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.



New DEQ fracking rules don’t help; we still need a ban

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A frack well in Gladwin County, Wiley 1-81 HD1, in 2012. Photo by LuAnne Kozma.

By Ellis Boal

After public hearings last summer amid the public uproar about fracking, in March 2015 the Michigan Department of Environmental Quality’s Office of Oil, Gas and Minerals published new administrative rules for oil, gas, and fracking. DEQ provided a link and said the new rules:

contain additional requirements when completing a well using high volume hydraulic fracturing [HVHF] by modifying Rule 201 and adding Part 14 High Volume Hydraulic Fracturing. The revised administrative rules also contained other minor updates related to definitions, injection, and spacing issues.

Since horizontal fracking came to Michigan in 2010, some environmental groups have put all effort into improving sloppy practices, and getting tighter DEQ fracking regulation.

The new rules show the futility of those efforts. If anything, they facilitate more fracking than the old rules.  Protection of public health, the environment, forests, water resources, air, climate, and our communities is still at stake.

The technical details are below.

“Construction of part”

The overall show-stopper is the legislature’s statutory finding at MCL 324.61502. This law will remain in place unless the ballot initiative campaign of the Committee to Ban Fracking in Michigan succeeds in 2016. Innocuously titled “construction of part” – meaning “how the DEQ is to construe part 615 [the state oil-gas law]” – the finding ends with these words:

It is accordingly the declared policy of the state to protect the interests of its citizens and landowners from unwarranted waste of gas and oil and to foster the development of the industry along the most favorable conditions and with a view to the ultimate recovery of the maximum production of these natural products. To that end, this part is to be construed liberally to give effect to sound policies of conservation and the prevention of waste and exploitation.

Binding on judges, juries, and DEQ regulators, this special-interest provision has been on the books since 1939. Most government agencies treat their regulated industries neutrally. Not so with DEQ and oil-gas. “Fostering” the industry means fostering oil-gas profits. “Maximizing” oil-gas production means maximizing Michigan’s contribution to fossil fuel-driven global warming.

Thus “construction of part” declares a vision statement or ideology, that animates both the old DEQ rules and the new DEQ rules.

The citizen-led ballot initiative will ban horizontal fracking and acidizing in the state, and render the HVHF rules obsolete.

Just as importantly, it will eliminate the oil-gas industry’s special-interest protection. Instead of fostering the industry and maximizing production, the new “construction of part” will say:

It is accordingly the declared policy of the state to protect the interests of its people and environment during gas and oil development. This part is to be construed liberally to give effect to sound policies of conservation and to protect water resources, land, air, climate, human health, and the natural environment.

Terminology and a caveat

Terminology: “Part 615” noted above refers to the oil-gas “part” of Michigan’s overall environmental law known as “Natural Resources and Environmental Protection act” (NREPA), found at MCL 324.101 et seq. Part 327, noted below, is also in NREPA.

The DEQ rules are also divided into “parts,” numbered part 1 through part 14. They are in a different number sequence than the parts of NREPA. Confusingly, the two sets of “parts” have no relation to each other.

The caveat: Many of the new rules refer to “high volume hydraulic fracturing” (HVHF), defined as fracking which uses a total volume of more than 100,000 gallons of primary carrier fluid. HVHF usually occurs in wellbores which are horizontal, but not always. The ballot initiative of the Committee to Ban Fracking in Michigan by contrast seeks to ban fracking and acidizing in horizontal wellbores, without tying it to a specific volume of primary carrier fluid.

Details on the new rules

  • Greenhouse gas (GHG) emissions: On April 27 the Detroit News editorialized against signing the ballot initiative, asserting that the new rules “control methane emissions.” They do not. New rule 1404(1)(c) provides only for testing for methane (and six other chemicals) in water wells which are near HVHF wells. No tests are done for fugitive methane (methane which escapes into the air). Methane is the primary constituent of natural gas, and a potent GHG. Other new rules say nothing and do nothing about Michigan’s contribution to global warming. Comments by Ban Michigan Fracking at last summer’s hearings made particular note that the prohibition of “waste” in MCL 324.61501(q)(ii)(B) does not include air or climate as protected values, and that DEQ’s historic permitting practice has been to monitor only non-GHG emissions.
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This frack well fragmented a state forest in Antrim County, 2011, (State Mancelona 1-28 HD1). Photo by LuAnne Kozma.

  • Cumulative impacts and habitat fragmentation: The new rules say nothing about proliferation and cumulative impacts of wells. The DNR leases oil-gas rights and DEQ permits oil-gas wells separately with no coordination between them. Wells are often located near rivers and streams. In basins with a high density of operations, numerous wellpads in the same watershed compound cumulative impacts of above-ground wellheads, compressors, pipelines, access roads, and associated industry.
  • IMG_0113Wastewater, radioactivity: The new rules have no requirement for geochemical analysis of flowback and produced water, particularly from underground radioactive shale rock typically associated with shale gas.
  • Compulsory pooling of surface owners can now be done after drilling and fracking is done:  Rule 301(1)(d) now allows a permit to be issued and the well drilled on a unit with fractures extending under unleased land — land the fracker does not have the rights to — prior to a hearing being held to see if a dominant leaseholder can force other owners into a pool. The theory under MCL 324.61513(4) is that the leaseholder should not be deprived of a fair share of oil or gas in the pool. Pooling orders are typically justified by the “construction of part” language that requires the state to foster “maximum production” (language which will be eliminated if the ballot initiative succeeds). See this example of a case of compulsory pooling where DEQ relied on “construction of part” to force owners into a drilling unit. The assumption of compulsory pooling is that everyone wants to produce oil or gas from his/her land to the max. If ever accurate historically, the assumption is not uniformly true today. Cosmetically, the new rules also change the term “compulsory pooling” to “statutory pooling,” hiding the fact that landowners are forced into drilling units against their will.
  • Seismic impacts: The new rules have a single passing reference to seismic activity. It is in rule 1202(3)(a), the procedure for petitioning to establish secondary recovery operations. In April, the US Geological Survey linked oil-gas activities to induced earthquakes. The new rules require no seismic precautions.
  • Confidentiality: Rule 416(3) requires operators on request of the DEQ to give it fracking, acidizing, and other well records. But if an operator asks DEQ to hold well data and samples confidential (excepting data on spills, leaks, and chemicals used), DEQ will do so until 90 days after drilling is completed. Confidentiality advances no environmental principle or policy.
  • Spacing and blowouts: When a fracker seeks a special spacing order, rule 303(2) no longer requires that DEQ make sure that the distance between wells prevents interference. Interference can result in a blowout at an adjacent well. DEQ is now content to grant a permit to a well where a blowout could happen.
  • Conformance bonds: Bonds for single wells range between $10k and $30k depending on depth according to rule 212, but the state auditor general found in 2013 the average cost to plug one is $50k+.
  • Hearings on well permits: Rule 201(4) provides for no notice to nearby landowners of fracker applications for well permits, and no hearings or appeals if a permit is granted.
One of the many injection wells used to dispose of horizontal frack wastes in Michigan, the Slowinski injection well in Kalkaska County. Photo by LuAnne Kozma.

One of the many injection wells used to dispose of horizontal frack wastes in Michigan, the Slowinski injection well in Kalkaska County. Photo by LuAnne Kozma.

  • Injection wells: There is no change in rule 102(x), the definition of “injection well.” The rule’s definition includes disposal wells and wells used to inject water “for the purpose of increasing the ultimate recovery of hydrocarbons from a reservoir.” A reservoir is any gas-bearing formation, even if it is solid rock. Injecting to increase recovery is just what frack wells do in the Utica-Collingwood, A-1 carbonate, and other gas-bearing formations. By nature, frack wells are permanent disposal wells of half their own injectate. In 2014 our court of appeals interpreted the rule definition to refer to any well used to increase recovery of hydrocarbons from a reservoir which was already producing before water was injected. Every well in the Utica-Collingwood and A-1 carbonate, and practically every other frack well in the state today, fits that interpretation. Yet DEQ refuses to treat them under the rules for injection wells. Those rules include rule 804 which uses a formula to limit the amount of injection pressure.
  • HVHF: The new rules have an amended part 2 and a new part 14 to cover high volume hydraulic fracturing (HVHF). HVHF is defined in rule 1401(h) as fracking which uses a total volume of more than 100,000 gallons of primary carrier fluid.
  • Trade secrets and HVHF: Under rule 201(2)(c), anticipated chemicals in the injectate, and their “chemical abstracts service” (CAS) numbers, must be identified in advance. Under rule 1406(1)(c), the chemicals and CAS numbers actually used have to be listed with FracFocus 30 days after completion. (FracFocus does not operate under a public mandate or verify information submitted to it.) But both requirements have an exception if the fracker simply makes a claim for protection under Michigan’s trade secrets statute, MCL 445.1901 et seq. The trade secrets law does not protect the public from frackers. It protects frackers from each other. Neither the trade secrets law nor the new rules provide a mechanism for a citizen to challenge a fracker’s claim of secrecy.
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    Students protest in Mt. Pleasant, 2012. Photo by LuAnne Kozma.

    Baseline water testing and HVHF: Rule 1404 requires the permit holder to do pre-drilling sampling of water from potable wells near the surface hole, test the samples at a lab for seven chemicals, and give a copy of the lab results to the landowner. No testing for the hundreds of other chemicals identified in frack operations is required. And chemicals in secret mixtures can’t be tested for at all. Sampling in the vicinity of the horizontal laterals, sampling of water levels and flows, sampling of surface waters, splitting samples so the landowner can have half, and doing post-drilling sampling are not required. Nor is sampling required for water wells near gas wells which are not HVHF.

  • Water Withdrawal Assessment Tool and HVHF: Rule 1402 has provisions for protection of water withdrawn for fracking. The rule requires screening by Michigan’s water withdrawal assessment tool (WWAT), adopted in 2008 by the legislature in MCL 324.32701 et seq (or NREPA part 327). If a fracker’s withdrawal request fails WWAT screening, it may request a site-specific review. DEQ would then take a closer look and decide whether to approve withdrawal. In the past, DEQ has routinely approved permits even when the WWAT test “fails.” WWAT screening has problems. It estimates surface water flows from just 147 gauged stream segments around the state. The gauges tend to be on medium- and large-sized streams, not sensitive headwaters. WWAT has not been updated since 2008. It was developed to deal with long-term withdrawals like agricultural irrigation, not the short-term intensive withdrawals required for fracking. WWAT cannot assess the potential impacts on habitat, wildlife, and nearby waters receiving site runoff. It does not account for water withdrawal impacts to wetlands and lakes. It cannot measure potential changes in surface runoff patterns due to the clearing of land and road construction. It overestimates stream flow (and so underestimates adverse effects). Academics have criticized it.
  • Use of WWAT and HVHF: Even were WWAT a valid screening device, DEQ misuses it. Two big frack wells were permitted in 2011, State Excelsior 1-13 HD1 and State Excelsior 1-25 HD1. Both wells failed WWAT screening according to the linked DEQ paperwork for the wells. That triggered a site-specific review by DNR water specialist David Deyoung. Deyoung gave the go-ahead and permits were granted. But according to pages 84-87 and 108-113 respectively of the paperwork, he gave no reasoning, did not consider the stream or river flow data of affected stream reaches, and did not even state he visited the sites.

To protect Michigan from harm, we must use the Precautionary Principle and do no harm. Rules by which to frack, only lead us down the road to more and increased fracking across the state.

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.