oil drilling

Randall Schaetzl, MSU

News of a decline might sound surprising since there has been so much excitement and controversy over horizontal hydraulic fracturing, or "fracking," in recent years.

But not many high-volume, horizontal wells were actually drilled since 2010, and the company that led the recent fracking boom has left the state.

That leaves the industry and its watchdogs wondering where new action will come from.

Mark Brush / Michigan Radio

A lot of us are curious about the oil pipeline running through the Straits of Mackinac.

Michigan Radio's M I Curious is a news experiment where we investigate questions submitted by the public about our state and its people.

As part of our M I Curious project, Justin Cross asked Michigan Radio this question:

What is the status of the aged Enbridge oil pipeline running through Lake Michigan at the Straits of Mackinac?  

Steve Carmody / Michigan Radio

This story was updated at 6:27 am on 9-10-14

State lawmakers got an earful today from people who want townships to have the ability to say no to oil and gas companies.

A 2011 amendment to the Michigan Zoning Enabling Act specifically bars townships from preventing conventional drilling. 

World Resources Institute

This Week in Michigan Politics, Emily Fox and Jack Lessenberry discuss U.S. Senate Terry Lynn Land's plan to fix Michigan's roads, if residents can have an impact on oil drilling and fracking in their communities, and how Michigan won't be a a dumping ground for other states' radioactive waste.

Eusko Jaurlaritza / Flickr

Michigan officials might allow up to 36 tons of low-level radioactive waste from Pennsylvania into a landfill in Belleville after other states have refused to accept it.

The technical term for this sludge is "technologically enhanced, naturally occurring radioactive materials," or TENORM. The waste comes from oil and gas drilling.

Keith Matheny’s article in the Detroit Free Press prompted action by Governor Snyder, who announced he will convene a panel to look at the situation.

Matheny said in another article that EQ, a USEcology company, announced yesterday that they have decided to voluntarily stop taking oil and gas related waste while this panel makes its decision.

State Representative Dian Slavens, D-Canton, plans to introduce a House bill to ban importing radioactive waste into Michigan. And State Senator Rick Jones, R-Grand Ledge, said he will do the same in the Senate.

*Listen to the full interview with Keith Matheny above.

Andrew McFarlane / Flickr

Our need for energy could be colliding with our desire to preserve Michigan’s natural beauty.

Case in point: around 9,700 acres of Hartwick Pines State Park near Grayling could be included in an MDNR auction October 29 for a lease of mineral rights.

Ron French reported on this story for Bridge Magazine. He said it’s not unusual for the state to lease ground underneath state parks.

Twice a year the Michigan Department of Natural Resources holds an auction where they lease oil and gas rights to anyone who wants to explore. Companies or individuals can nominate any state property for exploration for oil and gas. One Michigan oil company nominated Hartwick Pines.

Hartwick Pines State Park holds a 49 acre parcel that is the largest, and possibly the last, virgin forest of white pines in the Lower Peninsula.

“These are pine that are up to 400 years old, they’re up to 12 feet in circumference, they are up to 165 feet tall, this is what Michigan looked like before logging,” French said.

French points out that a lease is not a right to drill on the property.

“What are the chances of something going on near Hartwick Pines? They are small, but they are greater than they would be if this lease hadn’t occurred,” French said.

Photo courtesy of the Bureau of Land Management

One Michigan township wants to make special deals with oil and gas drillers. 

State law does not allow townships to regulate oil and gas drilling. But with all the controversy around fracking, some wish they could.  One township in northern lower Michigan is trying to work around that rule and have a voice.  

There are no active oil or gas wells in Edwards Township, a farming community near West Branch. However, there are some old wells that are capped off.

morguefile

A judge in Washtenaw County today dismissed a lawsuit to prevent oil drilling in Scio Township, near Ann Arbor.

Citizens for Oil-Free Backyards wants to stop West Bay Exploration from drilling. So it sued the Michigan Department of Environmental Quality for what it calls an "unfair and faulty" permitting process.

But the judge ruled that he had no jurisdiction over the case. He said Ingham County is the appropriate court.

Arthur Siegal represents the non-profit group. He said West Bay could start drilling within a week.

Laura Robinson

Exploratory oil drilling could come to Scio Township, near Ann Arbor, soon. But a community group has a filed a lawsuit to try to prevent it.

Citizens for Oil-Free Backyards filed the lawsuit against the oil company, West Bay Exploration, and the Michigan Department of Environmental Quality.

The group claims that DEQ did not follow its own rules meaningfully when considering the drilling permit.

Laura Robinson heads the group.  

Member of the public with a “No Fracking” sticker on her clothes as she testifies before a panel of environmental regulators.
Rick Pluta

State environmental regulators will put the finishing touches on new rules regarding “fracking” now that public hearings have wrapped up. They expect to have the new rules adopted by the end of the year, but the state’s rules may not be the final word on the controversial drilling process

“Fracking” is a drilling method that pushes water and chemicals into wells to force out oil and gas deposits.

morguefile

The state has approved a permit for a controversial exploratory oil well in Scio Township close to Ann Arbor.

The approval came despite fierce opposition from residents and Scio Township's board of trustees.

Adam Wygant is with the state Department of Environmental Quality.

He says because of the public comments, the state took two months to study the application - much longer than the 24 days it normally takes to approve a permit for an exploratory oil well.

Wygant says oil wells tend to be less disruptive than people fear, and often, they get used to them.

michigan.gov

The Michigan Court of Appeals says state regulators were correct to deny a drilling permit to developers who want to put oil wells on private land surrounded by a state forest.

The developers said the state should either grant the permit, or compensate them for their lost investment. They want to put 11 wells on private property surrounded by the Pigeon River Country State Forest in northern lower Michigan. The state Department of Environmental Quality said the wells were either in designated no-drill zones, or were too close to water.

“The takeaway from this decision is that you can’t drill an oil well just any old place in the state of Michigan,” said DEQ spokesman Brad Wurful. “There are some areas that are off limits.”

And the decision says since that was clear up front, the developers don’t get a payback from the state.

“What the court said was, everybody knew this beforehand going into this and it was clear,” Wurful said. “Nobody got surprised here. They simply wanted to do something that was not allowed and the court upheld that. We’re pretty pleased with the decision, obviously.”

The developers can file a new permit request with plans to use different technology, like directional drilling. They can also take their case to the Michigan Supreme Court.

Eusko Jaurlaritza / Flickr

What do the people who run Michigan's towns and cities think about the prospect of high-volume hydraulic fracturing, or "fracking" in or near their communities?

A new report from the University of Michigan's Center for Local, State and Urban Policy looks into that question.

In Michigan, only a handful of communities report some type of high-volume fracking operation. It's the controversial process used to extract natural gas by drilling into shale deposits.

The center’s program director, Tom Ivacko, joined us to talk about the results.

*Listen to the interview above.

Bureau of Land Management

"How many of you are here to stop the drilling?" one woman asked the crowd of about 200 at a town forum in Scio Township last night.

Big applause broke out.

It was the first indication that the crowd was not going to be a friendly one for the executives from West Bay Exploration, a Traverse City-based drilling company that has asked several landowners in Scio Township to sign over leases for their mineral rights.

The town forum was billed as an opportunity to "become educated about oil and gas leasing."

Creative Commons photo by user Meridithw

Ben Freed over at The Ann Arbor News has more about the plans being developed by Traverse City-based West Bay Exploration Company. Freed reports the company has approached landowners in Scio Township looking to obtain their mineral rights.

West Bay says it would drill for oil using a "traditional" method. The company's vice president, Patrick Gibson, said it wouldn't use horizontal hydraulic fracturing, or fracking:

“We’re a conventional oil and gas exploration company, we do not utilize hydraulic fracturing,” Gibson said.

“What we’re looking for is geological formations that are already fractured so that we don’t have to do any fracturing ourselves, hydraulic or otherwise.”

Landowners are being advised to educate themselves before signing contracts offered by the company. MSU's extension office offers insights into oil and gas leasing on this page.

Randy Knauf / Creative Commons

A new state law encourages oil companies to go back to oil wells that are considered tapped out and extract more oil.

So-called “enhanced recovery projects” are relatively new in Michigan. In fact, there’s only one company that’s using the technique.

The process recycles carbon dioxide that would otherwise be vented into the atmosphere and pumps it down into existing oil wells. The pressure forces more oil to the surface. Proponents say the process makes better use of existing oil wells because the oil couldn’t be recovered without the technique.

morguefile

The Michigan Legislature recently approved a package of bills that’s causing a split between environmental groups.

The legislation would lower a tax on a certain kind of oil recovery.

Jake Neher is the capitol reporter for the Michigan Public Radio Network and he’s been following this story. I spoke with him about these bills for today's Environment Report.

“The main bill in the package would cut the state severance tax from 6.6% to 4% for companies using what’s called enhanced production or enhanced recovery methods to essentially clean out low-producing oil wells. So basically, they pump a bunch of carbon dioxide into the wells to help get relatively little amounts of oil out of them. In other words, companies would pay a lower tax rate on the oil they take out of the ground using that process.”

World Resources Institute

The Michigan Department of Natural Resources auctioned off state-owned oil and natural gas drilling rights on more than 90,000 acres yesterday.

Here’s a recap of the auction results:

  • Total acres up for auction: 108,164.70
  • Total acres leased: 91,225.42
  • Total money raised: $4,118,848.60
  • Average bid per acre: $39.90

These auctions are typically held twice per year, in May and October.

The money raised from these biannual auctions has been steadily increasing since 2000, hitting peaks in 2008 and 2010.

In the first auction of 2008, the state leased all of the 149,000 available acres for more than $13 million. The last time the state had a 100 percent lease rate was in 1981.

The first auction in 2010 had a 99.6 percent lease rate and raised an unprecedented amount: more than $178 million.

The average bid per acre for that auction was $1,507, which far exceeds the average bids at any other auctions over the last 10 years, all of which have been under $100.

-Suzanne Jacobs, Michigan Radio Newsroom

(photo by Steve Carmody/Michigan Radio)

People opposed to a natural gas drilling technique called hydraulic fracturing protested outside a state office building in Lansing this morning. 

The state is auctioning off oil and gas mineral rights leases for more 100 thousand acres of public land.

The protesters chanted as energy industry and state government officials entered the building where the auction of oil and gas mineral rights leases was taking place.

The protesters worry drillers will use horizontal hydraulic fracturing, or fracking, to extract natural gas in Michigan, potentially contaminating drinking water and causing other environmental problems.

LuAnne Cozma is an anti-fracking activist.  She says state regulations are geared to help the industry, not to protect the people of Michigan.
 
“The gas is drilled…the more gas flows…the more money flows into the (state government) coffers…and that is why we don’t trust the whole process," says Cozma.

The protesters are circulating petitions to put an Anti-fracking question on the November ballot.

DNR

Starting at 9am this morning, the Michigan Department of Natural Resources will hold an auction to lease state-owned drilling rights for oil and natural gas. 

The state is offering drilling rights on more than 108,000 acres in 23 counties.  These auctions are usually held twice a year.  The minimum bid is $12 dollars an acre.

Mary Uptigrove is the acting manager of the DNR’s Minerals Management Section.  She says acquiring drilling rights is the first step in exploring for oil and gas.

“The lease is just a proprietary right that’s administered by our department. It does not give them the right to actually start drilling a well.  They have to seek other approvals from the Department of Environmental Quality for the drilling permit.”

The leases last five years, and the companies have the option to extend them.

Uptigrove says industry groups usually nominate parcels for the auction.  The state gets 1/6 of the royalties of any oil or gas that comes out of the ground.  That money is used to maintain state and local parks and to buy land.

Maryann Lesert lives near the Yankee Springs Recreation Area in Barry County. 

She’s worried the auction will lead to drilling under the park land... especially a kind of drilling for natural gas called horizontal hydraulic fracturing, or fracking. (To learn more, check out this recent article by Michigan Radio's Lester Graham about the benefits and risks of fracking)

“It’s beautiful land, it has beautiful bodies of water and the environmental and water impact threats from fracking are of great concern.”

Protesters are expected Tuesday morning outside of a planned auction of oil and natural gas lease rights on public land.

Lease rights on more than 100 thousand acres of public land will be available in the auction in Lansing.

Mary Uptigrove is the acting manager of the Minerals Management Section of the Department of Natural Resources.    She says much of the land on the auction list is there by the request of the drilling industry.

“They may know…areas where… current development is occurring….and they want to explore for additional development,” says Uptigrove. 

World Resources Institute

Hydraulic fracturing or "fracking" has created no shortage of controversy recently. And as Michigan Radio's Rebecca Williams reported last week, debate over this controversial method of extracting oil and gas from deep inside shale deposits has made its way to the Michigan statehouse.

(photo by Steve Carmody/Michigan Radio)

An overflow crowd filled a public meeting last night in Brooklyn, south of Jackson.    Many in the crowd are worried about the environmental impact of a growing oil drilling operation in the Irish Hills.

"There is nothing they can do here to keep from having an accident...It's going to happen," proclaimed one of the people in the audience. 

The crowd at the public meeting demanded answers from a panel of oil industry executives and state officials about drilling going on in the Irish Hills.   The region is becoming one of the leading crude oil production centers in Michigan.  

Tim Baker is a vice president with West Bay Exploration, the company doing much of the drilling.    He admits they need to do a better job explaining how they are trying to drill safely.

“These people have a lot of good questions.  This is a beautiful area.  There’s a lot of beautiful lakes and streams here," Baker said after the meeting, "We wanted to communicate to them that we are trying to develop (the oil) the best way possible.”  

 Many Irish Hills residents are worried oil drilling may end up lowering their property values.