Article published October 26, 2008
Reversing ban on Great Lakes drilling unlikely
Presidential candidates appear unified in keeping to status quo
Talisman Energy Corp. has used a portable compressor on a platform in Lake Erie to help push natural gas from its wells. The Canadian company removes the platforms in winter.
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TALISMAN ENERGY CORP.
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By TOM HENRY
BLADE STAFF WRITER
Drill, Baby, Drill.
Those three words became the rallying cry at the Republican National Convention in St. Paul seven weeks ago, with GOP delegates pumping their fists in the air and embracing the newly announced McCain-Palin ticket with cheerleaderlike enthusiasm.
Republicans were unified on tapping more domestic sources of oil and natural gas, leaving millions of television viewers with the message that times have changed and no place is off-limits.
So what does that mean for the Great Lakes, which the U.S. Geological Survey says still have an estimated 312 million barrels of oil, 5.2 trillion cubic feet of natural gas, and 122 million barrels of natural-gas liquids stored beneath them?
Apparently nothing, except more campaign rhetoric to sift through.
"John McCain supports drilling in the Outer Continental Shelf in an environmentally sensitive manner and in consultation with the states. He is not proposing that similar drilling proposals should be extended to the Great Lakes region, which is protected by separate federal statute," according to an e-mail to The Blade last week by Paul Lindsay, Mr. McCain's campaign spokesman.
Directional drilling north of Manistee, Mich, extracts oil and natural gas from Lake Michigan.
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MICHIGAN LAND USE INSTITUTE
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The lakes have been off-limits to more drilling since the first in a series of bans was enacted years ago.
Congress made the federal ban permanent under the Bush-Cheney Energy Policy Act of 2005 that was supported by Democratic presidential nomi-nee Barack Obama, but opposed by Mr. McCain.Candidate positions
While neither candidate claimed to be interested in expanding the limited shoreline drilling that has occurred for decades in Michigan and Ontario, both declined interviews on the topic.
The Obama campaign agreed to a 30-minute interview with Heather Zichal, a senior policy adviser on energy, environment, and agriculture policy for the Illinois senator.
It did not want direct quotes from her used without being run through a campaign spokesman.
Mr. Lindsay declined to have himself or a McCain policy adviser be interviewed on the phone.
He did not respond to a number of questions in his e-mails.
He would not expand on his opening statement that the prospect of expanded lake drilling could be interpreted to mean Mr. McCain favors the status quo for the time being.
"John McCain supports drilling where it can be done in an environmentally sensitive way and it is supported by the states," Mr. Lindsay wrote in a follow-up e-mail.
He reaffirmed the Arizona senator's position on drilling in Alaska's Arctic National Wildlife Refuge, saying Mr. McCain is opposed to it "because he believes we confer a special status on areas of our country that are best left undisturbed."
Mr. Lindsay declined to comment on the support for ANWR drilling from Mr. McCain's running mate, Alaska Gov. Sarah Palin.
The energy bill that permanently banned expanded Great Lakes drilling was approved in the Senate by 85-12, with three abstentions.
Mr. McCain was one of five Republicans who voted against it.
He did so because the bill "included billions in sweetheart deals for big business and oil companies," Mr. Lindsay said.
Mr. Obama believes there are areas that need to remain off-limits to drilling.
"The Great Lakes is one of them," Ms. Zichal said.
The Great Lakes hold 90 percent of the fresh surface water in the United States and 20 percent worldwide.
"That's something that's not to be overlooked," Ms. Zichal said.A source of frustration
Sitting on the sidelines is Tom Stewart, executive vice president of the Ohio Oil and Gas Association.
He's not happy.
He's upset over 475 wells in Canada that are extracting natural gas from the north side of Lake Erie between Port Alma, Ont., and Port Colburne, Ont.
An additional five wells are extracting oil from beneath the lake bed near Leamington, Ont.
"We simply have left it to the Canadians. They're fully developing their resources," Mr. Stewart said. "They have to be draining American resources."
Michigan has a much smaller operation: Three shoreline wells in Manistee County that extract natural gas from the eastern side of Lake Michigan and two shoreline wells in Bay County that extract natural gas beneath the western side of Lake Huron.
Its only other two wells along the shoreline are in Manistee County.
Both had been used to extract oil beneath Lake Michigan and are now out of service.
One has been temporary abandoned and the other has been capped, said Robert McCann, Michigan Department of Environmental Quality spokesman.'Very little support'
Mr. Stewart said there is "very little political support for [more drilling] from the Republican and Democratic side."
Why?
"Because it's the Great Lakes," he said. "Let's face it. Lake Erie is Ohio's crown jewel. It becomes an extremely emotional issue."
While he's angry that Ohio has to sit and watch Ontario extract resources from beneath Lake Erie, Mr. Stewart said Republicans did little to advance the issue with the "Drill, Baby, Drill" mantra that emerged from their convention.
Much of the public automatically links oil and gas development with pollution, oblivious to modern technology and the science that go into proper siting and construction of wells, he said.
The GOP's chant trivializes the issue and does a disservice to the industry by suggesting it's ready to stick rigs anywhere, Mr. Stewart said.
"You can't deal with complex issues such as energy exploration with sound bite. You can't trivialize it with 'Drill, Baby, Drill," he said.A slanted approach
Canadian drillers have placed some 2,500 wells beneath Lake Erie since 1913, although most of the large-scale activity didn't begin until the 1960s.
The 480 still in production are down from 550 in 2001. All are owned and operated by Talisman Energy.
The wells, like those in Michigan, are drilled from the shoreline in such a way that they penetrate beneath the lake at an angle and do not pass through water. The technique is called slant, or directional, drilling.
Talisman has 475 of the wells between Ontario's Port Alma and Port Colburne that extract natural gas.
The company often has a portable compressor on a platform in the lake, between Port Stanley, Ont., and Port Burwell, Ont., to help push out natural gas from its wells on land.
The compressor is removed before ice forms.
It was not used this past summer, though. Talisman Energy didn't see the need for it.
The company has five other shoreline wells near Leamington.
They extract oil beneath the lake.
For those wells, Talisman deployed a technique known as horizontal drilling, in which a drill bit is moved horizontally to avoid contact with the lake.
Those five oil wells were drilled nearly two-thirds of a mile beneath the lake bed, said Scott Tompkins, Talisman's superintendent for Ontario.
The company hasn't drilled wells at other sites along Lake Erie the past two years and is keeping its drilling program suspended through at least 2009, Mr. Tompkins said.Phasing down
The activity along the Canadian side of Lake Erie has been phased down because Talisman is focusing on higher-production sites.
"There are bigger projects in the world that Talisman has to focus on," Mr. Tompkins said.
Lake Erie "is a nice niche opportunity, but we always weigh where we are and how profitable it is. It's a matter of balancing cash in hand versus growth opportunities elsewhere," said Dave Mann, a Talisman spokesman.
Having reserves documented doesn't mean oil and gas are recoverable, though.
Energy companies are unlikely to drill in Lake Ontario because of the abundance of salt mines that would plug up wells, said Joe Van Overberghe, executive director of the Ontario Petroleum Institute.
Michigan issued its first shoreline leases in 1945, but drilling did not start for 34 years. The five wells that are in operation now are among 13 that have been drilled since 1979.Taking a stand, sort of
Great Lakes governors denounced offshore drilling through a memorandum of understanding in 1985. That didn't stop then-Michigan Gov. John Engler from announcing in 2000 that he would consider issuing more leases for slant drilling from the shoreline as a way of generating revenue for his cash-strapped state.
Activists were outraged. Mr. Engler, a Republican who is now president and chief executive officer of the National Association of Manufacturers, the Washington chief lobbyist group for the nation's industries, even caught flak from within his party, such as U.S. Sen. George Voinovich (R., Ohio), who supports drilling in ANWR but not in Lake Erie.
Michigan legislators responded in 2002 by banning additional drilling through or beneath the lakes that it borders, three years before the federal government's temporary ban became permanent.
Ohio Gov. Bob Taft banned all Lake Erie drilling along Ohio's border through an executive order in 2003.
The move was made just as the environmental unit of the Ohio Public Interest Research Group, now Environment Ohio, was about to go public with a report that showed his administration in 2000 had considered a $250,000 public relations campaign to sell the public on the idea of extracting oil and natural gas from the lake.
Now, even with prices for oil and natural gas bouncing up and down, Mr. Stewart sees little hope in trying to get Great Lakes drilling bans reversed.
"The Ohio Oil and Gas Association will never stop advocating for access," he said. "Politics is the art of the possible. [But] frankly, I just don't see it as possible right now."
Contact Tom Henry at:
thenry@theblade.com
or 419-724-6079.
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