Several Michigan citizens and the group Ban Michigan Fracking questioned the Department of Environmental Quality (DEQ) about its definition of “injection well” in Mich. Admin. Code , R. 324.102(x), urging that the definition should include wells completed with hydraulic fracturing (“frack wells”).
The DEQ responded by stating that “a frack well is not an injection well under Rule 324.102(x) because a frack well injects fluids for the ‘initial stimulation’ of oil and gas, whereas Rule 324.102(x) limits injection wells to wells that are used for disposal, storage, or secondary recovery of oil and gas.”
The citizens and Ban Michigan Fracking then filed a declaratory judgment action, requesting that the definition of injection well include a frack well, thus making the regulations relating to injection wells applicable to frack wells.
On February 11, 2014, the Michigan Court of Appeals sided with the DEQ, stating that under the plain language of the rule, an “injection well is either a well used to dispose of…waste fluids or a well used to inject…fluids for the purpose of increasing the ultimate recovery of hydrocarbons from a reservoir or for the storage of hydrocarbons.”
According to the court, for a well to be categorized as an “injection well,” it must be used for the purposes of recovering hydrocarbons before and after the injection of fluid.
The court continued:
“…it is undisputed that the frack wells at issue are not used for the purpose of recovering hydrocarbons before the injection of fluid… [B]ecause a newly constructed frack well does not involve the continuing recovery of hydrocarbons, but rather the initial recovery of hydrocarbons when such recovery was nonexistent, the wells at issue here to not fall within the scope of the unambiguous language of Rule 324.102(x).
On March 3, 2014, a motion for reconsideration was filed, asking the court to resolve a separate part
of the appeal which the opinion overlooked. The appellants indicate that
the court’s opinion did not adjudicate the “contention that a frack well is
used to dispose of waste fluids.”
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.
