oil & gas drilling

Drilling permits in Michigan at 89-year low

Dec 13, 2016
Sam Corden

The past decade has been slow for oil and gas development in Michigan, but 2016 has seen the industry come to a near halt.

So far this year, 40 permits have been granted; less than every year in history, except for 1927, which was the first year that Michigan began issuing permits.

Drilling for gas and oil in Michigan has just about stopped completely. As reported by the Detroit News, this year Michigan is on track to issue the fewest number of drilling permits since 1927.

No, it wasn’t anti-fracking environmentalists. It was the markets.

Oil prices dropped a couple of years ago and they’ve stayed down. The success of horizontal fracking across the nation has driven natural gas prices down.

Michigan does a fair amount of gas and oil production, particularly gas, but the market drop has killed a lot of jobs in the industry.

The state Court of Appeals decided recently that voter approval is not needed for cities to be able to lease drilling rights under public parks and cemeteries. The Court rejected an appeal by a group called Don't Drill The Hills. It was challenging the City of Rochester Hills' decision to lease oil and gas drilling rights in two parks and a cemetery to one company, and to allow another company to replace an aging pipeline under a park. 

Drilling for oil and gas in Michigan is down to levels not seen since the Great Depression.

And so far, newer methods of hydraulic fracturing, or fracking, are not producing a new boom for the industry.

The number of permits issued for new oil and gas wells so far this year is on track to be the lowest in more than 80 years.

A study released by a team of Penn State scientists found evidence that groundwater near a shale gas well in Bradford County, Pennsylvania was tainted by chemicals used in hydraulic fracturing and drilling for natural gas. The study suggests the chemicals traveled through sideways cracks in the ground. 

The campaign to ban the drilling process known as “fracking” plans to launch a petition drive next month. This will be the third time the anti-fracking campaign has tried to get lawmakers or voters to adopt a ban.

Earlier efforts fell short, but LuAnn Kozma of the Committee to Ban Fracking in Michigan says the ongoing controversy about drilling has helped the cause.
“I think people are getting it,” she said. “When they hear about fracking, they don’t want it.”

Residents of northern Michigan got a surprise last summer. They found out some drilling for oil and gas can be done confidentially. That unnerved some people in Emmet County, who now want their local government to do something about it.

Oil and gas exploration could pick up near Traverse City and Manistee this year. Late last year, a company based in Colorado called Wyotex Drilling Ventures applied for permits to drill five wells in Manistee and Grand Traverse Counties.

It’s a small sign of life for an industry that has been on the decline in northern Michigan. If approved, the wells will be drilled into a formation called the A-1 Carbonate. That layer of the earth has produced a modest amount of oil and gas in Michigan. It’s been drilled in various parts of the state for more than 30 years.

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.

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

You might recall a story last month in which Detroit Free Press reporter Keith Matheny reported that a Pennsylvania oil and gas company planned to ship up to 36 tons of low-level radioactive waste from fracking to a landfill in Wayne County near Belleville.

That news led Gov. Rick Snyder to assemble a panel of experts to take a close look at the state's regulations for this waste, known as "TENORM".

And it sparked a bipartisan reaction. State Sen. Rick Jones, R-Grand Ledge, and State Rep. Dian Slavens, D-Canton, both proposed bills to ban importation of radioactive fracking waste.

Now, Keith Matheny has been looking at the track record of the proposed dumping ground of this radioactive fracking waste.

Matheny says after reviewing records at both the state level and the federal level, he found a litany of violations going back to the 1980s, and at least 15 violations in the past decade which involve fines of more than $471,000. 

* Listen to the full interview with Keith Matheny above.

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.

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.  

Rick Pluta / Michigan Public Radio Network

UPDATE 2:35PM: Our story has been corrected because the ballot campaign is now looking to get a voter initiated law, not a constitutional amendment.

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.

An energy company has agreed to pay a $5 million dollar fine and plead no contest to a misdemeanor anti-trust charge as part of a plea deal. Under the bargain, Encana Oil & Gas USA also promised to help the state pursue legal action against another oil company.

Bob Allen

New rules proposed for oil and gas drilling in Michigan are getting a mixed response, at best, from watchdog groups. The rules would apply to a type of drilling often referred to as “fracking.” Critics say the proposed changes continue to favor the oil and gas industry over neighbors and the public.

The official line in Michigan has long been that drilling for oil and gas is well-regulated and done safely, but many people are not convinced.

Hal Fitch directs the state’s supervision of the oil and gas industry and says they are responding to those concerns.

When Williamsburg Erupted

Apr 15, 2014
Geology Department at Northwestern Michigan College

Starting with President Nixon in 1973, every U.S. President has pledged to make America energy independent. That same year, 500 drilling permits were issued in Michigan, and the quest for domestic oil nearly destroyed one small village in Northern Michigan.

Williamsburg is about halfway between Traverse City and Kalkaska. It was settled in a place American Indians called the Weesh Ko Wong, or clear cold water, because of the many natural springs that bubble up there. Spring-fed trout ponds and a state fish hatchery were once the pride of Williamsburg.

A new audit says the state could be doing a better job of regulating oil and gas drilling in Michigan.  The Michigan Auditor General's report says almost 70 percent of wells currently producing oil and gas are not being inspected as frequently as the state had planned. Also, it says the department needs to better document and report environmental violations.

Brine Investigation To Proceed

Sep 13, 2013

Some residents in northern Michigan are upset about the practice of spraying liquid waste from oil and gas wells on dirt roads. County Road Commissions have been doing that for decades to control road dust. But an incident this summer has critics accusing state officials of failing to protect human health.

Falls Short
In Benzie County, in June, a county official decided to test the water being sprayed on the dirt roads. It tested at levels way above limits to protect human health from cancer causing chemicals.

Earlier this summer, a Kalkaska company spread industrial waste on roads in Benzie County. The toxic contaminants were mixed with brine from oil wells that is used to keep down dust on gravel roads.

The pollutants tested way above what’s allowed for human contact. And some residents think the DEQ is treating the oil and gas industry with kid gloves.

Set of Coincidences

If Bryan Black hadn’t been out tending his garden one morning in early June, it’s likely nobody would even know about the toxic chemicals spread on nearby roads.

DEQ Cites Company for Road Brine Violation

Jul 31, 2013

State environmental regulators sent a notice of violation to a Kalkaska company last Friday.

The DEQ says the company, Team Services, violated its permit for applying brine from oil and gas drilling to keep down road dust in Benzie County.

A sample taken by the Benzie County Road Commission exceeded state standards for toxic chemicals, such as benzene, by as much as a thousand times. The brine was applied in early June on several roads southwest of the village of Lake Ann. 

A group that wants to ban hydraulic fracturing in Michigan says the state didn’t follow its own rules in disposing fluid from wells that were fracked. Millions of gallons of water mixed with chemicals is used to get oil and gas out of deep shale wells.

Ban Michigan Fracking has learned that some wastewater from those wells was spread on public roads. And this was done close to a lake and in a campground near the Mackinaw Bridge last summer.

Chesapeake Litigation

Jan 6, 2012

Last month attorneys suing one of the nation's largest energy companies had their first victory in a long line of cases related to hydrofracking in Michigan. Two years ago land owners across the region were receiving record sums of money in exchange for the right to drill for oil and gas in a deep shale formation that had been untouched until then. But more than 100 landowners now say they were cheated when Chesapeake Energy walked away from their agreements.

Last May, oil and gas companies spent of hundreds-of-millions of dollars buying up rights to drill in Michigan. By summer, private landowners in northern Michigan had signed leases promising record payments to drill for their minerals.

But by the end of the year, the frenzy over the new gas play had fizzled, and hundreds of people were claiming they'd been cheated. Lawsuits now say gas developers didn't just break their word, but they allegedly engaged in fraud and conspiracy to manipulate the market.