Tagged: oil drilling

The Michigan Department of Natural Resources auctioned off state-owned oil and natural gas drilling rights on more than 90,000 acres yesterday.

Here’s a recap of the auction results:

• Total acres up for auction: 108,164.70
• Total acres leased: 91,225.42
• Total money raised: $4,118,848.60
• Average bid per acre: $39.90

These auctions are typically held twice per year, in May and October.

The money raised from these biannual auctions has been steadily increasing since 2000, hitting peaks in 2008 and 2010.

In the first auction of 2008, the state leased all of the 149,000 available acres for more than $13 million. The last time the state had a 100 percent lease rate was in 1981.

The first auction in 2010 had a 99.6 percent lease rate and raised an unprecedented amount: more than $178 million.

The average bid per acre for that auction was $1,507, which far exceeds the average bids at any other auctions over the last 10 years, all of which have been under $100.

-Suzanne Jacobs, Michigan Radio Newsroom

People opposed to a natural gas drilling technique called hydraulic fracturing protested outside a state office building in Lansing this morning. 

The state is auctioning off oil and gas mineral rights leases for more 100 thousand acres of public land.

The protesters chanted as energy industry and state government officials entered the building where the auction of oil and gas mineral rights leases was taking place.

The protesters worry drillers will use horizontal hydraulic fracturing, or fracking, to extract natural gas in Michigan, potentially contaminating drinking water and causing other environmental problems.

LuAnne Cozma is an anti-fracking activist.  She says state regulations are geared to help the industry, not to protect the people of Michigan.
 
“The gas is drilled…the more gas flows…the more money flows into the (state government) coffers…and that is why we don’t trust the whole process," says Cozma.

The protesters are circulating petitions to put an Anti-fracking question on the November ballot.

Starting at 9am this morning, the Michigan Department of Natural Resources will hold an auction to lease state-owned drilling rights for oil and natural gas. 

The state is offering drilling rights on more than 108,000 acres in 23 counties.  These auctions are usually held twice a year.  The minimum bid is $12 dollars an acre.

Mary Uptigrove is the acting manager of the DNR’s Minerals Management Section.  She says acquiring drilling rights is the first step in exploring for oil and gas.

“The lease is just a proprietary right that’s administered by our department. It does not give them the right to actually start drilling a well.  They have to seek other approvals from the Department of Environmental Quality for the drilling permit.”

The leases last five years, and the companies have the option to extend them.

Uptigrove says industry groups usually nominate parcels for the auction.  The state gets 1/6 of the royalties of any oil or gas that comes out of the ground.  That money is used to maintain state and local parks and to buy land.

Maryann Lesert lives near the Yankee Springs Recreation Area in Barry County. 

She’s worried the auction will lead to drilling under the park land... especially a kind of drilling for natural gas called horizontal hydraulic fracturing, or fracking. (To learn more, check out this recent article by Michigan Radio's Lester Graham about the benefits and risks of fracking)

“It’s beautiful land, it has beautiful bodies of water and the environmental and water impact threats from fracking are of great concern.”

Protesters are expected Tuesday morning outside of a planned auction of oil and natural gas lease rights on public land.

Lease rights on more than 100 thousand acres of public land will be available in the auction in Lansing.

Mary Uptigrove is the acting manager of the Minerals Management Section of the Department of Natural Resources.    She says much of the land on the auction list is there by the request of the drilling industry.

“They may know…areas where… current development is occurring….and they want to explore for additional development,” says Uptigrove. 

Hydraulic fracturing or "fracking" has created no shortage of controversy recently. And as Michigan Radio's Rebecca Williams reported last week, debate over this controversial method of extracting oil and gas from deep inside shale deposits has made its way to the Michigan statehouse.