Crews flare gas at a drilling site near Kalkaska, Michigan in July 2013. (AP Photo / Detroit News, Dale Young)

Crews flare gas at a drilling site near Kalkaska, Michigan in July 2013. (AP Photo / Detroit News, Dale Young)

Groups say Michigan’s proposed fracking rules fall short

In an effort to address ongoing concerns about hydraulic fracturing development in Michigan, regulators here have proposed a series of changes to the state’s permitting instructions over the natural-gas extraction method.

But those with concerns — largely from the environmental community — over how permits are issued and what information is available to the public say the state is not going far enough and that proposed changes favor industry interests.

The rules would affect high-volume forms of fracking that use more than 100,000 gallons of “primary carrier” fluids.

The groups’ concerns reflect several categories of the process: That chemicals used aren’t required to be disclosed before drilling; that water-quality testing only takes place involving high-volume withdrawals; that the state’s system for reporting water withdrawals is not set up for operations that could require tens of millions of gallons; and that statutory rules for pooling resources below the surface should not apply to natural gas deposits in shale formations.

“From what we’ve read in the proposed rules, they’re not actually doing anything that makes fracking safer, but making some changes to make people feel better about it,” said Rita Chapman, clean water program director for the Michigan Sierra Club. “Some of them go backwards, even.”

Groups leading the push for stiffer regulations include the Michigan Environmental Council, the Michigan League for Conservation Voters and the Michigan chapter of the Sierra Club.

Separately, the University of Michigan has also convened a panel of stakeholders on a multiyear study of the fracking industry in the state. It is still working on a final report.

Hal Fitch, director of oil, gas and minerals for the Department of Environmental Quality, said changes may be in store based on reaction from environmental groups and the public. Public comment on the rules ends today (July 31), he said, and the state will put together its own response.

Erin McDonough, president of the Michigan Oil and Gas Association, said in a statement that oil and gas developers in Michigan “have a long history” of drilling “safely and responsibly, and our commitment is to protecting Michigan’s environment and communities while supporting Michigan’s energy supply needs, economy and jobs.”

She went on to call the state’s regulations “among the strongest in the nation. Still, the public wants additional protective measures in place, and we respect that. The proposed rule changes add tough but fair requirements to an already existing strong set of regulations with which all oil and gas companies operating in Michigan must comply.”

‘Long, safe history’

Fitch, too, emphasized that there is a “long, safe history of hydraulic fracturing in Michigan,” with over 12,000 wells drilled since 1952. “Despite that,” he added, the department started hearing public concerns around 2008, particularly as it relates to high-volume wells.

In 2011, the department issued permitting instructions that involves submitting data sheets and reporting of high-volume water withdrawals. That includes requirements for using the state’s online Water Assessment Tool, which “will tell you whether there is a potentially adverse impact on surface waters.” Industries using high-volume water withdrawals already had to use the system since it came online in 2006.

“Most (gas companies) were exempted when it went into effect in 2006,” Fitch said. “We felt it needed to apply to gas needs also.”

The latest process is an attempt to “broaden” those initial efforts at public disclosure, Fitch said, “to clarify things and give the public and interested parties a chance to comment.”

According to the Michigan Policy Network at Michigan State University, “Michigan has relatively strong regulations compared to other states where safety standards are lower.”

A 2010 land auction by the state Department of Natural Resources, which took in $178 million for 118,000 acres, “suggests that energy developers are seriously considering a major natural gas expansion in the state as natural gas becomes more popular from a business sense as well as environmentally,” according to the MPN.

Still, some dispute the notion that hydraulic fracturing has a spotless history here.

“I don’t think that’s accurate,” Christopher Grobbel, an environmental consultant and adjunct professor at Michigan State University, said of Fitch’s comments. “That message needs to be a little more nuanced.”

Grobbel worked for the DEQ for roughly a decade in various capacities in the 1980s and ‘90s, including the department’s remediation development division.

He cited “hundreds of contamination sites” in Michigan involving the oil and gas industries, which include anything from pipeline ruptures to truck spills. While there have been no major reported incidents of groundwater contamination here, Grobbel said his experience in the public and private sectors proves there are still risks.

“That’s a non-starter and it’s not a statement that gets us anywhere meaningful,” he said. “Frankly, it alienates the public.”

Chemical disclosure, baseline testing

Chapman said her organization is “asking for full public disclosure of every chemical with no regard to trade-secret protection.”

The rules call for a list of chemical additives used during the process, unless they are subject to trade secret. In that case, companies “shall list the chemical family associated with the chemical constituent” and provide a statement of trade secret protection.

The new rules would also require baseline sampling from up to 10 water-supply wells and require companies to submit chemical additives used in the process to the website FracFocus, a nationwide chemical disclosure registry maintained by the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission (IOGCC). Yet Chapman has concerns that it’s not a publicly run site.

“We’d like to see the DEQ keep that information in-house,” Chapman said.

Addressing those concerns, Fitch said he is the incoming vice chairman of the IOGCC this fall, and that the DEQ has “close involvement with both organizations.” The DEQ will also have information submitted to the website “automatically sent to us.”

Fitch added that, “In the best of both worlds, I’d prefer not to have trade secrets,” but that the state is not trying to “override federal law.” He also said well operators are required to provide those chemicals to local emergency preparedness coordinators.

“We think there are adequate protections,” he said.

As for the baseline testing, the Michigan Environmental Council says that companies should be required to test groundwater before a well has been drilled, rather than having 30 days after it has started.

Chapman said the new rules “put the burden on the homeowner to prove something went wrong instead of putting the burden on the company to show that nothing happened. … After fracking has been done, that’s meaningless. People need that information immediately.”

Compulsory pooling, water withdrawals

Environmental groups also contend that the pooling section of the rules, which involves landowners with gas resources on their land but who have competing interests on whether to tap it, is out of date and should only apply to conventional drilling methods.

They say “statutory pooling” (it is redefined from “compulsory pooling”) should not apply to natural gas that doesn’t exist in pools, as oil does, because it doesn’t infringe on a neighbor’s right to tap into the gas on their land.

Compulsory pooling occurs when landowners may refuse to allow an oil or gas company to drain resources beneath their land. But if their neighbor does, “I would be denying my neighbor’s ability to use the oil and gas under hers. So, I could be legally compelled … to allow the drilling,” according to the MEC. “In exchange I’d get a check for my share of the reservoir.”

According to the proposed rules, “statutory pooling shall be done on a basis which ensures that each owner of an interest within a drilling unit is afforded the opportunity to receive his or her just and equitable share of the production from the unit.”

“Therefore, I should have the right to prevent fracking on my property, as long as I decline to sign a lease and agree to forgo compensation, or receive only minimal payment for having the pipe run through my land,” according to the MEC.

Chapman, of the Sierra Club, added: “It just doesn’t apply and it doesn’t make any sense.”

Meanwhile, Grobbel said the state’s Water Withdrawal Assessment Tool needs to be broadened to also include warm water and wetland withdrawals, not just coldwater resources. He also said there are problems with artificially inflated hydrology numbers, and that deciding whether there will be impacts is done “at a desktop, not in the field.”

The MEC, in a recent post on its website explaining the group’s position on the rules, said the state’s “existing system of assessing and issuing permits for large water users isn’t set up for the massive one-time withdrawals associated with fracking.”

Concerns center around potential impact on trout streams and drinking-water wells.

“The Water Withdrawal Assessment Tool is not built for that situation,” Chapman said. “It’s built for irrigation that goes on every so often. It’s not the appropriate tool for assessing whether these water withdrawals will have an impact.”

Public comment on the rules ends July 31. Fitch said the state will review those and it’s possible some are incorporated into a final draft. Committees in the state Legislature will take two to three weeks to review them.

But summing up the state’s position, and how the process moves forward until final rules are adopted, he concluded: “We recognize there are some interests out there that will never be satisfied with everything.”

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