Environment
11:00 am
Thu February 3, 2011

Oil & Gas Royalties for Parks - or Roads?

At the moment, all royalties from oil and gas development in Michigan go into something called the Natural Resources Trust Fund. The trust fund money is used for improving wildlife habitat and parks and it's used to buy land for conservation.

But at a time when pretty much everything’s up on the chopping block... the future of that trust fund is in question.

State Representative Dave Agema (R) from Grandville has introduced legislation to divert oil and gas royalties away from the Trust Fund.

Under his proposal:

  • 60% of oil and gas royalties would go into the State Transportation Fund
  • 20% would go into the State Aeronautics Fund
  • the remaining 20% would go into the Natural Resources Trust Fund

The NRTF has been around since 1976. It was negotiated as part of a larger deal to allow oil and gas development in Michigan's Pigeon River Country State Forest.

I talked with the Michigan Environmental Council's policy director, James Clift, about this.  He says:

"Every corner of the state has obtained some of this trust fund money, either buying parkland or developing parkland, setting aside public land for hunting and fishing... It’s a very popular program and I think people are going to be very supportive of the way it’s spent currently."

Three things to know about the Natural Resources Trust Fund:

  1. It's constitutionally protected.  If Rep. Agema's package of bills (HJR B, HB 4021, HB 4028) passes, the issue would be placed on the next general election ballot for voters to have their say on the issue.
  2. It would take a constitutional amendment to change how oil and gas royalties are allocated. 
  3. There's currently $102 million available for conservation and park projects in Michigan.  Governor Rick Snyder wants the legislature to pass a capital outlay bill to distribute that money.  Each year, the Michigan legislature has to vote on how the NRTF money is spent.