By BETH ALTENA
Rich Collins from Trendwell Energy has been following the news about the safety of hydraulic fracturing nationwide in the Rockford Squire, located in Rockford just like Trendwell itself. He called the Squire because he thought residents and those interested in oil and gas development in Kent County might appreciate hearing from a local representative in the industry. He had a lot to say that may surprise our readers.
“Trendwell doesn’t have a dog in this fight, we were not bidding on any of the leases in the October 24, 2012 sale,” said Collins. He is referring to the sale of oil and gas leasing rights on state owned land in Kent County, including along the White Pine Trail, the Cannonsburg State Game Area and the Rogue River Conservation District.
The announcement of the leasing rights sale last summer alarmed some local resident conservation organizations, and nationwide there has been controversy over the safety of current gas and oil drilling practices, including the drilling of horizontal wells and hydraulic fracturing, which is the process of injecting a mixture of water and chemicals into shale formations to break up pockets of gas and oil trapped within.
A conversation with Brad Wurful of the Michigan Department of Environmental Quality was reported in the Squire. Wurful stated that he believes the recent negative uproar is the result technologies that allow access to our state’s (and country’s) ample supply of gas and oil. The result of using new technologies will effectively set back investment in non-renewable energy supplies by ten to fifteen years, Wurful described.
Collins said the information in the articles published in the Squire so far is all good, but there is much more to the picture of oil and gas development. “These sales are not new, they have been going on for 60-plus years,” said Collins. “People here are just hearing about it because it is happening in Kent County now.”
He said that there is always the possibility that properties up for sale will go no bid entirely, as some properties are nominated by energy companies and others by the State of Michigan. He said, in fact, energy companies acquire leases before they can bring in science teams, and in cases where leasing rights are sold, drilling may still never take place if insufficient oil and gas are discovered.
Potential drilling areas, called “prospects” in the industry, are addressed by a team of scientists—geologists, engineers, geophysicists—who attempt to determine the availability of gas and oil below. Whether or not to drill can be very scientifically determined, using seismic imaging equipment, by hunch, or in some cases Collins has heard of, by means as low-tech as the use of divining rods.
Seismic imaging allows the team to shoot sound waves underground, which return and provide an image, allowing the tracking of hydrocarbons (gas and oil). “More often than not, eighty to ninety percent of the leases never get drilled,” Collins said. “You have to get your lease before you can do your science.”
Collins showed a map of the State of Michigan downloaded from the Department of Natural Resources website that shows all the wells drilled in the state, including twenty or so along the Rogue River in downtown Rockford. He said the site of the closed wells are undetectable to any observer, as the well heads are capped and sealed well below ground and covered back over with soil. Many of the icons for wells on the map were white circles, indicating a well where no gas or oil was found—a “dry hole.”
Collins addressed one of the most often cited controversies of hydraulic fracturing, which is the identity of the chemical used in the process. He said detractors of the process use alarming words like “biocide” to describe the chemical mix. He said the ingredients could be as easily described as included in common products with which we all are familiar—dishwasher soap, Heinz catsup, bleach and ice cream. “Obviously I’m not going to take a glass of Clorox bleach and drink it, but used appropriately in a closed system, it is a wonderful tool.”
A main point that Collins said frustrates those in the industry is that the practice of hydraulic fracturing has been studied on both national and states levels, including to the satisfaction of the Environmental Protection Agency. He said he appreciates those who argue for caution and wait for federal testing studies on hydraulic fracturing, but in reality no industry could sustain the long wait of an active, ongoing study. “Could Wolverine just wait and not sell shoes for three years? Could the Squire not sell ads for three years?” he asked.
Additionally, the industry is already working under strict laws protecting natural resources, such as water. He said, in fact, deeper drilling is safer than shallow drilling because most water tables are closer to the surface. Deep wells go through 5000 to 7000 feet of rock, and drilling pipes are extremely strong, built of layers of cement and steel.
“We take our responsibility seriously,” said Collins. “It doesn’t behoove us to contaminate anyone’s well. We live where we do business and any contamination would shut us right down.”
Collins said a lot of controversy began after the creation of the movie Gasland, where residents’ wells all tested positive for methane gas after drilling took place in the community. He said responsible energy companies test wells first because methane is a commonly occurring substance. This myth of drilling-caused methane in residents’ wells is among many that are debunked as they come up.
In addition to being an advocate in defense of his industry, Collins is an advocate of the advantages to residents of the presence of companies like his. In Michigan the oil and gas industry provides 10,000 jobs and $80 million annually in royalty checks to residents, who not only receive payment for the leases, but a percentage of the value of oil and gas that is recovered through wells on their property.
“Nationally it is stunning what’s happening because of the ability to drill horizontally and frack. It has led to this growth—this really serious growth—within the last five years.” In Michigan the industry also contributes $40 million a year in oil and gas severance tax. Since 1927 this tax has contributed nearly a billion dollars in revenue for the state.
A fun fact—where does the money go? Collins pointed out that the funds are dedicated to the Michigan Natural Resources Trust Fund (MNRTF), with almost $25 million distributed over the years to Kent County. Unlike funds that collect fishing license or hunting license revenue, the MNRTF is one hundred percent made up of oil and gas tax money.
“You always hear the negatives of this industry, but it is an industry that creates jobs and money that come back to the community in a cool way,” Collins said. He also noted that emissions from compressed gas are “incredibly cleaner” than other common fuel sources. He also said there are huge implications of the United States producing our own energy rather than hauling it in from Saudi Arabia and other Middle East sources.
Collins was also blunt about realities of the industry. He said of drilling sites, “It’s not pristine, it is a construction site.” He said wells last anywhere from a couple of years to up to 40 or 50 years. Leases are usually in five-year increments. He said there are wells up north that have been working since the mid 1980s, even since the 30s and 40s.
Any visual remnant of drilling is not permanent, however, and drivers who head up M32 to Gaylord and Alpena won’t know from looking that there are 10,000 wells up there, Collins said. He also explained that the actual drilling of the well is quick, usually taking seven to 14 days. In his experience, people want the energy companies to make an offer and he said 90-percent plus people sign.
“If what we were doing is so bad, why would a thousand people say yes to a lease. It’s short term, it’s temporary. It’s like looking at a house. You don’t buy it when they are excavating the basement, you look at it when it is all done.” He also pointed out that everyone uses energy. It’s how we heat our homes, how we run our computers, how we get to meetings.
He said the implications of the current oil and gas boom are important for our state’s future, and currently he is excited to be hearing conversations about the United States becoming energy independent. He said the talk he is hearing is that the U.S. could actually be self-sufficient for energy by 2020 or 2025, especially if the gas and oil resources are complimented by other sources, such as renewables like solar and wind. “That is a really cool debate to be in.”
Residents are already benefiting financially from more retrievable gas and oil and Collins said anyone who compares this winter’s heating bill to that in 2008 will likely realize their cost is lowered by half, if not more, of the earlier rate. “People are saving hundreds, if not thousands of dollars.”
In Kent County, since oil was discovered here in 1938, 484 holes have been drilled and the county has produced 18,996,047 barrels of oil and 5,360 billion cubic feet of natural gas. This ranks Kent County as 21st and 45th in production of each among the state’s counties. Since 1976 the county has received MNRTF grants totaling $24,387,753.
Cannon Township has received $500,000 in grants from the MNRTF, Cedar Springs built the Fred Meijer White Pine Trail Staging Area with a $100,000 MNRTF grant. Grattan Township has received $30,000 for the Satterlee Park acquisition and $48,100 for the Sealy Creek Park Expansion. A Pickerel Lake trail addition was funded with $240,500 from MNRTF, Alpine Township’s Wahfield Park was developed with a $236,500 MNRTF grant. Pickerel Lake Park property was acquired with a MNRTF grant of $1,110,000 and $490,000.
Finally, here in Rockford, the Rogue River Park Redevelopment was funded with MNRTF grants of $482,796 and the Rogue River Trail network projects received three development grants of $118,200, $222,700 and $86,500. Riverfront property for the trail development was purchased with acquisition grants from the MNRTF of $20,000 and the riverfront overlook on the trail was built with a development grant from the MNRTF for $92,554.