Learning from others, Michigan considers best options for future fracking

There is significant momentum behind natural gas extraction in the United States, with many states viewing it as an opportunity to foster economic growth, move toward domestic energy security and create a cleaner energy supply.

However, as domestic production has accelerated in the past 10 years, there has also been increased public scrutiny of natural gas development, particularly with respect to high-volume hydraulic fracturing in shale gas deposits.

Key concerns include potential chemical contamination from fracturing fluids, wastewater disposal, and possible environmental and health impacts.

There is also a perceived lack of information transparency on these questions.

With the rapid rise in hydraulic fracturing activity, numerous government, industry, academic and environmental organizations have rushed to examine the potential benefits and impacts of high-volume hydraulic fracturing. In fact, one review of the available scientific peer-reviewed literature on the impacts of shale gas development found that the bulk, or 73%, of the studies have been published only since January 1 2013.

Last month the University of Michigan (U-M) published a comprehensive report on the options for Michigan for high-volume hydraulic fracturing.

The report, which we both worked on, takes into account both the sometimes-problematic development of shale gas elsewhere in the US as well as the projected growth in natural gas production in the US. It also identifies a number of issues related to environment, the economy, health and communities that other states – or countries – should consider before expanding natural gas development.

Limited production thus far

Michigan has a long track record with respect to oil and gas development and hydraulic fracturing.

While not a top producer of natural gas, there has been significant activity in Michigan, with the state ranking 18th in natural gas production and ninth in shale gas production in 2013.

Extracting gas from shale rock involves cracking, or fracturing, a layer of underground rock with a high-pressure mix of water, sand and chemicals. After drilling a vertical well, drillers can then drill horizontally through layers of rock to access fuel. The combination of fracturing and horizontal drilling has allowed drillers to access gas trapped in shale rock and fueled the surge in domestic gas production in the US.

Hydraulic fracturing process.Tip of the Mitt Watershed Council

According to the Michigan Department of Environmental Quality (DEQ), over the past several decades, more than 12,000 oil and gas wells have been fractured in the state. Regulators have not reported any instances of adverse environmental impacts. Most of these wells are relatively shallow (1,000 to 2,000 feet deep), are in the Antrim Shale in the north of the state and were drilled and completed in the late 1980s and early 1990s.

A May 2010 auction of state mineral leases, however, brought in a record US$178 million – nearly as much as the state had earned in the previous 82 years of lease sales combined.

Most of this money was spent for leases of state-owned mineral holdings with the Utica and Collingwood Shales and will likely require so-called high-volume hydraulic fracturing or a well operation that is intended to use a total volume of more than 100,000 gallons of hydraulic fracturing fluid.

To date, though, there has been little activity on lands leased for drilling. As of May 28 2015, there were only 14 producing oil and gas wells completed with high-volume hydraulic fracturing in Michigan. Higher gas prices, though, could significantly change this course.

Even with the limited activity, several bills have been proposed in the Michigan legislature to further regulate or study hydraulic fracturing. And, since 2012, the ballot question committee Let’s Ban Fracking has been working to get the issue in front of Michigan voters.

Best practices

The purpose of the U-M report is to present information that expands and clarifies the scope of policy options available. It does so in a way that allows a wide range of decision-makers to make choices based on their preferences and values. The report, in other words, does not advocate for recommended courses of action.

However, several key stakeholders have identified areas of particular importance.

For example, in a special message on energy policy earlier this year, Michigan Governor Rick Snyder noted that the project helped the state to “see an opportunity to strengthen our protection of water and give the public more information.”

Left: Activity in Michigan of oil and gas wells in 2005. Right: Activity in Michigan of high-volume hydraulic fracturing wells as of May 28 2015.Michigan Department of Environmental Quality

In addition, the Michigan Environmental Council and the Tip of the Mitt Watershed Council highlighted several areas that they believe deserve special consideration by Michigan lawmakers and the Snyder administration. These include:

In public notice and involvement

• expanding public notification when the state proposes to lease oil and gas drilling rights on public land

• requiring the Michigan Department of Natural Resources to compile a summary of public comments received, how the department responded to public input and how that input influenced its decision about whether and how to lease the rights on the parcel

• allowing adversely affected parties to request a public hearing before a high-volume hydraulic fracturing well permit is approved.

In water protection

• disallowing high-volume hydraulic fracturing operations within areas with a cold-transitional stream, which have highly permeable geologies

• updating the state’s Water Withdrawal Assessment Tool used to determine the impact of drawing large volumes of water.

In wastewater disposal

• increasing monitoring and reporting requirements for wastewater that is a byproduct of fracking

• obtaining primary authority by the state over injection disposal wells to improve oversight of wastewater disposal activities.

In financial assurance to protect taxpayers

• requiring oil and gas companies to purchase liability insurance, in addition to the bonds, to protect taxpayers from cleanup costs.

We developed the policy options in our report based on key issues identified in a set of previously released technical reports, numerous public comments and a review of current policy in Michigan, other states, and best practices.

A peer-review panel of subject area experts noted that the report provides a potential model for how other states can assess these issues, and 2020 Science noted that “while the report focuses on Michigan, the analysis is broadly applicable to other states and beyond, and provides a deep and broad analysis of fracking.”

We hope the contributions of all involved in this report will be put to good use for shale gas regulatory decision-making, both in Michigan and elsewhere.

The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.