TOO CLOSE TO HOME:
THE LOCATION OF OIL AND GAS WELLS
IN MICHIGAN
A POSITION PAPER BY LAURA ROBINSON, PSY.D.
PRESIDENT, CITIZENS FOR OIL-FREE BACKYARDS
MARCH 2015
ACKNOWLEDGMENTS
The author would like to acknowledge the following individuals for their contributions to this paper: Nick
Schroeck, Executive Director, Great Lakes Environmental Law Center; Christopher Grobbel, Ph.D., Grobbel
Environmental and Planning Associates; and Jacque Rose, research consultant. General feedback during the
writing process was provided by COFBY staff members Rob French, M.S.; Judith Hoffman, M.S.; Kathy
Knol, J.D.; Ian Moyer, Ph.D.; and Yi-Li Wu, Ph.D.
2 5 3 1 J a c k s o n Av e . , S u i t e # 2 1 1 , A n n A r b o r, M I 4 8 1 0 3 • ( 7 3 4 ) 8 2 1 - 6 8 8 8 • o i l f r e e b a c k y a r d s . o r g
Legislative FAQs
What’s the issue?
Oil and gas wells are being drilled in neighborhoods (including near homes with well water), and near
water resources and preserved open space.
What’s the current law?
Unlike cities and villages, townships and counties:
•
don’t have local control under the Michigan Zoning Enabling Act to enact zoning ordinances
pertaining to the location of oil and gas wells
•
have no recourse against oil and gas wells being placed within their borders
Under Part 615 of the Natural Resources and Environmental Protection Act, oil and gas wells can go:
•
300 feet from a home’s foundation and drinking water wells in townships/counties under 70,000
population
•
450 feet from a home’s foundation and drinking water wells in townships/counties over 70,000
population
•
as close as wanted to surface water, except on state-owned land
What’s our position?
We think there needs to be local control over the surface location of oil and gas wells, along with effective
setbacks from surface water.
Why has this issue arisen?
•
In summer 2014, oil wells were drilled in Scio and Shelby Townships, approximately 720 and 460
feet from homes, respectively.
•
The result: unprecedented public response, continued substantial negative publicity for the oil
and gas industry, and an increase in the number of townships enacting moratoriums and
ordinances.
•
Bills on this topic, SB 1026 and SB 1076, were introduced and defeated.
Is this a bipartisan issue?
Yes. This is about:
•
local land use
•
the rights of local units of government to plan and regulate land use within their own unique
communities
•
the protection of natural resources and the environment in order to protect the health, safety, and
welfare of the public
•
the rights of homeowners and businesses to have confidence in their investment in a community
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What’s the solution?
•
Give townships/counties authority over the surface location of oil and gas wells and
accompanying infrastructure.
•
Establish required minimum setbacks from surface water.
Why isn’t it appropriate to use population thresholds as a cutoff for protection?
•
Neighborhoods are neighborhoods, regardless of the size of the township or county in which
they’re located.
•
The law should apply to everyone equally; population thresholds are arbitrary cutoffs.
Why isn’t it appropriate to use areas “zoned residential” as the criterion?
•
Zoning often differs from a township or county’s master plan, a 20-year plan for growth and
development. For example, the Scio well was in an area zoned agricultural but planned and used
for rural-residential purposes.
•
Local units of government can best decide what types of areas they want to protect, whether
those areas are for preservation, outdoor recreation, residences, or other purposes.
Why might this matter to you?
•
Oil and gas companies are actively expanding their reach, and your neighborhood might be next.
•
All townships and counties should be given the right to choose whether or not they want to
exercise control over surface location of wells.
•
Local communities, including your own, are best able to decide their own zoning needs, as
spelled out in their master plans. Zoning and master plans are the way townships deal with
conflicts over land use.
Will the oil and gas industry be harmed by variations in local regulation? No.
•
Producers can access bottom-hole location with directional drilling.
•
Ability to lease the non-surface rights to land between the surface and bottom hole is unchanged.
Is this more of a patchwork of regulation than already exists? No.
•
Other industries are already abiding by local ordinances and permits that vary by locality. The oil
and gas industry is capable of doing so as well.
•
The oil and gas industry already deals with a variety of restricted surface use regulations from
DNR on state-owned land, and this does not appear to have created unacceptable hardship or to
have kept it from utilizing DNR lands.
•
Our proposed solutions will actually create greater regulatory consistency for townships/
counties, residents, and investors, because they will be able to predict where oil and gas activities
will go.
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Executive Summary
In the summer of 2014 oil and gas exploration close to homes and drinking water in two Michigan
townships—Scio and Shelby—unleashed a negative public response that was and continues to be
significant. The wells in these townships were located in areas typified by residential use and/or
residential zoning and were near drinking water supplies—including families’ water wells and, in the
case of Scio, near the Huron River, which provides drinking water to neighboring Ann Arbor. Subsequent
citizen and political action in both townships led to the introduction of two bills that sought to address
drilling in townships with a population of 70,000 or more by removing them from part of the Michigan
Zoning Enabling Act (MZEA) and by amending Part 615 of Michigan’s Natural Resources and
Environmental Protection Act (NREPA).1 These bills were defeated and were followed in early 2015 by a
Supervisor of Wells instruction addressing “potential land use conflicts over oil and gas development in
areas with high residential population densities,” 2 as well as by two additional House bills.
Meaningful legislative change is called for at this time, when the desire of the oil and gas industry to
explore near homes and water resources, along with the mandate of the MDEQ to facilitate oil and gas
resource extraction, has come into conflict with certain rights of state residents and local units of
government. The paper accompanying this summary describes our position in detail. In brief, we at
Citizens for Oil-Free Backyards (COFBY) believe that all local communities should be given the right to
choose how oil and gas operations might best fit within their own master plans for land use, and that, in
the absence of townships and counties being removed from the oil and gas restrictions of the MZEA, this
should be accomplished by focusing on the surface location of wells. Allowing townships and counties
jurisdiction over surface location of wells would provide a solution for all townships and counties,
regardless of their goals, giving control at the local level to the unit of government most capable of
addressing its own set of unique circumstances. To protect the health and safety of all state residents, we
additionally propose minimum setbacks from surface and drinking water.
The presence of oil and gas exploration and development in the areas described is a state-level issue
that sits at the intersection of several significant principles: local land use; the rights of local units of
government to plan their own unique communities; the protection of natural resources and the
environment for the public good and for the health, safety, and welfare of the public; and the rights of
homeowners and businesses (for example, those based on outdoor recreation, the sale of residences, or
residential development) to have confidence in their investment in a community. Current state law does
not provide for these concerns to be satisfactorily addressed.
Under state law townships and counties are authorized to create master plans and to create separate
zoning districts for all industries other than oil and gas and non-metallic mineral development. These
allow communities to plan for certain purposes such as residential use, preservation, industry, or outdoor
recreation, and to create rules to guide land use over time. Yet under the MZEA—which is based on laws
that were written at a time when current land use and development were quite different than today and
when the state population was much lower and less dense 3—townships and counties are denied the
ability to exercise that same local control to manage oil and gas exploration and development.
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Residents and local governments throughout Michigan are concerned about the negative consequences
of oil and gas operations for themselves and for their communities. The well-established negative effects
and risks of oil and gas exploration and development include noise, light, vibration, industrialization of
previously non-industrialized areas, truck traffic, air pollution, soil and/or water contamination, and
threats to emergency responders. Importantly, due to the concentration of activity at the surface location
of wells, more nuisance and in all likelihood more risk is posed in that location. There are more than 700
documented instances of soil and groundwater contamination from spills at oil and gas sites in
Michigan, 4 and a 2001 study named contamination sites in the state that had not been remediated for over
30 years and cited eight instances of contamination of drinking water supplies.5 The state constitution
directs the legislature to pass laws “for the protection and promotion of the public health,”6 and
townships and counties are charged with protecting the health, safety, and welfare of their residents. 7
However, when it comes to oil and gas, they are prevented by the MZEA from doing so.
We believe that protection should be offered to all Michigan residents through allowing local
communities to choose how oil and gas operations might fit within their master plans, by giving them the
right to have zoning regulations apply to the surface location of proposed oil and gas wells. The oil and
gas industry has argued that zoning is inappropriate for oil and gas operations since such operations
depend on access to mineral rights at the immediate location of oil and gas deposits. However, such
arguments ignore the fact that it is possible to locate surface development away from designated areas
while still accessing oil and gas through directional drilling. We propose that subsurface operations be
permitted to occur at the bottom-hole location of oil and gas deposits while surface exploration and
development are allowed to be subject to local zoning control. We also support required minimum
setbacks from drinking and surface water in all townships and counties.
Pushback against oil and gas exploration and development in areas where there are homes and
preserved areas, and where surface and drinking water are at risk if there were to be contamination, has
reached a point of no return in Michigan. Citizens, local units of government, and legislators are calling
for reasonable restrictions so that there is local control and so that designated master plans can be
followed. It is now time to relinquish a regulatory structure that essentially shuts out township and
county governments from adequately protecting their residents and their properties, water quality, and
the environment from the inherent risks of oil and gas operations that lie within their jurisdictions.
1
Senate Bill No. 1076, Sept. 17, 2014; Senate Bill No. 1026, Aug. 13, 2014.
State of Michigan, Dept. of Environmental Quality. Supervisor of Wells Instruction 1-2015. Oil and Gas
Development in High Population Density Areas.
2
3
U.S. Census Bureau. Population Change by Decade, 1910-2010. Jan. 31, 2013.
4
Environment Michigan Research and Policy Center, Dec. 2001, p. 11.
Lake Michigan Federation. The Case Against New Great Lakes Oil & Gas Drilling: Michigan Fails to Clean Up Oil
and Gas Pollution. Sept. 2001.
5
6
History: Const. 1963, Art. IV, § 51, Eff. Jan. 1, 1964.
7
MCL 41.181; MCL 125.3201; MCL 125.3203; MCL 125.3504.
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Table of Contents
Introduction!
1
Issues!
2
Risks Relating to Residential Drilling, Drinking Water and Surface Water, and Protecting the Public!
2
Residential Drilling!
2
Drinking Water and Surface Water!
3
Protecting the Public!
5
Planned Land Use!
6
Location!
6
The Michigan Zoning Enabling Act!
7
History!
7
The Silva Test!
8
9
Arguments and Solutions!
Position and Proposed Recommendations!
10
Summary!
11
Endnotes!
12
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Introduction
In the summer of 2014 oil and gas exploration in two Michigan townships—Scio (a general law township)
and Shelby (a charter township)—unleashed a negative public response that was both widespread and
significant in its impact. This strong public reaction was due in large part to the location of statepermitted and privately drilled oil exploration wells in areas typified by residential use and/or
residential zoning and in close proximity to drinking water supplies, including families’ water wells and,
in the case of Scio, near the Huron River.
Subsequently, citizen and political action in both townships led to the development of legislative bills in
late 2014 to amend the Michigan Zoning Enabling Act (MZEA) and Part 615 (Supervisor of Wells) of
Michigan’s Natural Resources and Environmental Protection Act (NREPA). This proposed legislation
(Senate Bills 1076 and 1026) focused on population parameters as the mechanism of regulatory action. 1
Specifically, the first of those proposed measures would have removed from the MZEA the five Michigan
townships with a population threshold of 70,000 or more, or 0.4% of 1,240 total townships statewide,
while the second addressed issues related to permits in those same townships. Both bills were defeated,
given opposition—for different reasons—from industry, business, environmental groups, some citizens’
groups including our own, and both political parties. Following these developments, the Supervisor of
Wells issued an instruction in February 2015, ostensibly for the purpose of “minimiz[ing] potential land
use conflicts over oil and gas development in areas with high residential population densities.”2 This
instruction, which addressed certain aspects of oil and gas operations (lighting, fencing, groundwater
monitoring, and others) provided inadequate protections and had limited effect, as it pertained only to a
small subset of the state population in highly dense, residentially zoned areas within the three Michigan
counties with a population of 750,000 or more. Two House bills were also introduced in late February
2015.
We at Citizens for Oil-Free Backyards (COFBY) believe that several principles have converged at this
pivotal moment, and that they should be addressed as a whole at the state level. Among these principles
are local land use; the rights of local units of government to plan their own unique communities; the
protection of natural resources and the environment for the public good and for the health, safety, and
welfare of the public; and the rights of homeowners and businesses to have confidence in their
investment in a community. It is clear that both the desire of the oil and gas industry to explore near
homes, drinking water sources, and natural rivers, and the mandate of the Michigan Department of
Environmental Quality (MDEQ) to facilitate oil and gas resource extraction, have now come into direct
conflict with certain rights of state residents and of local units of government. As a result, the MDEQ and
the oil and gas industry are being forced to confront calls for a different approach to oil and gas
exploration and development near residences, drinking water supplies, and surface water. This is a time
when meaningful legislative change is needed.
Having been an active participant in all aspects of this ongoing issue, we hold the position that additional
legislation should be put forth that fairly and adequately offers protection and local control to all
Michigan residents. In the absence of this being accomplished through removal of townships and
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counties from the pertinent section of the MZEA (MCL 125.3205), we suggest that protection could be
granted through empowering local communities to choose the best fit for their unique circumstances. We
believe that achieving the goal of local control for townships and counties might best be accomplished at
this point in time by focusing on proposed oil and gas well location. The aim of this position paper is to
provide detailed factual information on local land use and planning, on relevant acts and statutes, on oil
and gas exploration and development, and on the particular circumstances of the Scio and Shelby wells;
to identify, clarify, and address salient points; and to make recommendations for what needs to be
accomplished through legislative channels.
As the issues discussed in this paper pertain to all types of oil and gas wells, no distinction is made
herein between oil and gas wells that are hydraulically fractured and those that are brought into
production or “completed” using traditional methods.
Issues
Risks Relating to Residential Drilling, Drinking Water and Surface Water, and Protecting the Public
Oil and gas exploration and development in the vicinity of people’s homes and drinking water supplies
are inherently riskier than such activity in areas with lower population density and/or removed from
water sources, due to the numbers of people who are or may be directly affected by adverse
consequences. Of course, risk remains for the environment regardless of population density. This section
will examine the risks, as well as the responsibilities of local units of government to mitigate those risks.
Residential Drilling
Oil and gas exploration and development have a long history in rural parts of Michigan; however, it is
only recently that the industry has begun significantly expanding into areas that are planned, used, or
zoned for residential purposes. Oil and gas exploration is pushing into these areas because the industry
wishes to follow the path of the underground geological formations that potentially contain profitable
quantities of oil and/or natural gas. As the industry continues to develop oil and gas in these residential
areas, numerous homeowners of all political stripes have become increasingly and understandably
alarmed at the prospect of having oil and gas wells in their neighborhoods or, in some cases, merely a few
hundred feet from their doorsteps.
Under the MZEA, townships and counties “shall not have jurisdiction with reference to the issuance of
permits for the location” of oil and gas wells.3 In effect, this means that oil and gas exploration and
development are allowed anywhere in townships and counties (on leased or compulsory-pooled land)
that the industry wishes to place them as long as it abides by the residential setbacks stipulated in Part
615 of NREPA. 4 The setback for wells in townships and counties with a population of less than 70,000 (i.e.,
the size of Scio Township) is 300 feet from a home’s foundation, while in townships and counties with a
population of greater than 70,000 (i.e., the size of Shelby Township) wells must be set back 450 feet from
the foundation of a residence. 5
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Although oil and natural gas wells were indeed located near homes in Michigan before the summer of
2014, the permits approved in Scio and Shelby Townships in July 2014 brought to light the weakness of
existing regulations and the current limitations of local governmental control in protecting residential
neighborhoods from the negative impacts of oil and gas exploration and development. In Shelby
Township a subdivision developer, Nino Homes, leased the mineral rights for oil and gas exploration and
development, and a permit was approved by the MDEQ to allow drilling in the middle of the densely
populated housing subdivision. The Nino well was drilled merely 457 feet from the front steps of the
closest home. 6
Drilling rig at Nino Well in Shelby Township!
Drilling rig at Wing Well in Scio Township
The drilling of the Nino well came on the heels of substantial opposition in Scio Township to a drilling
permit for a well there that had been approved after a lengthy delay caused by unprecedented public
comment, political statements, and organized citizen response. The drilling in Scio commenced after the
drilling in Shelby was completed. The Scio well—known as the Wing well—was located in an area of the
township where the planned land use is rural-residential and is typified by low-density residential
properties, and it was approximately 720 feet from the nearest home. 7 Scio Township lies between the
cities of Ann Arbor and Dexter and is known for its character as a destination for local and non-local
residents seeking the quiet of a rural/wooded setting, outdoor recreation, and nature. Much of the area
near the Wing well, in addition to being typified by residences, had been set aside for current and future
preservation. 8
There are a host of reasons for concern on the topic of oil and gas exploration and development in areas
used for residential purposes. Among these are noise, light, vibration, industrialization of previously nonindustrialized areas, heavy truck traffic, air pollution from exhaust and flares, and potential soil and/or
water contamination due to human error or equipment malfunction. In addition, property values have
been demonstrated to decrease in groundwater-dependent areas near wells.9 For these and other reasons,
many residents and townships have expressed a need for local control over oil and gas exploration and
development in areas used for residential purposes.
Drinking Water and Surface Water
Drinking water and surface water are at risk from oil and gas exploration and development. Due to the
hydrologic connectivity of Michigan’s vast water systems, impacts from such exploration and
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development have the potential to be widespread rather than localized, further increasing risk.10 Yet
required distances for oil and gas operations to be set back from water are minimal (in the case of
drinking water) or nonexistent (in the case of surface water). The only Part 615 restriction on oil and gas
development that pertains to its location near drinking water is a required setback of 300 feet from
residential water wells. 11 In townships/counties with more than 70,000 people, the required Part 615
setback is 450 feet. 12 There is no scientific basis for these setback distances, and the close proximity of
water wells to oil wells is cause for concern due to potential contamination of drinking water, as
described below. As a result, the existence of 91 water wells located within the same square-mile section
of the Scio oil well, and 71 of the Shelby oil well, is worrisome for the residents who rely on them for
drinking water, as their health and safety are put at risk.13
The only regulation of oil and gas exploration and development relating to setbacks from surface waters
is contained within Michigan Department of Natural Resources (MDNR) mineral leases, which require
that such development be further than 1,320 feet (a quarter mile) from any lake or stream. However, this
requirement, which is not codified in departmental regulations, applies only to state-owned land and
thus is not pertinent to the majority of the state or to the circumstances described in this paper. 14 The lack
of required setbacks from surface waters on non-state-owned land allowed the Scio Township oil
exploration well to be located merely 1,100 feet from a tributary of the Huron River, which provides 85%
of the City of Ann Arbor’s water supply. 15
Significant concerns have been raised over the potential contamination of drinking water supplies by oil
and gas exploration and development. The Graham Institute at the University of Michigan noted in a
recent technical report that shale oil and gas development “could adversely affect water quality due to
surface water and groundwater contamination as a result of 1) spills and releases of produced water,
chemicals, and drill cuttings, 2) erosion from ground disturbances, or 3) underground migration of gases
and chemicals.” 16 The National Ground Water Association includes the following as pathways to
potential drinking water contamination: “improper well construction, both water well and oil or gas
well; accidents during the transport or storage and use of oil and gas well development chemicals;
improper wastewater management and disposal; abandoned water, oil or gas wells, which have not been
properly filled and sealed that could provide a preferential pathway for contaminants to enter shallower
formations, or migrate from surface spills; upward migration along geologic features such as faults; [and]
increased use of freshwater, including groundwater, in oil and gas operations.”17 The occurrence of such
instances is not hypothetical. The well-casing failure rate, or “compromised structural integrity,” of wells
drilled in Pennsylvania from 2010-2013, for example, was found in a Cornell University study to be
6-7%. 18
Although some argue that oil and gas exploration and development pose no risk to drinking water, there
are more than 700 documented instances of soil and groundwater contamination from spills at oil and gas
sites in Michigan. 19 A 2001 study described contamination sites that had not been remediated for over 30
years and cited eight documented instances of contamination of drinking water supplies in Michigan due
to oil and gas activities. 20 Elsewhere, a 2011 Duke University study identified a higher incidence of
methane in drinking water wells in proximity to gas wells in Pennsylvania and New York. 21 C i t i z e n s f o r O i l - F r e e B a c k y a r d s!
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There is precedent in Michigan law for protecting drinking water supplies and surface water. Specifically,
MCL 324.61505a and 324.502(4) prohibit drilling “beneath the lake bottomlands of the Great Lakes, the
connected bays or harbors of the Great Lakes, or the connecting waterways.”22 The Great Lakes, which
hold approximately 21% of the world’s surface freshwater supply, 23 not only provide drinking water for
40 million people but are also critical for agricultural and manufacturing purposes, 24 as well as for
recreation and fishing.
Protecting the Public
The state legislature is directed by the Michigan Constitution to pass laws “for the protection and
promotion of the public health.” 25 Furthermore, the constitution directs that “[t]he conservation and
development of the natural resources of the state are hereby declared to be of paramount public concern
in the interest of the health, safety and general welfare of the people. The legislature shall provide for the
protection of the air, water and other natural resources of the state from pollution, impairment and
destruction.” 26 Townships and counties are subsequently empowered through statute to enact ordinances
to protect public health, safety, and general welfare through the enactment of zoning, police power, and
other regulations.27 In addition, county and district health departments are given the ability to “prevent
disease, prolong life, and promote the public health. . . including prevention and control of environmental
health hazards.” 28
The documented adverse effects of oil and gas exploration and development—such as air pollution from
flares and diesel exhaust, noise pollution, light pollution, contamination of surface- and/or groundwater
as described above, and explosions or accidents requiring emergency responders29—pose a threat to the
public health, safety, and welfare. As such, it is incumbent upon townships and counties to protect their
citizens from these harms, yet the oil and gas provisions of the MZEA profoundly compromise their
ability to do so. Although the Supervisor of Wells provided an instruction in February 2015 that requires
permittees to communicate with the local fire marshal and emergency responders and to post material
safety data sheets (MSDSs) for all chemicals used or stored at a well site, 30 these requirements appear to
stop short of full disclosure of chemicals; in addition, as noted above, these requirements apply only to a
small fraction of state residents.
Because the phenomenon of oil and gas exploration and development in residential areas is relatively
recent, there is still relatively little published research that directly measures the health impacts of these
activities. However, there is great interest in such issues, and the findings that have already emerged
underscore the very real threat to public health posed by drilling in proximity to residential areas. A 2012
study undertaken by the School of Public Health at the University of Colorado found an increased risk of
health issues such as headaches, sore throats, and breathing difficulties for residents within a half-mile of
natural gas wells. 31 A 2014 Yale University-led study found deleterious health effects in people living near
fracked wells. 32 Additionally in 2014 a Texas jury awarded $3 million to a family suffering from health
problems caused by fracking.33
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Planned Land Use
Through state law, townships and counties are empowered to create separate zoning districts for all
industries other than oil and gas and non-metallic mineral development. Townships and counties that
enact zoning ordinances must base such regulation on a master plan—a 20-year vision of a community’s
future development—allowing them to plan for zones to be used for certain purposes (e.g., agricultural,
rural-residential, preservation, outdoor recreation, and varying densities of residential areas). 34
Importantly, while zoning allows communities to create enforceable rules to guide future land use in a
community over time, the MZEA keeps these local units of government from exercising that same control
in managing oil and gas exploration and development.
Although planned land use is not expected to precisely mirror current zoning, it is considered to
accurately reflect a township’s long-term goals for development. In the case of Scio and many other
townships, it is increasingly the case that areas zoned for agricultural use based on their historical use
have evolved into rural-residential or residential use and are now typified by residences instead of
agriculture. However, much of Michigan’s antiquated oil and gas law, written long ago when agricultural
areas were not highly populated, has not been adequately revised to account for such changed
demographics and changed circumstances. Oil and gas exploration and development thus do not operate
under laws and rules that reflect consideration of the impact of the industry on modern-day residential
development in townships and counties. These impacts are felt not just by residents, but also by certain
businesses. Under the MZEA, real estate professionals and developers or recreational tourism businesses,
for example, are unable to be certain whether the incompatible land use of oil and gas exploration and
development may arbitrarily encroach upon their potential market or investment at any point in time.
Location
It is argued by industry that zoning is an inappropriate tool to guide oil and gas operations since these
operations, by their very nature, depend on access to mineral rights at the immediate location of oil and
gas deposits. However, such arguments ignore the fact that it is possible to locate surface development
away from homes and drinking water while accessing oil and gas deposits through the use of directional
or slant drilling. Giving townships and counties the authority to make such zoning distinctions would
put the oil and gas industry into the same regulatory category as other polluting or potentially polluting
industries.
Although the term “well location” is not defined in Michigan statute, the Supervisor of Wells is given
authority over the surface location of a well in the MDEQ Office of Oil, Gas, and Minerals (OOGM)
administrative rules. R324.103 (t) defines “well location” as “the surface location of a well.” In a hearing
of a petition filed in 2013 against MDEQ, the Supervisor of Wells made a single exception in ruling that
“location” of a well specifically refers to the bottom-hole location. 35 However, “well location” can be
reasonably assumed to mean surface location. Thus, any legislative change giving townships and
counties control over location would provide control over surface development only, with the Supervisor
of Wells retaining jurisdiction over bottom-hole and subsurface location. Accordingly, in such a scenario,
subsurface oil and gas exploration and development would be permitted to occur at the location of the oil
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and gas deposits, while surface exploration and development would be subject to local control. Although
empirical data are not made available in such a manner as to easily provide specifics on all the areas
where contamination occurs, in all likelihood more risk—and certainly more nuisance—is posed at the
surface location due to the concentration of activity in that area.
The Supervisor of Wells’ instruction issued in February 2015 addressed location in its discussion of permit
applications, in requiring permit applications to include “an evaluation of feasible and prudent
alternatives for the proposed well location.”36 As required in other Michigan environmental regulations,
“feasible” is typically interpreted to mean technically achievable and “prudent” is generally considered to
mean economically reasonable. However, no guidance—such as that recommending maximum distance
from public or private structures—is provided in the instruction for what might constitute better alternate
locations. Further, an evaluation is all that is required in terms of location; there is no requirement that the
permittee change its plans based on the findings of the evaluation.
The Michigan Zoning Enabling Act
History
As described above, the general location of oil and gas exploration and drilling in Michigan is regulated
under the Michigan Zoning Enabling Act (MZEA), while its specific distance from residences and
residential water wells is regulated under Part 615 of NREPA. Since 1943, when Public Acts 183 and 184—
the precursors to today’s MZEA—became law, Michigan’s population has nearly doubled from 5,256,106
to 9,895,622 based on 1940 and 2013 U.S. Census figures. 37 Similarly the state’s population density
increased from 93 to 174.8 people per square mile.38 Population density did not increase uniformly across
the state. Instead, during the 1940s and beyond, greater population density became concentrated in the
Lower Peninsula while smaller increases in density occurred in the northern townships. 39
In short, the laws regulating the oil and gas industry today were written at a time in which there were
substantially fewer people per square mile and in which suburbs, subdivisions, and residential
development in townships did not exist as they do today. The negative effects and potential harms of oil
and gas exploration and development on people and the environment were as yet unknown. In addition,
the oil and gas industry was relatively new in the state in 1943. While small amounts of oil had been
discovered in the late 1800s, it was 1925 before a well produced enough oil for commercial production. 40
The oil and gas industry had thus been producing in Michigan for only 18 years when the public acts
were made law. A boom in new oil and gas development since 201041 has further strained the system of
outdated laws that could not have predicted the type of exploration and development we are
experiencing today.
In 2006, the public zoning acts were combined, along with another zoning act, to create the Michigan
Zoning Enabling Act, which, like its predecessors, states that “a county or township shall not regulate or
control the drilling, completion, or operation of oil or gas wells or other wells drilled for oil or gas
exploration purposes and shall not have jurisdiction with reference to the issuance of permits for the
location, drilling, completion, operation, or abandonment of such wells.”42 Cities and villages are not
mentioned in this section of the MZEA and thus, importantly, keep intact the ability to protect their
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residents through regulating and controlling oil and gas operations, while townships and counties
cannot. (SB 1076 would have removed from this section of the MZEA mention of the specific townships
described earlier, thus effectively letting them function like cities; HB 4237 proposes the same for all
townships and counties.)
Two relevant but distinct points must be made in regard to the distinction between cities/villages and
townships/counties. First, due to population density and the obvious limitations on leasing enough land,
cities and villages as a whole are less likely, relative to townships and counties, to have oil and gas
operations within their borders. 43 Townships and counties are more vulnerable to oil and gas leasing due
to their open space and larger land parcels, yet they have less authority to manage oil and gas exploration
and development. Second, the ability to regulate does not necessarily provide full protection. For
example, city water supplies often come from surface waters and watersheds outside the city limits, 44
thus rendering such cities vulnerable to adverse events outside their regulatory jurisdiction. This was the
case for Ann Arbor, with activity in Scio Township potentially putting the city’s water supply at risk.
Because of this vulnerability, the rights of neighboring townships and counties can affect nearby cities
and villages.
In 2011, the “no very serious consequences” rule from the 1982 Silva v. Ada Township case (referred to as
the Silva test)45 was added to the MZEA, stating that “an ordinance shall not prevent the extraction, by
mining, of valuable natural resources from any property unless very serious consequences would result
from the extraction of those natural resources.”46 The “no very serious consequences” rule was
incorporated into the MZEA language despite a 2010 Michigan Supreme Court ruling in Kyser v. Kasson
Twp that (1) the rule elevated mineral extraction to a specially protected land use and that instead a
“reasonableness” standard should apply; (2) the rule violated the separation of powers principles in the
state constitution, and local governments, not courts, have the role of regulating land use; and (3) the
MZEA superseded the rule since the MZEA prohibits exclusionary zoning and thus municipalities may
regulate land uses as long as the regulation does not constitute exclusionary zoning. 47 Legislative analysis
at the time of the 2011 amendment to the MZEA pointed out this legal issue. 48
The Silva Test
The traditional meaning of mining is “the extraction of solid natural resources from the earth.”49 Further,
the Michigan Mining Association states that it “represents the breadth and depth of Michigan's mining
industry including producers of metals (such as copper), industrial minerals (including borates,
limestone, rare earth elements, clays, gypsum and tungsten), rock, sand, gravel, and salt.”50 Thus the Silva
test, because it specifically refers to extraction “by mining,” would clearly seem to not apply to oil and gas
extraction. The legislative history buttresses this argument, as the first draft of the amendment inserting
the “no very serious consequences” language into the MZEA referred to “natural resources” generally
before specifying “mining” later in the process, more narrowly tailoring the application of the law rather
than including all natural resources. 51 The legislative intent about the Silva amendment to the MZEA was
further clarified during discussion of SB 1076 by lawmakers who said that it was added “to help large
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mine projects in the Upper Peninsula. We never envisioned it being used this way [for oil and gas in
residential areas] and this is certainly not what was intended.”52
However, to err on the side of caution, in the summer of 2014 Shelby Township officials documented
residents’ complaints “in what they believe is a clear demonstration of ‘very serious consequences.’”53
Such precautions are understandable, given that this premise has not yet been tested in court as it applies
to oil and gas, and given potential statutory interpretations in the Michigan courts about what constitutes
mining. In Weaver v. Richards, for example, the court stated that “the words ‘mineral’ or ‘minerals,’
without any qualification, would include both oil and gas, and that therefore a reservation of minerals in
place in the earth would include both gas and oil.” 54 However, minerals are defined by geologists as
being substances that are naturally occurring, inorganic, solid, and possessing definite chemical
composition and an ordered internal structure. 55 Oil and gas, being liquid/gas and organic (i.e., carbonbased), clearly do not meet all such scientific criteria necessary to be classified as minerals. Nonetheless,
this discrepancy between definitions and legal opinion leaves open the possibility that, defined as
minerals, oil and gas could be “mined” under the statute. This discrepancy is problematic and would
benefit from clarification.
Arguments and Solutions
The discussion of SB 1076 and SB 1026 opened the door for much argument over the intention of the
legislation. We at COFBY provided testimony against these bills. Notably, however, bill supporters such
as a citizens’ group from Shelby Township that was a vocal opponent of drilling in their subdivision were
described in a Michigan Chamber of Commerce memorandum as wanting “to use this legislation to
completely ban oil and gas extraction in Michigan.” The Chamber of Commerce also stated that “none of
the people in charge of this at the local level will have any background or experience in this industry as
do the trained regulators.”56 In expressing opposition to these bills, the oil and gas industry raised similar
concerns57 that allowing townships with populations over 70,000 these rights would be the start of
creating a patchwork of regulation around the state rather than maintaining a coherent regulatory system.
Yet the seeming intent of the legislation, and certainly of its supporters in Shelby Township, was not to
ban it outright or to wrest control from MDEQ, but simply to protect their neighborhoods and drinking
water supplies.
What citizens and local units of government throughout the state want is for townships and counties to
have some say over having oil or gas wells crop up within their borders without the control of local units
of government. Given the legislative situation as it now stands, we suggest that townships and counties
could achieve such protection through having control over the surface location both of the wellhead and
of the various facilities attendant to oil and gas development and production, as well as those rights
provided for in statute and in legal opinion (e.g., Addison Twp v. Gout58 ).
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Position and Proposed Recommendations
We therefore propose addressing location in the MZEA to give local control to townships and counties so
that they can determine whether oil and gas exploration and development are compatible with their
master plans and zoning regulations. Although we do not consider them alone to be sufficient, we
additionally propose the creation of required minimum setbacks from sources of drinking water and
surface water that are in line with the DNR leasing setbacks from streams and rivers on state land, given
that water sources should be protected for the safety of residents even in townships that might not choose
to exercise control over the surface location of oil and gas development.
It is reasonable to assume that some townships or counties would not wish to act on oil or gas exploration
development in areas zoned, used, or planned for residential, preservation, outdoor recreation, or other
purposes, just as it is reasonable to assume that other townships or counties would indeed wish to
develop in accordance with master plans that have areas designated for certain purposes and not others.
Allowing townships and counties jurisdiction over surface location in the MZEA would provide a
solution for all townships and counties, regardless of their goals, giving control at the local level to the
unit of government most capable of addressing its own set of unique circumstances.
Crucially, this change would grant local zoning control for only one component of oil and gas exploration
and development, leaving the current statewide regulatory framework wholly intact. Although local
control would create differences among local units of government in terms of where they would locate oil
and gas exploration and development, such differences are consistent with the law as it currently stands
for other industries. To the likely argument that subjecting the oil and gas industry to the same standards
other industries must follow creates a problematic patchwork of regulations, our reply is threefold. First,
such a patchwork is simply a fact of doing business for other industries, as they must all abide by local
ordinances and permits that vary from township to township. There is no reason that the oil and gas
industry would be unable to handle the same requirements that other industries handle as a matter of
course. Second, due to the lawful allowance of oil and gas in areas where other industries are not allowed
to go, neither businesses nor residents are now able to predict future land use by the oil and gas industry
when making decisions about whether to invest in a community, nor are townships able to adequately
plan for protection of areas set aside for outdoor-recreational or preservation purposes. One might argue
that it is these particular parties who are having to deal with a patchwork of unpredictable land use.
Third, the oil and gas industry already is subject to a patchwork of regulations by the DNR on stateowned land. For example, when putting state land up for auction, the DNR designates, by 40-acre parcels,
whether the lease for a given piece of land will permit surface development or not. 59 Such designations
do not appear to have created unacceptable hardship for the oil and gas industry and have not kept it
from being able to utilize DNR lands.
Changing the MZEA to address oil and gas well location as we describe it would also not “send a chilling
message to the energy industry that they are not welcome here” nor demonstrate that “as a state. . . we
want to ban [oil and gas] extraction here,” as others have suggested SB 1026 and 1076 would have done. 60
Instead, allowing townships and counties control over location of oil and gas exploration, development,
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and facilities would do just the opposite. It would establish more certainty in future oil and gas well
locations, as zoning does for other industries. Further, it would demonstrate that state government is
responsive to both its industry and its citizens, business, and local units of government in maintaining the
status quo except for a change in allowing local units of government to determine the best way to manage
their own residential, preserved, and outdoor-recreational areas, and to protect their water quality and
water supplies.
Summary
The issue of oil and gas exploration and development in areas planned, used, or zoned for residential
purposes came to statewide attention in Michigan in the summer of 2014 due to exploratory wells that
were drilled in such areas in Scio and Shelby Townships. Residents very strongly opposed both wells,
citing problems such as noise, air pollution, industrialization of residential areas, and expected decreases
in property values, among others. Other factors of great concern included the location of the former well
near a tributary to the river that supplies most of the City of Ann Arbor’s water supply and near areas of
the township set aside for land preservation, and both wells’ locations near large numbers of residential
water wells.
The deleterious effects of oil and gas exploration and development on the quality of life in areas
surrounding wells and associated infrastructure are well established, as are the risks of contamination
and well-casing failure, which have the potential to affect water supplies. As the oil and gas industry
moves ever closer to areas typified by homes, these effects and risks are amplified due to the number of
people who experience them. We consider these effects and risks to be at an unacceptably high level and
current regulations and statutes to be insufficient for the protection of Michigan residents.
Legislators and officials representing Scio and Shelby Townships have taken the same view, and
legislation was put forth in fall 2014 to begin to address the issue of residential drilling through amending
the MZEA and Part 615 of NREPA. However, it appears that giving townships and counties the same
rights as cities and villages in regulating oil and gas well locations by removing the pertinent restrictions
from the MZEA is not going to be provided by the legislature at this time, and thus a different avenue of
change is needed legislatively. It is our stance that, while clearly many aspects of regulation should
remain under the control of the Supervisor of Wells and MDEQ, location is best handled by local units of
government, and addressing it offers an appropriate solution for the issue at hand. (Such a stance in this
context does not suggest that we believe other reforms for MDEQ OOGM and Part 615 are unnecessary.)
Townships and counties are given power under state law to protect their citizens. It is thus our position
that townships and counties should have the authority to determine, through being given direct control
over the surface location of wellheads and of various facilities attendant to oil and gas development and
production, whether oil and gas exploration and development should occur in specific areas within their
borders. Further, townships and counties are charged with the development of master plans that serve as
blueprints for land use. We believe that local units of government, using their master plans and their
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ordinances, should be allowed to determine for themselves the way in which oil and gas exploration and
development fit into their communities, as they can with other industries.
Pushback against oil and gas exploration and development in areas where there are homes and preserved
areas, and where surface and drinking water are at risk if there were to be contamination, has reached a
point of no return in Michigan. Citizens, local units of government, and legislators are not calling to
replace MDEQ or for a ban on oil and gas; they are calling for reasonable restrictions on the oil and gas
industry so that there is local control and so that designated master plans can be followed. It is now time
to relinquish a regulatory structure that essentially shuts out township and county governments from
adequately protecting their residents and their properties, water quality, and the environment from the
inherent risks of oil and gas operations in their jurisdictions.
Endnotes
1
Michigan Senate Bill No. 1076. Sept. 17, 2014; Michigan Senate Bill No. 1026. Aug. 13, 2014.
2
State of Michigan, Dept. of Environmental Quality. Supervisor of Wells Instruction 1-2015. Oil and Gas
Development in High Population Density Areas.
3
MCL 125.3205.
4
MCL 324.101 et seq.
5
State of Michigan, Dept. of Environmental Quality. Michigan’s Oil and Gas Regulations. Natural Resources and
Environmental Protection Act, No. 451 of the Public Acts of 1994. Part 615 Administrative Rule 324.301 (v), p. 57. Part
615, Administrative Rule 324.301 (v).
6
Michigan Dept. of Environmental Quality, Office of Oil, Gas and Minerals, Application for Permit to Drill, Nino
Homes Well 1-6, July 3, 2014.
7
Michigan Dept. of Environmental Quality, Office of Oil, Gas and Minerals, Application for Permit to Drill, Wing
Well 1-15, April 29, 2014.
8
Scio Township. Park, Recreation, and Open Space master Plan. February 12, 2013.
9
Lucija Muehlenbachs, Elisheba Spiller and Christopher Timmins. The Housing Market Impacts of Shale Gas
Development. Resources for the Future Discussion Paper No. 13-39-REV. January 10, 2014. Social Science Research
Network.
10
Environment/Ecology Technical Report. Hydraulic Fracturing in the State of Michigan. Graham Sustainability
Institute Integrated Assessment Report Series, Vol. II, Report 4. Sept. 3, 2013.
11
State of Michigan, Michigan Dept. of Environmental Quality. Michigan’s Oil and Gas Regulations. Natural
Resources and Environmental Protection Act No. 451 of the Public Acts of 1994. Administrative Rule 324.301 (v), p.
57. Lansing, MI.
12
Michigan Legislature. Natural Resources and Environmental Protection Act (Excerpt). Act 451 of 1994.
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13
Michigan Dept. of Environmental Quality Wellogic System.
14
Sample Oil and Gas Lease. Michigan Department of Natural Resources. By authority of Part 5, Section 502, 1994
Public Acts 451 as amended.
15
City of Ann Arbor, MI. Water Supply and Treatment.
16
Hydraulic Fracturing in the State of Michigan. Environment/Ecology Technical Report. Graham Sustainability
Institute Integrated Assessment Report Series, Vol. II, Report 4. Sept. 3, 2013.
17
National Ground Water Association. Hydraulic Fracturing: Meeting the Nation’s Energy Needs While Protecting
Groundwater Resources. July 21, 2014.
18
Anthony R. Ingraffea. Fluid Migration Mechanisms Due to Faulty Well Design and/or Construction: An Overview
and Recent Experiences in the Pennsylvania Marcellus Play. Physicians, Scientists & Engineers for Healthy Energy.
January 2013.
19
Environment Michigan Research and Policy Center, Dec. 2001, p. 11.
20
Lake Michigan Federation. The Case Against New Great Lakes Oil & Gas Drilling: Michigan Fails to Clean Up Oil
and Gas Pollution. Sept. 2001.
21
Stephen G. Osborn, et al. Methane Contamination of Drinking Water Accompanying Gas-Well Drilling
and Hydraulic Fracturing. Proceedings of the National Academy of Sciences, Vol. 108, No. 20. May 17, 2011.
22
MCL 324.61505a; MCL 324.502(4).
23
Environmental Protection Agency, Great Lakes: Facts and Statistics.
24
National Oceanic and Atmospheric Administration. About Our Great Lakes: Great Lakes Basin Facts.
25
History: Const. 1963, Art. IV, § 51, Eff. Jan. 1, 1964.
26
History: Const. 1963, Art. IV, § 52, Eff. Jan. 1, 1964.
27
MCL 41.181; MCL 125.3201; MCL 125.3203; MCL 125.3504.
28
MCL 333.2433.
29
Jon Szerlag. Greg Peacock, Who Was Seriously Injured in a Natural Gas Explosion Last Week Has Died, Deputy
Director Reports. MLIVE, June 21, 2013.
30
State of Michigan, Dept. of Environmental Quality. Supervisor of Wells Instruction 1-2015. Oil and Gas
Development in High Population Development Areas.
31
McKenzie LM, et al, Human health risk assessment of air emissions from development of unconventional natural
gas resources, Sci Total Environ (2012), doi:10.1016/j.scitotenv.2012.02.018.
32
Peter M. Rabinowitz, et al. Proximity to Natural Gas Wells and Reported Health Status: Results of a Household
Survey in Washington County, Pennsylvania. Environmental Health Perspectives. Vol 123, Issue 1, Jan. 2015.
33
Jenny Deam. Jury Awards Texas Family Nearly $3 Million in Fracking Case. Los Angeles Times. April 23, 2014.
34
Michigan State University Extension, Michigan Citizen Planner Program, 2015.
35
State of Michigan, Dept. of Environmental Quality, Supervisor of Wells, Cause No. 01-2014: The Petition of Paul
Brady and August Jyla, to Contest Spacing Exceptions.
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36
State of Michigan, Dept. of Environmental Quality. Supervisor of Wells Instruction 1-2015. Oil and Gas
Development in High Population Development Areas.
37
State of Michigan, Dept. of Environmental Quality. Supervisor of Wells Instruction 1-2015. Oil and Gas
Development in High Population Development Areas.
38
Bloomberg Business. U.S. Population Density: People per Square Mile.
39
U.S. Census Bureau. Population Change by Decade, 1910-2010. Jan. 31, 2013.
40
U.S. Census Bureau. Population Change by Decade, 1910-2010. Jan. 31, 2013.
41
Nicholas Schroeck & Stephanie Karisny, Hydraulic Fracturing and Water Management in the Great Lakes, 63 CASE
W. RES. L. REV. 1167, 1171 (2013).
42
MCL 125.3205.
43
See Mich. Dept. of Environmental Quality, Hydraulic Fracturing in Michigan 8 (Apr. 2013) (map of drill sites).
44
Detroit Water and Sewerage Dept., DWSD Fact Sheet 1 (2013).
45
Silva v Ada Township, 416 Mich. 153, 330 NW2d 663 (1982).
46
MCL 125.3205.
47
Kyser v Kasson Twp, 486 Mich 514, 786 NW2d 543 (2010).
48
House Fiscal Agency, Legislative Analysis: Natural Resource Extraction by Mining Under Local Zoning
Ordinances, Complete to 7-26-11; Senate Fiscal Agency, Bill Analysis HB 4746 (H-3), 6-22-11.
49
MCL 125.3205.
50
Michigan Mining Association, 2010.
51
In re Certified Question from U.S. Ct. App. for the 6th Cir., 659 N.W.2d 597, 600-02 (Mich. 2003) (finding that
statutory history could not be used because there was no ambiguity); see also Mayor of Lansing v. Mich. PSC, 680
N.W.2d 840, 846-47, rev'd on other grounds (rejecting use of statutory history and explaining ambiguity standard).
121 Id. § 125.3205.
52
Rep. Pete Lund, Michigan News. Oil Well Battle Moves to Suburbs.
53
Michigan News. Oil Well Battle Moves to Suburbs.
54
156 Mich. 320, 324, 120 N.W. 818, 819 (1909).
55
What Are Minerals? Geoscience News and information. Geology.com.
56
Michigan Chamber of Commerce memorandum to Members of the Michigan Senate, Dec. 10, 2014.
57
Michigan Senate Committee on Natural Resources, Environment, and Great Lakes, Dec. 5, 2014.
58
Hammersley, Ross A., and Redman, Kate E. Local Government Regulation of Large-Scale Hydraulic Fracturing
Activities and Uses. Michigan Bar Journal, June 2014.
59
MDNR Procedure 2315.15.
60
Michigan Chamber of Commerce memorandum to Members of the Michigan Senate, Dec. 10, 2014.
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