Michigan Land Use Institute

MLUI / Articles from 1995 to 2012 / Case Study of the Pigeon River Hydrocarbon Development Plan

Case Study of the Pigeon River Hydrocarbon Development Plan

(continued from previous page)

New requirements, he argued, should include conducting an intensive survey of wildlife before drilling starts. He also suggested that drilling occur in stages -- as the industry proved it could develop with minimal disturbance, then it should be allowed to proceed.

The compromise plan very quickly gained support. Michigan United Conservation Clubs endorsed the concept. The oil and gas industry said it was interested. And the DNR announced it would negotiate a new deal. The environmental coalition, however, was split.

Though its own leader had introduced the concept, the Pigeon River Country Association announced it would oppose a compromise. "We are convinced that it is unrealistic and contrary to known conditions to believe that drilling can be controlled in such a way that it won't be harmful," the group said in a public statement.

The protest was not as effective as the association hoped. Negotiators met through the summer and fall, and on November 24, 1980, a new management plan was announced for the Pigeon River Country State Forest.

It advanced the 1976 plan by requiring new wildlife studies and surveys of recreational users, the posting of a performance bond for each well, and by directing that drilling occur in stages. It also called for eliminating waste pits in the forest used for the disposal of salt water brine, a common byproduct of oil and gas development, due to concerns that high concentrations of chloride from the brine would contaminate groundwater. (A complete listing of the safeguards required under the final Pigeon River Hydrocarbon Development Plan appears on page 15).

The agreement was entered as an amended stipulated consent order with the Circuit Court in Lansing, and incorporated into SB1119, which was approved by the Legislature. On December 5, 1980, Gov. Milliken signed the new bill.
In February 1981, after an eight-year moratorium, drilling resumed in the Pigeon River Country State Forest.

Assessing The Energy Development Plan

In all, 58 oil and gas wells were drilled in the Pigeon River Country State Forest -- 22 yielded proven reserves of oil and gas.

Through the end of 1996, the most recent year for complete statistics, the Pigeon River field yielded 13.5 million barrels of oil and 58.8 billion cubic feet of gas worth more than $400 million. Income to the state from royalties, rent, and taxes has totaled $65.5 million through the end of 1996. Of that amount, payments to the Natural Resources Trust Fund totaled $19.75 million.

The flow of oil and natural gas in the Pigeon River wells has declined sharply in recent years as the reserve becomes played out. Shell Oil has said it could shut down operations in the forest by 2008.

In 1988, Shell Oil called the agreement "finally, unarguably, a success on all counts." Many of the state officials involved consider the agreement one of the high points of their careers. "If there is a better plan for allowing oil and gas drilling in sensitive ecosystems, I'm not aware of it," said Ned Caveney, the DNR Field Operations Supervisor and the first Area Forester in the Pigeon River Country State Forest.

Environmental advocates also recognize the value of this model. Ann Woiwode, program director for the Mackinac Chapter of the Sierra Club, said, "The drilling plan for the Pigeon River Country was a significant improvement over the type of drilling that now blankets the landscape of the northern Lower Peninsula."

Said Ken Ide, a member of the Pigeon River Country Advisory Council, "It certainly limited the number of wells and prevented the kind of rampant development that we've seen with the Antrim gas drilling."

Lessons From The Pigeon River Struggle

The Pigeon River Hydrocarbon Development Plan represented the convergence of many social and political trends. But the most important factor by far in motivating government and industry to consider such a novel plan was intensive public pressure. The potential for one of Michigan's natural treasures to be permanently spoiled kept public interest focused on the Pigeon River Country for a decade.

Other factors that led to the plan:

•The personal and timely intervention of Gov. Milliken and his wife, Helen Milliken. Both opposed oil and gas drilling in the Pigeon River Country.

•The Natural Resources Commission, and the three DNR directors during the period of the Pigeon River controversy, consistently supported taking strong measures to limit environmental damage by restricting oil and gas development.

• Persistent, high-profile coverage by Michigan's print and electronic media kept the case before the public eye. The Detroit Free Press led the coverage, and published at least 29 editorials in the 1970s that supported decisive state action to protect the Pigeon River Country.

•The national and state environmental movement was motivated, young, aggressive, and on the rise. Environmental groups enjoyed enormous popularity and credibility with the public in the 1970s. When the debate over drilling in the Pigeon River Country first erupted, the nation had just been alerted to the hazards of drilling for oil in sensitive environments. In 1969, an oil well off the coast of Santa Barbara, California, ruptured and spilled hundreds of thousands of barrels of oil on the city's beaches. The accident was a signal event for the American environmental movement.

Thus the political conditions in the 1970s were conducive to important public policy initiatives for the economy and the environment.

Faced with regulatory and public relations obstacles in Michigan, Shell made it known early in the Pigeon River debate that it was interested in negotiating a compromise that would protect the forest while allowing drilling. Shell's prominence in and out of the industry was more than enough to overcome the substantial dissent to such a plan that was stirring in the Michigan Oil and Gas Association, the industry's statewide trade group composed primarily of small energy companies.

Michigan Land Use Institute

148 E. Front Street, Suite 301
Traverse City, MI 49684-5725
p (231) 941-6584 
e comments@mlui.org