The DEQ's current regulatory framework for permitting and overseeing oil and gas development allows wells, pipelines and processing facilities containing dangerous levels of H2S without any assessment of the health risk.

The DEQ has no exposure limits for citizens, and no defined procedure for assessing health and safety risk. Emergency preparedness plans do not adequately protect the public.

Moreover, the piecemeal approach to overseeing oil and gas operations, with separate agencies overseeing different aspects of the development, makes for a disjointed, ineffective regulatory system that has the potential for even larger accidents. The many documented H2S incidents in and around Manistee County, and the potential for larger accidents, have shown that this regulatory framework presents an unacceptable risk to citizens.

Permitting Wells, Pipelines, Facilities Handling H₂S

For wells containing H2S concentrations of 300 ppm or more the Administrative Rules under part 615 of P.A. 451 require a blanket setback of 300 feet from public areas, highways, and structures used for public or private occupancy. The rules require a 600-foot buffer for H2S processing facilities.

In 1976 a state task force, made up of regulators and industry representatives, recognized the serious health risks of H2S and recommended that the setback distance increase to 1,400 feet from nearest residence or public area. The task force recommendations were not, however, incorporated into the rules.

This threshold of 300 ppm is not based on an evaluation of site specific risk assessment. The 300 and 600-foot setbacks are based on a generic mathematical formula that incorporates a radius of exposure of 100 ppm. These concentrations far exceed the recommended public exposure limits for H2S.

The occupational H2S exposure limit for a healthy 160 pound male is a concentration of 10 ppm over a normal 8-hour work period. Considering that a diverse population can range from newborn infants to senior citizens with serious ailments, the Michigan Department of Community Health recommends a public H2S exposure limit of 0.01 ppm.

Independent safety studies conducted on wells and pipelines in Manistee County show that well, pipeline and facility leaks would result in an H2S exposure much higher than the occupational limit of 10 ppm. That level is a clear danger to a diverse population and greatly exceeds the Health Department's recommended public exposure limit. Risk assessment experts have told us that other states, such as California and Texas, have established recommended exposure limits below 0.1 ppm.

Recommendation:

To ensure the safety of residents a regulatory structure must be developed that is based on exposure limits. Mere setbacks that do not incorporate a thorough safety analysis for the maximum credible gas leak scenarios will not protect public health and safety in the event of a release.

Emergency Procedures

Current rules require a contingency plan for all wells and facilities containing H2S concentrations of 300 ppm or more. The contingency plan must contain general procedures to be followed in the event of a release, a map of the areas, and a list of contacts in the event of an emergency. The rules do not require a oil and gas operator to provide surrounding residents and workers with procedures for emergency evacuation. There is no community notification procedure. There is no consideration of evacuation routes for residents, and there is no required training process for local emergency preparedness personnel and local hospitals.

If a release occurred in a populated area this type of plan would be almost useless. Residents would not be notified in a timely manner, they would not know what to do, and local emergency personnel would not be able to respond appropriately.

Recommendation:

The requirements for these plans must be completely overhauled and a new set of risk-based criteria established.

Disjointed Jurisdictions

Michigan's oversight of H2S oil and gas operations is a confusion of separate agencies regulating differing aspects of oilfield operations:

* The DEQ's Geological Survey Division regulates wells, some pipelines, and processing facilities.

* The Michigan Public Service Commission holds the regulatory responsibility for gathering and transmission lines.

* The DEQ's Air Quality Division maintains oversight of air emissions from processing facilities.

* The Michigan Department of Community Health establishes and oversees the health exposure criteria.

* Local governments create and enforce local land use ordinances and have the obligation to protect the health and safety of residents.

* This multi-jurisdictional regulatory structure creates conflicts because no single agency is responsible for ensuring that the development of wells and facilities containing dangerous levels of H2S occurs in a safe and orderly manner:

* The Geological Survey Division does not follow the exposure limits set by the Health Department.

* Neither agency coordinates their permitting process with the MPSC.

* Even within the Geological Survey Division, permits are granted for wells without consideration of the pipeline routes and locations of processing facilities.

Recommendation:

In order to establish an effective system for managing oil and gas operations, and to protect the health and safety of citizens, there has to be consistency and uniformity among the agencies. An interagency commission should immediately be formed to develop a coordinated oversight framework for oil and gas development. Health and safety standards must assume that public exposures to H2S do not exceed credible limits set by public health professionals. The public should be invited to participate on the commission.