During his State of the State address, the Governor unveiled a proposal to buy private minerals in the Jordan Valley as part of an effort to preserve Michigan’s "very special, irreplaceable, unique areas."

To some this sounds like a good plan. But before this idea goes too far, we need to understand what it could mean to the state treasury and to Michigan’s long-standing tradition of environmental protection.

First, a bit of background: The Governor’s announcement came after Walter Zaremba, an Elmira businessman, submitted plans to drill what would be the first natural gas well on state-owned surface land within the Jordan Valley in Antrim County. Since 1975, the revered 22,000-acre natural area has been off limits to industrial development, including oil and gas drilling, under the state-sanctioned Jordan Valley Management Plan. At a recent hearing in Lansing, the Department of Natural Resources publicly opposed the drilling plans and reinforced that the Management Plan is still the guiding policy for the forest.

Mr. Zaremba proposes to drill on a 40-acre tract of privately owned minerals that is surrounded by miles of state-owned forest. He leased the minerals in 1994, and then a year later the DNR acquired the surface. Mr. Zaremba also wants to install a pipeline across state land that has been restricted oil and gas development for 22 years.

The problem with the Governor’s proposal is that by buying out Mr. Zaremba, the state would be affirming that he has a legal right to drill. That assumption has by no means been substantiated.

The state’s top legal experts argue that the environmental damage from the drilling and the pipeline would clearly violate the Michigan Environmental Protection Act. The law, which has been the backbone of Michigan’s regulatory system, specifically requires the state to protect the "air, water, and other natural resources of the state from pollution, impairment or destruction".

Legal experts say that Mr. Zaremba is not entitled to any public payment because he had no reasonable expectation of gaining economic returns from his speculative investment. They cite a decision in 1979 by the Michigan Supreme Court in a remarkably similar case in the Pigeon River Country State Forest. In that case, the court denied a drilling permit on public land without granting compensation.

The recent move to open up the Jordan Valley appears linked to a nationwide push from property rights advocates to weaken environmental laws. DNR officials say that had such a proposal been filed 15 years ago, the application would have been soundly denied on the basis that it would have caused unreasonable harm to the environment and violated the Management Plan.

And consider this. Public records show that in 1994 Mr. Zaremba paid $1,200 to lease the minerals. Now, according to a newspaper article, Mr. Zaremba’s attorney claims it will take a nearly $600,000 tax-supported payment to stop his drilling plan.

Think about it for a minute.

A man leases out land in the middle of a public forest that is off limits to oil and gas drilling. He pays just over a thousand dollars. Then, after doing little more than submitting a drilling permit application, and responding to questions at an administrative hearing, he claims the legal right to more than half a million dollars of our tax money.

It’s preposterous. The state, and by extension the public, should not be held responsible for paying off a speculator for a risky investment that didn’t pan out.

The DNR reports that there are 1,560 acres of privately held minerals in the Jordan Valley. These interests vary considerably. There are mineral owners. There are mineral leaseholders. And there are oil companies that hold state leases. Some of the private parcels have been in private ownership for generations and others, however, were acquired well after the Management Plan was adopted.

Given these variables, the enormous potential cost of a buyout, and the policy precedent at stake, it is imperative that the property rights issues and environmental laws are thoroughly evaluated before a buyout policy is considered.

One place to look for guidance is the Pigeon River Country State Forest. In 1980, after a decade of public debate, the state established a management plan that is widely regarded as the nation’s best land use plan for developing oil and gas in sensitive environments. The plan restricted drilling to one third of the forest and placed strict standards on the development.

The Pigeon River plan should be used as a model for addressing the issues in the Jordan Valley. That doesn’t mean drilling in a third of the Jordan Valley. Rather it means carefully evaluating the quality of natural resources, the technical ability of the industry, and the rights of the mineral owners. Then, only after such a comprehensive evaluation is performed, should the state consider whether it is appropriate to use public funds to buy private minerals.

Governor Engler deserves credit for his commitment to protecting the Jordan. With his leadership, it is entirely possible to develop a fair policy that respects the constitutional rights of private property owners and maintains Michigan’s proud tradition of environmental protection. Before any money changes hands, citizens and state leaders have an obligation to think this through.

Hans Voss is the Associate Director of the Michigan Land Use Institute, a non-profit economic and environmental policy research and education organization based in Benzonia.