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The State of Michigan is planning to auction off oil and gas leases on October. 24, 2012. Many Michigan residents turned out for a public meeting to share their concerns about the decision. Here’s a look at some of their perspectives and those of the state. 

By Howard Meyerson

LANSING – A plan to auction off subsurface oil and gas mineral rights beneath 196,000 acres of state land brought dozens of concerned Michigan residents to the September Natural Resources Commission meeting. Most expressed opposition to the plan approved there by Michigan Department of Natural Resources director, Keith Creagh.

“Predominately they were there to talk about fracking,” said Julie Manson, supervisor for the DNR’s oil and gas lease management unit. “Some asked the director not to approve the auction, but an overwhelming majority was concerned about fracking.”

Fracking is short-hand for hydro-fracturing, the practice of injecting highly pressurized fluids into cracks in subterranean rock to open cracks so more oil comes out of a formation and into wells. The practice is controversial due to its potential to cause contamination of ground water, air pollution and surface contamination, among other things.

Some critics asked DNR director, Creagh and the NRC to delay auctioning the parcels until more is known about dangers of fracking. Others claimed the going auction price was too low as well as the market price for natural gas. The state is offering parcels at $10 per acre minimum bid with a $2 per acre rental fee for five years. Oil and gas royalties fund the state’s Natural Resources Trust Fund which provides money to buy and/or develop recreation lands and facilities around the state.

“We don’t feel the price justifies the potential risk,” said Nick Occhipinti, the director of policy and community activism for West Michigan Environmental Action Council in Grand Rapids. Occhipinti was one of 64 who signed up to address the NRC on the topic at its public forum and was one of the 38 that spoke on the issue.

“We are in a period of historically low natural gas prices. We are giving this stuff away,” Occhipinti said. “The value of our ecological resources is more valuable than the current supply and demand at auction, given the risks.”

Occhipinti asked the NRC to delay the auction until the U.S. Environmental Protection Agency completes its comprehensive study of hydro-fracking in 2014.

Manson said the fracking issue is one for the Michigan Department of Environmental Quality, not the DNR.

“We don’t regulate fracking; that’s the Department of Environmental Quality,” Manson said. “And a nomination (for oil and gas lease) doesn’t equal fracking.”

Only two-thirds of the lease offerings typically get auctioned, she said, and a far smaller percentage of those actually get developed for oil and gas. Fracking may be used on a still smaller percentage of those parcels.

Brad Wurfel, spokesperson for the Michigan Department of Environmental Quality said fracking has been used in Michigan for years without incident.

“Hydro-fracturing has been used in Michigan since the 1950’s on more than 12,000 wells around the state to maximize production and with a tremendous environmental safety record,” Wurfel said. “It has never caused an environmental problem in Michigan because from start to finish we have people on the ground inspecting the process.”

Erin McDonough, executive director for Michigan United Conservation Clubs spoke in support of the planned auction and was the sole voice in favor. McDonough said the state has done a good job of regulating fracking and oil and gas exploration. She said Michigan’s approach and geology is different from Pennsylvania where there have been problems. McDonough said there is too much emotion coming out and not enough examination of the facts.

But Jim Olson, an environmental attorney claimed that there are other issues at stake.  Olson, a principal with Olson, Bzdok & Howard, P.C. in Traverse City, spoke to the NRC representing the Friends of the Jordan River Watershed Inc. and Michigan Land Air and Water Defense. He said: “It’s time to know the basic ramifications and risks (of leasing) before you sell. After you sell the permit has been issued. These are the jewels of the state.”

Olson maintains the DNR and DEQ are shirking their duties under the Michigan Environmental Protection Act to assess the cumulative environmental impacts of decisions like those to lease the acreage up for auction. Excessive water withdrawal is among the concerns along with contamination of the landscape.

“They have no idea what the impact will be to air and water. No EIS (environmental impact statement) is done in Michigan any more under MEPA or the Public Trust,” Olson said.

Letters from Olson to Tim Nichols, the NRC chairman outlined his client’s concerns which include protecting the Jordan River, a federally designated Wild and Scenic River and the 18,000 acre Jordan River Natural Area along with the Barry State Game Area and Yankee Spring State Recreation Area in Barry County where over 23,000 acres were leased for oil and gas exploration last May.

While oil and gas drilling is not permitted on those properties or on state parks they are allowed on adjacent properties and on inholdings within those boundaries.

“It’s simply a matter of enforcing the principles and legal duties we have rather than slide into looking the other way,” Olson said. “There is no excuse, these state lands designated as special and held in public trust.”

Manson said nine of the parcels up for auction, a total of 68.51 acres in Plainfield Township, lie under the Fred Meijer White Pine Trail State Park. Any parcel nominated for auction has been reviewed by DNR forestry, fisheries, wildlife and endangered species staffs. The DEQ’s Supervisor of wells then establishes spacing requirements to assure no adverse impact.

“Nominations don’t equal leases and leases don’t equal wells and wells don’t equal fracking. There is a big leap between wells and fracking,” Manson said.

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Copyright © 2012 Howard Meyerson