Shale Daily / NGI All News Access

Michigan Issues New Hydrofrack Rules

Michigan regulators on Wednesday announced a new series of regulations that will impact the future operations of oil and gas drillers using hydraulic fracturing (hydrofracking) to stimulate production.

According to the Michigan Department of Environmental Quality (DEQ), the "permitting instructions" will "increase public disclosure and better protect public health and the state's natural resources."

DEQ said Michigan's drilling operators have used hydrofracking on nearly 12,000 wells around the state since the 1960s "without any instance of environmental harm from the fracturing process." The environmental safety record, said regulators, "is attributable in large part to the state's tight standards for well construction and water disposal."

The instructions, which will be administered by the state's supervisor of wells, cover water use oversight; reporting and hydrofracking records. Under the rules operators will be required to document where they plan to obtain the fresh water used in hydrofracking using the DEQ's water withdrawal tool to ensure that neither surface water nor any neighboring water wells are impacted. They also are required to report the total volume of water recovered during hydrofrack operations.

Material safety data sheets (MSDS) will be required to be disclosed to state officials and will be posted on the DEQ website for public review. An MSDS under federal law is required to be posted in certain workplaces for every chemical used or stored; the sheets list the characteristics of the chemical additives and their potential health and environmental effects.

In addition, operators now will be required to submit their service company hydrofracking records and associated charts showing fracking volumes, rates and pressures.

"In recent congressional hearings, Michigan has been lauded as a regulatory model for responsible production of gas and oil reserves," the DEQ said. The announcement "is part of the state's effort to further ensure environmental protection and public transparency."

The instruction documents are available at www.michigan.gov/deq.

Although the drilling pace is not as fast as in some of the other onshore unconventional plays, Michigan's Collingwood, Antrim and Utica shales have piqued the interest of several high-profile producers, including Encana Corp. (see Daily GPI, May 10, 2010) and Linn Energy LLC (see Daily GPI, March 24, 2010). Chevron Corp. gained close to 370,000 net acres in the state in the Antrim (270,000) and Collingwood/Utica play (100,000) after buying Atlas Energy Inc. last year (see Daily GPI, Nov. 10, 2010).

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