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Ann Arbor — A report released Friday on hydraulic fracturing conducted by University of Michigan researchers challenged several state and industry practices for the controversial gas extraction technique and was rebuffed in turn by the oil and gas industry.

While it sidesteps making recommendations, the 200-page-plus document compiled by scientists at the university's Graham Sustainability Institute raised questions about the way the gas industry protects its proprietary information, handles its waste products and monitors its impact on surrounding waters. The report, which was requested by Gov. Rick Snyder, also challenged a few approaches of the Snyder administration in dealing with the expansion of hydraulic fracturing or "fracking" in Michigan.

Michigan Department of Environmental Quality's "experts will review it in the weeks ahead," department spokesman Brad Wurfel said in a Friday statement. "We look forward to working with them to refine the document."

The department indicated that it is continuing to review and update its regulatory policies, which it says are "regarded nationally as one of the toughest." The department added that "we have found no incidents of environmental contamination associated with hydraulic fracturing."

An oil and gas official was more critical, expressing concern about the preliminary report's attitude toward the industry.

"Concerning to us is the overall negative tone of the report toward oil and gas production, and fundamental misunderstandings that we believe can be cleared up," said Erin McDonough, president and CEO of the Michigan Oil and Gas Association, in a Friday statement. "We are confident the report could serve a beneficial purpose, but only if its authors use accurate information and balance the context and tone of the final report."

In recent years as exploration companies have increased their presence in Michigan, Snyder and DEQ officials have attempted to quell fears among some critics with a simple message: Hydraulic fracturing has been used in Michigan for decades with no problems.

Some see it as misleading. Hydraulic fracturing pumps a water/chemical mix into shale formations beneath the surface to crack the rock and release natural gas. While that process has been used in the past, the current practice of using millions of gallons of water paired with horizontal drilling at much deeper levels has a much shorter track record.

"With the intensity of wastewater generation associated with high-volume hydraulic fracturing, it is not clear whether the laws and regulations written at a time of small-scale, shallow hydraulic options will be adequate," according tothe part of the report written by Shaw Lacy, a former researcher at the institute.

Health concerns — for residents and their environment — have been one of the driving factors behind opposition to hydraulic fracturing. Researchers blame that situation, in part at least, on a lack of data.

Factors that challenge progress on this front include the recent development of fracking "latency issues," — the time delay between exposure and disease, especially diseases known to take a long time to develop — "limited monitoring data, limited baseline health data and a lack of complete chemical disclosure (e.g., trade secret exemptions) among others," the report reads.

Natural gas companies have been legally protected from fully disclosing the chemicals in their fracking fluid for proprietary reasons. Although they must detail most of the chemical makeup, they can submit the information up to 60 days after a fracking well has been closed. In April 2012, Democrats in the Republican-controlled state House introduced legislation calling on companies to reveal those chemicals as well as the amounts used, but it never made it out of committee.

The University of Michigan report outlines the potential benefits of full disclosure.

"More extensive requirements pertaining to information on chemical use and water quality appear desirable — if they are in plain language — given public concern relating to these aspects and their potential public health concerns," according to the report. Among the options laid out are requiring companies to provide the information before fracking or mandating them to provide full disclosure of all information on fracking fluid, including that considered proprietary, to the state.

The study's other areas of concern are the amount of water used to fracture the shale, as well as the wastewater generated by the process. Wastewater is currently handled through deep well injection, and researchers view that approach as effective, but perhaps not the most efficient use of the product. The University of Michigan report lays out the option of recycling fracking wastewater to be re-used in the fracking process.

The industry responded that the wastewater idea is "a change to a problem that doesn't exist" and that the proven deep well injection process "puts water flowback that contains brine from oil and gas formations right back to where it came from."

Researchers also identify another potential source of water for hydraulic fracturing to possibly offset the massive amounts that need to be taken from the state's aquifers.

"The State of Michigan does not allow for the use of treated municipal wastewater as the water source for hydraulic fracturing operations, even though this can be used an alternative water source," the report reads. "Providing opportunities for recycling wastewater and using alternative water resources both hold potential benefits of improved water quality, through diminished demands for groundwater resources. However, neither of these are a total panacea, as they both carry associated environmental risks."

The oil and gas industry's McDonough criticized the UM institute for "exaggerating" the amount of water used in most Michigan hydraulic fracturing operations and failing to compare the industry's use of water to "many widely accepted and more intense and ongoing water uses, such as agriculture and power plant use."

On the subject of public participation in hydraulic fracturing issues, the report critiques the state's approach.

"To date, Michigan has largely treated (high-volume hydraulic fracturing) as an extension of other types of oil and gas activities," the report reads. "As a result, the public has had few opportunities to weigh in on whether and where (fracking) occurs."

The report's authors offer several potential avenues for increasing public participation, including revamping the DEQ website and providing communication training for state officials on the subject of risk.

DEQ's Wurfel said the department is putting in place new rules about transparency and public access to information this spring.

"While the U of M experts did not identify any specific threat to Michigan's natural resources or public health, we agree there is a need for DEQ to continue working to provide the public greater access to information about this process," he said in a statement.

John Callewaert, integrated assessment director at the Graham Sustainability Institute, said the report does not advocate any of the options it lists. It "presents information about the likely strengths, weaknesses and outcomes of various courses of action to support informed decision making," Callewaert said.

So it will likely fall to Snyder to address which, if any, options he wants to pursue. But the industry made it clear the UM study has what it considers flaws that don't lead to solutions.

"While we appreciate the work of the Graham Institute to address issues raised about hydraulic fracturing," McDonough said, "the draft as presented today contains problems that need to be corrected before the final report could be used as a credible reference for potential policymaking."

JLynch@detroitnews.com

(313) 222-2034

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