Representatives of a Michigan oil and gas company say there's oil under Rochester Hills. That's why they're asking some city residents — and city leaders — for permission to drill.
This week, representatives of Jordan Development Company presented their case to Rochester Hills City Council, which is being asked to approve a lease of mineral rights to some city-owned land.
The city's approval would allow Jordan Development to drill under the land then pay the city royalties for any oil that is found there.
Jordan Development is a Traverse City-based company founded in 1996, that operates more than 450 oil and gas wells throughout Michigan.
After expressing concerns about residents' feedback, the city charter and parks amendment, city council members agreed Monday night to a tentative approval of the lease; they asked for a finalized lease, an opinion from the city attorney and a detailed description of the city-owned land.
The motion passed six to one, with councilmember Ravi Yalamanchi casting the lone dissenting vote.
"I'm not ready tonight," Yalamanchi said after expressing concern for local homeowners. "Somebody's home, to me, is of more value than anything else."
At least one of the dozen residents left in the audience during the Monday meeting applauded. "If they don't say yes there's no way I can say yes to this."
'We believe there are minerals to be found'
Jordan Development Vice President Ben Brower presented to city council.
"We believe there are minerals to be found under some Rochester Hills properties," Brower said. "A couple of those we would like to ask for a lease from you folks."
The city-owned properties are in the area of Tienken and Adams. (After Brower discovered during the meeting that one of the properties in question actually belongs to the city of Rochester, City Council President Greg Hooper asked him to clearly define the properties when he returns.)
Based on seismic testing that occurred early this year, these sites most likely contain oil, Jordan Development researchers have said.
If city leaders agree to the lease, Jordan Development will pay the city $150 per acre as a signing bonus. The city would then earn additional royalties if oil is found.
For example, Brower said a well on 40 acres at Crooks and Square Lake roads has paid just under $10 million in royalties over nine years to its land owners, which are Michigan State University and the State of Michigan.
Brower said most questions the company answers about drilling projects are related to the environmental impact. The State of Michigan Department of Environmental Quality would have jurisdiction over the drilling project in Rochester Hills as they do for all oil and gas projects in the state.
The MDEQ has specific requirements to protect groundwater and for containment in case of spills.
Brower said there have been no incidents in Jordan Development's history.
"There's a lot of talk about fracking and we have no intention to frack," Brower said.
"Fracking" is a term used for hydraulic fracturing, a process of drilling and injecting fluid into the ground at a high pressure in order to fracture shale rocks to release natural gas. The process is controversial because of the possibility of air pollution and toxic chemicals entering the local water supply.
"We will put it in the lease: 'No fracking,' " he said.
Members of City Council made it clear throughout the meeting that they had no interest in having surface structures, drills or well heads on city land — especially in city parks.
Brower said many property owners in area subdivisions have already been contacted for leasing and with the number of small lots, it was "almost a for sure thing" that the oil would be horizontally drilled.
Horizontal drilling allows for the direct drilling of wells in the earth laterally instead of vertically. This also allows the well to be located off-site. A 1-acre space is needed for drilling.
Brower said the company can typically drill 3,000 to 3,500 feet horizontally — and even 5,000 feet is feasible. The maximum drill area is two miles.
"We've had to get creative but we have never not drilled a well because we couldn't find a location for the drill," Brower said.
Jordan Development drilled in White Lake in August.
"I would recommend you contact people we've drilled on," Brower said. "We've had no complaints, no incidents, there's no smell, no lights."
There is "some sound, like vehicle traffic" during the three to four weeks the drilling takes place, but once the production well is installed there is no sound, according to Brower.
When the one-time drilling is complete, a well head about 6-feet-tall takes the rig's place. Brower described it as similar to a Christmas tree; it is surrounded by security fencing but can be additionally landscaped. The oil is "shipped to market via pipeline."
In addition to approaching City Council, Jordan Development mass-mailed leases to residents and has also been going door-to-door talking with Rochester Hills property owners, primarily in the Tienken/Adams area, to try to secure leases to their mineral rights. More residents will be contacted, according to Brower.
"We've got quite a few leases," Brower said to the City Council. "We're buying leases every day."
Brower said that no matter what City Council decides about the city-owned land, Jordan Development will continue to move forward with obtaining leases from private property owners.
"This is a civil thing between the property owners and this company," the city's director of planning, Ed Anzek, said.
The next Rochester Hills City Council meeting will be held at 7 p.m. Nov. 12.