Environmental Risks of Michigan Oil and Natural Gas Development

1. Environmental Risks of Michigan Oil and Natural Gas Development Christopher Grobbel, PhD GROBBEL ENVIRONMENTAL & PLANNING ASSOCIATES PO Box58 Lake Leelanau, Michigan 49653 cgrobbel@grobbelenvironmental.com

2. Michigan basin geology

3. Oil & Gas History in Michigan • 52,000 oil and gas wells have been drilled in Michigan since 1925. • Today 28,000 wells in place in the state (15,000 oil and 13,000 natural gas wells). • 9,900 wells in the Antrim shale (600 to 2,200 feet deep), late Devonian (365 million years ago.) • According the DEEQ, Michigan is ranked 12th nationally in natural gas production. • 20% of gas consumed in Michigan is produced in Michigan.

4. Oil & Gas History – Michigan Plays • 1930s – 1940s Michigan Stray & others • 1970s – early 1980s Niagaran Trend (Manistee to Rogers City) - natural gas storage today • Mid-1980s Prairie du Chien (central lower Michigan) • Late 1980s – 1990s Antrim shale (northern lower Michigan) • 2010 - 2012 Collingwood/Utica shales • Policy: energy independence, global warming, economic downturn, bridge fuel to low carbon economy, etc.

5. 13th largest source of natural gas in the U.S. • Michigan’s natural gas boom late 1980s thru 1990s.

6. Environmental Record • In 1995 the MDEQ, OGM stopped keeping a list of oil and gas contamination sites (known as the “SAPP” list). • No comprehensive list publically available today. • Info today only gleaned from individual FOIA requests and study.

7. Environmental Record • In 2001, 187 of 2,842 or 6.6%known sites of environmental contamination site due to oil and gas extraction or drilling (Alliance for the Great Lakes study). • 25% contaminated drinking water (61% had not investigated groundwater contamination) • 21% no action • 2% cleaned up • 0% with groundwater contamination fully remediated (some known to MDEQ up to 35 years) • In 2007 reported that the MDEQ, Office of OGM maintains an internal list of ~700 O&G contamination sites known since 1986.

8. Environmental Record • 2008 study indicated 5,938 active oil and gas development sites in Otsego County (Lake Louise Christian Community - Methodist Camp, 2,800 acres). • Review of last published MDEQ list of environmental contamination sites including oil and gas sites, revealed 44% were result of releases oil and gas sites in 1996. • 2009 review of Part 201 list of sites of environmental contamination in Otsego County revealed 30% at oil and gas sites. • Especially at collection sites, dehydration /processing facilities, pipelines, truck spills, on and off loading accidents…not the well head.

9. MDEQ Record • Record of inadequate clean ups…reliance on visual and olfactory evidence vs. discrete soil/groundwater samples. • Environmental expert “(OOGM) implements its own substandard approach based on Part 615 under the guise of an intra-division Memorandum of Understanding.” • “all efforts to resolve this with the MDEQ have failed to address this internal disparity between the OOGM and Remediation Division.”

10. Example: Hayes 22 Central Production facility, Gaylord • Separates oil, gas and brine from the Niagaran Foundation • Nearly 60 releases of crude oil, brine and condensate since July 30, 1985. • Groundwater contamination plume 3,500 ft long, 1,000 ft wide, 30 feet thick (200 feet below ground surface) or 10.5 million cubic feet.

11. Table 1: Representative Antrim Gas Brine Contaminant Concentrations, Otsego County.17 Water Quality Parameters Niagaran Brine Drinking Water Standard Description • pH 6.21 6.5 to 8.5* Low pH water may cause corrosion of metal plumbing resulting in poor tasting water and high levels of copper and/or lead from plumbing components. • Total Diss. Solids (mg/L) 189,810 Less than 500* Measures all of the dissolved materials in water. High total dissolved solids causes poor-tasting water. • Chloride (mg/L) 117,500 Less than 250* Can cause a salty taste to the water along with corrosion and blackening of metals. • Arsenic (mg/L) 0.86 Less than 0.01 May cause cancer and other serious health effects. Causes no obvious tastes, odors or stains in water. • Barium (mg/L) 57 Less than 2.0** May cause hypertension and other serious health effects. Has no obvious tastes, odors or stains in water. • Sodium (mg/L) 48,000 Less than 120 High concentrations may be causer hypertension and problematic for individuals on low sodium diets. No obvious tastes, odors or stains in water. • Iron (mg/L) 100 Less than 0.30*/less than 2.0** May cause orange or brown stains and metallic-tasting water. • Manganese (mg/L) 1.92 Less than 0.05*/less than 0.86** Causes black stains or flecks along with a metallic taste. Causes impairment of neurobehavioral function. • Lead (mg/L) 4.77 Less than 0.004** Causes many serious mental health effects, especially in children. Causes no obvious tastes, odors or stains in water. • Lithium (mg/L) 10 Less than 0.17 May cause serious health effects. Causes no obvious tastes, odors or stains in water. • Arsenic (mg/L) 2.10 Less than 0.01** May cause cancer and other serious health effects. Causes no obvious tastes, odors or stains in water. • Radium-226 & Radium 228 (pCi/g) 0.95 to 24 pCi/g. Background at 5 pCi/g 10 mrem/yr exposure* May cause cancer and other serious health effects. Causes no obvious tastes, odors or stains in water. • Strontium (mg/L) 250 Less than 4.6 May cause serious health effects. Causes no obvious tastes, odors or stains in water. • Selenium (mg/L) 0.33 Less than 0.05 May cause serious health effects. Causes no obvious tastes, odors or stains in water. • Sulfate (mg/L) 850 Less than 250* . Causes taste, odor or staining problems in water.

12. Example Hayes 22, Gaylord • Impacted 3 private drinking water wells, located 233 and 298 feet from the facility (chloride, benzene, etc.) • Clean up stalled despite 35 years of MDEQ oversight, 3 private lawsuits filed in 2007. • Computer model projected 20 to 30 years to clean up.

13. Private Property, Gaylord • Brine release from pipeline discovered by snowmobiler on 2/16/2004 (from Antrim well). • Oil company reported spill of 42 gallons. • Soil samples after MDEQ overseen soil cleanup showed Chloride in soils at 70 to 1,400 ppm (500 soil standard). • 2/27/2004 MDEQ told company more cleanup required, some done but overall definition not completed. • MDEQ closed file absent adequate investigation.

14. Private Ranch, Northern Michigan • 39 wells gas wells drilled on parcel since 1989, two central production facilities (CPFs ). • 11/5/2000 hunter found leak of underground pipeline, brine pool at soil surface. • Pipeline repaired, some soil removal completed. • Landowner objected to continued operations due to pipeline condition. • Landowner filed suit, no more production until past spills investigated/cleaned up and equipment inspected.

15. Private Ranch, Northern Michigan • Through litigation 5 other spills since 1997 were revealed, did not require reporting to MDEQ or investigation or clean up pursuant to Part 615. • Court ordered a groundwater investigation documenting groundwater contamination plume 600 feet long and 100feet wide, but source soils were cleaned up. • Court determined lack of adequate MDEQ action and passage of time resulting in groundwater contamination.

16. Dairy Farm, Gladwin County • 9/11/2003 release of brine and crude oil of an unknown quantity reported from “a hole in a flow line…overtime” reported to MDEQ. • Second spill reported on 6/22/2004 to MDEQ from a “second leak in the flow line...” • Periodic and piece-meal soil excavation and free product removal from wetland/soils with vacuum truck. • Soils excavated and placed in on-site bio-treatment cell. • Full extent of contamination not defined. • MDEQ signed off that cleanup complete.

17. Dairy Farm, Gladwin County • October of 2007 – soil and water sampling by myself indicated free phase crude oil, benzene at 61,200 ppb; toluene at 87,800 ppb; ethylbenzene at 32,900 ppb; xylene isomers at 107,000 ppb; 1,2,4-TMB at 236,700 ppb; 1,3,5-TMB at 9,020 ppb; Naphthalene at 4,900 ppb; lithium 14 ppm; chloride at 24,400 ppm in soils all dramatically above standards. • 10/07 – benzene at 47 ppb in surface water and chloride in groundwater above standards.

18. Oil & Gas History in Michigan Interest now in deeper “shale gases.” “Unconventional” shale gas US EPA estimates shale gas will represent 20% of total US supply by 2020.

20. Oil & Gas History in Michigan • Michigan has a rich history of oil and gas drilling. In fact, hydraulic fracturing has been used extensively for many years in Michigan. • Hydraulic fracturing is used in virtually every Antrim shale well (~9,900 wells, 60 to 220 feet thick) • According to the MDEQ, there is no indication that traditional hydraulic fracturing techniques used in the state have ever caused damage to ground water or other resources. (Focus is at the well head.)

21. Michigan Oil and Gas • MDEQ collects 7% severance tax on oil produced in the state. • MDEQ, Office of Oil, Gas and Mineral (OOGM) is the only part of the state’s environmental protection agency that is essentially funded by the industry it regulates.

22. Produced 136 billion cubic feet of gas in 2007 • Current average daily gas production rate 35 thousand cubic feet per day (mcfpd) per well. • Most actively drilled shale gas play in the U.S. • Drilling peaked in 1993

23. Oil Development in Jackson County

24. Oil Development in Jackson County • Starting in 2009 oil found in Jackson and northern Lenawee Counties , producing more than 791,000 barrels of oil in in the first 9 months of 2011…highest producing county in the state by nearly two-fold. • Drilled in the Trenton Limestone -Black River Shale Formation (conventional shale bearing oil and gas ). • More than 60 wells drilled since 2009, almost ½ of them in Norvell Township, Irish Hills.

25. Trenton-Black River Formation approximately 14,000 to 15,400 feet deep AND immediately below the Collingwood/Utica unconventional shale.

26. Deep well injection • Oil and gas liquid wastes are trucked or piped to deep injection wells for disposal. • Intended to be isolated from and below any geologic strata used as a drinking water source.

27. Deep Well Waste Injection – Federal Safe Drinking Water Act • Class I – hazardous liquid wastes, industrial and non-industrial liquid wastes, and municipal waste water. • Class II – brines and other oil and gas production fluids. • Class III – mining fluid wastes. • Class IV – hazardous and radioactive wastes. • Class V – general class for non-hazardous shallow liquid waste injection. • Class VI – carbon sequestration wells.

28. Michigan currently has 7 active hazardous Class I wells • 20 Class I non-hazardous wells • More than 1,500 Class II brine licensed deep injection wells.

29. Deep Injection Wells – Environmental Risk • Factors to consider in locating a deep well injection site include: • 1) the capacity of the geologic unit or “reservoir” to accept and confine the waste (i.e. porosity, permeability lateral extent, consistency and thickness of the reservoir); • 2) the structural geology of the setting (i.e. elevation of the injection zone in its geologic setting, density variation between injectate and naturally occurring brines, presence or absence of faults and/or fractures, and the potential for injection-induced earthquakes); and • 3) presence or absence of valuable mineral resources within the potential area of influence.

30. Deep Injection Wells – Environmental Risk • Risks and potential consequences of releases of liquid wastes at deep injection well sites include: • The contamination of water supplies through upward or lateral migration of waste fluids; • Induced earthquakes due to increased subsurface pressures from deep well injection (a well-known series of more than 1,500 earthquakes, three over magnitude 5 on the Richter scale are known to have occurred from military waste injection at the Rocky Mountain Arsenal near Denver between 1962 and 1967, and several in northeastern Ohio); and • Land or subsurface mineral contamination through upward or lateral migration of waste fluids.

31. Deep Injection Wells – Environmental Risk • 80% of spills at deep well injection sites are the result of human error, 20% result from mechanical failure or loss of system component integrity. • E.g. corrosion within pipelines and other system components, especially at welds and joints; the plugging well injection zone from high concentrations of suspended solids (especially > 2 parts per million); system fouling from calcium encrustation and/or iron oxidation (i.e. soluble ferrous ions precipitating as ferric iron when encountering oxygen); and fouling from the induced growth of naturally occurring bacteria with waste streams of high concentrations of organic carbon. • Another example includes the injection of industrial wastes in Ontario caused by the upward seepage of injected wastes in improperly abandoned oil wells near Port Huron, Michigan.

32. Natural Gas Development Trends • New “push” Silurian/Ordovician-aged Collingwood/Utica shales at ~12,000 ft below grade & approximately 40 feet thick (465-510 million years old.) • “Unconventional” shale gas development. In a thin shale “reservoir” with microfractures/micropores very low porosity and permeability requiring “hydraulic fracturing”

35. Natural Gas Chemical Components

36. Deep Shale/Unconventional Shale in Michigan • 21 permits used thus far by MDEQ, 5 pending. • 3 wells hydraulically fractured thus far in Collingwood/Utica Shale.

37. Pioneer Well, Missaukee County State-Pioneer Well 1-3 drilled by Alberta-based EnCana Corp, Canada’s largest natural gas producer. Produced 2.5 million cubic feet of gas/day for 30 days. ~$12,500 gas/day or $375,ooo/month. Fracked with 5,880,000 gallons of water in 15 stages (140,000 bbls or 980 hauler trucks).

38. Excelsior Wells, Kalkaska County • State Excelsior well, starting in December 2011 north well producing 3.1 million ft3/day. South well producing 6.5 million ft3/day in first 7 day sale period. EnCana Corp.

39. Excelsior Wells, Kalkaska County

40. Excelsior Wells, Kalkaska County • Gas dehydrated and compressed at well head. • Piped along gravel county road north to MichCon Wet Header pipeline along M-72 Highway. • Then to Kalkaska processing facility (separate ethane and propane) and then to distribution pipeline. • Wide swath cut in Mackinaw State Forest for pipeline.

42. Excelsior Wells, Kalkaska County • Reportedly failed Michigan Water Withdrawal Assessment Tool, projecting adverse impacts on nearby streams & rivers (natural river section of the Upper Manistee River). • Approved for drilling & production anyway.

43. The Collingwood Play • Companies spent $178 million on May 4, 2010 for state leases in 20 Michigan counties. • 2009 – 2010 EnCana bought mineral rights to 250,000 acres across Michigan. • Record-setting state lease auction is expected in October and could encompass 500,000 acres.

44. Unconventional Shale Gas Development • Horizontal drilling and hydraulic fracturing or “fracking” are the rule.

45. Horizontal Drilling

47. What is hydraulic fracturing? • According to industry groups & MDEQ, fracking is a proven technology used in more than 1 million wells in the U.S. since the 1940s to help produce oil and natural gas. • Involves pumping a water-sand mixture into underground rock layers where the oil or gas is trapped. • Pressure of the fracking fluid creates tiny fissures in the reservoir rock. • Sand holds open the fissures, allowing the oil or gas to escape and flow up the well.

49. Shale Gas Development • A single well is “fracked” a dozen times or more when developed.

50. Unconventional Shale Gas Development • Now represents 46% of total US natural gas production (i.e. tight gas in sandstone, coal bed natural gas and shale gas) • Top US companies Chesapeake Energy, BP, Anadarko, ConocoPhillips, Devon, Range, XTO, EnCana, Chevron, EOG, ExxonMobil, etc. • New shale gas field are located in Texas, Louisiana, Arkansas, New York, Pennsylvania and Michigan. • Other shale gas fields include North & South Dakota, Colorado, Utah, Arizona, Oklahoma, Virginia, West Virginia, Indiana, Ohio, Maryland, Wyoming.