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Case Study of the Pigeon River Hydrocarbon Development Plan

Assessing the Environmental Effects -

Case Study of the Pigeon River Hydrocarbon Development Plan
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- 3. Assessing the Environmental Effects -

The third core document was an Environmental Impact Statement prepared by the DNR and made public on December 15, 1975. In it, the potential adverse effects of energy development on large game species were thoroughly explored, as were steps that could be taken to reduce noise, odor, and other intrusions.

In line with the unitization agreement put forward by the oil companies, the EIS focused much of its discussion on the effects of drilling only in the southern part of the new forest. The report said the effects on streams and groundwater would be minimized if the state implemented a development plan that limited the drilling area and the number of industrial sites within the area.

The EIS urged the Natural Resources Commission to prevent any crossings of the Pigeon River with pipelines, and to bar roads in "vitally sensitive environmental areas."

Lastly, the EIS strongly endorsed a promising idea introduced by the Michigan United Conservation Clubs, a statewide hunting and fishing organization. In October 1975, the group's executive director,Thomas L. Washington, proposed spending the royalty income from Pigeon River energy development on purchases of private land within the forest.

The proposal to invest income from non-renewable resources to enlarge and enhance the public domain was embraced by the oil industry, the environmental community, and the Legislature. It led to passage of Public Act 204, the Kammer Recreation Land Trust Fund Act of 1976, the predecessor of the Natural Resources Trust Fund.

- 4. The Hydrocarbon Development Plan -

Written by a team of DNR staffers, with the cooperation of Shell Oil and other companies, the Pigeon River Hydrocarbon Development Plan was a combination of the three previous documents. It was the first of its kind within the United States energy industry.

•The plan, initially adopted under an agreement signed by the industry and the NRC on June 11, 1976, called for locating drilling sites, access roads, facilities, and pipelines in areas that would cause the least possible harm to land, water, and wildlife.

• Companies were directed to conduct exploration and recovery operations in a sequential pattern, moving northward from the southern part of the forest, with each step carefully planned by the industry and overseen by the Advisory Council. Under the plan, Shell was directed to draw up a schedule for exploration and development that called for the industry to be finished with all drilling by a fixed date.

The plan also called for these measures:

• Requiring Shell to submit a complete plan of development to the NRC before production began.

• Barring well sites in wetlands.

• Minimizing the number of roads, and limiting the right-of-way of most of them to 20 feet or less.

• Installing pipelines along existing roads wherever possible.

• Limiting noise from wells, pumps, and processing installations. Noise limits were further reduced as new muffling technology became available.

• Installing electric pumps and burying transmission lines.

• Screening well pads, pipelines, and other facilities from roads and trails.

• Requiring all equipment to be removed, and surrounding land to be restored, when production ends.

Debate, Disagreement, Litigation

From the moment in the spring of 1969 when Ford Kellum spotted the first drilling rigs, dispute marked every facet of energy development in the Pigeon River Country.

• Energy industry executives, disturbed at state efforts to slow the development, asserted that they had a lawful right to gain economic value from minerals leased from the state.

The industry also deployed other arguments to gain quicker entry to the forest:

One tactic was to press the economic argument. Estimates of the value of the oil and gas lying beneath the Pigeon River Country were put at $4.5 billion, with up to $1 billion of that available to the state in royalty and tax income. The actual value turned out to be much less than that inflated estimate. (See "Assessing the Energy Development Plan" on page 14.)

Later in the 1970s, another industry tactic was to identify the need for greater domestic supplies of oil and gas in order to achieve American energy independence. Fuel shortages at the time were causing long gas lines and rising prices.

• Environmentalists and conservationists were equally impassioned. Casting the Pigeon River as a unique natural resource, the environmental community sought to frame the debate as struggle over Michigan's future. They asked whether Michigan citizens were willing to permanently forsake the beauty and tranquillity of a prized forest for short-term industrial profit. In a sense, the environmental community sought to turn the struggle over drilling in the Pigeon into a referendum on the energy-wasting patterns of the American way of life.

• For the DNR, and its often-divided Natural Resources Commission, the Pigeon River controversy boiled down to a test of the state's authority to manage public lands. Although individual commissioners supported one side or the other, the Commission as a whole consistently backed the idea that it was they who would decide how any drilling would occur.

The Natural Resources Commission, Independent Arbiter

Throughout the 10-year long dispute, the Natural Resources Commission exhibited extraordinary independence from industry, from environmentalists, and even from the Governor and senior members of the DNR staff.

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