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.”