Michigan's Department of Environmental Quality (DEQ) is moving ahead with development of new hydraulic fracturing rules. They would cover water withdrawals, baseline water-quality sampling, monitoring and reporting, and chemical additive disclosure. Well spacing requirements also would be updated, and terms describing well locations and drilling tracts would be clarified.
"What we're proposing is to expand on permitting instruction," Hal Fitch, who is chief of DEQ's oil, gas, and minerals office, said on Aug. 12. Public hearings on the proposed changes were held July 15 in Gaylord and July 16 in Lansing. Fitch said he and his staff are going through comments, many of which centered on specific areas, and may make changes that will need to be vetted. He hopes final regulations are issued sometime this fall.
It had been 3 years since Fitch last spoke with OGJ. Well construction and flowback fluids management were the main issues at the time in a state that had its first production in 1925 and enacted its first regulation of it 2 years later.
Things have worked well in the time since, Fitch said. "We never saw the kind of high-volume fracing that occurred in some places," he said. "It looked promising in 2010-11, but we only had 12 or 15 holes drilled. Some natural gas liquids were produced. Everyone is competing for investment dollars in places like the Eagle Ford and Marcellus, where the payout has been bigger."
Michigan has not seen much unconventional production, he said. "The biggest play is the Trenton and Black River formations, which primarily produce oil. That's where most of the interest has been the last several years," Fitch said. "We also have an A1 carbonate formation which produces gas and NGLs, but I'm not certain if that's going to take off on a big scale."
All the states learn
Fitch is the state's representative on the Interstate Oil & Gas Compact Commission. "We keep track of what's going on elsewhere. We tap into what's going on around the country," he said. "I think all the states are learning from each other, and sharing information. It's where regulation should be in place because we're closer to the different situations and the actual stakeholders."
Fitch said Michigan's long-time experience with oil and gas has helped in more ways than one. "We've benefited both as an agency, where much of our staff has been around for years, and in communities," he said.
"It can be a two-edged sword," Fitch observed. "On one hand, you want people to be aware of the potential. On the other, you want to be transparent about what's going to happen."
