Tom Shepstone
Shepstone Management Company, Inc. 

The Park Foundation, a wealthy special interest group out of New York State, is funding another anti-fracking campaign; in Michigan this time.

If you’ve followed how the Park Foundation lobbied some very naive New York municipalities to implement its own special interest fractivist agenda by offering “free” technical help, you have a good idea of what they’re up to in Michigan these days. This time, though, their representative, a group called FLOW, is actually charging for the advice. It’s not a bad strategy–people are always more committed to something for which they pay than something for free–but the advice is still someone else’s special interest agenda.

The Park Foundation and Its New York Agenda

The Park Foundation, located in Ithaca, New York, is a $315 million foundation that has been been pouring money into the fracking wars for several years now. It funds groups such as Food & Water Watch, EarthJustice and the NRDC while also paying for favorable media coverage from entities such as TruthOut and DC Bureau and even Common Cause, which rewards the foundation by attacking others for doing what it does and then giving its second-generation heir leader (who lives in a natural gas heated luxury home) an award for her service. It also funds junk science aimed at fracking.

A key Park Foundation initiative has been their campaign to entice New York municipalities to ban, or effectively ban, fracking on the theory they can do so under “home rule” or police powers despite a straightforward state preemption statute. They funded the organization of a group called the Community Environmental Defense Council, led by two husband and wife lawyers theretofore associated with their family chain of dollar stores. David and Helen Slottje had no significant experience with land use law but used their Park Foundation grants to launch a whirlwind tour of upstate New York communities on the fringe of the gas region to convince them they had the power to overrule state law and ban fracking. It wasn’t pretty.

They chose fringe communities, of course, because that’s where there was talk of fracking, but no one with a real stake in it. These were communities ripe for exploitation because it cost local officials nothing politically to appease small groups of loud fractivists who descended upon them repeatedly with the intent of getting them to enact bans or moratoriums. Fractivists were successful in intimidating the officials of 72 communities to enact bans and another 105 to adopt moratoria (so they say, but several have expired or been overruled).

A look at their list shows, within the five counties of the Southern Tier most likely to have any significant Marcellus Shale development (Broome, Chemung, Chenango, Steuben and Tioga), there were but three with moratoria and these were all communities where no drilling is likely. Moreover, one of them is the City of Binghamton and that moratorium has now been overturned. None of the bans passed have been in those counties–not a single one–while 34 communities in those counties passed pro-gas resolutions. The entire effort, therefore, was about as meaningful as banning orange groves on Michigan’s Upper Peninsula. [Note to regular readers: I know we’ve used that stolen analogy before, but it works so well to illustrate the vapidness of the New York ban and moratorium movement.]

Park Foundation Money Now FLOWing to Michigan

Now, the Park Foundation is throwing money at Michigan to support a similar campaign. They gave $35,000 last year to the Michigan Land Use Institute (MLUI) for the purpose of supporting “FLOW‘s work in advancing public trust policies to protect the Great Lakes as a Commons.”

Altogether, since 2010, this group named FLOW has received $115,000 from the Park Foundation, all funneled through the Institute. FLOW says it is a 501(c)3 non-profit corporation (a tax-deductible charitable organization) formed in 2008 and organized as a corporation in 2011 but it is not listed in the Michigan Attorney General’s Database of Charitable Trusts or on Guidestar. There are no 990 returns from which to evaluate its finances, as its non-profit status has been “pending” for three years.

FLOW is an acronym representing “For the Love of Water” and, despite not having its corporate documents all in order as yet, it has a comprehensive website that details its work, which seems to be connected with another amorphous group called the “Great Lakes Society.” FLOW is headed by Attorney Jim Olson and Eric Olson, a commercial real estate broker. Other members of the Board of Directors include Wenonah Hauter,
Executive Director of Food & Water Watch, which got a cool $250,000 from the Park Foundation last year alone and mega-money over several years. Food & Water Watch has been targeting Michigan recently and furiously trying to raise even more money by promoting fracking bans and moratoriums in the state.

FLOW has now picked up this theme as well and packaged it as a program for communities who want to let special interest groups such as the Park Foundation, FLOW and Food & Water Watch set their policies for them; with Jim Olson playing the role of New York’s David Slottje, the “Great Davidski,” in Michigan. Olson is apparently charging $5,000 for his FLOW act, however, as reported here and here.

Olson’s program, though, otherwise appears to be little different than the one the Park Foundation financed for Slottje. It, too, frankly acknowledges the state’s preemption laws and then goes on to suggest plain language doesn’t mean what it says and that municipalities can do precisely what is prohibited.  It’s worth noting here that Slottje has now lost twice on the issue in New York, once in Binghamton and again in Sidney. Olson is pursuing the same failed strategy.

That strategy is detailed in this memorandum, which is remarkable in setting out the facts on preemption and then pretending they don’t exist. It acknowledges the following:

Under Michigan’s Zoning Enabling Act, local governments also are prohibited from enacting or enforcing an ordinance that regulates permit issues related to the location, drilling, operation, completion, or abandonment of oil and gas wells.

Then, it proceeds to say:

Despite the Zoning Enabling Act’s prohibition to regulate oil and gas wells or operations, townships do maintain some zoning authority to regulate related oil and gas activities, such as natural gas pipelines, flow lines, gathering lines, treatment or production facilities, or compressors, water and chemical mixing stations, emission releases, high truck traffic and transportation issues, land impact, odors, noise, and handling, reuse, and disposal of wastewater, and hazardous solids or liquids.

The Township Ordinance Act authorizes a township to adopt police power ordinances, which are distinct from zoning ordinances, because they can only regulate harms and activities rather than land uses. Thus, townships could adopt police power ordinances that reasonably relate to the transport, disposal, and transfer, diversion, use, or handling of “produced” water and chemical mixing for fracking.

Anyone familiar with zoning law will know the statements are contradictory and realizes the fundamental principle of zoning is that it is a derogation of the common law, meaning all doubt regarding the applicability of law that is not specific must be resolved in favor of applicants or landowners. One cannot, therefore, take a blanket preemption and interpret it to include exceptions that aren’t specific. The implications of the Michigan preemption statute is discussed in full here, but here is the applicable language (emphasis added):

A county or township shall not regulate or control the drilling, completion, or operation of oil or gas wells or other wells drilled for oil or gas exploration purposes and shall not have jurisdiction with reference to the issuance of permits for the location, drilling, completion, operation, or abandonment of such wells.

Notice the FLOW memo initially ignores the bolded language, suggesting communities are only prohibited from dealing with “permit issues.” It later acknowledges a prohibition on regulation, but only for the purpose of adding a qualification suggesting townships could regulate nearly everything, right down to the “chemical mixing for fracking” as if that wasn’t controlling the “drilling, completion, or operation of oil or gas wells.” FLOW’s legal theories are further articulated here, including this bizarre piece of reasoning:

In sum, this Act preempts regulation by counties and townships on oil and gas operations only as it relates to the zoning of the location and related operations of wells themselves. In other words, as described below, other than the zoning of wells, there is no preemption of local regulation.

Huh? Regulation of related operations is preempted, but there is no preemption? Talk about taking a fork in the road. What FLOW is trying to say, of course, is that the preemption only applies to the location of wells and nothing else but that ignores the plain language regarding “drilling, completion and operation” of the wells, of which fracking is obviously a part to all of us who can read.

So, it’s pretty obvious what Olson and company are up to here. They are applying the Slottje tactics in Michigan. They even go so far as to refer to the case Slottje lost in Binghamton when he tried to ban fracking via the back door as a symbolic act.  He inartfully composed a moratorium law by another name and the court would have none of it. FLOW says:

The City of Binghamton argued that its ban ordinance was an exercise of its police powers, and therefore, was not subject to zoning requirements, such as review by the Planning Board. The Court rejected the City’s argument, stating that the two-year sunset period had transformed the law into a moratorium.

Yes, that’s correct, but FLOW is proposing much the same thing in advocating for moratoria in Michigan. It’s recommendations are sprinkled with caveats to protect them if things don’t go so well. They suggest moratoria and then caution the reader that it may well not work based on the experience of New York. This is the modus operandi of fractivist groups financed by the Park Foundation. Their aim is to throw up as many roadblocks as possible in the hopes of stopping the inevitable (note increasing natural gas in Michigan in chart below) through grinding delays.

Park Foundation Fighting Uphill Against Growing Natural Gas Use in Michigan

That’s the big strategy and whether any particular fight is won or lost is irrelevant to them. The Park Foundation and its minions couldn’t care less what happens to a given township in Michigan or New York. Michigan townships are now being used as pawns on the chessboard in implementing that big strategy, just as has happened in New York. And, Michigan doesn’t matter that much to them either because, for them, it’s all about New York, where they hope Michigan will send a signal and a politically correct base of voters, combined with a tragic comedy sort of governor, gives them a fighting chance in the short-term.

The sad part of the story is that some Michigan townships are willing to pay $5,000 for the privilege of being used this way.