More local control sought over Michigan oil drilling

Jim Lynch
The Detroit News

Shelby Township — Oleg and Iryna Rybchenko put their faith in Nino Homes Inc. to build their split-colonial dream home — the place they intended to share with their young child and the others they hoped for in the future.

The builders seemingly delivered, selling the couple a lot and constructing a 4,000-square-foot residence in a quiet development just off Dequindre in Shelby Township. But a new lawsuit claims Utica-based Nino Homes secretly agreed to lease mineral rights for land to West Bay Exploration Co. for the purpose of setting up an oil well 500 yards from the new home.

The couple's $740,000 dream investment, which amounted to Oleg Rybchenko's "life's savings," suddenly seemed like a disaster. "The drilling activity could be viewed and heard from the home of the plaintiff," according to the lawsuit.

Complaints like the one from the Rybchenkos are fueling continuing tensions over oil exploration in residential areas, leading in the past week to renewed efforts in the Legislature and in communities to stop or try to allow for more local regulation of drilling.

State Rep. Michael Webber, R-Rochester Hills, last week introduced a bill that would create a minimum setback of 1,000 feet between oil wells and homes in counties with 750,000 people or more. Rep. Peter Lucido, R-Shelby Township, also proposed legislation to amend Michigan's Zoning Enabling Act by deleting a passage that prohibits townships and counties from regulating or controlling drilling. And the Board of Trustees in Scio Township, outside of Ann Arbor, voted to extend a moratorium on oil drilling.

Lucido described as "archaic" the current state law that keeps places like Shelby and Scio from creating setback regulations to separate oil wells and residential areas.

"Township residents have inherent rights to their safety and well-being, and those rights are not being properly addressed" by the Michigan Department of Environmental Quality, Lucido said in a statement. "They're still taking a 1940s approach to a 21st-century reality."

It's a stance that immediately drew support from residents in each of the communities where new drilling projects have cropped up.

"The citizens of our state deserve to be confident knowing that when they move to a given township or buy a home in an area typified by residences, they will not be looking out the window or down the street at an oil well in the future, negatively affecting their quality of life, their property and their health, safety and welfare," said Laura Robinson, a member of Citizens for Oil-free Backyards in Scio Township.

But the oil and gas industry doesn't want to create unnecessary obstacles to exploration and drilling.

"Local oil and natural gas production benefits Michigan's citizens in many ways," said Michigan Oil and Gas Association President and CEO Erin McDonough. "While we appreciate the concerns these bills attempt to address, we want to make sure that Michigan remains open to local energy production. We think the best solutions come when we work hand in hand with communities on an individual basis."

Technology spurs drilling

New technologies have allowed energy companies to find oil and natural gas in new places around Michigan, leading to drilling projects that have met some resistance.

Those efforts have slowed as the price of oil dropped, discouraging further development. In the case of the Scio Township well, drilling conducted last year — also by West Bay Exploration — did not produce results that warranted further work at the site.

Moratoriums in Scio and Shelby townships bar new wells, but West Bay has indicated it thinks the actions are of dubious legality. Scio officials last week approved a three-month moratorium extension, a move Supervisor E. Spaulding Clark said was designed to give the township more time to create its own guidelines for drilling.

Planning and zoning officials around Michigan often have found they can do little to stop drilling "unless very serious consequences would result from the extraction of those natural resources," according to a 2011 state law.

Earlier this month, the DEQ released new guidelines for companies drilling in Metro Detroit that included providing earlier notification to communities and taking steps to mitigate noise and light issues, but little else to let local communities control where rigs are set up.

"Drilling is specifically protected by law from local bans," said DEQ spokesman Brad Wurfel. "In that context, we've done a lot of good work toward addressing the issues and trying to make sure everyone's interest is addressed."

But Wurfel acknowledged critics would not be satisfied with the new rules.

"We certainly would support some kind of additional powers to what we have now in regard to siting these things," Clark said.

The Webber and Lucido bills appear to face an uphill battle in Lansing. In December, the Republican-controlled Senate rejected bills that would have prevented the DEQ from approving drilling permits for projects in communities of 70,000 or more or for projects within 450 feet of residential buildings. Opponents of the legislation argued the bills would have a "chilling effect" on oil and gas exploration.

Communities caught off-guard

Metro Detroit communities were largely caught off-guard when drilling companies arrived in the last two years. It has led to contentious confrontations over decisions made by property owners that, while possibly legal, have others crying betrayal.

In Scio Township, when the owners of Wing Farms decided to lease the rights to their land to West Bay, they were attacked in public meetings and online. Kevin Wing, owner of the farm, declined to discuss the situation other than acknowledging that the drilling on his site did not produce as West Bay had hoped and that the likelihood of another try was small.

Over the summers, commentators dotted the farm's Facebook page with angry comments. "Count your money when it comes, I guess. But you screwed your town," wrote one. Another asked, "How could you do this to our community and your beautiful farm land?"

When West Bay and the Jordan Development Co. leased public land in Rochester Hills, residents turned their anger on the city officials who approved the deal. A lawsuit was filed that contended the city's decision should have been made by voters, an argument rejected by an Oakland County Circuit Court judge in November that is currently on appeal.

In Shelby Township, the frustration has turned toward Nino Homes. Renee Hassell, a Nino employee, said the company would not comment on the situation because officials had not yet seen the Rybchenko's lawsuit.

Nino Homes constructed dozens of residences in the neighborhoods closest to the well site, residents said. Jim Mattison, whose subdivision sits 500 feet from the proposed well site, was pleased enough with the company's building of his home a decade ago that he became friends with Nino LoChirco, son of the company's owner.

Since plans for the oil well became public, Mattison said he has been unable to reach LoChirco.

"I went so far as to text him one day — a very short message that said 'Nino, I thought we were friends. How could you?'

"I never heard back. Nothing. Not a word."

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