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Fracturing in Michigan

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About this Report This

About this Report This report is part of the Hydraulic Fracturing in Michigan Integrated Assessment (IA) which has been underway since 2012. The guiding question of the IA is, “What are the best environmental, economic, social, and technological approaches for managing hydraulic fracturing in the State of Michigan?” The purpose of the IA is to present information that: • expands and clarifies the scope of policy options, and • allows a wide range of decision makers to make choices based on their preferences and values. As a result, the IA does not advocate for recommended courses of action. Rather, it presents information about the likely strengths, weaknesses, and outcomes of various options to support informed decision making. The project’s first phase involved the preparation of technical reports on key topics related to hydraulic fracturing in Michigan which were released by the University of Michigan’s Graham Sustainability Institute in September 2013. This document is the final report for the IA. The IA report has been informed by the technical reports, input from an Advisory Committee with representatives from corporate, governmental, and non-governmental organizations, a peer review panel, and numerous public comments received throughout this process. However, the report does not necessarily reflect the views of the Advisory Committee or any other group which has provided input. As with preparation of the technical reports, all decisions regarding content of project analyses and reports have been determined by the IA Report and Integration Teams. While the IA has attempted to provide a comprehensive review of the current status and trends of high volume hydraulic fracturing (HVHF), specifically, in Michigan (the technical reports) and an analysis of policy options (this report) there are certain limitations which must be recognized: • The assessment does not and was not intended to provide a quantitative assessment (human health or environmental) of the potential risks associated with HVHF. Completing such assessments is currently a key point of national discussion related to HVHF despite the challenges of uncertainty and limited available data–particularly baseline data. • The assessment does not provide an economic analysis or a cost-benefit analysis of the presented policy options. While economic strengths and/ or weaknesses were identified for many of the options, these should not be viewed as full economic analyses. Additional study would be needed to fully assess the economic impact of various policy actions, including no change of current policy. PARTICIPATING UNIVERSITY OF MICHIGAN UNITS Graham Sustainability Institute Energy Institute Erb Institute for Global Sustainable Enterprise Risk Science Center For more information on this project, please go to: http://graham.umich.edu/knowledge/ia/hydraulic-fracturing You may also contact John Callewaert, Graham Sustainability Institute Integrated Assessment Center Director, (734) 615-3752 or jcallew@umich.edu. GRAPHIC DESIGN BY SUSAN E. THOMPSON DESIGN ILLUSTRATIONS BY JACK CURRY, MARLI DU PLESSIS, ZLATKO NAJDENOVSKI, STEFANIA SERVIDIO, AND SUSAN THOMPSON

HIGH VOLUME HYDRAULIC FRACTURING IN MICHIGAN INTEGRATED ASSESSMENT FINAL REPORT SEPTEMBER 2015 Table of Contents List of Tables, Figures, and Boxes . . . . . . . . . . . . . . . . . . . . . . . ii List of Acronyms/Abbreviations. . . . . . . . . . . . . . . . . . . . . . . iii Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 List of Policy Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 CHAPTER 1: INTRODUCTION 18 1.1 Purpose and Scope . . . . . . . . . . . . . . . . . . . . . . . . . . 19 1.2 Overview of Activity in Michigan . . . . . . . . . . . . . . . . . . 20 1.3 Structure of the Report . . . . . . . . . . . . . . . . . . . . . . . 21 1.4 Technical Report Summaries. . . . . . . . . . . . . . . . . . . . . 22 1.5 Integrated Assessment Process. . . . . . . . . . . . . . . . . . . 26 CHAPTER 2: PUBLIC PARTICIPATION . . . . . . . . . . 30 2.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 2.2 Incorporating Public Values in HVHF-Related Policies and Decision Making . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 2.3 Public Input in State Mineral Rights Leasing . . . . . . . . . . . . 39 2.4 Public Participation and Well Permitting . . . . . . . . . . . . . . 43 2.5 Summary of Options for Improving Public Participation . . . . . . 47 CHAPTER 3: WATER RESOURCES . . . . . . . . . . . . . 54 3.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 3.2 Regulating HVHF through Water Withdrawal Regulation . . . . . 59 3.3 Wastewater Management and Water Quality . . . . . . . . . . . 74 CHAPTER 4: CHEMICAL USE . . . . . . . . . . . . . . . . .84 4.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 4.2 Information Policy . . . . . . . . . . . . . . . . . . . . . . . . . . 86 4.3 Prescriptive Policy . . . . . . . . . . . . . . . . . . . . . . . . . . 95 4.4 Response Policy . . . . . . . . . . . . . . . . . . . . . . . . . . .101 CHAPTER 5: POLICY FRAMING ANALYSIS . . . . . 114 5.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 5.2 Adaptive Policies . . . . . . . . . . . . . . . . . . . . . . . . . . 115 5.3 Precautionary Policies . . . . . . . . . . . . . . . . . . . . . . . 116 5.4 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 CHAPTER 6: LIMITATIONS AND KNOWLEDGE GAPS. . . . . . . . . . . . . . . . . . . . . . . . .118 6.1 Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 6.2 Knowledge Gaps . . . . . . . . . . . . . . . . . . . . . . . . . . 119 APPENDIX A: GLOSSARY . . . . . . . . . . . . . . . . . . . 122 APPENDIX B: BROADER CONTEXT . . . . . . . . . . . 126 B.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 B.2 Climate Change: What are the Effects of Natural Gas Production and Fugitive Methane Emissions? . . . . . . . . . . 127 B.3 Renewable Energy: Will Natural Gas Be a Bridge to a Cleaner Energy Future?. . . . . . . . . . . . . . . . . . . . . . . 129 B.4 Manufacturing: Will Natural Gas Development Revitalize Domestic Manufacturing? . . . . . . . . . . . . . . . . . . . . . 130 B.5 Exports: What are the Implications of Natural Gas Exports? . . 132 B.6 Human Health Risks: How Do We Know If Shale Gas Development is “Safe”? . . . . . . . . . . . . . . . . . . . . . . 133 B.7 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134 APPENDIX C: ADDITIONAL ISSUES. . . . . . . . . . . 144 C.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 C.2 Environmental Impacts. . . . . . . . . . . . . . . . . . . . . . . 145 C.3 Air Quality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 C.4 Landowner and Community Impacts . . . . . . . . . . . . . . . 147 C.5 Agency Capacity and Financing . . . . . . . . . . . . . . . . . . 151 APPENDIX D: REVIEW PROCESS . . . . . . . . . . . . . 158 D.1 Review Panel Summary Report . . . . . . . . . . . . . . . . . . 159 D.2 Response to the Review Panel Summary . . . . . . . . . . . . . 161 D.3 Review Panel Individual Review Form. . . . . . . . . . . . . . . 162 APPENDIX E: PUBLIC COMMENT SUMMARY AND RESPONSE . . . . . . . . . . . . . . . . . . . . . . . . . . 164 U-M GRAHAM SUSTAINABILITY INSTITUTE

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    2.4.3.4: EXPLICITLY ALLOW ADVERSELY

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    37 N.M. Code R. §§ 19.15.14.1-11.

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    112 Mich. Dep’t. Natural Res., Po

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    Shaw Lacy LEAD AUTHOR Meredith Cote

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    TABLE 3.2: RELATIVE WATER USE RATES

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    Box 3.2 Why use the WWAT if it wasn

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    and Zone C conditions. Finally, the

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    gpm and 70 gpm and given that a min

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    3.2.3 Improvements to the WWAT The

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    into and out of the basin, as well

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    3.2.6.2.1: KEEP EXISTING MICHIGAN P

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    3.2.7.1.2: REQUIRE SITE-SPECIFIC RE

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    3.2.8.2.3: INCENTIVIZE THE ORGANIZA

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    3.3.4 Michigan laws In Michigan, th

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    3.3.6.3.1: KEEP EXISTING MICHIGAN P

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    have caused groundwater contaminati

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    73 Delaware River Basin Commission,

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    160 U.S. Government Accountability

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    Sara Gosman, Ryan Lewis, Diana Bowm

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    TABLE 4.3: POLICY CHARACTERISTICS O

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    TABLE 4.4: SUMMARY OF INFORMATION P

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    4.2.4.1: OPTION A: INFORMATION POLI

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    Information on chemical use Option

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    equirements, and result in signific

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    of the DEQ issued a letter directin

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    4.3.4.2: OPTION B: PRESCRIPTIVE POL

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    feet from freshwater wells that hav

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    TABLE 4.6: SUMMARY OF PLANNING, RES

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    4.4.4.2: OPTION B: RESPONSE POLICY

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    or environmental risks, and protect

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    55 See Ark. Code R. § 178.00.1-B-1

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    149 Harold R. Fitch, Chief, Office

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    John Callewaert, Maggie Allan, Dan

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    engage once specific, anticipated c

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    Chapter 6 6.1 LIMITATIONS While thi

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    ENDNOTES 1 Jackson RB, Vengosh A, C

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    Appendix A Note: Uncited definition

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    UNDERGROUND INJECTION CONTROL PROGR

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    Daniel Mitler, Maggie Allan, John C

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    separately) and top-down approaches

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    manufacturing industries are expect

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    economy, equating it to just six ho

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    20 Environmental Defense Fund. Co-P

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    88 Weber CL, Clavin C. Life Cycle C

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    159 Barteau M, Kota S, Mast A, Mitl

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    227 Sarica K, Tyner WE. Economic an

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    Daniel Mitler, Maggie Allan, John C

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    exposure to the widest variety of a

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    TABLE C.3: LANDOWNER AND COMMUNITY

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    Michigan also has several state law

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    ENDNOTES 1 Oil & Natural Gas Overvi

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    75 Solomon D, Schindler KH. Can loc

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    Appendix D D.1 REVIEW PANEL SUMMARY

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    a quick understanding of tradeoffs,

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    extraction technique, with an empha

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    Appendix E Stakeholder input is an

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    © REGENTS OF THE UNIVERSITY OF MIC

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