Source: Sherman Publications

Search is on for oil

by Mary Keck

December 19, 2012

Wildlife and wildlife aficionados aren’t the only visitors to Indian Springs Metropark these days. Oil rig operators have been frequenting the park located in both White Lake and Springfield townships.

Jordan Development, an oil and gas company from Traverse City, has drilled one exploratory well just off of Teggerdine road and will likely bore more holes in the ground around the park. The company’s sites aren’t only set on Indian Springs, however.

On December 18, Chris Bickley of Jordan Development intends to share a presentation with the Independence Township board of trustees on potential oil exploration in Independence.

Jordan entered into an oil and gas lease with the Huron-Clinton Metropolitan Authority (HCMA) in 2011 and to lease the entire 2,134 acres of the park the HCMA will receive $150 per acre or $320,199 upfront and one quarter of the royalties from any valuable minerals found beneath the ground.

In June 2012, Jordan drilled approximately 5,000 feet under the ground of Indian Springs to determine the potential of striking oil. Now, they have other well sites in mind, and the HCMA has agreed to let Jordan keep searching.

Jordan has “continued to sign leases with private property owners throughout Springfield Township, and they were also able to acquire leases from the Pontiac Lake state park lands,” said Indian Springs Metropark engineer Mike Arens.

Arens who observed oil-producing wells in Kensington Metropark and the one exploratory well in Indian Springs described his experiences with West Bay Exploration, another Traverse City company that frequently partners with Jordan Development.

“The well-head site during development is a construction site,” Arens explained. “It is typically a well-drilling operation for the span of two to three months [then] that drilling operation will disappear and all that will be seen at the well head location will just be the well head itself.”

Arens notes some truck traffic associated with drilling projects to bring in equipment. “There’s equipment coming and going,” he said. While there is a gas smell at the operation, Arens said it remains “localized to the site.” There are also “generators and diesel motors operating, and they are audible within a few hundred feet,” he described.

Because of the noise, truck traffic, and smells, Arens emphasized, “site selection is critical.” When it comes to the drilling location, the HCMA is “intimately involved in that process,” said Arens.

Based on their lease with Jordan, the HCMA only allows mutually agreed upon wellhead sites determined to be non-environmentally sensitive and not used for recreation.

Considerations like tree buffers, distance from park recreation and residential areas, and places where minimal surface vegetation will need to be removed are a part of choosing the right wellhead area. As a result of the HCMA’s site selection, Arens said there’s been no impact on wildlife or wetlands.

Another stipulation in the lease: “We did not permit hydraulic fracturing in our wells,” said Arens. Hydraulic fracturing (fracking) is a process in which high volumes of water and chemicals are pumped at a high pressure into the ground to break rock formations and release natural gas.

Despite the careful considerations made when working out a lease agreement with Jordan, Arens admits not everyone living nearby wants oil rigs in Indian Springs. The public opinion he’s heard runs the gamut. Some are entirely against any kind of drilling, others are excited about the potential revenues, while many don’t have an opinion either way.

“It has been a balance to make sure we’re balancing the environmental and recreational potential impact against the need to use these revenues for needed improvement and repair projects,” said Arens.

Since 1993, the HCMA has acquired about $13 million in revenues from successful wells drilled mainly in the Kensington Metropark.

“Just because someone’s looking in your area, it doesn’t mean a thing in terms of actually producing anything,” Arens pointed out.

If Independence Township or landowners in the area are thinking of entering into an agreement with Jordan Development, he encouraged them to remember “they don’t have to take exactly what’s presented . . . all the terms of the standard oil and gas lease are subject to negotiation.” He also stressed the importance of “communicating with and educating the residents.”

Overall, Arens said, “If they can balance the land use concerns of the township, the interests of the neighbors with respect to potential nuisance, if they can mitigate the potential environmental and recreational issues, then the potential for revenues can be very helpful in meeting whatever needs they have financially.”

As for Jordan Development, “I’m sure they are a responsible company,” said Chairman of the HCMA Board Anthony Marrocco. “They came to us with a proposal, and they laid out what they intended to do, so we agreed to some terms with them and made sure everything was done in a safe manner,” he said.

Michigan State University Extension offers oil and gas leasing advice for landowners on Find the HCMA’s lease with Jordan Development at The Independence Township board will meet again on Tuesday, January 8 at 7:30 p.m at Township Hall. Jordan Development did not respond to requests for comment.