Natural gas drilling in Northern Michigan poses threat to water supplies

Pennsylvania hydrofracking operation, photo courtsey of Helen Slottje

A new round of natural gas exploration in Northern Michigan, sparked by the development of a controversial new drilling technique that has yielded good results for the Encana corporation, is prompting serious concerns about potential damage to ground and surface waters.

A state of Michigan mineral rights auction in May brought in a record $178 million and private landowners are now being asked to lease their mineral rights for deep, horizontal wells that involve hydraulic fracturing or “hydrofracking” — a controversial, little regulated and rapidly growing mining technique that has been linked to ground water contamination in other states.

Natural gas companies see new opportunities for using this technique to extract natural gas from a giant shale formation that lies like a bowl under much of northern Michigan.

The flurry of investment was touched off by the results of an exploratory well drilled this year in Missaukee County, about 30 miles southeast of Traverse City.

That well, which is named Pioneer, was drilled by a subsidiary of the Calgary-based Encana corporation (NYSE: ECA). Unlike the natural gas wells that tapped into the Antrim shale formation (between 600-2,200 ft deep) across northern Michigan in the 1980s, Pioneer went down 9,685 feet and then drilled horizontally into the Collingswood shale formation for 5,000 feet.

According to Encana president and CEO, Randy Eresman, an initial 30 day production test at the well yielded about 2.5 million cubic feet of natural gas per day; by comparison, the average American home with natural gas heat consumes about 213 cubic feet per day. The company says it has acquired rights to about 250,000 acres of land in Michigan.

The use of hydrofracking is generating controversy in other states such as Pennsylvania, Colorado and Wyoming where it has been associated with toxic spills and well contamination.

Encana was fined $370,000 by the Colorado Oil and Gas Conservation Commission (COGCC) for flawed drilling practices that residents say caused methane and benzene contamination of Divide Creek in northwestern Colorado in 2004.

Deep shale has less organic content that the shallower layers previously exploited, the gas in these areas is stored in micropores, and in order to get it out in commercially viable quantities the shale must be fractured. The process involves drilling a hole deep into the earth and lining it with cement — this cement is a safety measure that is intended to prevent hydrocarbons and other materials from mixing into the water table. Billions of gallons of water, mixed with chemicals, are then forced into the well under high pressure in order to fracture the shale and release gas trapped inside.

According to Mike Barrett of the Michigan Oil and Gas Producers Education Foundation, more than 40 percent of current natural gas production nationwide is generated through hydrofracking in wells drilled within the last four years.

Although hydrofracking involves injecting chemicals into the ground, the practice was exempted from regulation under the federal Safe Drinking Water Act in a provision of the Energy Policy Act of 2005 known as the “Halliburton Loophole.”

Rep. Diana DeGette (D-Colorado) calls this exemption an “unconscionable Bush-Cheney loophole” and has introduced legislation to end the exemption and require that companies disclose the chemicals that they use in hydrofracking.

In March the U.S. Environmental Protection Agency announced that it would undertake a comprehensive study of the impact of hydrofracking on water and public health.

The surge of gas company interest in local mineral rights prompted the MSU Extension office to sponsor a forum on hydrofracking and mineral rights at Northwestern Michigan College’s Hagerty Center in Traverse City last week.

“I’m proud to say that I helped design the frack job at the Pioneer well,“ Darel Willison, a salesman and technical adviser for Superior Well Services of Gaylord told the crowd.

Willison insisted that hydrofracking is well regulated and that his company uses environmentally safe chemicals. He described fracking as a highly efficient industrial process and he showed a photo of an array of about 25 semi trucks that were used to pump the water into the ground at the Pioneer well in rural Missaukee County.

“We worked around the clock for eight days and eight nights for the frack job at Pioneer,“ he said, “When we frack these you can imagine the amount of traffic you are going to see on your roads. It costs a lot to put trucks on location and those trucks got to be rolling around the clock so that we can make money.”

Environmental consultant and former state regulator Chris Grobbel, another panelist at the forum, warned that fracking fluid can contain toxic substances and that the water that flows back up and out of the well can contain hazardous substances including heavy metals, hydrocarbons and radionuclides.

“It is hard to know what is going to be added to the [fracking fluid]” he said, “And there are toxic materials that are guaranteed to be in the return flow. Some of the naturally occurring materials are toxic at very low levels.”

Landowners who are considering leasing their mineral rights should take care to ensure that the contract they sign has provisions for who will be responsible for cleanup in the event of land or water contamination, said attorney Phil Rosi of Traverse City.

David Schweikhardt of Michigan State University’s Dept. of Food Agriculture and Resource Economics, cautioned the over two hundred locals in attendance at the forum that is it very difficult to negotiate a good mineral rights contract without expert assistance and he warned that Michigan does not regulate oil and gas contracts.