooling off period, if the issue is not resolved, then drilling and development can proceed and the property owner and company will need to fight it out.  The law on this complex and evolving.

Can fracking be used in these locations, as many have expressed concerns about that?  The answer is, if permitted and done in accordance with applicable laws and rules, then yes it can be.  If the operations cause harm, the property owners can sue but, as many have expressed concern, the damage will already be done.

Michigan has been lagging in closures of underground storage tanks for some time.   Back in the days of the MUSTFA program which funded tank removals and cleanups based on a 7/8 cent charge per gallon at the pump (extended for another 3 years), tanks were practically flying out of the ground and closures were quickly achieved.  After the money dried up, MDEQ began to take tougher stances and everything ground to a halt.  Reportedly, Michigan has 9100 “open” UST sites – the second most in the Country.

However, following the pattern set out by the successful Part 201 legislation enacted in 2010, a number of stakeholders have pushed a package of bills that were signed by the Governor this week.  These bills, now Public Acts 108, 109, 110, 111, 112, and 113,  will streamline and hopefully speed up the closure process by, among other things:

• Allowing the MDEQ to audit only final assessment and closure reports, rather than auditing at all steps of the corrective action process;
• Shortening the period for MDEQ to decide it would or would not audit a report;
• Allow MDEQ to audit a report only once;
• Make clearer that a report would be considered approved if MDEQ did not audit it or provide a written response to the owner or operator;
• Allow an owner or operator whose report was denied to seek approval from the Part 201 Review Panel or petition MDEQ’s Office of Administrative Hearings for a contested case hearing;
• Provide for a lien in favor of the State for all unpaid costs and damages for which a person was liable and allow that lien to have superpriority status when needed;
• Prohibit MDEQ from requiring a report to include information beyond that specified in Part 213;
• Revising the penalties for a person who fails to comply with an administrative order requiring corrective action; and
• Provide that MDEQ guidelines, bulletins, interpretive statements, operational memoranda, or forms would be advisory, and could not be given the force of law.

The hope is that this will provide clarity, consistency and encouragement to the MDEQ and the regulated community – largely owners of existing and former gas stations – so that they can achieve closure.  Given the slow progress of the Part 201 changes thus far, only time will tell.

I remember from Dr. Doolittle the pushmi-pullyu which had two heads and when it tried to move, both heads go in opposite directions.

House Democrats introduced legislation yesterday that would regulate more heavily “fracking” in Michigan.  If passed, it would require those seeking permits to explore for natural gas to:

• Describe the type and volume of fracking fluid to be used;
• Provide details about each additive in the fracking fluid including its trade name, supplier and purpose;
• List chemicals and concentrations expected to be in the fracking fluid, excluding trade secrets;
• Identifying the service company to be used;
• Evaluate alternative fracking treatments that are less risky and explain why those aren’t being used.

If this sounds familiar, it’s because the MDEQ required some of these things regulatorily about 11 months ago (here).

Frackers will also be required to provide information on the fluids actually used, including the trade secret information, which is to be held as secret, unless successfully challenged.  Another exception from the trade secret is the provision of information to health care professionals who need the information for diagnostic purposes.  In that case, it must be provided but then must be held in confidence by the health care provider.  Interestingly, the law would allow the information to be shared with other health care providers or laboratories but not to the patients themselves.  This sort of issue has already been criticized in other states.

The flip side of this is a report that was released by the House Natural Gas Subcommittee on Energy and Job Creation which urges greater efforts toward enhanced oil and gas recovery in Michigan as well as a sunset of 2008 PA 295 which imposed the renewable portfolio standard on Michigan utilities.

The Michigan House appears to be of “two minds” when it comes to fracking and resource extraction.  Let’s see if they can go anywhere.

The American Wind Energy Association has ranked Michigan 7th in wind energy jobs and notes that Michigan is in the process of almost doubling its existing wind projects (unfortunately, right now, that only amounts to less than 1% of Michigan’s energy usage).  In the last week,  DTE also announced yet another wind farm.

Last month, the Obama administration and five states (including  Michigan) announced an agreement to begin the process of speeding up  plans for offshore wind farms in the Great Lakes.  The deal is designed to allow state and federal agencies to develop a blueprint to speed regulatory review of proposed wind farms without sacrificing environmental and safety standards.

And then, last week, word was published in publications ranging from the liberal Daily Kos to the Wall Street Journal that Grand Valley State and Michigan Tech were seeking investors to help fund an effort to develop and study floating wind turbines in the Great Lakes.  These turbines would be out of sight of shore to avoid the NIMBY problems that have opposed previously discussed wind farms here and around the country.

Reportedly, the US and UK are working on similar issues to help England (and the US) with wind energy development.

It is certainly an exciting time to be in the wind field.

A recent study released regarding so-called “millennials” (those born after 1982) found here, reported that these young people considered goals relating to things like money, image, and fame more important than those related to self-acceptance, community, empathy, charity, and, most surprising to me, taking action to help the environment and save energy. Perhaps this is not so surprising given the economic crisis we are still working our way out of, coupled with the technological, Jersey Shore media world our young people find themselves living in.  However, given the emphasis on the environment in our schools and media, it still seems somewhat disturbing.

Given that Earth day is this weekend, there are sure to be a plethora of lists to “do this” or “do this and not that.”   There are lot of things that people  will talk about as win-wins (saving “green” as in money and the environment) – use programmable thermostats; don’t run the water while brushing your teeth (or before taking a shower); take showers not baths; don’t water your lawn mid-day; put a brick in the toilet tank; use a low flow showerhead;  switch to CFL or LED bulbs; use cloth grocery bags; keep your tires inflated, etc.   So, are people doing these things? And after they have done them, what’s next?  But even more importantly, is Earth Day relevant to the next generation of leaders, consumers and manufacturers who are now attending college – or do they just not care?

The images above should resonate with anyone my age, but that “crying Indian” first went on the air in 1971 – one year after the first Earth Day. I suspect that there are many out there who have never seen him and have no clue why he was crying.  Further, the environmental issues that spawned the first Earth Day have receded and have been replaced by far less tangible and even arguable threats.  No one argued about whether or why the Rouge and  Cuyahoga rivers caught fire or that they were a bad thing.  Now, there is far more debate about whether fracking is good or bad (maybe both), whether global climate change is occurring and even moreso over why and so it is far easier for today’s young people to tune out due to the complexity of the issues.

However, given the economy, the scarcity of resources and the economic times in which we live, it is a bit disappointing that we haven’t learned to look how our grandparents lived when they were young – how they “made do” and repaired and sewed, turned lights off (or used natural light) and gardened; not because it was “green” but because that was how they could afford to live and that’s how every generation until then had lived.

It’s only been in the last 65 years that disposability has been the norm.  Do we need to dial down the consumptive aspects of our lives and try to show our teens and college students that we need to live a bit more like the greatest generation did before World War II and a little less like they did after? What do you think?