Published December 16, 2013
Shelby Township grants lease to oil and gas company
By Sarah Wojcik email@example.com
SHELBY TOWNSHIP — In a 6-1 vote Dec. 3, the Shelby Township Board of Trustees approved a lease with a Traverse City-based oil and gas company that included a special clause in the agreement: no fracking.
The agreement allows West Bay Exploration Company to use geophysical methods to locate oil reserves, drill and produce gas and oil for the next five years on 48 acres of township-owned land — the Department of Public Works, Fire Station No. 1 and near the Ford/Visteon property — for $7,344 total. The township would receive royalties for any gas and oil produced.
West Bay’s vice president, Patrick Gibson, estimated the company might drill two wells, based on seismic testing conducted during the last two summers. Upon finding oil and gas, they would transport the products to a facility for separation, treatment and storage in an industrial or commercial area yet to be determined.
Gibson said the company follows a reef that was part of an ancient sea about 400 million years ago, which covered Michigan and some of Canada. He said the reef contains oil, but he is not sure how it got there.
“One theory is that marine plants and animals, primarily microscopic, died in ancient seas, the material fell to the bottom of the ocean and was covered by sediments, and then pressure changed the material into oil and gas,” Gibson said.
Most of the oil escaped to the surface, he said, but some confining beds of impermeable rock did not allow some oil to move to the surface, and that is what West Bay’s seismic trucks would check.
He explained that the trucks send vibrations into the earth, which are picked up by microphones that resemble tent stakes.
“Our brilliant geophysicist is able to take those squiggles and lines and convert them into a 3-D map of the subsurface,” he said.
In order to comply with the Michigan well casing program, which Gibson said is one of the most stringent in the country, West Bay uses fresh water, salt water brine and natural bentonite clay to insert five concentric strings of steel casing and cement into the earth 100 feet below the fresh water aquifer — up to 1,100 feet into the earth.
The casing seals off the fresh water aquifer and ensures that whatever they encounter — gas, water or saltwater — cannot come back up into the hole and contaminate the groundwater, Gibson said.
He said the rock in the reef layer is already naturally fractured and broken up with porous areas full of oil and gas, like a jar of marbles, and once the drill head penetrates it, the pressure from the earth sends the oil and gas flowing to the surface.
“If we were to use hydraulic fracturing in these types of reservoirs, it would probably damage it,” Gibson said, adding that “fracking” is not a term used in the industry but refers to “hydraulic fracturing.”
So far, he said 200 lot owners in Shelby Township have consented to the company scouting and drilling on their properties. They dug wells near the Post Office at 22 Mile Road and Van Dyke Avenue, and near Eisenhower High School. He said they plugged the last well in Shelby in June or July.
“I did not hear many good things about (the Eisenhower well). You left a mess behind you,” Clerk Stanley Grot said. “I, for one, am not going to support this because I believe the right belongs to the people, and I’m not here for the leasing business.”
John Holton, a Shelby resident, said he witnessed thumper trucks and test equipment along Jackson Road a year ago and, when he called, neither the township nor the county knew which company it was. He was also wary of the use of toxic chemicals potentially associated with fracking, groundwater contamination and oversight.
Gibson said the Michigan Department of Environmental Quality oversees the operation and that a field person is assigned to the district in southeast Michigan and will be on site every day while drilling occurs.
“All of our reporting is mandatory and available on the website. We will test water at the site before we drill and do incremental testing of the water,” he said. “We’re legally bound to do it and provide the township with the results of the well.”
Supervisor Rick Stathakis questioned how much revenue could be gained for the township.
Gibson said it depends on how much oil the well produces per day, the price of oil and the size of the unit the oil is produced from, but that royalty owner Kensington Metropark received $1,300 for three wells, and two royalty owners received just shy of $10 million each for the 80-acre site across from Delphi in Troy.
Gibson said Macomb County ranks 48 out of 64 counties in Michigan for oil production and 35 in gas, with 1 million barrels of oil and 18 billion cubic feet of natural gas produced so far — mostly, he said, by West Bay.
For more information about West Bay Exploration Company or maps of drilling units by county, visit www.westbayexploration.com.