Michigan Lifts Moratorium On Great Lakes Drilling

Three years after Michigan Gov. John Engler called a temporary moratorium on the practice of vertically drilling from shore to reach oil and gas deposits beneath the Great Lakes, the Michigan Natural Resources Commission has given its "overwhelming support" for the Department of Natural Resources (DNR) to approve procedures to resume leasing oil and gas property there. Since the 1970s, 13 oil and gas wells had been dug in the lakes, and seven are still in operation.

Assuming the state legislature did not block the drilling, it could take at least four months and as long as a year before new energy exploration could begin under Michigan's new guidelines, which will ensure more output from stakeholders. DNR Director K.L. Cool and the Michigan Department of Environmental Quality have approved procedures to resume the leasing of lands.

The regulatory changes require a minimum 1,500-foot setback from the Great Lakes for wells drilled directionally beneath the waters, and for new storage and treatment equipment and access roads associated with the wells. In addition, the regulations prohibit wells, equipment and access roads in sensitive coastal environments; nor will the use of excavated pits be allowed to dispose of drill cuttings.

"Hydrocarbon development from beneath the bottomlands of the Great Lakes is not a venture limited to the confines of the State of Michigan," said Cool. "Since 1913, Canada has drilled more than 2,200 wells in Lake Erie and continues to drill an average of 20 new wells each year in the lake without negative environmental impact."

Cool noted that the state-owned minerals are the sole source of funding for the Michigan Natural Resources Trust Fund, and since the fund's inception in 1976, more than $400 million has been added to state and local units of government to acquire and protect environmentally sensitive and special lands. Current projections indicate that up to an additional $100 million could be deposited into the fund from leasing and bottomlands development, he said.

Priority will be given to leases that can be "accomplished from existing infrastructure," Cool said. "This will ensure an opportunity for the oil and gas production industry to demonstrate by their actions their commitment to public and environmental safety as well as aesthetics."

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