Rivers At Risk

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IMAGE imgs/rivrisk04.gif

Introduction

***
In a distinct departure from the careful
analysis and high-minded debate that
characterized the formation of the
Pigeon River Hydrocarbon Development
Plan, the tapping of the Antrim Shale
formation a decade later is more like a
19th-century free-for-all.
***

The Department of Natural Resources purchased
the Blue Lakes Ranch area of the Pigeon River
Country State Forest with $1.9 million from oil
and gas royalties to protects its unique and
environmentally sensitive character. Now an
Antrim developer is seeking permits to drill there.

In 1980 Michigan took an extraordinary step to bridge economic and environmental goals in the Pigeon
River Country State Forest of the northern Lower Peninsula. Three energy companies -- Shell Oil, Amoco,
and Northern Michigan Energy Company -- reached an agreement with the Department of Natural Resources
and several conservation groups to safeguard a wild forest while tapping a reserve of oil and gas that lay
below.
The Pigeon River Hydrocarbon Development Plan was forged after 10 years of intense public debate,
which included two path-breaking court decisions.
The plan strictly limited the number of oil and gas wells allowed in the Pigeon River Country State Forest.
The energy companies also agreed to subject most aspects of drilling and exploration to oversight and review
by the Pigeon River Country Advisory Council. The council, which now has 18 members, includes private
citizens, county government officials, public interest group representatives, and one member each from the oil
and gas industry, the forest products industry, and the Otsego County Road Commission.
Under the historic 1980 agreement, less than one-third of the roughly 83,000 acres of state-owned forest
was opened to drilling. Shell Oil, which managed the development, tapped the reserves of oil and gas from 22
different sites, often using directional drilling technology. Because the wells were kept to the lowest number
necessary, the need for new roads and pipelines cut through the forest also was minimized.
A Workable Compromise
From an environmental perspective the Pigeon River Plan necessarily has some flaws:
•As operator, Shell Oil continually complained about what it called the laborious process of gaining
approval from the Advisory Council for management decisions.
•The DNR made decisions that led to lingering groundwater contamination. State officials did not enforce
the restriction on waste pits in the drilling zone, and just as environmental scientists had predicted, chloride
leaked from the pits to contaminate groundwater. In the mid-1980s, the DNR ordered Shell to dig up and
remove 11 waste pits.
•The road widenings, pipeline construction, and oil-related development altered the character of the
Pigeon River Country, especially in the drilling areas. What had been a truly wild area with few passable roads
and a rare solitude was turned into an industrial zone characterized by heavy truck traffic, big machinery, and
a vastly quickened pace. The Big Wild has been tamed.
However, considering the economic and political tenor of the times, the Pigeon River Plan was the most
careful possible approach to energy development in a sensitive ecosystem:
•The state and the industry agreed to put the northern two-thirds of the Pigeon River Country State Forest
off-limits to drilling, which also prevented the installation there of the accompanying roads, pipelines, and
processing plants.
•The southern third of the forest was opened to development, and the plan stipulated that drilling occur in
stages. Shell Oil conducted exploration and recovery operations in a sequential pattern, moving from the
southern part of the forest northward, with each step carefully planned by the industry and monitored by the
Advisory Council.
•The industry accepted the principle that the damage to public resources caused by drilling should be
financially compensated. This led to the formation of the Natural Resources Trust Fund, a state-managed
public account to buy wild land and improve recreation that is financed by royalties and fees collected from
oil and gas drilling on public lands.
The Pigeon River Plan effectively weighed the competing interests and produced a workable compromise.
It demonstrates that energy development can occur with a high standard of natural resource protection.
As such, the Pigeon River Plan represents a high point for energy policy-making in Michigan. Seventeen
years after the plan went into effect, the Pigeon River Country State Forest remains one of the most productive
oil and gas fields in Michigan. It also is a place where elk, bear, and bobcat roam, and where hikers, skiers,
and hunters can trek for days without coming into contact with industrial civilization.
Model Overlooked During Gas Drilling Rush
-Third-Largest Natural Gas Field in the U.S. -
Despite its proven usefulness, the model plan never again was applied to manage oil and gas development
in other environmentally sensitive regions of Michigan. This public policy lapse occurred even as the north
woods became the center of the greatest natural gas drilling boom in state history.
Since 1989, more than 6,000 wells have been drilled into a shallow but highly productive reserve of
atural gas, called the Antrim Shale formation, underlying much of the northern Lower Peninsula. A
magnificent sweep of quiet forest, clean rivers, and serene lakes has been turned into the third-largest natural
gas field in the United States. The development has come with a very high price, by causing substantial
damage to natural resources.
(continued on next page)




	Introduction
* In a distinct departure from the careful analysis and high-minded debate that characterized the formation of the Pigeon River Hydrocarbon Development Plan, the tapping of the Antrim Shale formation a decade later is more like a 19th-century free-for-all. *
		The Department of Natural Resources purchased the Blue Lakes Ranch area of the Pigeon River Country State Forest with $1.9 million from oil and gas royalties to protects its unique and environmentally sensitive character. Now an Antrim developer is seeking permits to drill there.
	In 1980 Michigan took an extraordinary step to bridge economic and environmental goals in the Pigeon River Country State Forest of the northern Lower Peninsula. Three energy companies -- Shell Oil, Amoco, and Northern Michigan Energy Company -- reached an agreement with the Department of Natural Resources and several conservation groups to safeguard a wild forest while tapping a reserve of oil and gas that lay below. The Pigeon River Hydrocarbon Development Plan was forged after 10 years of intense public debate, which included two path-breaking court decisions. The plan strictly limited the number of oil and gas wells allowed in the Pigeon River Country State Forest. The energy companies also agreed to subject most aspects of drilling and exploration to oversight and review by the Pigeon River Country Advisory Council. The council, which now has 18 members, includes private citizens, county government officials, public interest group representatives, and one member each from the oil and gas industry, the forest products industry, and the Otsego County Road Commission. Under the historic 1980 agreement, less than one-third of the roughly 83,000 acres of state-owned forest was opened to drilling. Shell Oil, which managed the development, tapped the reserves of oil and gas from 22 different sites, often using directional drilling technology. Because the wells were kept to the lowest number necessary, the need for new roads and pipelines cut through the forest also was minimized. A Workable Compromise From an environmental perspective the Pigeon River Plan necessarily has some flaws: •As operator, Shell Oil continually complained about what it called the laborious process of gaining approval from the Advisory Council for management decisions. •The DNR made decisions that led to lingering groundwater contamination. State officials did not enforce the restriction on waste pits in the drilling zone, and just as environmental scientists had predicted, chloride leaked from the pits to contaminate groundwater. In the mid-1980s, the DNR ordered Shell to dig up and remove 11 waste pits. •The road widenings, pipeline construction, and oil-related development altered the character of the Pigeon River Country, especially in the drilling areas. What had been a truly wild area with few passable roads and a rare solitude was turned into an industrial zone characterized by heavy truck traffic, big machinery, and a vastly quickened pace. The Big Wild has been tamed. However, considering the economic and political tenor of the times, the Pigeon River Plan was the most careful possible approach to energy development in a sensitive ecosystem: •The state and the industry agreed to put the northern two-thirds of the Pigeon River Country State Forest off-limits to drilling, which also prevented the installation there of the accompanying roads, pipelines, and processing plants. •The southern third of the forest was opened to development, and the plan stipulated that drilling occur in stages. Shell Oil conducted exploration and recovery operations in a sequential pattern, moving from the southern part of the forest northward, with each step carefully planned by the industry and monitored by the Advisory Council. •The industry accepted the principle that the damage to public resources caused by drilling should be financially compensated. This led to the formation of the Natural Resources Trust Fund, a state-managed public account to buy wild land and improve recreation that is financed by royalties and fees collected from oil and gas drilling on public lands. The Pigeon River Plan effectively weighed the competing interests and produced a workable compromise. It demonstrates that energy development can occur with a high standard of natural resource protection. As such, the Pigeon River Plan represents a high point for energy policy-making in Michigan. Seventeen years after the plan went into effect, the Pigeon River Country State Forest remains one of the most productive oil and gas fields in Michigan. It also is a place where elk, bear, and bobcat roam, and where hikers, skiers, and hunters can trek for days without coming into contact with industrial civilization. Model Overlooked During Gas Drilling Rush -Third-Largest Natural Gas Field in the U.S. - Despite its proven usefulness, the model plan never again was applied to manage oil and gas development in other environmentally sensitive regions of Michigan. This public policy lapse occurred even as the north woods became the center of the greatest natural gas drilling boom in state history. Since 1989, more than 6,000 wells have been drilled into a shallow but highly productive reserve of atural gas, called the Antrim Shale formation, underlying much of the northern Lower Peninsula. A magnificent sweep of quiet forest, clean rivers, and serene lakes has been turned into the third-largest natural gas field in the United States. The development has come with a very high price, by causing substantial damage to natural resources. (continued on next page)