Look Beneath the Surface
Minerals "swap" doesn't save Jordan Valley from development
April 1, 1998 | By Hans Voss
Great Lakes Bulletin News Service
In 1975 the Department of Natural Resources established the Jordan Valley Management Area, a block of both state and private land in Antrim and Charlevoix counties. A special DNR Management Plan outlined a long-range program to keep the valley as close to its wild state as possible. The goals included prohibiting oil and gas development, and acquiring the privately-owned property. CONTACTS: Watch That Revolving Door
Because of Michigan's policy to allow the severance of surface land ownership from the mineral rights, there are four different property situations in the Jordan.
This means that the oil and gas restriction has been enforced with increasing difficulty when the state owns the surface but not the minerals, and not at all when it owns neither. Meanwhile, little has been done since the Management Plan went into effect to acquire the private property.
The announcement last January that the DNR will acquire 1,217 acres of mineral rights, but not the surface land, from private owners in the southwest part of the Management Area fits in with stated goals. It is, however, only a small step, and considering the many threats facing the Jordan, it is among the lowest of priorities. The deal by no means resolves the issues over oil and gas drilling in the Jordan, contrary to the spin that emanated from the Capitol and the acceptance of it by some in the press. ("Swap Saves Pristine Jordan River Valley," trumpeted a Detroit News headline.)
The mineral exchange agreement was brokered by Traverse City-based Oilfield Investments, Ltd. (O.I.L.), one of the state's most active Antrim Shale gas producers. O.I.L. first purchased the mineral rights in the affected area from the private landowners. Then, under the terms of the deal, the state will take ownership of the minerals, but O.I.L. will continue to operate the existing wells until they run dry 15 to 30 years from now. In return O.I.L. will take ownership of 1,220 acres of the state's minerals located outside the Management Area in Antrim and Kalkaska counties
The deal, which was approved by DNR Director K.L. Cool in January but has not yet been finalized, represents the first mineral swap in DNR history. This important precedent occurred without a clear and cohesive policy to guide the process. Instead, the DNR hastily executed a trade involving publicly-owned resources on a politically-motivated timetable so the Governor could highlight it in his State of the State speech.
The DNR reports that there are other private parties in the Management Area interested in similar deals. The Institute, the Friends of the Jordan River Watershed, and other groups are urging the DNR to establish an appropriate policy and priority system for acquiring minerals before making any further transactions.
The lobbyist for Oilfield Invesments, Ltd., who brokered the mineral rights exchange in the Jordan was none other than Roland Harmes, who was the Director of the DNR and the state's top oil and gas regulator from 1991 to 1995.
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