The State of Michigan suffered a blow to its economy and its environmental programs when President George W. Bush on November 14 signed a federal water and energy bill halting oil and gas drilling in and around the Great Lakes.
Governor prepared to lift restrictions
Following a recommendation by the Michigan Department of Natural Resources (MDNR), Michigan Governor John Engler was prepared to lift drilling restrictions on Lake Michigan and Lake Huron that he imposed in 1997. Engler had decided to lift the restrictions after MDNR studies showed drilling would pose no threat to the lakes.
Although the eight Great Lakes states ban drilling from platforms on the lakes themselves, Michigan proposed to allow land-based drilling at an angle beneath the water. According to MDNR, modern technology assures there is little or no risk of a spill from the proposed drilling. Even if a spill were to occur, concluded MDNR, the small risk would be confined to the onshore wellhead. There would be no risk of a spill affecting the lakes themselves.
Senator sponsors federal intervention
The legislation signed by Bush, however, included an amendment halting Great Lakes drilling until September 2003. The amendment was sponsored by Senator Debbie Stabenow (D-Michigan), after she failed to convince her own state officials to ban future oil and gas recovery.
Susan Shafer, Engler’s press secretary, worried federal intervention in the state’s oil policies may signal greater federal meddling in a broad array of issues traditionally entrusted to the individual states.
“Today it’s the federal government telling us what to do with oil and gas, and tomorrow it could be them telling us to send our water to other states,” asserted Shafer.
Shafer indicated the state is considering a suit against the federal government, but hasn’t made a final decision yet.
“We’re looking at our options. I don’t have a yes or no answer … but we will look at our options. This is a terrible precedent.”
Significant reserves taken off the board
The extent of Lake Michigan’s recoverable oil resources is still unknown. Estimates range from a minimum of 30 million barrels to a maximum of 500 million.
Although the Lake Michigan deposits pale in comparison to the Arctic National Wildlife Refuge’s estimated 3 billion to 16 billion barrels, the Lake Michigan oil reserves are nevertheless quite substantial. The state currently ranks 17th out of the 50 states in oil production, even though its land-based wells produce only 8.3 million barrels of oil each year.
Before Engler imposed the 1997 drilling restrictions, 13 directional wells were drilled along the Michigan shore. Engler cited environmental concerns as motivating his restrictions, and he asked that a board of environmental advisors conduct a study on the environmental impact of drilling. With the board concluding that directional drilling poses little risk of a spill and no risk to the lakes themselves, Engler was ready to lift his drilling restrictions.
Environmental programs hurt by lost revenues
Ken Silfven, a spokesperson for the Michigan Department of Environmental Quality, asserted the environmental concerns behind the federal legislation fly in the face of scientific data. Silfven argues that well leases have actually been environmentally friendly, providing $15 million in funds the state uses to buy and maintain parks. Silfven foresees $100 million in additional state revenue, much of which would be used for the benefit of new environmental programs, if the state is allowed to resume drilling.
Canada continues Great Lakes drilling
Although the United States government has banned Great Lakes drilling for the immediate future, this hasn’t halted oil and gas drilling altogether. Canada owns one-half of all the Great Lakes, with the exception of Lake Michigan, and allows substantial drilling in its half. Lake Erie in particular has proven to be a valuable source of Canadian oil.
“Yes, we’ve had spills of oil, and leaks of gas occur,” said Rudy Rybansky, chief engineer for Ontario’s Department of Natural Resources, but “everything has been minor. We haven’t had any problems. There’s nowhere near the debate in Canada that you’re seeing in the U.S. That’s your debate.”
Added Michigan attorney Jack Lynch, “Sometimes, we need fuel and drilling is encouraged. When there aren’t lines at the gas stations, the view is that drilling is bad. This is what I say: If we aren’t drilling now, we can’t suddenly turn the valve on the next time we really need it.”