May 16, 2012 - Northern Oakland County saw mineral rights for two of its natural treasures leased on May 8.
Mineral rights for the entire Polly Ann Trail and Watershed Preserve Park, located in northern Addison Township, were auctioned off in Lansing to Jordan Development Company, an Oil and Gas producer out of Traverse City, MI.
Jordan Spokesman Ben Brower said that all of Oakland County's properties were snapped up by the Traverse City-based producer. In all, Jordan spent about $600,000 securing mineral lease rights across Michigan in the auction.
Nonetheless, Jordan assures the Oxford Leader that no plans exist to develop the leases won on May 8, and no plans are in the works to extract natural gas in Oakland County with the controversial hydraulic fracturing technique. The motivation for buying the mineral rights it doesn't intend to utilize is in part to thwart competition in the region.
Jordan, in business since 1996, now operates more than 450 wells in the state. About 300 of those wells employ an exploration method known as hydraulic fracturing, mostly in the northern parts of the state.
Mark Snow, permit manager and geologist for the Michigan Department of Environmental Quality (MDEQ), said Jordan Development has handled themselves well within the regulatory framework" in place here in Michigan.
Snow noted his agency is "doing all we can to be good stewards of the environment and (still) provide access to a local resource."
Brower said that Jordan wishes to be a responsible corporate partner to Addison Twp. Brower understands the apprehension some may feel about turning over a critical wetland in a beautiful state like Michigan to oil and gas producers, especially in the wake of the BP disaster in the Gulf, or the Kalamazoo oil spill. However, Brower assures, "we live here too, and don't want to see (environmental) destruction."
Both Watershed Preserve Park and the Polly Ann Trail are classified as non-developmental tracts of land by the Department of Natural Resources (DNR). According to Jeffrey Braunscheidel from the DNR Lake Erie Management Unit, these ecologically sensitive parcels are not amenable to surface drilling because of the hazard posed to the unique biotic community present.
Oakland County has many such regions and has the distinction of having the most number of lakes larger than 10 acres in the entire state of Michigan. The parcels auctioned in Addison Township are wetland habitats; they contain fish in the lakes and ponds, aquatic insects, invertebrates, frogs, water fowl, songbirds, deer, beaver, mink, and a whole array of diversity in the upland habitats.
Because of the natural beauty and the critical ecological makeup, Braunscheidel said he's "generally concerned" with the impact that could occur from oil and gas exploration. "It makes you uncomfortable, because we just don't know" the harm that can come from some of the exploration methods, Braunscheidel said. Like many in the state of Michigan, Braunscheidel relies on his colleagues at the DEQ to safeguard the habitat he's spent his life working to protect.
Because of his trust in the DEQ, Braunscheidel thinks the environmental risk posed by exploring for oil and gas in these ecologically sensitive areas is neglible, however. The "risk is (either) not there or so minimal" that he's not worried. "Normally, the features that hold oil and gas are so far down below the surface that it's not really an issue," Braunscheidel assures.
But there is enough harm from exploration that the DNR classified the parcels as non-developmental and denied access to their surface. To undertake explorations from the surface requires clearing a significant patch of ground, building pumping and storage facilities, developing and maintaining infrastructure to transport materials to and from the site, and other activities considered too destructive of the surface habitat. Where the surface ends remains an unanswered question.
In addition to surface interference, according to Braunscheidel, the potential is always present in such operations to have a ruptured line like in the Kalamazoo River incident, or associated troubles from erosion and runoff.
The damage to these vulnerable sites can vary, however, depending on the technique used to extract the resources. Many oil and gas producers are increasingly opting for hydraulic fracturing, a method of extracting natural gas that requires high-pressure injection of liquids to shatter the shale that seals in the coveted resource.
Hydraulic fracturing is an older method that has been used in traditional vertical style wells. In recent years, however, drilling techniques have been developed which allow producers horizontal access to trapped oil and gas reserves.
The horizontal technique requires a much greater volume of water than older vertical methods of injection drilling, water that is mixed with saline and unknown chemical compounds. According to the so-called "Halliburton loophole," the 2005 Energy Policy Act exemption to the Clean Water Act, gas and oil exploration companies are now shielded from revealing the chemicals used in their drilling efforts.
That's the option presented to winners of the mineral rights auctioned off on May 8. The parcels are blocked from surface exploration, but if a neighboring land owner can be persuaded to house the drilling platform and associated development site, the exploratory company can drill horizontally under the protected tract of land.
Approximately 12,000 such hydraulic fracturing wells have been dug in Michigan, and according to DEQ geologist Michael Shelton, 6.7 million gallons of freshwater are used at a single well site. Only seven or eight of the larger scale hydraulic-fracturing wells have been bored in Michigan, Snow insisted, though 6.7 million gallons is still "a lot of water," he admitted.
At the same time, we "have a good water supply" in Michigan, he countered. Moreover, the volume of water used should be considered in the context of other economic sectors that consume large quantities of water in their daily operations. Snow couldn't say what was the upper limit approved for use by oil and gas producers.
A danger can arise when the unregistered compounds of chemicals used in the horizontal bores migrate through the surrounding rock layers, possibly into neighboring aquifers.
Interaction between the chemicals injected into these deep bore holes and the surface remains a controversial topic.
Another potential hazard from these horizontal hydraulic fracturing sites is the disposal of the waste water once it returns from its high pressure journey under the earth. At half of one percent of the liquid flowback, this means 30,000 gallons of chemical waste are leftover from each injection site and are susceptible to evaporation, runoff, or consumption by wildlife.
According to Brad Wurfel, communications director for the DEQ, the risk from hydraulic fracturing waste water is mitigated by particularly stringent Michigan regulations. Michigan requires all water used in these deep horizontal bores to be stored in steel containers, and "never brought to the surface," where troubles with runoff and evaporation can cause surface environmental troubles. DEQ spokesman Wurfel confirmed that Michigan requires "operators use steel tanks to contain it and that it's sent to a deep injection well for disposal."
Snow agrees that Michigan's regulatory framework is unique in many respects, and offers "more protection than other states."
For one, Michigan has particularly "robust" casing regulations, such as the intermediate casing rule in place since 1973. Brower confirmed the regulatory situation. In terms of environmental regulations, Michigan is "the toughest state" and working with the legislative framework is "very time consuming," the Jordan spokesman said.
Snow is aware that fears about hydraulic fracturing have been running high in other regions. For instance, in 2011 Ohio had a string of earthquakes associated with hydraulic fracturing.
Snow points out that the trouble there was because of improper disposal of waste water, not the high-pressure fracturing itself.
On the other hand, the Halliburton loophole remains in effect for oil and gas development companies operating in Michigan.
Michigan does require a Material Safety Data Sheet, but not until after an incident is reported, rather than before injecting diluted carcinogenic chemicals into the ground.
The DEQ opts to "not impinge on the proprietary rights" of these developers, Snow said.