City answers concerns about oil and gas drilling

By: Linda Shepard | Rochester Post | Published January 22, 2014

ROCHESTER HILLS — After listening to almost a dozen residents opposed to gas and oil drilling in the city, city officials said their hands are tied when it comes to individual property owner rights.

Jordan Development Company, which owns West Bay Exploration Company, has contacted city officials and residents, seeking approved leases for exploration drilling and permission to extract gas or oil. If gas or oil is found and extracted, property owners are paid a royalty.

Many of the residents who spoke to the Rochester Hills City Council Dec. 13 opposed the use of fracking, where fractures below the earth’s surface are opened and widened by injecting chemicals and liquids at high pressure. Some environmentalists link high-volume hydraulic fracturing to the contamination of ground water and risks to air quality.

In addition, “many homeowners are being deceived by strong arm and presumable compliance sales tactics that the oil company is employing to tell the people that they will lose rights/compensation if they do not join voluntarily,” said city resident Mike Gruber in an email.

Other residents said their property values could fall if gas and oil drilling is done in the city, and they asked for a city ordinance prohibiting gas and oil drilling.

According to the terms of the lease agreements with Jordan, “There would be no high-volume fracturing,” said City Council President Greg Hooper. “So this shouldn’t be an issue. There are high-volume and low-volume fracking procedures. There is no fracking allowed in Rochester Hills.

“As far as private property owners in the city signing leases, we are not a part of that,” Hooper said. “It is a private party transaction.”

Hooper addressed the issue of home values.

“Anytime something occurs and people are against it, the first thing they raise is that it is going to affect home values,” he said. “It is an issue that can’t be proven or disproven one way or another. The seven of us all live here in the city. We all have a vested interest in maintaining our home values, as well. In my opinion, it doesn’t affect our home values.”

According to Council member Mark Tisdale, currently more than 400 city residents have signed leases for gas and oil drilling.

“All the residents that have signed a lease (have) nondevelopmental leases, meaning there are no surface activities,” he said. “The population of the city puts us into a category where no drilling site or wellhead can be any closer than 450 feet to an existing structure. You’ve got 1 1/2 football fields between a drilling site and the nearest home.”

Council member Adam Kochenderfer said a city ordinance would be ineffective. 

“The bottom line is, if we terminated the lease agreement and pass an ordinance, none of that would prohibit Jordan Oil from drilling for oil in Rochester Hills,” Kochenderfer said. “State law is trumping us, and we can’t stop it. Some cities have written ordinances, but the problem is, they are unenforceable. That is the reality. In some situations, if a property owner does not sign a lease, they can still drill under your house. Our hands are a little tied.”

Rochester Hills Mayor Bryan Barnett said the city has no authority to prohibit gas and oil drilling on private property, and an ordinance forbidding it could do more harm than good.

“In other cities, from what we understand, those ordinances are not enforceable,” he said. “One of the cities had a lawsuit over the ordinance and the city had to pay $800,000 in the settlement because the ordinance, was found to be not compliant with state law.

“The limitations of the mayor and the city council are pretty concrete, as we have been advised,” Barnett said. “We all live in this area and are happy to continue the discussion. We know that when it is a matter of your home, it matters a lot.”

According to the Michigan Department of Environmental Quality, permits have been issued for more than 60,000 oil and gas wells in the state.

“Michigan is quite well-known for its oil and gas production,” said Ben Brower, vice president of Jordan Management Company, based in Traverse City. “We are 17th out of 33 for oil, and 10th for gas (in the country).”