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CLF's Afternoon of Hope
A vibrant, buzzing crowd (200-plus) and colorful auction/raffle/sweet table displays (see photo gallery) made the Village Club the place to be on a mid-September afternoon. Two guys – emcee WXYZ’s Brad Galli and CLF board chair Jim Berline – kicked off the agenda with high fives for the sponsors and the chairs before the splendid luncheon. Then Beaumont’s Dr. Kate Gowans talked about “The Faces of Childhood Leukemia”, complete with first names and colored prints of those precious beings, not all of whom beat their cancer. “We work, we wait, we pray a lot…there are too many sad stories,” she concluded with moist eyes. CLF president Heidi Grix then revealed that the very successful luncheon resulted from a series of small house parties where guests learned of the CLF mission (compassionate, personalized support for the 43,000 adults and children in Michigan affected by leukemia and other related blood disorders). At one of these mini gatherings “…the two Roses volunteered (to chair a larger event),” said Grix.
08/30/2013 - The influence of oil and gas in our lives is inescapable. From the time we wake up until after we go to sleep, natural gases and petroleum-based products are used in the manufacture, delivery or consumption of nearly all the goods and services we come into contact with everyday. Considering that the price of crude oil is growing with our dependency on fossil fuels, it's no surprise oil discussions have changed from miles per gallon to barrels per acre.
While the search for oil and gas in Oakland County started in the 1930s, the number of lakes in the county made reaching reservoirs difficult and restricted access to more open, less populated areas. Technological advances in the industry, such as seismic exploration, horizontal drilling techniques and hydraulic fracturing (fracking) have opened more areas to oil and gas development in recent years, and with it, potential risks to the environment and public health and safety.
Jack Lanigan, a geologist with the Michigan Department of Environmental Quality (MDEQ), said most companies exploring and drilling in Oakland County are searching for oil, as natural gas reserves are high and prices are low.
"They are all looking for oil," said Lanigan, who monitors oil and gas operations in southeast Michigan for the MDEQ's office of oil, gas and minerals.
In Oakland County, there are at least 21 active oil wells in operation, which produced 49,716 barrels of oil in 2012 and 56,244 barrels in 2011. Oil production in Michigan, which is the fifteenth largest oil-producing state in the nation, increased more than 6 percent from 2011 to 2012, according to the Michigan Oil and Gas News, based in Mount Pleasant. A barrel of oil is equal to about 42 gallons.
Major oil developments in the state's northern Lower Peninsula utilizing high-volume hydraulic fracturing are the main contributors to the state's increase in overall production.
Hydraulic fracturing, or fracking, is a way of tapping a reservoir to allow oil or gas to flow back to the surface, or completing a well, after the initial wellhole has been drilled. The method uses high-pressured water mixed with sand and chemicals to crack the layers of rock surrounding the oil or gas reservoir. When the reservoir is fractured, sand remains in the cracked rock, holding it open and allowing gas or oil to pass through and reach the surface. More traditional "cased-hole" techniques complete the drilling process by drilling several small holes, or perforations, in the rock to allow the gas or oil to reach the surface. While fracking may produce more oil and economic reward, critics say the process poses a potential risk to a region's ground and surface water, as well as other environmental resources.
To date, fracking hasn't been used in any Oakland County oil and gas developments.
Lanigan said most of the oil and gas wells that were completed in Oakland County in the past 60 years have since been classified as "dry holes" and have been capped in accordance to state regulations. The MDEQ regulates and enforces the oil and gas process, from a development's initial permitting to the closure of a well. The process, Lanigan said, determines the type of drilling and safeguards that are permitted, as well as ensuring operators have proper permission from land owners and mineral rights.
Oil and gas developers obtain mineral rights through leases, and typically offer mineral rights owners a per-acre bonus, as well as a percentage of royalties if a well becomes productive and profitable. The majority of leases in Oakland County are held by Traverse City-based Jordan Development, which has agreements with the Michigan Department of Natural Resources, several municipalities and private landowners.
Royalty payments from state-owned land in Oakland County totaled about $145,845 from January to June this year, according to Tracie Bonner, unit supervisor of the Revenue Verification Unit at the DNR. About $269,433 in royalties were received in 2012; $298,459 in 2011; and $271,341 in 2010. Bonner said royalty amounts are based on production units or reservoirs that are producing oil or gas, which may cross county lines.
"There's a lot going on in Oakland County," said Curtis Talley Jr., a farm and business management educator with Michigan State University Extension. "We have a lot of calls from Oakland County residents. Oil companies are leasing entire subdivisions and building lots. There are a lot of people who have been approached with (mineral rights) leases that just own a house."
Figures for mineral rights leases on privately-owned property are not available.
Talley hosts public education meetings throughout the state for MSU Extension to help private landowners navigate the business of mineral rights leases. Property owners in White Lake, Waterford and Springfield townships have been approached in the past two years by oil companies seeking permission to extract minerals below their land. Some companies are offering lease bonuses in the state that range from $25 to $200 per acre, Talley said. In addition to bonuses for signing a lease, private mineral rights owners typically have more leeway to negotiate leases than the DNR.
"The royalties for landowners is not pocket change," Talley said.
Waterford Township Supervisor Gary Wall said the township signed a lease agreement with Traverse City-based Jordan Exploration this year which included a bonus of $80,891 for leasing oil and gas rights to 641.13 acres of township-owned land throughout Waterford.
"Waterford signed a contract with them back in the spring with a no fracking guarantee clause," Wall said. "Fracking is a big concern of residents in the township."
"I told them that (oil companies) are going to drill the wells, you can't stop them – that's state regulated. We are on the bottom of the totem pole. If the state says they are going to allow (drilling) in your community, they are going to do it once they get enough landowners together. If that's the case, I said, 'let's make sure you're not going to frack.' It makes me sleep a little better at night. You have to do whatever you can to to protect your assets as best you can."
Ben Brower, vice president of Jordan Exploration, said the company is focusing current exploration in Oakland County on areas in White Lake, Waterford and Springfield townships, where the company has procured lease agreements with public and private mineral rights owners.
"We have a couple of wells operating and a couple more with permits coming," Brower said, confirming a recent well construction in Springfield Township, just north of White Lake. "White Lake was our first well. We are testing a second well now. The results are confidential."
Calls to White Lake Township supervisor Greg Baroni regarding oil and gas drilling in the township weren't returned.
Commerce Township Supervisor Tom Zoner said while there are thousands of acres of parkland in Commerce, the township hasn't been approached regarding any oil or gas developments. However, state parkland purchased by Commerce Township from the Michigan Department of Natural Resources did not include mineral rights.
Wynn Berry, a real estate professional and former Downtown Development Authority director in Commerce Township, said testing conducted by exploration companies 25 or 30 years ago in the township resulted in two exploration wells. The wells, one at 14 Mile and Haggerty, and the other near the Birmingham Gun Club, around Richardson and Martin roads, didn't result in any commercial production of gas or oil.
"They tested nearly every major mile road or so," Berry said. "They did hit oil, but my recollection is that it had a high sulfur content, so they didn't use it."
Documents obtained from the DNR indicate thousands of acres of mineral rights are being leased by Jordan Development near Proud Lake, including an area between Sleeth and Wixom roads to the north, Old Plank Road to the west, Glengary to the south and Bass Lake Road to the east. State-owned mineral rights have also been leased in Union Lake, in areas near Cass Lake, Carrol Lake and Long Lake.
The majority of state-owned parkland that has been leased in Oakland County is classified as "non developmental" parcels, meaning that oil and gas may be removed from the land; however, no drilling operations may disturb the surface.
The DNR has been leasing state-owned oil and gas rights through the public auction process since 1929. The auctions are held twice a year, once in the spring and once in the fall. The next oil and gas lease auction is scheduled for October.
Historically, funds received from oil and gas lease auctions and royalties were used to fund the Michigan Natural Resources Trust Fund, which is used to purchase land or rights for recreational purposes. However, the fund was capped in May 2011 after reaching its constitutional limit of $500 million. Revenue from state-owned oil and gas rights is now deposited primarily into the State Park Endowment Fund, which is used for operations, maintenance and capital improvements at state parks, and for the acquisition of land or rights in land for state parks, according to Julie Manson, Oil and Gas Lease Management Unit supervisor with the DNR's Mineral Management Section.
Although the parks endowment fund is the primary beneficiary of leasing revenue, Manson said the trust fund still processes grants each year.
"It's also interesting to note that through fiscal year 2012, projects in Oakland County have received the large majority of these grants," she said. There were 143 grants totaling over $77 million.
Revenue from oil and gas lease auctions hit an all-time high in May 2010 when oil and gas prospectors paid over $178 million for a total of 118,117 acres, for an average of $1,507.14 per acre. Previously, the highest dollar-per-acre average was $315.94 in September of 1981. The record sale was due as much to the speculation of oil and gas reserves in the northern part of the state's lower peninsula as any other reason. No leases for state-owned land were purchased during the record sale.
Revenue from leases on state-owned land located in Oakland County in October 2012 was $38,720 for 3,876.60 acres of land; $616,514 in May 2012 for 18,347.32 acres; and $765 for 50.57 acres of in October 2010. No leases were offered in Oakland County in May 2010 or October 2011. Eleven acres within the county which were offered in May 2013 didn't receive any bids.
While the largest holder of oil and gas leases on state-owned land in Oakland County is Jordan Development, Brower said Jordan isn't interested in expanding south, particularly to the Birmingham/Bloomfield areas, as there is little state-owned land and high population density. In addition to developments in White Lake, Waterford and Springfield townships, the company holds leases at with the Huron-Clinton Metropark Authority in Milford, where the company operates wells at Kensington Metropark.
Bloomfield Township Supervisor Leo Savoie said there hasn't been any discussions about oil and gas drilling in the township.
Only one small parcel, less than one acre, just south of Square Lake Road between Opdyke and Squirrel, has been identified by the DNR as available for mineral rights lease in Bloomfield Township. Several acres just outside the township bordering Orchard Lake are also listed in the DNR's mineral rights inventory as available for lease.
"I have yet to hear that there are any type of reserves in the area," Savoie said. "I know there are some close by in Waterford and northern Oakland County."
Savoie said the township would oppose any kind of oil or gas development in Bloomfield Township, and would use all available resources to stop it.
"Something like that, we would oppose from day one," he said. "If I knew of someone trying to put a derrick in someone's backyard, we would be out there and our building department would classify it as an ancillary structure. It just wouldn't happen without a court order."
While oil and gas drilling hasn't encroached upon the Bloomfield Township border, a spokesman with Sunoco Logistics confirmed a natural gas pipeline project along Long Lake Road between Franklin and Telegraph in Bloomfield Township, which is expected to carry about 20,000 barrels of ethane gas a day, beginning in September.
Jeff Shields, with Sunoco Logistics, said yellow markers in the area are part of the Mariner West project, which will transport gas from western Pennsylvania to Sarnia, Ontario, for use in the petrochemical market. The gas is used in the manufacture of some plastics.
"Mariner West is scheduled to start pumping about 20,000 barrels of ethane a day in September, with the ability to expand up to 50,000 barrels a day in the first quarter of 2014," he said.
Despite the potential for oil and gas development to provide new sources of revenues to public and private landowners, some public officials don't think the price is worth the risk it poses to the environment and the public.
Oakland County Water Resources Commissioner Jim Nash said he and many residents in the county are greatly concerned about oil and gas development, particularly the possibility of fracking. Nash started conducting a series of town hall meetings in September 2012 to raise awareness and education about oil and gas drilling.
"Fracking is the most obtrusive," Nash said. "It uses an insane amount of freshwater that has to disappear from the hydrological cycle. It's a much more dangerous operation, to me, by far. The traditional shallow (drilling) has been going on for decades, and that has it's own problems."
Depending on the type of hydraulic fracturing operation, the amount of fresh water needed during the operation may range from 50,000 gallons to more than 20 million gallons, according to the MDEQ. Withdrawal of water for oil and gas operations is exempt from Michigan's Natural Resources Environmental Protection Act, which regulates water withdrawals from natural water aquifers in the state. Instead, the MDEQ requires well operators to perform a water withdrawal impact assessment.
Twenty million gallons of water, in terms of a visual representation, would be equivalent to an Olympic-sized pool with a length of nearly a mile.
The MDEQ categorizes a hydraulic fracturing operation as "high volume" as the operation uses more than 100,000 gallons of water per day when averaged over 30 consecutive days. The department requires that observation wells are installed to monitor freshwater wells if they are located within a quarter mile of the proposed project.
Brower said Jordan has no plans for fracking operations in Oakland County.
"Even if it's not fracking, the operations and things they are doing are very intrusive into our community, and there is potential for spills," Nash said. "There are just issues around drilling. Most drilling has historically been done in very small populations. When looking at large populated areas, it could have a huge economic impact and affect property values if it spills in a river or lake."
Nash said harmful vapors that can escape the area around a wellhead can result in higher incidents of respiratory problems among residents. The increase in traffic of heavy trucks can also stress local infrastructures, he said. While the issues have raised concern with the public, Nash said specific information about what the public may be exposed to during the process is limited.
"This is the wealthiest industry in the history of the planet, and they have an endless amount of money to promote it," he said. "We don't have a lot of money behind it. We have our voices. They've been spending a lot on public relations. That's what we are up against."
In July, the American Petroleum Institute launched an online, print, radio and television advertising campaign in Michigan and eight other states aimed at addressing the public's concern about fracking. The ad features statements by a Colorado family that said fracking operations on their family-owned ranch has been safe for the land, water and air.
John Griffin, executive director for API's Associated Petroleum Industries of Michigan division, said oil and gas operations have been ongoing in southeast Michigan for decades without incident or disruptions to residents.
"If you haven't been exposed to the oil and gas industry in your county, it's easy to demagogue the oil and gas industry," Griffin said. "We have a few things out there in our history that would give people a healthy dose of skepticism, and I accept that. The MDEQ has strict regulations that you have to follow. Every once in a while someone does something wrong. That's why we have laws and prosecutors."
In July, Calgary-based Encana Oil and Gas spilled 300 to 400 gallons of flowback fluid consisting of water, brine and other chemicals at a drilling operation in Kalkaska County, near Traverse City in northern lower Michigan. The MDEQ, which cited the company, stated the fluid was inadvertently leaked from a tank while cleaning a wellhole that was being prepared for production testing.
Charlevoix-based Ban Michigan Fracking, which is petitioning to stop fracking in Michigan through a state-wide ballot initiative in 2014, lists the potential for fracking fluids to leak during on-site mixing and injection operations as one of the main public health hazards of fracking.
The group, and others in the state, such as Nash and state Rep. Jeff Irwin (D-Ann Arbor), are pushing for oil and gas companies to disclose the specific contents of fluids used during the hydraulic fracturing process.
The MDEQ indicates that 9.5 percent of fracking fluid is water and sand, with the remaining ingredients consisting of varying chemicals. While the department lists some of the chemicals that are commonly used, such as hydrochloric acid and other potentially hazardous substances, specific ingredients aren't made available to the public due to trade secrets.
Irwin, along with Reps. Gretchen Driskell (D-Saline) and Adam F. Zemke (D-Ann Arbor), have introduced eight bills designed to make more information about fracking available.
"These deep, horizontal fracking operations should disclose the chemicals they are pumping underground, and they should be held publicly accountable for their massive water use," Irwin said. "Nobody should be allowed to pump a nearby creek or well dry. My colleagues and I are introducing legislation to make sure this process is safe and transparent."
Specifically, the bills would:
• Require the disclosure of chemicals used in the fracking process and a report the water used when it exceeds 100,000 gallons.
• Give municipalities and individuals the opportunity to request public hearings before fracking permits are issued.
• Allow local units of government to control fracking operations in their communities.
• Create a public-private industry advisory committee to study the effects of fracking and make recommendations.
• Increase the setback distance of fracking operations from residential areas, schools, hospitals, day care centers and parks.
Griffin said the oil and gas industry is watching the bills but "isn't terribly worried" they will be enacted anytime soon.
"We will still need oil and natural gas for a long time," he said. "This idea that we can somehow legislate away oil and natural gas and still live lives as we know it just isn't true."
Strict regulations enforced by the MDEQ, and measures taken by the industry, are already helping to protect the public and environment, according to Griffin. And while he said there have been instances of where mistakes have been made, much of the information about drilling, particularly fracking, are based more on myth than facts.
"Burning faucets – it's just not true" he said, referencing a phenomenon that was highlighted in the 2010 documentary "Gasland," in which the filmmaker tied gas well fracking to well water contamination. Griffin cited a 1965 publication issued by the Michigan Department of Public Health in which the department said methane gas from natural deposits is sometimes emitted directly from water faucets in homes through seepage.
"I can understand why they are concerned," Griffin said, "but people filling their tanks with gasoline every day are more exposed to oil and gas than if they had an oil or gas line in their yard."