Oil and Gas Permitting Process
Explanation of the Oil and Gas Permitting Process
Act 325 of 2004 changed the permitting process for oil and gas wells in several ways:
- Requires determination of an administratively complete permit within 30 days
- Provides for ‘tolling' the application period until the application is complete
- Provides an addition 20 days processing period, so that a permit decision is made within 50 calendar days from receipt, minus any period while the application was tolled
- If the Department of Environment, Great Lakes, and Energy (EGLE) fails to process an application within these timeframes, 15 percent of the permit fee shall be refunded to the applicant
Applications to drill and operate oil and gas wells can be submitted electronically* (*preferred) or through the US Mail. Once an application is received by the Oil, Gas, and Minerals Division (OGMD) a date is established for when it was received. The submitted application is scanned and the application file placed on a network drive so that it is immediately available to all OGMD staff for use in their review.
The Permit Coordinator reviews the submitted application within the first 5 days of submittal to conduct the initial completeness review. In essence, it must be a viable application, in all respects, to be considered administratively complete. In addition to the permit fee, bond, and all relevant forms, notifications, and attachments, the application must be properly spaced for its location and intended formation. The applicant must also have the necessary mineral and surface rights, at the time of the application, to allow processing of the application to proceed.
After the initial review, the Area Geologist inspects the staked location on-site to verify the survey, environmental impact assessment, and all other aspects of the application are administratively complete and technically accurate. The Area Geologist may contact the applicant directly if there are minor technical deficiencies that may be corrected in a few days or if there are additional conditions or changes needed to recommend issuance. If the applicant moves the staked well location, it is considered a new permit application and resets the 30-day application period.
It should be noted that if the well site is located on state-owned surface, near threatened or endangered species, within a state-managed area, or near to environmentally sensitive areas, additional staff from the EGLE, Department of Natural Resources (DNR) and/or the Michigan Natural Features Inventory (MNFI) may also be involved in the application review and may recommend possible mitigation of impacts.
- If the application is found to be administratively incomplete within the first 30 days of submittal, a written or email notice will be sent to the applicant specifying the information necessary to make the application complete. The application period is tolled pending receipt of the specified information.
The District Supervisor for OGMD is notified by email when the Area Geologist has completed their review and made their recommendations. At this time, the application may be recommended for approval to issue, recommended for denial based on the potential to cause waste as defined in Part 615, or recommended for approval after the correction of a technical deficiency.
The Permit Coordinator reconciles all of the recommendations and proceeds to either issue the permit with conditions determined through the review process, denies the proposal based on waste, or notifies the applicant of any remaining technical deficiencies, which need correction.
A generalized Part 615 permitting flowchart is provided below: