Source: Sherman Publications

Concerns bubbling over potential oil operation

by Trevor Keiser

October 23, 2013

While drilling for oil and natural gas may not be new to Addison Township, the potential use of pipelines in excess of 30 years old has both residents and township officials concerned.

“We’re not against the oil and gas industry,” said township Supervisor Bruce Pearson. “My issue is these pipes were put in (sometime in the) 1970s.”

The company seeking use of those pipelines is Energex Petroleum (USA) L.L.C, based in Windsor, Canada.

Energex representatives went before the Department of Environmental Quality (DEQ) Supervisor of Wells at an Oct. 7 hearing to seek petition approval for “a plan of unitization for secondary recovery of oil, gas and related hydrocarbons” from four wells known as the Addison 12 Unit along East Leonard Road.

A decision from the DEQ regarding Energex’s request is expected next month.

According to the Oct. 7 hearing transcripts, a representative from Energex told the Supervisor of Wells that the Addison 12 site was originally discovered in 1978 and oil was produced by four different companies until about 1998 when production at the facility was suspended.

The last company to work the site was Onco Petroleum USA Inc. who took over the property in 2005 and produced from about 2007 to 2009. Energex said the field has produced 438,000 barrels of oil and about 2.67 billion cubic feet of natural gas in total since operations began.

The plan

If approved Energex would be looking at a project lasting approximately 10 years, producing 90,000 barrels of oil along with 50,000 barrels of natural gas. That would equate to 75 barrels per day of oil and 42 barrels per day of natural gas. It would generate approximately $11 million in gross revenue in nine years and a cash flow of approximately $5 million over an eight-year period.

In order to achieve this, the company’s plan includes $1.45 million in facility upgrades, which would allow it to not only drill oil, but refine oil and natural gases on site, something that, according to Pearson, has not been done before.

“What we heard is they’re going to be processing gas out of there. We’ve never authorized (that site) for a processing plant,” Pearson said. “It’s supposed to be just the oil and then they come get the oil and take it out of there (and refine it elsewhere).”

Because the oil wells have sat dormant for so many years, Energex wants to inject natural gases into the pipelines, which will help draw the oil out of the ground. These natural gases have the capability to corrode the pipelines, which could result in a blowout.

The concerns

“If they do have a blowout and it tanks our water system. I have no other place (to get) water around here. I have to bring it in (from) some place (else) and (Energex’s) $1 million dollar liability policy and $5 million blowout policy is not enough to get me water in here,” Pearson said. “I told them, ‘Well, Superintendent, I’d like a $20 million performance bond put on this company at least then I could bring water into these people when the wells are all tainted. We still have to live here and breathe the air and drink the water after they’re long gone.”

“If it blows out, they’ll do like the last company and file bankruptcy and run back to Canada,” he added.

However, should a blowout happen, Pearson said they are prepared to deal with the situation. For the past five years, Pearson along with Addison’s Oakland County sheriff’s substation commander and the township’s fire chief have received training to handle a blowout should one occur.

Pearson used Enbridge, Inc. as an example of a company replacing old pipelines that were laid during the 1960s and 1970s.

“They had the big blowout down there in the Kalamazoo River, that’s why they’re putting new pipeline in,” he said. “At least they recognized those pipes have seen better days and they’re not going to risk it anymore.”

The other problem with injecting natural gases into the pipelines along with refining is the nuisance odor of the poisonous gas Hydrogen Sulfide, also known as H2S, which is described as a “rotten egg” smell.

According to the Michigan DEQ website, “Hydrogen Sulfide is an extremely toxic and irritating gas. Free hydrogen sulfide in the blood reduces its oxygen-carrying capacity, thereby depressing the nervous system. Hydrogen sulfide is oxidized quite rapidly to sulfates in the body, therefore no permanent aftereffects occur in cases of recovery from acute exposures unless oxygen deprivation of the nervous system is prolonged. There is no evidence that repeated exposures to hydrogen sulfide results in accumulative or systemic poisoning. Effects such as eye irritation, respiratory tract irritation, slow pulse rate, lassitude, digestive disturbances, and cold sweats may occur, but these symptoms disappear in a relatively short time after removal from the exposure.”

Odors become detectable in concentrations as low as .008 parts per million (ppm), according to California studies, but the sense of smell is lost after 2-15 minutes at 100 ppm.

H2S, even in low doses with long-term exposure, is harmful to humans, especially children and pregnant women, which is why Addison resident Bill Carroll is concerned for his two year-old son and pregnant wife.

“That’s a huge concern. The next equal concern is what this family experiences. My fear is that (at) 3 or 4 o’clock in the morning, we smell rotten eggs,” Carroll said. “We don’t know if it’s 100 parts per million or 7,000 parts per million. All we know is we have to get to our car as fast as we can and escape in whatever direction, but we don’t even know which direction because we’re surrounded by wells here.”

Carroll said the closest well is about 500 feet from his house and 300 feet from his property line, where his kid plays.

“I understand we need oil. That’s the world we live in, but when you start risking people’s health and lives to squeeze out a few extra barrels from a site that’s been already abandoned, is it really worth that cost?”

Not only are they concerned for their own health, but many property owners also own livestock including the Carrolls.

“I don’t want to go out there and find my horses all dead because the H2S has come down in the valley,” said Carroll’s neighbor Dianna Johnson.

Carroll also said when they purchased their property in 2003, they were told by the seller’s real estate agent that the wells had been abandoned and plugged. He said probably in the 1970s and 1980s there weren’t as many houses surrounding the site.

“We are now a suburban agriculture district,” said Tom Johnson. “It’s a residential area and the DEQ needs to realize that and be more stringent with the inspection process.”

If Energex is granted the use of the site, Carroll said every time they go outside they will have to carry a portable H2S sensor with them, which runs $170 and they will eventually have to get one to mount on a wall inside the house. That unit costs $750.

Fellow neighbor Julie Shoenherr said the last thing they want is a fight with Energex.

“We just want this to be safe,” she said. “It just really feels like they are really loose with the safety precautions we think are necessary.”

When contacted, an Energex spokesman declined to comment. “Once the order is issued and if (the) request to conduct recovery operations is approved, we would be happy to discuss the operation and invite you out to the location,” said Spokesman Brad French. When asked if he could address any other questions, French replied “not today.”