Court of Appeals Upholds MPSC Order in Antrim Vacuum Case

ERIN McDONOUGH, MOGA PRESIDENT

On March 21, 2017 the Michigan Court of Appeals issued a ruling on the decision of the Michigan Public Service Commission (MPSC) to allow companies to operate wells in the Antrim formation under vacuum.

 

In 2009, companies applied to the MPSC for permission to operate their wells under a vacuum.  In April 2010, the MPSC opened a docket to consider the issue.  During the course of taking evidence, it was acknowledged by the MPSC that the MDEQ shared authority to regulate gas wells and there was no understanding as to what agency would exercise that authority.

On May 14, 2015 the MPSC granted all applications to operate gas wells in the Antrim Shale Formation under vacuum and laid out the guidelines for companies seeking such permission.  Following the May decision, the case was appealed. Key areas addressed in the ruling include:

1. The court determined that the MPSC order could and does cover the entire scope of production in the Antrim, not just the parties to the case.  This means that the MPSC order has the legal weight of rulemaking associated with it, even though the process was done through MPSC docket and limited the types of communication and engagement that could be had on the issue by the industry at large.

2. The court determined that the order did not fail to protect correlative rights of other owners of wells in the Antrim area, ruling that no common pool of gas existed.

3.The MPSC ruled appropriately on issues of safety, lack of waste and impact of correlative rights.

The appellate case did not discuss the joint MPSC/ MDEQ authority.

Michigan Petroleum Directory Now Available!