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Hydraulic Fracturing In Oakland County?

18 Feb 2013

Recently elected Oakland County Water Commissioner, Jim Nash, will be holding “listening meetings” to provide information and get public comment on hydraulic fracturing.  The first meeting will be Wednesday, February 27th in West Bloomfield.   For more information check this link.  The most recent Michigan oil and gas rights lease included 33 different leases in Oakland County, covering over 3700 acres, reportedly including some locations fairly near to many of the County’s most-used lakes.

Interestingly, last year West Bloomfield Township adopted a 6 month moratorium on “fracking” found here.    That resolution might have been dead on enactment given a provision of the Michigan zoning law that appears to preempt such local regulation.

Blue methane bubbles?

31 Jan 2013

Last fall, I blogged about this very cool burning ice, methane hydrate.  This is actually methane trapped in ice.  Well, I just came across this story which shows methane hydrate in another view.  The video, which shows the trapped gas being ignited, is pretty impressive.

On the plus side, this may be a cleaner source of fuel. On the other hand, methane escaping on its own is a powerful greenhouse gas (some say almost 20 times as powerful as CO2).  Extracting something like this obviously poses its own challenges when a spring thaw sends the methane bubbling into the air.

Top Green Stories of 2012

31 Dec 2012

As we race toward the end of the year, we thought we’d look back at what we thought were the big stories of 2012 on, in no particular order:

Wetland Rules – EPA and the Army Corps of Engineers submitted final guidance to clarify the scope of waters regulated under the Clean Water Act to the Office of Management and Budget for federal interagency review. The EPA and the Corps have been the subject of “inquiries” from Congress, industry organizations, environmental groups, states and the public for rulemaking to further clarify the requirements of the Clean Water Act consistent with decisions of the Supreme Court. We continue to wait.

Fracking– something that was little heard of before 2011, received a lot of notoriety as dueling reports were released and a flurry of rules and guidance including: an EPA rule to require well developers to institute “green completion” procedures which phases in over the next two years; EPA guidance when diesel fuel is included as a component of the fracking fluid used to free the trapped gas; and U.S. Department of the Interior draft rules for fracking on federal and Indian lands.  The comment period closed in September and the Department recently announced that the rules would not be finalized until sometime in 2013. Finally, the petition drive to amend the State Constitution to ban the use of horizontal hydraulic fracturing fell flat and did not make the ballot.  Given the voters’ response to Constitutional amendments and in particular, how Proposal 3 relating to the clean energy renewable portfolio standard failed, it seems likely that this would’ve failed too.

MDEQ reorganization – the Director shook up the staff at the MDEQ. There was a CSI process intended to streamline the cleanup program and, in the last month, the Department’s cleanup division got a new chief, Bob Wagner, and the Governor signed legislation that was developed in part through the CSI process.

EPA Greenhouse Gas Rules vs. Congress. – a federal appellate panel approved EPA’s rules under the 1990 Clean Air Act  aimed at coal burning power plants.

• Coal Ash – Hazardous Materials – while EPA had proposed rules to more heavily regulate ash from the combustion of coal, it ran into a political buzz saw and the regulations went nowhere.  Luckily, the coal industry avoided the sorts of accidents that plagued them in 2011.

Keystone Pipeline.  As we predicted, President Obama and Congress started 2012 locked in a politically charged dispute over the Keystone XL pipeline, a proposed 1,700-mile oil pipeline from Canada to Texas.  The President deferred it, catching some election year heat, and will likely have to deal with it again in 2013.

Governor Snyder focuses on Environment/Energy – at year’s end, the Governor issued a policy statement on these two interrelated issues and we expect next year to see a focus on improvements in both.

Change at the EPA? Lisa Jackson announced on December 27, 2012, that she’d be stepping down as head of the EPA early next year.


Governor Snyder marries energy and environmental policy

28 Nov 2012

Today, Governor Snyder announced his Special Message on Energy and the Environment. True to his nature, he focused on strategic plans and smart decisionmaking with a long term view – something that I agree with.

The Governor focused on three “pillars” relating to energy: (1) reliability; (2) affordability; and (3) environmental protection.  Possibly to the chagrin of  some, he proposed a 2013 legislative dialogue to set goals for energy efficiency and renewable energy, certainly reviving hopes of the people who unsuccessfully  pushed Proposal 3 on the 2012 ballot.  He also bemoaned the lack of a federal energy strategy.

He didn’t discuss every one of the many points of his 19 page message but did talk about the following:

1. expanding the successful Michigan Saves program to help small businesses with energy efficiency;

2. figuring out how to expand development of Michigan’s natural gas resources  (he touted Michigan’s successful fracking practices) and announcing a partnership with UM’s Graham Sustainability Institute to work with industry and environmentalists to ensure that fracking is done safely; and

3. He discussed revamping and strengthening Michigan’s program’s to provide at-risk people maintain utility services.

As to environmental policy, he urged an ecosystem approach and he:

1.  proposed a strategic plan for all of Michigan’s publicly owned lands – building off his blue ribbon parks paneland including a plan for abandoned urban lands and pushed for better methods to aggregate and plan for them;

2. said it was time to resolve the conflict between urban farming and the Right to Farm Act;

3. announced that he was going to co-chair the Great Lakes Governor’s Council and would call a summit to discuss many issues including invasive species (both focusing on prevention and control) – this will likely be a thorny issue particularly in dealing with Illinois on the issue of Asian Carp;

4. asked for a proactive strategy for Michigan’s inland lakes and sustainable water usage; and

5. a surprise to me, he talked about improving recycling programs across the State.

There’s a lot more in there which we will be discussing in the future. But even treating energy and environmental issues as integrally related is a welcome new and dynamic approach.

More fracking pro and con

17 May 2012

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.

On April 18, 2012, EPA published a final rule to require well developers to institute “green completion” procedures to reduce or capture the gases created during the well exploration and development process (fracking).  EPA’s final rule creates a transition period during which well developers can either reduce emissions through flaring of gases or using green completion techniques.  The transition period ends on January 1, 2015. The reason for the phase in is that enough green completion equipment isn’t available for all the fracking sites across the U.S.   Low pressure wells are exempt and developers who use green completions before the deadline may avoid applying for new permits that are normally required when an air emission source changes its process.   There are annual compliance reports required, so the senior official signing must report accurately or face significant penalties, including criminal ones.

In May, the U.S. Environmental Protection Agency also announced new guidance when diesel fuel is included as a component of the fracking fluid used to free the trapped gas. A 2005 amendment to the Safe Drinking Water Act exempted fracking from regulation, except when diesel fuel is used.
This month, the U.S. Department of the Interior also announced a draft of new rules for fracking on federal and Indian lands.   If finalized, companies seeking to drill fracking wells on such lands will have to submit details on the layers of rock they plan to frack and how they will manage and dispose of the spent fluids. They will also have to document tests performed to ensure integrity of the seal around the well before the actual fracking begins – a point of much contention when problems have occurred.  Interestingly, only after the process is complete, will the drillers have to publicly disclose the chemicals they used in the fracking fluid.

Now, a Michigan group,  The Committee to Ban Fracking in Michigan has announced a petition drive to amend the Constitution to state ban the use of horizontal hydraulic fracturing in the State and to bar any person or company from accepting, disposing of, storing, or processing anywhere in the State, any flowback, residual fluids, or drill cuttings used or produced in horizontal hydraulic fracturing. They’ve got to collect some 332,000 signatures by early July – no small task and one, given how little the public knows about hydraulic fracturing, that may be impossible to meet.

Once again, there appear to be two completely opposed positions on what to do about fracking both nationally and here in Michigan.

Oil and gas production in your backyard? Maybe.

8 May 2012

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.

Fracking in the Michigan Legislature – “push me pull you”

25 Apr 2012

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.