Michigan Foia law protects secrecy of permits for gas-oil wells disguised as mineral wells

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by Ellis Boal

On March 16 the Michigan court of appeals rejected an appeal of a FOIA information case brought by landowner Gary Cooley and Ban Michigan Fracking about a supposed “mineral well” in Crawford County. Though not questioning their standing, the court held plaintiffs had not stated a proper claim of right to information.

D4-11, October 6, 2016. Photo: LuAnne Kozma.

Plaintiffs had sought the environmental impact assessment (EIA) and other information about this well drilled in the state forest a mile from Cooley’s property in Beaver Creek Township.

In 2015 Cooley, who opposes gas-oil development in the state forest, refused an offer to lease the gas, oil, and minerals under him. The offer included a signing bonus and a royalty interest.

Typically the requested documents are voluminous, sometimes running to over 100 pages. In particular the EIA has information about water wells, wetlands, surface waters, endangered species, pad facilities, soil erosion, and disposal of fluids and brines at or near the wellhead. These are items of interest to any nearby landowner.

“D4-11″

The applicant for the well was Marathon Oil, which owns nearly 1000 square miles of leases in Michigan under state land. The name of the well is “Beaver Creek D4-11,” or just “D4-11.” In June 2015 Marathon applied for a permit under “part 625,” the state’s law for mineral wells.

The only evidence D4-11 would actually be a mineral well and not a gas-oil well was a non-notarized “x” in a box on page 1 of Marathon’s application form. (This page is the one document which Marathon had to make public.) According to the instructions for that form, the application was supposed to have described in detail the well’s “purpose.”

According to the same page 1, D4-11 was to be a non-exploratory vertical mineral “test well,” and the drill rig would target the “Amherstburg” formation at 4700 feet. (DEQ provides for the possibility of horizontal wellbores and fracking on a different form for mineral wells.)

DEQ granted the permit on an unknown date.

The drill rig had seen service in oil-gas exploration in North Dakota a thousand miles away before coming to D4-11. The nearly-200-foot-tall rig must have cost Marathon millions to transport and operate. Marathon Oil is in the oil-gas business. In September a worker on the rig told a visitor, me, the company hoped to find gas or oil. A blowout preventer was left in place after the rig departed D4-11, a practice required only by the gas-oil rules, not the mineral well rules.

An official DEQ brochure states there are no minerals anywhere in Crawford County.

These and other facts indicated that D4-11 would be a gas-oil well, not a mineral well. Part 625 does not define “mineral.” But in ordinary English minerals are understood to be hard, crystalline, and inorganic, which gas and oil are not. Minerals are extracted by mining but gas and oil are extracted by drilling. And the idea of testing a mineral in a 4700-foot hole is ridiculous.

I published a video and the story of the investigation here.

DEQ rules for gas-oil wells prohibit nuisance noises, but the rules for mineral wells do not.

And unlike for gas-oil wells, FOIA has a confidentiality period lasting 10 years for mineral well data including the permit and EIA. But legally it is the DEQ which has the burden of proof to show the exemption applies.

DEQ answered the FOIA request by denying all information. Relying on the 10-year mineral exemption it refused to say even whether it had actually issued a permit.

Marathon itself was similarly close-mouthed, except by email it did admit there was a permit.

Plaintiffs sued in February 2016. In its responsive motion in May, DEQ finally admitted there was a permit. But it did not provide the date or a copy.

The practice of gas-oil companies which claim mineral well treatment

Later that month I chanced on an article about the work of William Harrison of Western Michigan University, an author of 35 technical papers on Michigan geology. I decided to email him, outlining the theory of the FOIA case, and the evidence showing D4-11 is probably a gas-oil exploratory well not a mineral well. I invited him to view our video of the drill rig, said I would drop the case if D4-11 proved to be a legitimate mineral well, and asked him to respond.

He did, the next day, very helpfully:

Wildcat exploratory wells for oil and gas have often been drilled under the State “Mineral well act” so that a company can gain information about the geologic deposits in that area with out releasing the information to the public and hence their competitors.

I do not have any specific knowledge about the Marathon well you mentioned, but the area in Beaver Creek Township is a well-known oil and gas region with an old very large oil field there called the Beaver Creek Field. The Amherstberg formation is a known oil and gas producing zone in other parts of the state and is very likely the target zone they were evaluating.

The naming of the well “Beaver Creek D4-11″ is also a very common naming style for oil and gas wells. As far as I know other mineral wells that are looking for solid minerals do not use this type of naming convention.

The Amherstberg is not a formation that contains Salt, Potash or any other type of solid minerals that could be produced commercially, so I am reasonably confident that this was an exploratory well for oil and gas that was drilled under the Mineral Well Act

(underlining added)

There was one statement in Harrison’s response, a legal point, that I knew to be wrong:

In fact, oil and gas are considered “minerals” under the definition of that type of well.

He was wrong because there is a strict separation between mineral wells regulated under part 625, and gas-oil wells. The latter are regulated under part 615.

As plaintiffs explained to the court later — in addition to highlighting the DEQ brochure which says there were no minerals in Crawford County — gas and oil are not considered “minerals” at the DEQ. Part 625 excludes gas and oil because gas and oil come under part 615. Even if the purpose of a well is only partially to explore for gas or oil, there must be a 615 permit.

Neither the DEQ’s court brief nor the court’s opinion disputed our contention that gas and oil do not qualify as “minerals.”

I responded to Harrison the same day with documents including Marathon’s page 1, and noted his error about the DEQ definition of “mineral.”

I asked if he would write me a separate letter affirming the opinion just expressed, that the Amherstburg is not a formation that contains solid minerals that could be produced commercially, and therefore he was “reasonably confident” that D4-11 was an exploratory well for oil and gas that was drilled as a mineral well to “maintain confidentiality.” I said this would likely suffice to win the case. I gave information about myself, and offered to pay his regular rates.

He responded the same day:

I am not interested in any consulting work for you or your client.

Rather, he said he provides “basic general information” to the public and is “not involved in any of the regulatory decisions.”

Translated: His practice is not to testify as an expert witness, not for anyone including the industry. I believe him but was surprised he wouldn’t repeat something in court that he had just told me, a stranger, for free.

Later I realized how tied in he is to DEQ and the industry. Last June he joined DEQ’s industry-dominated oil and gas advisory committee. The committee, composed of the “stakeholders,” is supported by several DEQ staff. Last month the Michigan Oil & Gas News pictured him with his wife as “silver medal sponsors” of the annual petroleum conference of the Michigan Oil & Gas Association (MOGA) and Northern Michigan American Petroleum Institute.

Surely everyone else on the DEQ advisory committee knows what he knows, that exploratory wells for gas and oil have “often” been drilled as mineral wells to get geologic information and then kept secret. Surely the rest of them know what he does not, that oil and gas are not DEQ-defined minerals and the oft-repeated claims of mineral well applicants — that their “purpose” is just to test “minerals” but not explore for gas and oil — are false.

Proceedings of the FOIA suit

Harrison’s encouraging emails were not confidential. I would have been free without his permission to quote them and his credentials to the court. But I decided to respect his desire to stay out of it.

The suit made two claims for opening the DEQ files, one of which we dropped when we filed at the court of appeals. (That one had contended that even if D4-11 actually were a mineral well, under a literal reading of the statute, except as to “logs” the confidentiality period applied only “during” the period after the well was “completed,” and D4-11 hadn’t yet been completed on the date of the FOIA request.)

As to the claim that D4-11 was not actually a mineral well, and therefore mineral well confidentiality should not apply, plaintiffs pointed out that the DEQ website links to the dozens of forms which it uses to question applicants for mineral wells. None of the forms asks the applicant whether the well will actually test a mineral. None of the forms asks the applicant to name the mineral it proposes to test.

Stated otherwise, as plaintiffs’ brief did (without citing Harrison’s insightful words):

Plaintiffs have no facts to contend that DEQ and Marathon arranged a sweetheart deal to keep this particular well secret. Rather it appears from the 64 DEQ forms that it never asks any operator who is testing minerals known to be present –- as opposed to exploring to see whether they are present –- to demonstrate the point. If so, DEQ invites a train of abuse from industry operators desiring to maintain secrecy by falsely stating their objectives while not under oath.

The DEQ brief responded:

In other words, even if Mr. Cooley’s allegations of deception on the part of Marathon were factually meritorious … this alleged “deception” would not be illegal.

In reply plaintiffs stated:

to qualify as a mineral well the operator’s intent at the start can only be to explore for or test minerals. In this case the operator’s stated intent was not to explore for a mineral, but to test one…. But … the Marathon safety man’s expression of hope that the company would find gas or oil at D4-11 means in the most literal commonsense sense that the company was “exploring” for gas or oil.

The court ruled on March 16. The unpublished opinion recited none of the facts indicating that D4-11 was actually a gas-oil well except it did acknowledge the claim that Marathon hoped D4-11 would find oil. The court also acknowledged that a plaintiff’s well-pleaded factual allegations have to be accepted as true at this stage, and DEQ had the burden to prove that any exemption for mineral wells under part 625 applied.

At oral argument plaintiffs had noted Marathon’s hope that D4-11 would find oil was not a fact critical to the case, and based on all the other facts, the case would be just as valid had the rig worker not made that admission.

The complaint and exhibits had shown that D4-11 would be a test well not an exploratory well, no minerals exist in Crawford County to even be tested, DEQ excludes gas and oil from its definition of “minerals,” DEQ relied solely on Marathon’s checkbox and did no independent investigation of minerals at D4-11, and the Amherstburg is a formation where Michigan oil prospectors have frequently looked. These facts showed “a good circumstantial case,” the brief said.

But even if these facts were all true, the court held, the exemptions of part 625 still applied. The case ended.

The decision amounts to a ruling that even if DEQ rightly should have processed D4-11 as a gas-oil well under part 615, the fact that it did process it as a mineral well under part 625 controls, and the exemptions to FOIA apply.

What should a landowner do?

Anyone can sit in on the quarterly meetings of the mentioned DEQ advisory committee, and minutes of past meetings are available on request.

Just one of its eight members is from an environmental organization, and that one (Michigan United Conservation Club) has long accommodated the gas-oil industry. Its director recently left there to become director of MOGA.

Since joining the committee Harrison has not brought to its attention the frequent industry practice of filing for a mineral well in cases where his expert opinion is that the operator’s purpose is really to explore for oil.

Landowner Cooley’s court complaint only sought information. It did not seek to invalidate the permit. So in the future suppose some landowner notices an ugly new several-acre gash in the forest nearby and a big noisy drill rig going up. Suppose too the rig gives every indication it is exploring for gas or oil, but DEQ claims it is really a mineral well.

Is there a remedy? Yes.

One tack would be to just assert that a permit was issued and then sue to invalidate it. A Michigan statute allows such a suit in the court of claims. The gas-oil applicant would have to be named as a co-defendant. The statute has no requirement to exhaust administrative remedies before suing, and indeed how could a landowner try to exhaust given that all information was refused? The statute of limitations is a very short 21 days, but would not be a problem if DEQ refused the permit date.

Circumstantial evidence can prove any case. Expert testimony such as what Harrison refused for D4-11 would likely be necessary, because unlike in a FOIA case the plaintiff would have the burden of proof. The burden would be satisfied simply by showing the “purpose” of the well, at least in part, is more likely than not to explore for gas or oil.

DEQ could hardly defend in light its practice of not investigating the real purpose of a mineral well. The defense, if any, could come only from the gas-oil applicant. But in the face of the plaintiff’s evidence, it would have to provide facts including the name of the supposed mineral. It would lose if it merely answered “it is a mineral well because we say so.”

Litigation isn’t the only way. Instead the landowner could find someone knowledgeable in the academic world, and then publicize the well. Surely experts are there who would be willing to shame a practice which sacrifices landowners and the environment to profit-driven competitive gas-oil interests. Surely someone would be willing to speak up.

Marathon’s well near Grayling: a ‘test’ or a ‘nightmare’?

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by Ellis Boal

Chance discovery

One day in August I drove to Crawford County to take a look at Marathon Oil’s recent activities along King Road in Beaver Creek Township, which is near Grayling.

State Beaver Creek 1-23 HD1, a horizontal frack well in the state forest, has been producing on a pad there, tapping the nearly-two-mile-deep Utica-Collingwood shale for some time.

State Beaver Creek 1-23 HD1, on August 15. Photo: Ellis Boal

In late July Marathon applied for a second horizontal frack well on the same pad, named State Beaver Creek 1-14 HD1, which would explore into the Detroit River formation, about a mile shallower than the Utica-Collingwood.

This is the first high-volume frack well to explore in this formation in Michigan.

Not much was happening that day on the pad. But previously I had noticed an unusual feature on the plat accompanying the application for the new well, a half-mile away. It was labeled “State Beaver Creek D4-11″. The nomenclature is not typical for Michigan wells and no operator name was given. I thought it might be a processing facility of some kind.

D4-11

D4-11, still a forest on August 15. Photo: Ellis Boal. Click for close-up.

I didn’t see a direct two-track through the forest between the wellpad and D4-11, so I drove around and found an old one leading to the spot where it was supposed to be. There was nothing but trees, and a few scattered stakes and flags. No permit was posted. Nothing indicated that something big was about to happen.

A week later, in a quick turnaround time DEQ issued the permit for State Beaver Creek 1-14 HD1.

In September I inquired of DEQ what was going on with D4-11. On September 18 DEQ tech Kelley Nelson wrote that it is a well, not a processing facility. It was regulated under part 625 of the Michigan environmental law. Therefore, she said, it was a totally confidential operation. I asked if that meant the permit number, and even the fact whether the well was permitted, were unavailable. She answered:

You are correct. Nothing is available for any part 625 test well. It is confidential for 10 years.

Well, “nothing” was not really the whole truth. Part 625 regulations required Marathon to send the first page of its application to Beaver Creek Township, “post the permit in a conspicuous place” at the surface location until drilling is completed, and post a “conspicuous” sign near the wellhead showing the permit number.

D4-11, a/k/a the “science well,” under construction on August 26. Photo: Gary Cooley.

Obtained publicly from the township, the first page of the application tells us: Marathon posted a conformance bond of $33,000, the well is vertical, sour gas is expected, the intended total depth is 4700 feet, and the target formation is the Amherstburg. This is a fossil-bearing non-shale formation in the Detroit River group, the same formation being explored by State Beaver Creek 1-14 HD1. Vertically, D4-11 is just 300 feet deeper.

Marathon refers to D4-11 informally as a “science well.”

I visited again on September 20. This time there was a nearly-200-foot drill rig there, operating with a loud hum. The rig name, Ensign 161, was prominent on the side.

I was wearing my letsbanfracking t-shirt. Three workers came out. I identified myself and we chatted. They were from out of state. I asked who was the supervisor. They didn’t know, they said.

Later toward midnight I drove by again, this time staying on King Road. Through 100+ yards of trees I could hear the hum. Over the tree line I could see lights on the rig.

D4-11, operating on September 22. Photo: Gary Cooley

Two days later Gary Cooley, who has a home a little over a mile from D4-11, visited and took pictures of the rig in operation.

FOIA request

On September 22, I sent DEQ a formal FOIA request asking for all its documents on the facility. DEQ denied it on October 1, citing section 8 and section 9 of part 625.

But section 9 only says that the application and permit are “confidential in the same manner as provided for logs and reports on these wells.” Section 8 says “Logs on brine and test wells shall be held confidential for 10 years after completion.” It adds that “logs” — but not “reports” — can be held confidential even longer, forever.

Marathon’s application, permit, and pre-drilling correspondence with DEQ are not “logs.” So according to these sections, they were not confidential until the well was “completed.” And according to part 625 rules, completion was not until the well reached its “permitted depth or the [DEQ] has determined drilling has ceased.” Obviously, D4-11 was not complete on September 20 or 22. Ensign 161 was still there, and working.

So DEQ should have produced the application, permit, and all records other than logs.

Exploring for gas and oil

On October 2 I visited again. A different worker came out to say hello. He said his name was “Trace” and he was the Marathon safety man. Asked how long the rig would be there, he didn’t know and said they were hoping to find gas or oil. He gave the card of his boss in Houston, in case there were further questions.

A brief internet search showed that earlier this year Ensign 161 was active at Marathon wells in three different counties of western North Dakota. Fracking for oil there is big business.

Trace’s information, Ensign 161’s design and history in frack country, and D4-11’s exploration in the Detroit River group all mean there is a second reason the well information is not confidential. By its title, part 625 only regulates “mineral” wells. Mineral wells include so-called “test wells.” A test well determines the presence of a “mineral, mineral resource, ore, or rock unit,” or obtains data related to “mineral exploration or extraction.” Exploratory test wells look for “an orebody or mineable mineral resource.”

Oil and gas are not “minerals”

Part 625 does not define “mineral.” But in ordinary English minerals are understood to be hard, crystalline, and inorganic. They are extracted by mining.

Gas and oil are extracted by drilling. They are not in DEQ’s list of Michigan minerals. There are no minerals of any kind in Crawford County, according to the list. Anyway, the idea of looking for a mineral in a 4700-foot hole is ridiculous.

Cooley’s nightmare. Photo: LuAnne Kozma. Click for close-up.

Rules under part 625 say if a mineral well encounters oil or gas of any value, the operator has to stop and apply for a separate permit under part 615. This is the part of the law that covers exploration for gas and oil. Part 615 part makes no mention of targeting minerals. It specifically does not apply to “mine and quarry drill and blast holes.”

Part 615, not part 625, was the part under which DEQ granted the “exploratory” permit given for State Beaver Creek 1-14 HD1. As an exploration well for gas and oil, D4-11 should have been permitted if at all under part 615, not part 625.

Whats’ the difference? A big one is that confidentiality under part 615 is quite limited. Logs and other data are confidential only for 90 days after completion and then only if the operator requests confidentiality. All other documents, including applications, permits, and pre-drilling correspondence, are routinely made public to me or anyone else at any time. The same is true of logging and production data after the 90 days has passed, or even before 90 days if the operator did not request confidentiality.

Another difference is that part 625 has no rules prohibiting nuisance noise. Part 615 does.

What will D4-11 do to the countryside?

Part 625 rules allow for horizontal mineral wells, though fortunately this well is vertical. The rules also allow for acidizing, perforating, and fracturing.

As mentioned, so far only the first page of Marathon’s application for D4-11 has been made public. Applications typically run to 50 or 100 pages. The full application had to include an environmental impact assessment.

DEQ’s form for that required Marathon to identify distances to nearby water wells and other human-made features, and wetlands, surface waters, and endangered species. Marathon should have stated if high-volume fracking will be done in which case it should have specified the water volumes and a water assessment, and identified at least some of the chemicals. It should have explained how muds, cuttings, pit fluids, and brines would be disposed. It should have given details about any flowline or other facilities on the pad, and explained how it would deal with soil erosion and sedimentation.

Cooley and Ban Michigan Fracking are appealing DEQ’s refusal of D4-11 information except for the logs. Ninety days after completion the logs will be requested too. A monster operation like this is a matter of public concern. People birding, hunting, or snowmobiling in the forest are entitled to know what DEQ knows, including the environmental effects and everything else.

Separately, On October 8 I wrote the Marathon boss asking him to confirm Trace’s statement that D4-11 was looking for gas and oil, and provide a copy of the “application [and] permit.” A week later a PR flack wrote back confirming a permit was issued but refusing to send any documents.

D4-11, October 16. Photo: LuAnne Kozma.

Lighting the heavens

LuAnne Kozma (the director of Ban Michigan Fracking and the Committee to Ban Fracking in Michigan) and I visited the site again on October 6, at twilight. Ensign 161 was lit up. She recorded the sounds and pictures in the video above.

On October 16 we visited the last time. Drilling was complete. The pad was quiet and empty, a gash in the forest with a blowout preventer at the center. No sign displayed the permit number, “conspicuously” or at all.

Ensign 161 had moved a half-mile to the pad of 1-14. It was drilling there in the same Detroit River formation.

The rig is expected back at D4-11 soon, after Marathon runs the numbers. It cost millions to cut the trees, excavate the pad, and bring in the rig. The company won’t want to walk away empty-handed. And next time the bore would not just be vertical. It could be aimed right at Cooley, his nightmare.


Marathon Oil makes its move with new Michigan frack well

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By Ellis Boal

Marathon Oil applied for a horizontal frack well in Michigan this past July, its first since buying out Canadian frack company Encana’s Michigan frack wells and permits last year and becoming the biggest potential fracker in the state.

Marathon acquired 430,000 acres of state leases from Encana. At the October auction of the Department of Natural Resources (DNR) it added 148,000 acres, and 53,000 more this May. That works out to nearly 1000 square miles of leases under state land. The number does not count private leases it may also own.

The Department of Environmental Quality (DEQ) granted permit # 61130 unusually quickly, on August 21.

Stake and flag for Marathon’s applied-for State Beaver Creek 1-14 HD1 in Crawford County. In the background is the blowout preventer for the existing State Beaver Creek 1-23 HD1. Click and then click again to enlarge. Photos by Ellis Boal, 8/15/15.

Till now Marathon has kept its plans under wraps.

The 80-page application is viewable and downloadable here.

Named “State Beaver Creek 1-14 HD1,” the well, located in Crawford County, would descend to a true vertical depth of 4400 feet into what is called the “Detroit River” formation. This is a Devonian-age rock composed of a mixed series of carbonates, evaporites, and sandstones. It is shallower than the record-breaking Utica-Collingwood frack wells drilled in the area by Encana in 2012. Horizontally in the Detroit River formation, the bore would then head south 5255 feet.

It would be an exploratory well. The surface hole is said to be 55 feet south of an earlier Beaver Creek wellhead on the same pad, named “State Beaver Creek 1-23 HD1,” which is now producing.

Encana’s application for the earlier well cited 350,000 barrels of water, or 14.7 million gallons, as the amount it would use for fracking.

Marathon’s surveyor was Dean Farrier. He claims to moonlight as a “biologist.” In January 2013 he prepared an environmental impact assessment for the gathering line for the earlier Beaver Creek well. Asked by the Public Service Commission to demonstrate the efforts and resources he used to write the assessment, he said he “conducted a thorough onsite survey of [the] pipeline route for the presence of protected species” including what he called “Kirkland’s” warblers.

The claim is ridiculous. He didn’t pay attention in the biology classes. They are “Kirtland’s” warblers. At the time of his survey they were actually 1000+ miles south, wintering in the Bahamas.

Kirtlands are beautiful, popular, and endangered birds, for which a local community college is named.

Marathon’s application says the new well may pass through sour gas (H2S) zones. H2S is lethal. The application includes a 30-page “contingency plan” for dealing with H2S. If there is an uncontrolled release, the extreme recommended solution is to ignite the well via an upwind approach, wearing self-contained breathing apparatus, using a meteor-type flare gun and a safety rope attached to a backup responder, with a quick retreat path available. After ignition, H2S converts to sulfur dioxide which is also highly toxic, according to the contingency plan.

The new well will have a permanent water well. The environmental impact assessment of the application says volume of frack water will be “1.815 gallons.” On a later page the application says “1,815,000 gallons.”

Waters Landfill

The Waters landfill in Crawford County. Photo by LuAnne Kozma.

Cuttings and muds will be disposed at Waste Management’s nearby Waters landfill.

The chemical constituents of the frack fluid are said to be: water, hydrochloric acid, crystalline silica quartz, tributyl tetradecyl phosphonium chloride, hemicellulase enzyme, propargyl alcohol, methanol, hydrotreated light petroleum distillate, alcohol C12-16 ethoxylated, ammonium chloride, naphthalene, ethanol, heavy aromatic petroleum naphtha, and guar gum.

The public health study of the University of Michigan’s Graham Sustainability Institute identified three of these as particularly concerning:

  • methanol (cardiovascular, dermal, hepatic, neurological, irritant/corrosive)
  • hydrotreated light petroleum distillate (carcinogen, irritant/corrosive)
  • silica (dermal, ocular, respiratory).

Marathon also filed an application for a pooled 800-acre spacing unit. It notes there are numerous critical unknowns with the Detroit River formation in this area. These include reservoir pressure, permeability, porosity, hydrocarbon saturation, and in-situ rock stresses. This well would be the first in the drilling unit.

Marathon paid a $300 application fee.

Marathon welcomes the public

   

Photos by Gary Cooley, 9/5/15.

Photos by Gary Cooley, 9/5/15.

As it was assembling equipment to start drilling the new well in early September, the company put this sign up on the site. It says:

Photographing or otherwise recording this facility or its operations is prohibited without written consent from the company.

The sign adds “Access to this facility is limited to authorized personnel only.” It refers to the area as “company property.” It claims the right to search the “person, personal property, and vehicle” of any visitor to the premises. It adds that anyone “suspected” of violating a “company policy” may be “referred to law enforcement officials.”

But the state owns the property. Marathon has a permit to drill, but it does not have a permit to exclude visitors. People have the right to walk in the state forest, carry a camera, and use it. The DNR manages it and its policy is:

Michigan’s forests are of incredible value to the people, animals, plants, and other organisms that live in and travel through the State.

On September 22 Ban Michigan Fracking demanded of Hal Fitch, DEQ’s supervisor of wells, that DEQ order the company to paint over the offending language. Fitch refused. He wrote back saying there was “no evidence of any violations of either Part 615 or Part 625“, the laws he administers.

Under current Michigan law, DEQ’s job is to “foster” the industry “favorably.”

The Graham Institute completed its intensive two-year report this month on high volume hydraulic fracturing (HVHF) in Michigan. One thing in the executive summary that it got right was a criticism of the DEQ’s current policy involving the public and well permitting. It said the policy “hinders transparency about HVHF operations in the state.” Fitch’s response proves the point.

The next day BMF made the same demand of DNR. DNR promptly sent staff to the pad and told the foreman to take down the sign.

The threatening bullying sign had been up, unchallenged, for three weeks.



Pipeline secrecy: the poster child

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By Ellis Boal

On May 5, twelve members of the Michigan House introduced a pipeline secrecy bill, HB 4540. The bill would amend Michigan’s Freedom of Information Act, or FOIA law.

Before-and-after pictures of clearing for the pipeline along King Road, taken by neighbor Gary Cooley. Cooley found flattened Kirtland’s warblers in excavated dirt on the day and near the location of the third picture. Click and then click again to enlarge.

It would allow public agencies to withhold “critical energy infrastructure” information — defined as “engineering … or detailed design information” which “relates details about the production, generation, transportation, transmission, or distribution of fuel or energy” of “existing and proposed” infrastructure “relating to crude oil, petroleum, electricity, or natural gas.”

The definition is limited to information that is “more than the general location,” and that “could be useful to a person in planning an attack” on systems and assets, the incapacity of which “would negatively affect public security, economic security, health, safety….”

Both proponents and opponents have focused on oil and gas pipelines and high-powered electrical lines as the critical energy infrastructure which the bill targets. But in ordinary discourse the term also includes oil and gas production.

In the future as wind and solar begin to take hold in the state, central production and transmission facilities related to them would seem to be included too.

(The bill also has provisions related to cybersecurity generally, not limited to oil, gas and electricity. They have not sparked widespread controversy.)

If the bill were amended to exclude production, the primary agency affected by it would be the Michigan Public Service Commission (MPSC) which regulates transmission of oil, petroleum, electricity, and gas.

What follows is an object lesson, where secrecy of gas pipelines proved disastrous for Michigan forests and wildlife.

Secret pipelines

To build a gas line, a company has to give MPSC a plat showing the line’s dimensions, character, compression stations, control valves, and connections. Similar details are required for oil, petroleum, or electric lines.

In January 2013 deep-shale fracker Encana Oil & Gas (USA) applied for and MPSC permitted gathering lines for two horizontal wells. The lines were to connect the wells to a transmission line crossing southern Crawford and Kalkaska Counties.

This is Kirtland’s warbler territory. Kirtlands are federally endangered birds. If you kill one you pay a fine or go to jail or both.

Encana asked MPSC to process the applications “ex parte” — which means secretly. MPSC obliged. Neighbors near the lines had no chance to object. Twenty days later MPSC granted the applications in boilerplate decisions. Only then did the existence of the proposed lines became public.

Neighbors John Buggs, Dan Bonamie, and Gary Cooley live in inholdings of the state forest which the Crawford County line traverses. The line goes along King Road, what was once a stately woodland two-track. They and their neighbors walk, hunt, and bird throughout the area.

Encana had submitted environmental impact assessments (EIAs) to MPSC. But the EIAs were slopwork, supposedly authored by Encana’s surveyor but unsigned. His only enviro credential is a certificate to teach high school biology. The EIAs made no mention of the nearby Kirtland nesting sites, and did not even claim to investigate environmental impacts in the forest alongside the pipeline easements.

MPSC didn’t read the EIAs, saying that wasn’t its job. Buggs and Bonamie tried to intervene and ask for reconsideration, but the agency refused, holding they lacked standing.

In the court

The two appealed to the court of appeals, where Encana argued again they lacked standing.

Meanwhile the company spent $2 million and built the lines, flattening two Kirtland’s warblers in the process, according to witness Cooley’s affidavits. Cooley reported the find to two Encana contractor employees who refused to even look at the dead birds or report the incident to DNR as required.

Cooley also took before-and-after pictures of the one line which goes by his place. DNR had allowed easement widths of 35 feet, but the company used 53 feet including an 8-foot strip of roadside trees along King Road outside the easement boundary.

The court was shocked by Encana’s standing argument. It told the company that dismissing the appeal “may result in a miscarriage of justice.” It added environmental review is the job of every agency, under longstanding Michigan precedent. It reversed the MPSC permits as “unlawful,” and remanded to the agency.

Meanwhile Encana had sold the lines to DTE Michigan and the wells to Marathon Oil.

Back at MPSC

DTE then told MPSC it should now read the EIAs and re-affirm the permits summarily with no hearing.

Getting some backbone for a change, MPSC refused. The EIAs were “mere guesswork,” it ruled. Then it gave DTE till August to try to show the “efforts [it] made and resources [it] used” to produce the EIAs.

MPSC did not ask DTE to submit new EIAs by someone who does have credentials. Any new EIA — after Encana already gouged the forest — would be untimely by 2½ years and objectionable.

Recognizing the “interest” the case has generated, MPSC issued a press release and will allow public comment for 30 days after DTE’s submission in August.

Technical details

Pleadings and decisions in the case are at this link. The technical details provided by Encana when it applied for the lines is in items 1 and 2 of the link. The details include pipe specs and diameters, wall thickness, minimum yield, joint information, coating information, fitting information, maximum and normal pressures, max/min/expected operating temperatures, and other data.

In particular the details showed the line diameters would be 6.625 inches (commonly referred to as 6-inch).

This is the kind of detail which MPSC would be privileged to withhold under HB 4540. Are such details important to Buggs’s and Bonamie’s case?

This is where it gets interesting.

After the court decision, DTE did not remove the lines. It didn’t even stop operating them. Today it is making money off them. But the law provides for fines and a year of prison for corporate officers who have or operate a line without a permit. Here we have two lines and no permits.

Buggs and Bonamie began to question DNR about the 35-foot easements over which the lines run. The width of the easement determines how wide a forest swath can be excavated and cleared for a line. DNR procedure, in effect since 2005, recommends widths of 20 feet or 30 feet.

So why did DNR allow 35 feet for these lines?

And why did it allow taking of the 8-foot strip in violation of its 1994 policy that roadside trees make a “significant contribution to the natural beauty of the surrounding area”?

A DNR employee questions

DNR land use forester Jerry Grieve handled Encana’s application for one of the two lines. He questioned superiors about the width in the fall of 2012. Encana had requested 50 feet for that line. Grieve wrote:

Note: This requested easement is for 50′ not the normal 20′. This is because of the kind of pipeline being put down…. [D]iscussions about the width … are still on going in the Department. A final determination of width will be made by the time the easement is issued in Lansing.

FOIA information shows that in the case of this line, DNR did comply with the normal procedure — in writing — and allowed just 20 feet. But when Encana started excavating and clearing it went out 35 feet. DNR’s reaction: It just winked. In the case of the other line, the written permission stated 35 feet.

No FOIA notes of the DNR decisions show why it deviated from “normal” 20 feet.

But there are clues suggesting possible explanations. One is that the company overstated the line diameters. It told MPSC they would be 6 inches and DNR they would be 8 inches. Companies are supposed to be straight with public authorities. But neither MPSC or DNR have demanded an explanation of the contradiction. DNR fell for it and may have used the exaggerated diameters as an excuse for too-wide easements.

The second clue may be that something in the technical specs — perhaps the steel construction material or the expected pressure — motivated the deviation.

If this information caused DNR to violate its longstanding “normal” procedure, then the public is entitled to know. The width issue goes to the core of the DNR’s mission. Its job is to protect state forests from fragmentation, not violate rules secretly just because a powerful company wants it to.

But it is exactly the kind of data which MPSC and DNR could withhold under HB 4540, by simply declaring terrorists might use it.

In May, Buggs and Bonamie sued DNR in the court of claims to vacate the easements and restore the slashed forest. DNR has not yet responded.

Regardless how the new suit turns out, HB 4540 will allow MPSC and DNR to continue hiding information, and eating out of the hands of the frackers.

Adrian Today reported on May 10 that a search of campaign finance records shows that all the bill’s 12 sponsors received financial support from the energy industry in 2014.

 


 

The litigations are supported by Ban Michigan Fracking.