Tag: Fracking

Colorado Rules That State Laws Trump Local Bans on Fracking

On Monday May 2, 2016, the Colorado Supreme Court ruled that state laws regulating the oil and gas industry trump local bans and moratoriums on fracking.  Colorado has become a leader in oil and gas production with more than 50,000 actives wells and more than 45,000 inactive wells.  The high court overturned Longmont’s 2012 ban on fracking and fracking waste disposal, as well as Fort Collins’ five –year moratorium on fracking on the grounds that these local measures “operationally conflict[]” and “materially impedes” state power.

By contrast, the law in Michigan preempts regulation by counties and townships on oil and gas operations only as it relates to the zoning of the location and related “location, drilling, completion, operation, or abandonment” of oil and gas wells.  In other words, townships and counties do have some authority and ability to regulate related facilities, processes, and activities, such as natural gas pipelines, flow lines, gathering lines, treatment or production facilities, or compressors, pursuant to the Addison Township v. Gout case. Click here for more information about local authority to regulate ancillary activities of oil and gas in Michigan.

 

Read the full news stories from the Denver Post and Forbes.

 

FLOW Urges the Department of Environmental Quality to Strengthen Its Proposed 2014 Fracking Regulations to Protect Michigan’s Water, Air, and Land Resources

August 1, 2014

FOR IMMEDIATE RELEASE

Contact: Liz Kirkwoood, Executive Director

231 944 1568 or [email protected]

FLOW Urges the Department of Environmental Quality to Strengthen Its Proposed 2014 Fracking Regulations to Protect Michigan’s Water, Air, and Land Resources

Traverse City, Mich. – On July 31, 2014, FLOW submitted extensive public comments to the Department of Environmental Quality (DEQ) regarding their proposed fracking regulations on water withdrawals, baseline water quality sampling, monitoring and reporting, and chemical disclosure. FLOW’s comments urge the DEQ to take a number of steps to strengthen the oil and gas regulations governing high-volume hydraulic fracturing (HVHF) or fracking.

“As a whole, the DEQ’s proposed new rules to address the risks, impacts, and uncertainties surrounding HVHF in Michigan do not measure up to the values and principles embodied in Michigan’s history, law, and policy,” said FLOW’s president and founder Jim Olson. “They are not strong enough to protect our air, water, natural resources, the public trust, and public health and welfare from the risks HVHF poses.”

FLOW’s written comments elaborate on comments made by Executive Director, Liz Kirkwood, at the DEQ’s Gaylord public hearing on July 15, 2014. “Existing oil and gas laws are built around the assumption that the rule of capture applies to all oil and gas production and that fracking is simply a technique to “enhance” the recovery of another fungible oil and gas liquid.” said Liz Kirkwood, “The DEQ cannot and should not bootstrap fracking into conventional oil and gas development regulations.” Key recommendations included:

Notice and Comment Requirements: The application process on drilling permits should be subject to formal notice, comments, and hearing procedures as required under current Michigan law.

Comprehensive Environmental Impact Assessment: The environmental impact assessment should examine the entire area of potential impact, beyond the drilling pad site, and consider alternatives and cumulative impacts as required by the Oil and Gas

August 1, 2014Act and the Michigan Environmental Protection Act.

Good Faith Effort Not Enough for Pooling Authorization: The department should prohibit the drilling of wells prior to all properties being leased or a compulsory pooling hearing is conducted; otherwise, the proposed rules are likely to run afoul due process and takings challenges. Fracking should be prohibited on any property that has not voluntarily agreed to be leased.

Chemical Disclosure in Drilling Application: The regulations should require full disclosure of all fracking chemicals as part of the drilling application, not 30 days after the well has been completed.

Baseline Sampling Before, During and After Drilling: Baseline testing should be integral part of the drill permit application and after the drilling has occurred. Given the large water withdrawals associated with fracking and the impacts of surface and ground waters, baseline testing should sample both water levels and flows.

Evaluation of Adverse Impacts: Mitigate adverse impacts to all water bodies, especially headwaters, by requiring a separate high-volume water withdrawal approval with adequate hydrogeological baseline data to be filed along with the drilling permit application.

Interference Requirements: Increase isolation distance between hydraulically fractured wells (> 660 feet) and offset wells in the current regulations.

FLOW urged the DEQ to consider these additional changes, as well as review the pending final Graham Sustainability Institute’s Integrated Assessment, which examines the reality of fracking and the entire regulatory framework. Failure to do so increases risk of waste, health, safety and welfare, harm to the environment, and threatens property owners and citizens who use and enjoy Michigan’s abundant water and natural resources.

FLOW’s submitted comments enhance and support its Local Government Ordinance Program to provide technical assistance to township and counties in Michigan experiencing associated fracking impacts to their local air, water, and land resources.

FLOW also was a signatory to an another public comment submitted by the Anglers of the AuSable, Michigan League of Conservation Voters (LVC), Tip of the Mitt Watershed Council, Moms Clean Air Force, and more than 20 other environmental and conservation organizations.

View the full comments here: DEQ Comments 

FLOW is the Great Lakes Basin’s only public trust policy and education 501(c)(3) nonprofit organization. Our mission is to advance public trust solutions to save the Great Lakes.

 

 

Local Government Regulation of Large-Scale Hydraulic Fracturing Activities and Uses

Ross Hammersely and Kate Redman, attorneys with the Traverse City law firm, Olson, Bzdok & Howard, have done a marvelous service for local government officials, planners, administrators, property owners, industry, and the public in publishing a cogent, objective article on the scope and nature of local government regulation, including zoning and police power ordinance tools, to address oil and gas development, including recent large-scale hydraulic fracturing. This is a must read for those interested in land use planning, local government, proper development, and the protection of neighborhoods, farms, recreational lands and uses, and the environment and quality of life in Michigan. – Jim Olson Click here to view and download the article as a PDF, or read on below. See original article also at michbar.org.

Local Government Regulation of Large-Scale Hydraulic Fracturing Activities and Uses

The development of oil and natural gas resources using high­volume hydraulic fracturing (fracking) has become an increasingly politicized and controversial issue in re­cent years. The attention is due to a profound industry shift from the relatively shallow, vertical wells used for several decades in Michigan to significantly deeper well bores requiring unprece­dented volumes of chemically treated water and sand, as well as other support activities and uses.1 The intensified scale of this type of well has resulted in nearby communities experiencing new and greater effects from fracking operations including increased noise levels, traffic volumes, water use, and hazardous chemical trans­portation, among others. As a result, whether a community wel­comes or opposes fracking, local governments have a growing in­terest in exercising regulatory control over fracking and its ancillary activities, uses, and effects. This article explores the extent to which local governments have authority to exercise police power and zoning approval to regulate fracking in light of evolving state and federal regulation.

State and federal regulation of fracking

Local governments in Michigan may only exercise powers dele­gated by statute or the Michigan Constitution, and powers that can be fairly implied from those sources.2 Once granted, a power should be liberally construed in favor of local governments but is subject to preemption by state or federal law.3 An important thresh­old question in determining local authority to regulate fracking is the extent of federal and state regulation.

Federal regulation of fracking

Federal regulation of fracking could have the effect of preempting state or local regulation under the Suprem­acy Clause of the United States Constitution.4 However, oil and natural gas development via fracking is largely exempt from major federal environmental laws and reg­ulations including the Safe Drinking Water Act,5 Clean Water Act,6 Solid Waste Disposal Act,7 Clean Air Act,8 and the Emergency Planning and Community Right ­to ­Know Act.9 Accordingly, regulation of fracking and its related activities and uses falls primarily to the states.10

State regulation of fracking

The Michigan Department of Environmental Quality (MDEQ) is the primary agency regulating fracking in the state, and issues permits under authority of Part 615 of the Natural Resources and Environmental Protection Act and its associated regulations.11 Part 615 grants authority over the “administration and enforcement of all matters relating to the prevention of waste and to the conser­vation of oil and gas,” as well as jurisdiction over per­sons and things necessary to enforce this authority.12 The MDEQ asserts authority to regulate many components of fracking under this provision, including well location and spacing, drilling/construction timetables, certain production operations, waste and emissions management, well plugging, and site resto­ration.13 A permit holder under Part 615 is exempted from certain other regulations, including soil erosion permits and the water withdrawal statute.14 The water withdrawal statute also expressly preempts local governments’ authority to regulate large water withdrawals to the extent provided in the statute.15 Some commentators have suggested that the MDEQ’s authority preempts all local regulatory authority,16 but the Michigan Su­preme Court has rejected this conclusion. State law preempts local ordinances when the ordinance directly conflicts with a statute or the statute “completely occupies the field that [the] ordinance attempts to regulate” either explicitly or by implication, which can be assessed by looking at factors such as pervasive state regulation, legislative history, or a need for uniformity. Applying these standards to Part 615, the Michigan Supreme Court held that “the exclusive jurisdiction of the Supervisor of Wells applies only to oil and gas wells and does not extend to all aspects of the production process,” and affirmed the ability of local governments to regulate other aspects of oil and gas development if not ex­pressly preempted by another statute.17 Under this precedent, there is a role for local regulation of oil and gas wells and ancillary activities, facilities, and uses, and water withdrawal wells, as long as the regulation does not directly con­flict with Part 615 and is not limited or preempted by Part 615 or another statute.18

FAST FACTS: The development of natural gas resources by high-volume hydraulic fracturing, or “fracking,” is exempt from most federal regulation under environmental laws. Fracking regulation is left primarily to the states. In Michigan, the supervisor of wells has exclusive jurisdiction to regulate and control the drilling, completion, and operation of oil and gas wells. Subject to statutory limits, local governments retain police power and zoning authority to regulate certain ancillary activities and effects related to fracking, including truck traffic, unsafe material transportation and storage, certain types of pipelines, and other similar effects.

Permissible scope of local regulation of effects of fracking

Michigan’s oil and gas regulations do not address many of the effects of fracking and its ancillary activities, facilities, and uses that would ordinarily be issues of local concern subject to local regulation. For example, fracking requires the transport, storage, use, and disposal of large volumes of water, sand, and potentially unsafe chemicals, resulting in perhaps as many as 100 additional truck trips a day per well during certain active periods,19 with at­tendant noise, pollution, wear and tear on roads, and environ­mental risk. The scope of local authority to regulate in these areas under (1) the Michigan Zoning Enabling Act (zoning act) and (2) the police power to control for the public health, safety, and welfare is subject to both the usual reasonableness constitutional limits on police power authority20 and some limits unique to oil and gas wells. However, there is likely still ample room for care­fully designed and reasonable local regulation of these types of activities, facilities, and uses.

Zoning regulation

The zoning act delegates broad authority to local governments to regulate land use for public health, safety, and welfare pur­poses, including the expressly stated authority to zone and regu­late land use related to energy and transportation based on a mas­ter plan that includes consideration of energy uses.21 However, the act limits this authority when it comes to oil and gas wells.22 First, the act states that “[a] county or township shall not regulate or con­trol the drilling, completion, or operation of oil or gas wells… and shall not have jurisdiction with reference to the issuance of permits for the location, drilling, completion, operation, or aban­donment of such wells.”23 It’s notable that, on its face, this limi­tation does not apply to villages or cities, extends only to wells themselves, and does not include zoning of all ancillary activi­ties, facilities, and uses associated with fracking or zoning of water wells and pipelines. Second, the statute does not allow local gov­ernments to exclude or ban a land use if there is a demonstrated need for it in the area unless an appropriate location for the use does not exist; fracking or its ancillary uses cannot be banned without meeting this stringent test.24 The Michigan Supreme Court has af­firmed that, subject to Part 615 preemp­tion, the zoning act provides limited authority for a local government to adopt zoning regulations for fracking and par­ticular ancillary activities, facilities, or uses not otherwise regulated by Part 615.25 The Court has not provided further guidance on the scope of this author­ity or the preemptive effect of the water withdrawal statute, but there are a few particular areas that likely remain subject to local regulation, both in terms of the subject areas of regulation and special zoning tools provided by the zoning act.

Areas of Regulation. First, local gov­ernments could address ancillary frack­ing facilities and uses not included in the definition of the “operation” of a gas well by Part 615 regulations.26 A court may not agree with the MDEQ’s defini­tion of this term, but it is at least a safe starting point and might include, for example, transportation of certain materials to and from the well pad, the use of roads other than the access road to the well pad, and regulation of ancillary storage tanks and other facilities. Local governments can likely place zoning regulations on water withdrawal wells and pipelines as long as they do not regulate the withdrawal quantity or the adverse effects on sur­face water regulated by the water withdrawal statute.27 Second, the Part 615 regulations themselves incorporate provisions of lo­cal zoning codes that authorities could better inform and affect through local zoning regulations. For example, Part 615 regula­tions provide that a person shall not cause a “nuisance noise” in the production or handling of gas, and take into account an area’s environmental values. As such, the definition and measurement of what constitutes nuisance noise and environmental value could be informed by the local government’s clear development of these concepts in its zoning and master plan.28 Finally, land uses in zoning districts with oil and gas resources can be limited to uses compatible with the noise, pollution, traffic, and risk of hazard­ous spills generated by fracking.

Tools for Regulation. The zoning act provides useful tools unique to a local government’s zoning authority. Most notable are (1) amending a master plan to identify the environmental re­sources and the location of natural gas resources relative to other land uses that might be inconsistent with fracking and its ancil­lary facilities and uses, such as residential areas, parks, and natu­ral areas;29 (2) identifying ancillary fracking facilities and uses and nonexempt water well uses as “special land uses” subject to a more rigorous review of traffic flows and other public health, safety, and welfare effects of the activity;30 and (3) imposing con­ditions and escrow requirements on the approval of these special uses in a manner designed to protect the public health, safety, and welfare from the identified risks of the activity.31

Police power regulation

It is fundamental that local governments have broad authority to adopt ordinances for the benefit of the public health, safety, and welfare, and there is a presumption in favor of the constitu­tionality of an ordinance exercising police power.32 Subject to the specific state­level preemption detailed previously, fracking effects may be subject to regulation under this broad police power. For example, police power regulations might be adopted to address truck traffic, hazardous material transport, and various pipelines. The sharp increase in roadway activity and the pos­sibly hazardous nature of the cargo carried on many of those trips present risks and concerns that a local unit of government could regulate by designating certain allowable routes for ship­ments of specific chemicals regulated as hazardous by the U.S. Department of Transportation to avoid and protect high­risk areas in the jurisdiction such as schools, residential areas, and commer­cial districts. Designating such routes and allowable truck staging and parking areas could also ensure that supporting infrastruc­ture is available in the event of an accident. Local governments could also apply the requirement in Michigan’s Fire Prevention Code (Act 207) that any company handling hazardous chemicals provide the local fire chief certain information on written request, including a list of the hazardous chemicals on site, a material safety data sheet for those chemicals, and disclosure of the quan­tity and location on site of any such chemicals.33 Further, local governments would arguably be permitted to adopt ordinances governing “flow” or “gathering” lines, water or certain gas trans­mission pipelines, compressors, and other processing and asso­ciated equipment, as well as the construction, installation, relo­cation, alteration/modification, operation, or closure of pipelines off the well pad and over surrounding lands. Finally, emergency contacts and other locally focused accident planning require­ments could potentially be adopted and implemented.

Moratorium power

Inherent in the police power and zoning authority, courts have recognized that local governments may adopt temporary morato­riums for a reasonable period pending research and adoption of regulation in that subject area.34 Local governments may use this authority to allow time to carefully design practical fracking reg­ulation as described in this article.

Part 615 grants authority over the “administration and enforcement of all matters relating to the prevention of waste and to the conservation of oil and gas,” as well as jurisdiction over persons and things necessary to enforce this authority.

Conclusion

Police power and zoning tools remain available to communi­ties and officials interested in exercising local decision­making authority to regulate the increasingly localized effects of expand­ing fracking; its ancillary activities, facilities, and uses; and wa­ter withdrawal wells in Michigan. However, any local regulations should be carefully crafted and designed to reasonably address specific risks imposed by fracking operations and to fit within the scope of local authority not otherwise limited or preempted by state law.

Ross A. Hammersley is an attorney with Olson, Bzdok & Howard, P.C., an environmental and municipal law firm in Traverse City, where his practice focuses on land use and zoning matters, oil and gas leasing and development issues, energy policy and utility regulation, environmental conservation, and Brownfield redevelopment. He is a co-chair of the Great Lakes and Inland Waters Committee of the SBM Environmental Law Section.

Kate E. Redman is also an attorney with Olson, Bzdok & Howard, P.C., where her practice focuses on land use, local government, small business, non-profit, and appellate law. Kate assists local governments throughout the state with developing and implementing zoning and police power ordinances.

ENDNOTES 1. Crawford, Fracturing Rocks to Unlock New Oil, 135 Mechanical Engineering 27 (December 2013), available at asme.org (accessed May 15, 2014). 2. See City of Taylor v Detroit Edison Co, 475 Mich 109, 115–116; 715 NW2d 28 (2006). 3. Const 1963, art 7, § 34; Ter Beek v City of Wyoming, 495 Mich 1, 8; NW2d (2014). 4. See generally Ter Beek v City of Wyoming, 495 Mich 1; NW2d (2014). 5. 42 USC 300h(d). 6. 33 USC 1362(24) and 1342(l)(2). 7. 42 USC 6921; see also 53 FR 25447 and 58 FR 15284. 8. Most fracking is unlikely to be subject to air quality regulation because oil and gas production sites do not qualify as “major source[s]” of hazardous air pollution. 42 USC 7412. 9. 42 USC 11023(b); 40 CFR § 372.23. 10. For a more expansive review of these exemptions, see Brady, Hydraulic fracturing regulation in the United States: The laissez-faire approach of the federal government and varying state regulations, 14 Vt J Envtl L 39, 43–52 (2013). 11. MCL 324.61501 et seq. and 1994 AC, R 324.101 et seq.; see also MCL 319.101–319.110; MCL 483.101–483.120; and MCL 483.151–483.162. 12. MCL 324.61505. 13. Rule 324.101 et seq. 14. Alcona Co v Wolverine Envtl Prod, Inc, 233 Mich App 238, 263; 590 NW2d 586 (1998); MCL 324.32727(1)(a). 15. MCL 324.32726. 16. Turrell, Frack off! Is municipal zoning a significant threat to hydraulic fracturing in Michigan?, 58 Wayne L R 279 (2012). 17. Addison Twp v Gout, 435 Mich 809, 813; 460 NW2d 215 (1990); see also Alcona, 233 Mich App at 263. 18. The Soil Erosion and Sedimentation Act has been held to preempt local governments from imposing stricter soil erosion requirements on the location of wellheads, access roads, pipelines, or processing facilities than is required under Part 615 because Part 615 is specifically exempted from the act. In contrast, Part 615 does not preempt a landowner from zoning regulations except to the extent specifically provided in the Michigan Zoning Enabling Act. See Alcona, 233 Mich App at 263. However, it should be noted that an operator with a Part 615 permit is expressly exempted from certain state-level regulations in addition to the soil erosion permits, including an exemption from the statute regulating water withdrawals, unless the withdrawal is a “diversion” under the act, meaning it is transferred into another watershed. MCL 324.32727(1)(a). The water withdrawal statute also explicitly preempts local governments from regulation of large water withdrawals. MCL 324.32726. 19. The state of New York prepared a comprehensive review of the roadway impacts and costs imposed by heavy truck traffic as well as numerous other potential environmental impacts related to fracking, which is available at dec.ny.gov; (accessed May 15, 2014).(For truck traffic discussion, see Section VI, Part B, pp 6-300–6-315.) 20. Plymouth Twp v Hancock, 236 Mich App 197, 199; 600 NW2d 380 (1999). 21. MCL 125.3101(1) and 125.3203(1). 22. Notably, fracking is probably not affected by the recent codification of the “very serious consequences rule” because the rule applies only to mining activities, and fracking does not fit within the common definition of “mining” or the definition set forth in the Natural Resources and Environmental Protection Act. MCL 125.3205(3)–(6) and 125.63201(g). 23. MCL 125.3205(2). Although not binding on a court for purposes of determining legislative intent, a court might look to the definition of these terms in the MDEQ regulations promulgated under Part 615, which provide that the “operation” of an oil and gas well includes production, processing, gathering, compressing, treating, transporting, conditioning, brine removal and disposal, separating, storing, injecting, testing, reporting, secondary recovery, and maintenance and use of surface facilities. See 1994 AC, R 324.103(c). 24. MCL 125.3207. 25. See Addison, n 17 supra. 26. See 1994 AC, R 324.102. 27. MCL 324.32723(c). 28. 1994 AC, R 324.504(4)(d) and 1994 AC, R 324.1015(1), (2), and (3)(c) and (d). These factors could include the identification of “quiet” as a primary consideration in use of public recreational sites near a well, or the identification of what level of noise will cause “injurious effects to human health or safety or the unreasonable interference with the comfortable enjoyment of life or property,” specific to areas around a well. These determinations are not necessarily binding on the MDEQ but may be informative. See also 1994 AC, R 324.505, 324.506, and 324.507. 29. MCL 125.3203 and 125.3843. 30. MCL 125.3502 and 125.3504. 31. See Cornerstone Investments, Inc v Cannon Twp, 239 Mich App 98, 106; 607 NW2d 749 (1999) (interpreting equivalent language in earlier zoning act). 32. Home-rule cities and villages enjoy all powers not expressly prohibited by law, and townships’ powers are to be liberally construed and include those fairly implied and not prohibited by the Constitution. Detroit v Walker, 445 Mich 682, 690; 520 NW2d 135 (1994); Hess v Cannon Twp, 265 Mich App 582, 590; 696 NW2d 742 (2005); see also Austin v Older, 283 Mich 667, 674; 278 NW 727 (1938). 33. See MCL 29.5p. However, there are exceptions and exemptions. See MCL 29.5p(4) and (6). 34. See Cummins v Robinson Twp, 283 Mich App 677, 719; 770 NW2d 421 (2009).

Crawford County Avalanche: Township will host meeting regarding hydraulic fracturing

Click here to read the article on Crawford County Avalanche

By Dan Sanderson, Staff Writer – Crawford County Avalanche

April 30, 2014

Grayling Charter Township is hosting an informational presentation regarding Horizontal Hydraulic Fracturing, more commonly known as fracking for oil and gas, for area citizens.

A organization called FLOW, For Love of Water, will make a presentation called  Horizontal Fracking for Oil & Gas in Michigan:  Legal Strategies & Tools for Local Communities. The presentation will be held at 6:30 p.m. on Tuesday, May 13 at the Grayling Charter Township Hall.

“We as township officials are educating ourselves and researching possible zoning and ordinances that could be adopted to help regulate ancillary activity associated with oil and gas exploration and production in our area,” said Grayling Charter Township Supervisor Rick Harland. “This will be a great opportunity to get a good overview of what goes on and a chance to ask questions.”

Hydraulic fracturing involves drilling into geologic formation ranges between 5,000 to 10,000 feet deep, compared to more common oil and gas well that are 600 to 2,000 feet deep. High volume hydraulic fracturing involves the use of more than 100,000 gallons or water. In addition, materials such as sand and chemicals are used to prop open the artificially created or enhanced fractures to extract the oil and gas from the deeper formations.

FLOW is a Great Lakes water policy and  education center, dedicated to advancing public polices to protect the Great Lakes for current and future generations.

According to FLOW, the natural gas and oil industry is largely exempt from key federal environmental laws including the Safe Drinking Water Act and Clean Water Act.

“We all need gas and oil to continue a life style we have become accustom to,” Harland said. “Having said that, it is equally important to protect and preserve our precious rivers, lakes and other sources of fresh water. We believe that we can protect our valuable resources at the same time explore for oil and gas, through regulation and cooperation.”Therefore, states are primarily responsible for regulating activities.

Rick Henderson, field operations section supervisor for the Michigan Department of Environmental Quality (DEQ) Office of Oil, Gas and Minerals, said the state updated its regulations to address hydraulic fracturing for oil and gas exploration, development and production in 2011.  More rules were proposed in late 2013 and are currently under consideration.

Henderson said that hydraulic fracturing was first used for oil and gas exploration in the State of Michigan in 1952. Throughout the 1980s and 1990s, Henderson added that 12,000 wells were drilled using hydraulic fracturing in the Otsego County-region.  Those wells were shallower and did not involve a high volume  of water usage, but had no negative impact on the environment or public health and safety.

“It’s our goal to protect the resources of the state and public’s health and safety – that’s our number one goal and focus,” Henderson said.

FLOW educates township officials on ordinances they can adopt to regulate related oil and gas activities such as natural gas pipelines, flow lines, gathering lines, treatment or production facilities, compressors and water and chemical mixing stations. In addition, townships can adopt ordinances regulating emission releases, high truck traffic and  transportation issues, land impact, odors, noise, the handling reuse and disposal of wastewater and hazardous solid materials or liquids.

Harland encouraged residents from throughout the area to attend the meeting.

More Than a Christmas Miracle – The Successful Outcome of the Michigan Holy Water Mineral Leasing Issue for Fracking

By Tom Baird, FLOW Board of Directors member and First Vice President of the Anglers of the Au Sable

This article originally published in the Anglers of the Au Sable quarterly newsletter, THE RIVERWATCH, Winter 2014 Number 68. Click here to read the original article, or view it here. For more about Anglers of the Au Sable, click here to visit their website.

More Than a Christmas Miracle

The Successful Outcome of the Holy Water Mineral Leasing Issue Was
a Product of Shrewd Planning, Coalition Building and a Sense of Urgency

 

It was a tight clock, and there was a long way to pay dirt.

This football analogy best captures the circumstances Anglers faced last October as it became evident that the [Michigan] DNR was going to allow oil and gas companies to bid for leases on land interspersed throughout the heart of the Au Sable [River], its Holy Water. Worse, a third of those parcels were designated “development with restrictions,” which would allow the construction of production facilities and the installation of drilling rigs, storage tanks, compressors, and the other equipment necessary for oil and gas production. At first there was shock, then anger, but there wasn’t much time to dwell on either.

The task was daunting. Still, Anglers of the Au Sable had done the impossible before. Folks who were at the Grayling Ramada in August of 2003 remember the forest of hands that were raised when somebody said, “Who here thinks that oil well is going in on the South Branch no matter what we do?” at a public meeting concerning that crisis. Then there was Kolka Creek — not as dramatic as the Savoy case but maybe more important. The consensus was that Merit Energy would have a free hand in remediating the Hayes 22 facility.

In the end, we won, sometimes with the help of friends, sometimes on our own. Our record is not perfect, nobody’s is, but we know the rules of the game.

In the Holy Waters mineral leases fight, we twice asked DNR Director Creagh to remove the parcels from the October mineral rights auction. After our requests for reconsideration were denied our work was cut out.

First up was the gathering of personnel. We needed experts in communication, issue management, folks with knowledge and connections within the state government, especially the Department of Natural Resources, and, of course, attorneys. Several conference calls were held in short order to get the ball rolling.

We began a behind-the-scenes campaign, including communications from some of our well-placed members, to the DNR, Nature Resources Commission, DEQ, and Governor’s office. There were some weeks when the negotiations had the frenetic feel of a peace accord, but we stayed the course. It is important to remember that those folks involved were also working regular jobs, had family obligations, and were dealing with the same holiday mishmash as everybody else. There were times for some when sleep came at a premium. But we received important signals from key governmental officials that our request was meeting with approval – if we could keep the pressure on.

Next up came building a coalition. Fortunately, the outrageous nature of the DNR’s plan – some likened it to opening the Pictured Rocks or Sleeping Bear Dunes to oil and gas development – aided us in our recruitment. We had partnered with many of the same organizations on sundry causes before. In a very short time Michigan Trout Unlimited (plus two local chapters), the Sierra Club, Michigan League of Conservation Voters, National Wildlife Federation, Michigan Environmental Council, and the Au Sable Big Water Preservation Association were all on board.

It was decided that we needed to go further than the “usual suspects” this time. We were grateful for their support, but everybody involved, including all of them, knew that the extra mile was necessary if we hoped to succeed.

An extensive outreach effort was made to bring in several “non-traditional” partners. It worked better than expected. The City of Grayling, Grayling Township, property owners associations, the Au Sable River Watershed Committee, FLOW, recreation and real estate businesses, and, the Michigan United Conservation Clubs (MUCC) all joined us. MUCC is an extremely important voice regarding conservation questions in Michigan, and having them with us added tremendous weight to our push.

A letter to the DNR Director was carefully crafted. In the end 17 groups, businesses and governmental bodies signed on to it. The letter was sent on December 6, 2013, and copied to any and all in government likely to have a say in the leasing decision.

Many of these organizations took up the reigns on their own, but always staying on message in a carefully coordinated plan of attack. Email blasts to their memberships were forwarded to friends and so on. Almost everybody knew within a day of two of operatives hitting the “send” button what the Holy Water lease issue was all about.

In the meantime, our Public Relations team put together maps, photos, articles and op-eds. We began planting stories with a selected group of reporters throughout the state including the Detroit News, Free Press, the Associated Press, and Michigan Public Radio. The Holy Water lease story was showing up everywhere. It put the oil and gas development issue on the agenda, and the whole thing started to resonate with the public.

And then it went viral. Citizens were now furthering what groups initiated. Perhaps the best example of this was from Robert Thompson, a member of Anglers who is a video producer in Chicago. Thompson was already working on a feature film concerning the Au Sable (watch for its release soon!) and had plenty of footage of the river. He created a 90 second collage of the Holy Water and superimposed the slogans from our “Save The Holy Waters Poster” while adding an affecting soundtrack. Now the cause had a polished, professional commercial (http://vimeo.com/81287261) rolling through the cyberspace.

The tables had turned dramatically in roughly a fortnight. In the public sphere the pressure was mounting with every Internet refresh. People from discrete backgrounds, many of which who were not the typical responders to this sort of thing, were making their views known to the powers-that-be. Thousands of emails and letters were sent to Director Creagh. Behind the scenes in a highly disciplined dance of advocacy our well-placed members were making headway.

And in the end it worked. As outlined in RIVERWATCH 67 (“DNR Director Creagh Joins Anglers in Saying ‘No Surface Development’ on Holy Water”) the Director relented. He allowed the leases, but only as “non-development” in the Holy Waters corridor. This was our objective: preventing development of oil and gas wells near this special piece of water.

Of course, the devil is in the details. We are now working with the DNR on lease language that will prevent changes in the surface use designation during the life of the leases. In addition, Director Creagh assigned his Manager of Mineral Leases to design a way to identify “special places” like the Holy Waters in advance, and, if they are nominated for lease, make it clear they will be non-development. That’s not all there is left to do by a long shot, but we’ve come a long way since last October.

To say that this outcome was one of the most successful efforts in the 27-year history of Anglers would be self-serving, but not necessarily any less true. Given the short window of time and the nature of the government in this right-of-center, “drill, baby, drill” era, it seemed unlikely that we could affect a favorable outcome. But we did more than that. Now there is dialogue. The issue of oil and gas leasing and fracking is far from resolved in our state. The path forward is not clear.

We have a blueprint, though, recently tested and found to be effective. It involves smart and committed people from varied backgrounds hammering out consensus. It involves new partners, who for the first time are seeing the downside of oil and gas development when allowed to proceed in places that are special. We need to keep the pressure on, through a campaign involving diverse voices from the conservation community, environmental groups, business and local government. It cannot succeed without respectful discourse with the decision makers. And, finally, it can only truly be effective when it has the support of the people.

So, you see, it’s really not self-serving to say this may have been one of the Anglers’ Finest Hours. It came about due to a hell of a lot of people putting in a hell of a lot of effort, and doing it in double time.

Thank you all!

FLOW’s Transparent Open Door Fracking Program

“For a successful technology, reality must take precedence over public relations, for nature cannot be fooled.” – Richard Feynman

As a non-partisan policy and education center focused on protecting the Great Lakes, FLOW undertakes projects and programs based on the demonstrated reality of problems needing resolution. Unequivocally, FLOW’s mission and sole motivation is to protect our common fresh water resources from permanent harm through education and empowerment of leaders and citizens.

Recently in several online articles, FLOW was misrepresented as an “anti-fracking” “advocacy” group. We were painted as “environmentalists” possessed by an ulterior motive to obstruct the existence of the oil and gas industry, writ large, through “backdoor” practices.

We would like to clarify for the public record that these characterizations are neither true nor reasonable. Rather, our program for local governments to address fracking impacts is an apolitical and pragmatic solution for communities who approach FLOW and voluntarily participate in the program. Our approach is based on factual information regarding the potential risks of fracking and oil and gas development, and what local governments can and cannot do. It is then up to local communities and citizens to identify their local concerns and implement the legal tools and ordinances that address those concerns.

Our method is to work transparently and in direct participation with citizens and officials involved in the issue and solution. This democratic, participatory approach to problem-solving is why we pursue both policy and education as a means of protecting the public interest and maintaining the quality and quantity of our public common waters.

Our program to address local impacts of fracking derives from our thorough and intensive legal analysis report on the topic. FLOW was prompted to investigate the impacts of fracking as it relates to freshwater consumption in the unconventional horizontal (also known as high-volume) fracking process, which in Michigan uses unprecedented volumes of water (more than 21 million gallons per frack well).

The water-intensive horizontal fracking technology we’re seeing proliferate throughout the U.S. is occurring in a vacuum of federal and state regulations, and the industry is exempt from several key water, air, land, and public health protections.

In the spirit of Feynman, we echo the sentiment that, in regards to this particular fracking technology, “reality must take precedence over public relations, for nature cannot be fooled.” FLOW’s intention is to address the reality of fracking impacts as they affect nature and human health in our communities. Despite the fallacious clamoring from some sources that say we are advocates, Luddites, or otherwise in denial of modernity, we at FLOW are – and will remain to be – nonpartisan nonprofit consultants working to protect the public interest of our Great Lakes water.

FLOW Local Ordinance Program Addresses Fracking Impacts in Conway Township, MI

FLOW Founder Jim Olson addresses Conway Township Fracking Issues

Click here to view and download the full press release as a PDF

FOR IMMEDIATE RELEASE
Contact: Liz Kirkwood, Executive Director
[email protected] or 231-944-1568

FLOW Local Ordinance Program Addresses Fracking Impacts in Conway Township, MI

Over 100 Citizens Attend FLOW Presentation

FOWLERVILLE, MI – In February of 2014, Conway Township signed up as the third township to participate in FLOW’s Local Ordinance program that helps the township develop regulatory ordinances to address potential risks and impacts of high volume hydraulic fracturing (“fracking”) for oil and gas. On February 6th, FLOW Executive Director Liz Kirkwood and FLOW Founder Jim Olson delivered the first of two public presentations to educate and empower Conway Township leaders and residents about the associated risks and impacts of fracking and specific legal strategies to consider.

Held at the Alverson Center for Performing Arts in Fowlerville, the presentation drew an estimated crowd of almost 150 citizens and leaders who came to learn about horizontal fracking developments in Michigan since 2010, potential risks and impacts, and viable legal strategies to regulate fracking impacts as part of FLOW’s ordinance program for Conway Township. FLOW works with the township to determine what areas of concern are most pertinent to the community to regulate, and the public presentations dually serve as a forum for citizens and leaders to express the topics they hope local legal strategies can address.

“The turnout was impressive,” says Olson, “and the citizens demonstrated not only a real concern but a remarkable knowledge of the issues and context of fracking in Michigan and in their own community.” The GeoSouthern Energy Corporation drilled an exploratory well in Conway Township, granted by a 2013 permit. The permit approved three million gallons of water and fracking fluid to explore a one-mile radius area. The exploratory well is located on a property that, according to the owner in a Denver Post article from September 2013, was drilled three times in the past 30 years without success.

The February 6th presentation in Fowlerville was the first of two public presentations FLOW will host for Conway Township. Then, the FLOW staff will carefully craft a package of recommendations for Township leaders to consider incorporating into their local ordinances and laws as they see fit.

FLOW Founder Jim Olson addresses Conway Township Fracking Issues

FLOW Founder Jim Olson addresses Conway Township Fracking Issues. Photo (c) FLOW/Liz Kirkwood

“The fracking process is largely under-regulated or exempt from key federal and state laws that protect common water, land, air, and public health,” says Kirkwood. “The local governments are left holding the bag when it comes to protecting their citizens from the potential harms and risks of the fracking process or any other industrial processes that come to their town. Our program empowers local governments and their citizens to prepare themselves in advance to handle it,” she says.

Fracking for oil and natural gas is exempt from many regulatory laws at both the federal and state levels, including the Clean Water and Safe Drinking Water Acts, the Great Lakes Compact, and Michigan’s Water Withdrawal Act. Despite zoning prohibitions to regulate drilling, construction production, and operation of oil and gas wells, townships still do maintain legal authority to regulate ancillary activities, including roads, truck traffic, pipelines, flow lines, gathering lines, location of wells, disclosure of chemical use, air pollution and more. Moreover, townships can rely on other sources of authority such as police power ordinances and franchise agreements.

FLOW has delivered a similar educational overview to over twenty communities throughout Michigan in the past year. This informational presentation is based on FLOW’s November 2012 report, “Horizontal Fracturing for Oil and Natural Gas in Michigan: Legal Strategies and Tools for Communities and Citizens.” FLOW’s report highlights legal strategies and policies designed to assist local governments in safeguarding their communities against the unprecedented and cumulative impacts of fracking.

Horizontal fracking requires injecting a cocktail of up to 21 million gallons of water and over 750 chemicals under high pressure into wells in order to fracture deep shale formations and release oil and natural gas. A review of literature on fracking and its associated risks reveals several concerns: (1) massive water withdrawals; (2) groundwater contamination; (3) surface spills and leaks; (4) wastewater management; (5) land-use impacts; (6) truck traffic and burden on infrastructure; (7) lack of public disclosure.

An op-ed piece from January 12, 2014 the news service LivingstonDaily.com published outlined that, no matter where Conway Township officials and citizens choose to draw their party lines in regards to fracking, “there clearly can be an impact on the surrounding community where fracking is conducted, and it is more than fair for the local communities to have some controls in place to make sure they are minimal.”

The next FLOW public workshop for Conway Township will be held in late March, early April.  Conway Township like many of the neighboring townships in Livingston County is interested in proactively protecting the area’s valuable natural resources for agriculture and high quality of life. To ensure different viewpoints on this topic, Conway Township has invited the Department of Environmental Quality to speak to local officials about its permitting role for the oil and gas industry this coming week of February 10.

Contact:
Liz Kirkwood, Executive Director
[email protected] or 231-944-1568

LivingstonDaily.com: ‘Fracking’ authority debate ignites

Click here to read the article on LivingstonDaily.com

‘Fracking’ authority debate ignites

By Christopher Behnan

February 9, 2014

FOWLERVILLE, MI – Fighting big oil would be a costly proposition for any local government.

That doesn’t mean local officials don’t have legal ground to challenge drilling operations, including those that use hydraulic fracturing to maximize oil and gas extraction from rock formations, environmental officials said last week.

That’s particularly the case when drilling that uses high-volume “fracking” transports hazardous materials on public roads, disrupts peaceful communities or draws millions of gallons of water from local water supplies, they added.

The ability of local governments to regulate drilling operations has been front and center since Texas-based GeoSouthern Energy Corp. received a state drilling permit allowing injection of 3 million gallons of water, sand and chemicals on private property in Conway Township.

Environmental groups, including Traverse City-based For Love of Water, the state Department of Environmental Quality and the oil and gas industry often have different views on the local-rule issue.

Each is armed with voluminous case law they claim supports its views.

Last week, FLOW gave Conway Township and other local officials an overview of hydraulic fracturing in Michigan and discussed local ordinances it said empower local governments.

FLOW Chairman Jim Olson said local governments have a host of regulatory powers over drilling sites, including under Michigan’s Zoning Enabling Act and state law that favors public health and safety over commercial interests.

State law doesn’t allow local governments to regulate the location of drilling projects or prohibit drilling practices, including hydraulic fracturing, but does allow regulation of noise, air pollution, use of hazardous substances, Olson said.

“You can actually pass ordinances and regulate pretty much any activity that causes interference with the use and enjoyment of property of the community lands and parks and schools,” Olson said.

Because the zoning act only prohibits regulation of drilling wells, local governments also can regulate several “ancillary activities” such as related storage, chemical mixing, pumping activities and truck traffic, Olson added. He said local officials can require site plans from oil and gas companies for their projects.

He said local governments can require drilling permit applicants to submit environmental impact statements to local units under Michigan’s Environmental Protection Act.

Current law doesn’t require oil or gas companies to disclose chemicals used in the fracking process, but officials can require disclosure of chemicals transported on local roads, he added.

“You can say, ‘Well, here’s our roads. You’re going to have to tell us what you’re hauling on these roads and what you’re disposing,” while using the roads, Olson said.

DEQ oversight of operations

Exclusion of drilling oversight in the zoning act leaves jurisdiction over drilling and related operations such as fracking in the hands of the director of the state Department of Environmental Quality, said Adam Wygant, section chief with the DEQ’s Office of Oil, Gas and Minerals.

Wygant on Wednesday will discuss oil and gas operations with Livingston County officials.

Local governments have a say when oil and gas companies want to establish ancillary operations, such as treatment or equipment-storage facilities separate from drilling sites, however, he added.

Local officials can pass bans and moratoriums, but they will not be enforced under current law because the DEQ director, as Michigan’s supervisor of wells, has exclusive oversight of drilling operations, Wygant said.

“We believe our authority is what it is and what has been upheld by case law,” he said.

FLOW’s Olson said it’s possible, but unlikely, for local officials to impose a ban or moratorium on drilling or fracking. That’s in large part because private landowners have the right to lease their lands as they see fit, Olson said.

He said townships would have to prove there is no way to allow hydraulic fracturing anywhere within its boundaries without harming the health and safety of residents.

“You would have to prove that in court, so it’s a pretty tough burden,” Olson said.

FLOW recommended that Conway Township consider drafting several ordinances, including requiring notification of drilling permits to the public and Board of Trustees before drilling begins; requiring companies to pay for water testing for residents within 2 miles of drilling sites before work begins; and requiring a road bond for possible repairs on company truck routes.

The DEQ in October announced proposed rules based on residents’ concerns about hydraulic fracturing, including installation of monitor wells and water sampling in certain conditions; notification to the state if hydraulic fracturing is expected to be used; and disclosure of chemical properties and concentrations used.

Environmental groups were not satisfied with the DEQ’s proposal.

Contact Daily Press & Argus reporter Christopher Behnan at 517-548-7108 or at [email protected]. Follow him @LCLansingGuy on Twitter.

LivingstonDaily.com: ‘A lot at stake’ for locals regarding fracking rules

Click here to read the article on LivingstonDaily.com

‘A lot at stake’ for locals regarding fracking rules

Environmental group discusses options at Fowlerville meeting

A note from FLOW Chair Jim Olson to clarify – At the meeting, FLOW did say townships could undertake a ban, however we specified that it would be difficult to defend a ban, although you cannot preclude some circumstances where it may well be proper, because there is no place suitable where it could occur. But it is more likely, and better, that these issues and concerns are based on a case-by-case review through a zoning special use permit or other similar proceeding under the zoning or a police power ordinance.

By Christopher Behnan

February 6, 2014

FOWLERVILLE, MI – Local governments can use existing law and amend their own rules to regulate — if not outright ban — hydraulic fracturing in their backyards, For Love of Water representatives told local officials Thursday.

For Love of Water, or FLOW, was hired by Conway Township to discuss local rights after a Texas oil giant was permitted to inject 3 million gallons of water, sand and chemicals to maximize the potential recovery of natural gas at a local farm property.

FLOW Chairman Jim Olson said Michigan’s Zoning Enabling Act — which does not allow prohibition of drilling projects — empowers local governments to regulate everything from noise, hazardous materials and air pollution, to chemical mixing, storage and pumping activities at drilling sites.

Jim Olson, chairman of For Love of Water, explains the possible legal approaches that might be taken to regulate hydraulic fracturing, or 'fracking,' Thursday evening at the Alverson Center for Performing Arts at Fowlerville High School. / ALAN WARD/DAILY PRESS & ARGUS

Jim Olson, chairman of For Love of Water, explains the possible legal approaches that might be taken to regulate hydraulic fracturing, or ‘fracking,’ Thursday evening at the Alverson Center for Performing Arts at Fowlerville High School. / ALAN WARD/DAILY PRESS & ARGUS

Olson said local governments also can require environmental-impact statements and bonding for some activities, and address concerns such as lighting and dust control on local roads.

“Local communities have a lot at stake, and the question we started asking about a year-and-a-half ago was, ‘What can local units do?’ ” Olson explained.

“This is all basic stuff to address what is coming,” he added.

Local governments, in defending the public’s health and safety, could have legal standing to ban or place moratoriums on fracking but would face much bigger legal challenges, Olson added.

Just over 100 people attended Thursday’s session, which was intended to educate local leaders on high-volume hydraulic fracturing and their legal ability to regulate drilling-related activities in their communities.

FLOW will ultimately deliver a legal analysis based on Conway Township’s concerns, then leave it to the township attorney to draft ordinances.

FLOW Executive Director Liz Kirkwood said the Conway site is one of 52 permitted projects that allow high-volume fracturing to tap oil or natural gas reserves.

Kirkwood said large volumes of local water usage for projects and hauling of “flowback” water from wells should be of top concern to local leaders.

“This is just another industrial use that is coming to your town,” Kirkwood said.

Cohoctah Township resident Arnie Nowicki asks a question about water quality during Thursday evening's meeting in Fowlerville. / ALAN WARD/DAILY PRESS & ARGUS

Cohoctah Township resident Arnie Nowicki asks a question about water quality during Thursday evening’s meeting in Fowlerville. / ALAN WARD/DAILY PRESS & ARGUS

John Simaz, a spokesman for the oil and gas industry, accused FLOW of using “backdoor” methods to attack a decades-old, environmentally safe practice that creates jobs and boosts the economy.

Olson noted that high-volume projects only emerged in Michigan a few years ago.

About 20 wells have been drilled in Michigan using high-volume hydraulic fracturing over the past few years.

Texas-based GeoSouthern Energy Corp. in September was issued the high-volume drilling permit in Conway.

GeoSouthern’s permit allows the company to drill about 4,400 feet into the ground and about 1 mile horizontally into a geological formation known as A-1 carbonate starting on resident Jack Sherwood’s farm property off Fowlerville Road.

Sherwood has said he doesn’t expect the process to yield much. His farm property has been drilled three other times over the past 30 years, and in all cases, the drills came up dry.

GeoSouthern to date has drilled an exploratory well and is awaiting results of rock samples that will determine whether there is enough product to justify the expense of hydraulic fracturing.

Results of the samples aren’t expected for at least another three weeks.

Contact Daily Press & Argus reporter Christopher Behnan at 517-548-7108 or at [email protected]. Follow him @LCLansingGuy on Twitter.

Pennsylvania Court Precedent on Fracking and How It Relates to Protecting Michigan’s Commons: PA State Supreme Court rules municipalities can limit what gas drillers can do

From the desk of FLOW founder Jim Olson: thoughts on the recent Pennsylvania Supreme Court ruling on how municipalities can limit gas drilling in their community (you can also read the full text of the TribLive.com article at the bottom of this post).

In a show of judicial analysis and sympathy toward the importance of land use stability and values of local communities, the recent Pennsylvania Supreme Court’s ruling upholding local government regulation of the risks of fracking sends a strong message: courts will look with skepticism and scrutinize attempts by state legislators to help special interests overrun local communities’ traditional land use and police powers to pass ordinances that address fracking for oil and gas. The decision is especially important in consideration of mainly vacuous federal regulation and tepid state regulation, where fracking’s substantial effects on land use, water, health, and quality of life are largely ignored.

In sum, the court’s decision refuses to allow a state legislature to take away local governments’ zoning or local power regarding expectations of their community and residents, thus upholding and retaining local governments’ ability to have a say in the location of land uses and the stability of their community, including regulation of industrial uses like fracking through land use districts and special use permits. This precedent is important for other Great Lakes states like Michigan with a long and strong history of enabling local governments with zoning powers because it protects their ability to use zoning powers as a legal and useful tool for protecting land uses, water, air, and health from the impacts and risks of fracking. Click here for more about FLOW’s local government ordinance program to address fracking impacts at the community level.

In December 2013, the Pennsylvania Supreme Court tossed out controversial portions of the state’s oil and gas law changes, letting municipalities retain control over where and when to allow gas drilling (fracking) in their jurisdictions. This is great news for Pennsylvania, and can be good news for local governments in other states as well. However, from state-to-state the laws are somewhat different, so while the ruling reveals a trend that is positive for empowering local governments to address fracking, it is not on “all fours” as we say in terms of useful precedent, and may not necessarily apply verbatim to other states. Thus, it is important that citizens and communities understand the differences of their own state and local government structures and laws so that communities can tailor their ordinances and regulation of various aspects of fracking and ancillary oil and gas uses and activities.

Basically, Pennsylvania’s prohibition on local regulations/ordinances was general in nature as to “oil and gas operations.” Since zoning power was and is delegated by states as a “state delegated specific power” and Pennsylvania zoning law does not exempt regulating the location of oil and gas operations or wells as land uses through districts and permitting schemes, the Pennsylvania court properly found that a general law prohibiting exercise of local governmental police power cannot be used to trump or limit a specific delegation of power like zoning. The Pennsylvania court also chastised the legislature for an overly general and vague prohibition, thus leaving room for local governments to exercise some power, and specifically their delegated zoning power. However, the Court also refused to allow the state legislature, by a broad sweeping law, to remove or take away zoning or the general exercise of local ordinance powers regarding expectations and reliance of communities and their residents on the stability of their land use plan and ordinances. This general reasoning is very important in states like Pennsylvania, Ohio, and Michigan, with strong local government traditions and involvement, including specified powers or preferences toward local governments in state constitutional provisions.

Here are five key points (with a few nuances) about how the Pennsylvania ruling relates to Michigan:

  1. In Michigan, there is no general prohibition on local governments to pass “police power” ordinances to address risks and harms and protect property, health, safety and general welfare. Hence, local governments in Michigan are free to regulate to the point that the ordinance does not outright prohibit a use but addresses the risks of harm or concern for protection of the public health, safety and welfare.
  2. Unlike Pennsylvania, in Michigan the state-delegated zoning statute to counties and townships specifically exempts “oil and gas wells, drilling, completion, production, and closure or abandonment.” However, the exemption is a narrow one. The Michigan Supreme Court has ruled that the “oil and gas well” exemption does not apply to ancillary uses and facilities related to oil and gas wells, such as pipelines, access roads, haul and transfer facilities, storage, sweetening facilities, pumps, and high-volume water wells such as those required for horizontal fracturing. At least as to the location of such wells and related facilities, a special use permit or other zoning regulation to assure compatibility with existing land uses, water uses essential to a land use district such as farming, residential, or park and recreation, could be required.
  3. On the other hand, like Pennsylvania, in Michigan there is no such specific exemption for “oil and gas wells” in the state delegated zoning power to cities. So, unlike townships and counties in Michigan, cities are similar to the Pennsylvania situation. If the legislature attempts to prohibit generally what the zoning power to cities specifically allows, i.e. does not exempt, the Pennsylvania case would be useful precedent
  4. In Michigan there are limitations, although not outright prohibitions, on local government police power ordinances that regulate the location of public utilities or natural gas or other pipelines that are certified by the Michigan Public Service Commission (with the exception of interstate federally certified lines, which are not subject to local ordinances). However, local governments, in these instances, may require by ordinance essential or critical information concerning:
    • use and safety of roads,
    • environmental and hazardous substances disclosures,
    • including chemicals,
    • bonds, indemnities, and insurance,
    • site plans,
    • reporting and inspection reports, and
    • action plans in the case of spills or emergency.
  5. Michigan’s 2008 water withdrawal law, with its corollary Water Withdrawal Assessment Tool (WWAT) contains a provision that prohibits local ordinances from regulating water withdrawals. However, this law does not regulate or address land use or zoning, such as the location, site plan, and facilities themselves. It follows that local communities could, through their state-delegated zoning power, regulate the location of water wells to assure they are harmonious and not incompatible with existing land uses.
    • It would be quite reasonable for a local community to restrict high-volume water wells, pumps, and facilities and pipelines through land use districts or special use permits. Indeed, the Pennsylvania court decision would provide solid precedent for this, because, as described above, a general prohibition on local ordinances would not preempt or limit the scope of specifically state-delegated zoning power.
    • So when it comes to high-volume water wells for oil and gas development, local communities should be able to regulate them through zoning. Why? Because for townships or counties, water wells are “ancillary” to the oil and gas well and therefore not within the “oil and gas well” zoning exemption, and for cities because there is no oil and gas exemption in the city zoning law.
    • Finally, in a somewhat ironic twist, the 2008 water withdrawal law expressly exempts oil and gas development from having to comply with the WWAT or 2008 water withdrawal law. Hence, arguably it would be inconsistent for an oil and gas company to argue that local governments could regulate their water withdrawals when they do not need a permit or fall with the regulatory purview of the water withdrawal law in the first place.
    • But there is another twist to the irony. The Michigan Department of Environmental Quality (DEQ) by internal directive requires oil and gas companies to comply with the WWAT to show no adverse environmental impacts. However, no permit is required under the 2008 water law, and the DEQ directive is more lenient in its application than the WWAT and its application and permitting requirements. Despite these twists, local governments, in any event, have the zoning power to restrict or require special use permits for high-volume water wells based on location and land use issues as opposed to withdrawal issues.

In conclusion, Michigan law already empowers local governments with a broader and more effective ability to address fracking impacts via municipal zoning and police power ordinances. However, this Pennsylvania Supreme Court case is still very relevant for supporting the broader effort throughout the Great Lakes and Midwest region to protect our land, water and common resources, and community well-being from a loosely regulated in terms of land use and impacts of fracking oil and gas development.

-Jim Olson

Read on for the full story from TribLive.com

PA State Supreme Court rules municipalities can limit what gas drillers can do

December 19, 2013

By: Timothy Puko, Pittsburgh Tribune-Review

After nine years of drilling, three years of debate and 14 months of court deliberation, Pennsylvania is back where it started, with shale gas companies and municipal governments at odds over how to manage the Marcellus shale natural gas boom.

The State Supreme Court ended more than a year of uneasy stalemate on Thursday when it struck down oil and gas law reforms that were supposed to limit municipal powers on drilling. The 4-2 decision allows municipal governments to keep blocking off some, though not all, of their neighborhoods from drilling, and subjecting drillers to reviews before permitting drilling.

The long-awaited decision undoes a key element of Gov. Tom Corbett’s signature legislation: It strips the oil and gas law reforms known as Act 13 of the biggest benefit they gave drilling companies. It gives environmentalists and municipal governments a potentially historic precedent to challenge drilling all over the state, reigniting legal battles that were brewing before the case went to state courts last year.

“It’s a great day for all the residents here in Pennsylvania,” said Deron Gabriel, commissioner in South Fayette, one of five Pittsburgh suburbs to lead the legal challenge that started in March 2012. “Fundamentally, we’re vindicated. … We’re able to continue to zone and keep industrial activities where they should be — in industrial areas.”

Both Corbett and members of the Marcellus Shale Coalition industry group called the decision a disappointment. Officials of the coalition and the Pennsylvania Independent Oil and Gas Association said they want to work with municipal groups to find solutions to their conflicts.

“We must not allow (Thursday’s) ruling to send a negative message to job creators and families who depend on the energy industry,” Corbett said. “I will continue to work with members of the House and Senate to ensure that Pennsylvania’s thriving energy industry grows and provides jobs while balancing the interests of local communities.”

The passage of Act 13 culminated three years of debate on how to modernize the state’s rules to manage the new rush of shale gas drilling. Horizontal drilling and hydraulic fracturing began in the Marcellus shale about nine years ago, booming to more than 7,400 unconventional wells statewide, according to state records.

Passed in February 2012, Act 13 was supposed to have a three-pronged effect. Two — an update to environmental protections and a fee on deep-shale wells — remain. But the effort to help drillers by making uniform land-use laws in all 2,500 municipalities was part of the challenge and the part the court struck down.

The rules would have required municipalities to allow drilling, wastewater pits and seismic-testing explosives even in residential areas, which Chief Justice Ronald D. Castille called a “remarkable … revolution” on existing law. It would have allowed pads within 300 feet of existing buildings, which Castille said effectively stripped municipalities’ ability to plan for development.

Municipalities previously had the power to decide where and when drilling could happen, and South Fayette, Cecil, Peters, Mt. Pleasant and Robinson in Washington County sued to keep that power. The law put them in conflict with a constitutional mandate to protect residents and property rights by not allowing them to keep drilling away from schools, parks and businesses, they argued.

The Supreme Court heard the case in October 2012 and took 14 months to craft a broad, 162-page decision. Castille wrote it for three members of the majority, and a fourth wrote a concurring opinion. Castille, a Republican Vietnam War veteran and former Philadelphia prosecutor, wrote at length about the state’s history of environmental degradation.

He quoted a passage on deforestation from the timber industry, listed a series of local environmental disasters including the 1948 Donora smog tragedy and noted the billions needed to repair decades of environmental damage from coal mining, which he later said may be rivaled by shale gas extraction. The state has a “notable history of what appears retrospectively to have been a shortsighted exploitation of its bounteous environment,” Castille wrote.

His argument attempts to re-establish the importance of the state Constitution’s Environmental Rights Amendment, the pivotal law cited in his opinion. That amendment empowers municipalities to protect the environment, and the state overstepped its powers by ignoring it, forcing them to accept uniform rules for gas drilling, Castille said.

“A new regulatory regime permitting industrial uses as a matter of right in every type of pre-existing zoning district is incapable of conserving or maintaining the constitutionally protected aspects of the public environment and of a certain quality of life,” he wrote. “Protection of environmental values … is a quintessential local issue that must be tailored to local conditions.”

The ruling is likely to trigger a flurry of activity from drilling industry lobbyists and lawyers, experts said as they awaited the high court’s decision.

The industry may pressure state lawmakers to try again to streamline rules. One option may be to write a model ordinance for municipalities, then pass a law that allows them to collect impact fees only if they use that ordinance, said Ken Komoroski, an attorney at Downtown-based Morgan, Lewis & Bockius LLP.

“If they can’t do it with a sledgehammer, they’re going to have to do it with a carrot,” attorney Kevin McKeegan, a land-use law expert with Meyer, Unkovic & Scott LLP, Downtown, said last December.

Timothy Puko is a staff writer for Total Trib Media. Reach him at 412-320-7991 or [email protected].