A party undertaking a remediation can now make a formal request for a “Certificate of Completion” to the MDEQ. The applicant would complete a form, which is to be prepared by the MDEQ and will be made available on the MDEQ’s website. The MDEQ can either grant the Certificate, deny the request, or notify the submitter that there is insufficient information on which the Department can make a decision. The Department shall specify what information is missing and is necessary for a decision. In the event of a denial, the Department is to provide specificity as to the reasons for the denial.

The amendments set forth an initial review period by the MDEQ of 150 days upon receipt of the form. There is only a 90 day review period in the event the submitter is requesting the Certificate of Completion after completing an MDNR approved remedy remedial action. In the event the Department fails to provide notice within the review time periods provided, a response activity is considered approved.

In the event there is a denial by the Department of a request for a Certificate of Completion, the amendments provide the submitter with opportunities to pursue an appeal of the MDNR’s decision to the Response Activity Review Panel. The submitter would file a petition appealing the decision to the MDEQ Director and pay a fee of $3,500.

In the December 2010 amendments to Part 201, the process for issuing a No Further Action Letter (NFA) was first developed. The NFA Letter has been only granted in a few occasions, and has generally been reserved for small clean-ups achieving residential criteria. This was not consistent with the intended purpose of the NFA review process, and the MDEQ has, at least informally, suggested it is more open now to the evaluation of No Further Action Reports upon completion of more remedial action projects.

By contrast, the NFA review process is much more complex than the request for a Certificate of Completion. If a party is concerned about the administrative costs associated with pursuing an NFA Letter, the Certificate of Completion does provide a much needed acknowledgement from MDEQ and a defined “end point” for parties undertaking clean-up.

The recent amendments to the provisions associated with the NFA request is a clarification that a party can pursue an NFA letter for a specific portion of a whole site, or specific media or exposure pathway. While many believe that the NFA provisions as originally drafted did allow for such limited requests, it took these amendments to make that clarification.

The post Is It Clean? – Michigan Certificates of Completion and No Further Action Letters appeared first on Dawda PLC.

Although the agencies tried to make it a general discussion on oil and gas, the presentation and most of the questions from the audience focused on the controversial topic of fracking….and it was clear the local police and the agencies were prepared for potential trouble as there were six conservation officers and three police cruisers in the parking lot. (A clear difference from other DNR/DEQ presentations I’ve attended in the past!) Despite the controversial topic, decorum was maintained and there were no disturbances.

The issue of fracking has been getting a lot of press recently but companies have been doing it in Michigan in a lesser but somewhat comparable form since 1952. Since that time more than 10,000 fracking wells have been installed in Michigan, mostly in a geological formation called the “Antrim Shale.” Since 1925 a total of 60,000 oil and gas wells have been drilled; of those 4,500 have been for oil, 11,000 have been for gas and 3,000 have been for gas storage.

About 80% of the wells drilled in Michigan (and the U.S.) recently have been fracking wells and the natural (methane) gas produced from those wells have caused the price of natural gas to plummet in the U.S. to $2 per million British thermal units (compared to $10 in the U.K.) According to some analysts (as noted in this recent Washington Post article), this gas boom is fueling a revival in American manufacturing – something we desperately need in this country.

Naturally, this flush of inexpensive gas doesn’t come without weighty public policy issues, and the issues the attendees focused on during last night’s forum are the same being raised elsewhere in the country: contamination of groundwater aquifers and depletion of fresh groundwater.

According to the DEQ, vertical fracking wells use between 50,000 to 100,000 gallons while some horizontal wells (like most of the current wells) can use up to 20 million gallons of water. In comparison, total water withdrawals in Michigan in 2010 amounted to 267 billion gallons. (However, the DEQ admitted that most of the later amount returns to the environment while the millions of gallons of water used in fracking are permanently removed from and never return to the watershed due to the contaminants in it.) Although groundwater used for oil and gas production are exempt from Michigan’s water withdrawal legislation, the Supervisor of Wells issued Well Instruction 1-2011 which allows the DEQ to use Michigan’s water withdrawal assessment tool to determine if a proposed gas well will have an adverse impact on stream flow. If such an impact is identified, the DEQ does not issue a permit.

The DEQ also asserted that claims about “flaming tap water” (as seen on YouTube) due to fracking are false and the instances where it has occurred are not due to the fracturing of bedrock but methane leaking around improper well casings (or methane naturally seeping into an overlying aquifer). According to the DEQ, Michigan’s well casing requirements prevent this from happening. In Michigan, drillers are required to use several corrosion resistant metal casings (conductor, surface, intermediate, and production casings) that are cemented together to seal off the well from the surrounding environment. (A diagram of the typical well is depicted to the right.)gas well

If these requirements are followed, according to the DEQ, the risk of a well contaminating groundwater is very low.

All in all I think the DEQ/DNR did a good job at trying to explain the issues and point out some facts to ameliorate the public’s concerns but I don’t think the issues, especially the water withdrawal issue, will be going away any time soon. As with everything, the goal will be trying to find the right balance.

Additional information about the location and type of wells currently in Michigan can be accessed here and the DEQ’s GIS database (GeoWebFace) of oil and gas related information can be accessed here.

The post Observations: MDEQ/DNR Presentation on Oil and Gas Production in Michigan appeared first on Dawda PLC.

MDEQ requests access regardless of previous environmental reports showing no levels of contamination. While the prior reports do not constitute a final closure of a LUST site, they may demonstrate that these old sites do not pose a threat. Presumably, the MDEQ’s effort will result in a reduction in the number of listed contaminated sites throughout Michigan.

If an owner requests additional information, such as a work plan, or somehow delays a response to the request, the MDEQ may classify such a response as a “denial”. In the case of a denial for access, the MDEQ will refer the matter to its Compliance and Enforcement Section for further evaluation. The MDEQ may then conduct a liability determination, which may take several months, to determine if the owner is a liable party. If liable parties are identified, the MDEQ will issue a request under Part 213 for the owner to conduct an initial assessment report or a final assessment report regarding the open LUST release.

If a liable party cannot be found, the site will revert to “orphan” status and the State will continue to spend resources to investigate the LUST release at the site. Court proceedings may be necessary to obtain access.

The MDEQ will typically not provide a complete work plan to the Owner when it requests site access due to time and budget constraints. The owner is typically allowed to take split samples of soil or groundwater samples. Owners have an option to conduct additional work at their sites to control information and otherwise acquire information relevant to the MDEQ’s request. Where time has lapsed and other contaminants may become relevant, it is important to enlist the support of a competent environmental consultant as well as a lawyer to determine the best course of action.

The post Old Tank Sites Subject to New DEQ Initiative appeared first on Dawda PLC.

Section 20120c(3) says you can do it if you apply the same degree of control in the new location that would need to have been used at the original location. But is that relocation then restricted by the requirements of Michigan’s solid waste statute (Part 111 of NREPA)? Some say it would.

The DEQ is aware of this conflict and is working on an amendment to the “other wastes regulated by statute” exemption in Rule 110. The amendment would exempt from Part 111’s scope any contaminated soils that are moved on-site provided it is done in accordance with Part 201. Right now the amendment is being held up because of the freeze that the Office of Regulatory Reform has on all State regulations while they review the ones that are considered overly burdensome.

See our Client Alert for more information on on-site and off-site soil movement under Part 201.

The post On Site Soil Movement: Part 201 or Part 111? appeared first on Dawda PLC.

In 1031 Lapeer, the tenant sought to void a lease with its landlord because the landlord failed to disclose that the premises were contaminated. The trial court ruled in favor of the tenant and the Court of Appeals upheld it because Part 201 Section 16 specifically states that if a party knows or is on notice that its property is contaminated, then it shall not transfer an interest in the property unless it has provided notice of that fact and the general nature of the contamination to the transferee. Based on the ruling in 1031 Lapeer, the notice requirement applies to sellers and landlords and failure to adhere to it can create a pretty harsh result – voiding the transaction.

Lenders have keyed in on this issue for obvious reasons; if their landlord or borrowers have redeveloped a contaminated property but have not disclosed the existence of the contamination to the tenants, the landlords are at risk of losing tenants (and thus the rent). With the current glut of retail and office space, this could mean a loss of income and the lender being saddled with a contaminated parcel – not a desirable picture from the bank’s point of view.

If you are a landlord that did not notify your tenants that the property they are renting is a Part 201 facility before they signed the lease, the bank may request that you provide the notice after the fact before the bank commits to refinance.

How do you handle that? Very carefully and with good legal counsel!

The post Baseline Environmental Assessments and Landlord Refinancing appeared first on Dawda PLC.