Executive Summary

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This report:

• Provides a well-documented history and thorough case study of the Pigeon River Plan.

• Calls for reviving this approach as a model for energy development and resource protection, implement- ing it in seven threatened watersheds, and expanding it for two rivers now partially protected.

• Calls for permanently barring oil and gas drilling in the northern two-thirds of the Pigeon River Country State Forest.

• Describes a 10-point action plan that the state, the energy industry, local governments, public interest groups, and citizens can follow to build a constituency for applying the Pigeon River approach to energy development statewide.

Opportunity for Action

Establishing these proposals in policy and in law is possible now because of the extraordinary attention that oil and gas development is attracting in communities, the Legislature, the Governor's Office, and the media.

• Careful research, persistent organizing, and cooperation within the Michigan Energy Reform Coalition (MERC), a 24-member alliance of local governments and public interest groups, has yielded an influential statewide grass roots movement.

•The DNR recognizes the need for resource management initiatives that work on a watershed basis.

• Lawmakers in the state House of Representatives are taking an interest in the MERC program and are considering policy reforms.

Inclusive Approach for Public and Private Land

One of the defining characteristics of the Pigeon River plan is that it covers state-owned and privately- owned land. Today's hydrocarbon plans also must include thorough assessments of and guidelines for the various potential economic and environmental effects on both types of land.

Since private land in most of these watersheds is experiencing rapid residential and commercial growth, the guidelines need to be particularly sensitive to the inherent conflicts presented by oil and gas development. Modern hydrocarbon planning guidelines must:

• Give special consideration to the effects of oil and gas drilling on private property values.

• Coordinate with the land use plans of local governments.

• Balance fairly the property rights of landowners with precautions to protect communities and the landscape from haphazard development.

Coordinating State Agencies

Another key aspect of the hydrocarbon planning process is to better coordinate the work of the DNR, the Department of Environmental Quality, and the Michigan Public Service Commission. The agencies need to:

• Develop a new ethic for cooperative management of oil and gas development.

• Jointly study the economic, land use, environmental, and health and safety issues associated with drilling in each watershed.

• Open the planning process to citizen participation.

The agencies then will be prepared to develop hydrocarbon development plans that:

• Identify those areas that are off-limits to drilling.

• Identify those areas where drilling is allowed.

• Establish criteria to guide the development.

Public Participation

An Advisory Council will be established for each watershed to ensure that citizens have a meaningful voice in the process. They will work with the DNR, the DEQ, and the MPSC on all matters concerning leasing, permitting, and oversight of oil and gas development.

Planning and Regulatory Improvements

The hydrocarbon plans will:

• Require specific setbacks from sand dunes, wetlands, surface water, parks, residences, buildings, and recreational areas.

• Identify areas in each watershed where the spacing among wells can be increased.

• Require energy companies to share wells, roads, pipelines, and processing stations under a "unitization" plan.

• Ban the use of on-site waste pits, which are used to bury drilling muds and rock cuttings, in especially sensitive areas.

• Require tougher standards on noise and odor, which include the most effective abatement technologies and more careful procedures for nuisance monitoring.

• Employ directional drilling technology, which enables producers to tap energy reserves from less sensitive areas.

•Align roads and pipelines in the same corridor, and keep both as narrow as possible.

• Minimize the visual intrusion of wells and associated industrial facilities.

• Require companies to submit complete development proposals, including locations for well sites, pipeline routes, and processing equipment, simultaneously to the DEQ, the DNR, and appropriate county and township representatives.