SPECIAL REPORT: Drilling for Dollars — Would we balance the budget with natural resources?
The Department of Natural Resources and Environment (DNRE) held an oil and gas lease auction on May 4 that netted a record $178 million – almost eight times the previous record of $23.6 million in 1981. The state leased 118,117 acres in 22 counties, something for which it can probably thank Canadian-based Encana.
June 10, 2010
By The Center for Michigan
Michigan isn't used to getting a lot of good news these days, but the state hit upon an unexpected bonanza last month.
The Department of Natural Resources and Environment (DNRE) held an oil and gas lease auction on May 4 that netted a record $178 million – almost eight times the previous record of $23.6 million in 1981. The state leased 118,117 acres in 22 counties, something for which it can probably thank Canadian-based Encana. In 2008, the company acquired 25,000 acres in Missaukee County and subsequently hit a deep natural gas reservoir in what's known as the Utica Shale, thus sparking the gas rush.
So where does the money go?
About two-thirds of the auction's proceeds will fill the coffers of the Natural Resources Trust Fund (NRTF), which was established in 1976 during the administration of Gov. William Milliken. Michigan is nearing the $500 million annual cap, although DNRE spokeswoman Mary Dettloff said that won't happen "unless we have another huge auction." If the state hits the cap, the State Park Endowment Fund would reap the benefit for operations and maintenance. The other 36 percent of the auction proceeds is tied to the much smaller Game and Fish Protection Trust Fund created in 1986. Continue Reading on The Center for Michigan Site
