We urge members to obtain information on oil, gas, and mineral leasing from Michigan State University Extension offices or through Michigan Farm Bureau before signing a lease. A checklist for oil, gas, and mineral leases is available on the MFB web site.
We believe wellhead and point of severance means the point at which the well is drilled or minerals are extracted. When oil, gas, and minerals are severed from the ground, everything occurring after severance is the responsibility of the lessee.
We believe government agencies, Farm Credit Services, local and state recording offices, and other state and federal chartered financial institutions should not be allowed to sever oil, gas, and mineral rights from surface rights when they resell land acquired through any land transfer. Oil, gas, and mineral rights that have been severed at foreclosure should be returned or sold to the surface property owner at fair market value.
Oil, gas, and mineral rights without activity revert to the owner of the property unless they are re-registered every 20 years by the owner of the specific rights at the register of deeds office. We believe this law should be changed to require re-registration every 10 years, and the property owner should be notified and be given the opportunity to object at the time of re-registration.
We support:
The extraction of oil, gas, potash and other minerals from both state-owned and private property in Michigan.
The Weights and Measures Division of the Michigan Department of Agriculture and Rural Development (MDARD) studying the feasibility of regulating the oil, gas, and mineral industries for the accuracy of reported volumes of oil, gas, and minerals extracted from private property. MDARD needs to become involved in the certification of all metering and measuring.
Legislation requiring oil, gas, and mineral rights lessees to notify the landowner and royalty owner by certified mail of their intent to explore for, or develop, oil, gas, and minerals prior to beginning any operations on leased land and that proof of the notification be submitted prior to granting any permit.
Legislation requiring an escrow account or bond be filed before commencing operations providing the opportunity for landowners to appeal within 10 days of its proposed release to prevent surface waste. The escrow account or bond should be reviewed annually and adjusted accordingly, with a post-closure monitoring period of 40 years.
The continued use of hydraulic fracturing with the appropriate scientifically verified environmental safeguards.
An agricultural environmental and economic impact statement being required before the supervisor of wells issues a permit.
When an injection well damages the value of the oil, gas, and mineral rights of adjacent landowners, the affected landowners being compensated for these losses.
Gas, oil, and mineral royalties from state-owned land and all severance taxes being shared with local units of government.
A reasonable severance tax for gas, oil, and precious metals, with the priority focus of the funds being in the region where the commodity is removed.
Rights of townships granted to them under the Township Ordinance, PA 246 of 1945.
Requiring a new permit for any change in a well’s use.
Agricultural representation on the state oil and gas advisory committee.
MFB exploring alternative distribution of Natural Resources Trust Fund. Consideration should be given to maintaining and improving parks, roads and wildlife habitat on existing state lands.
We oppose:
Any deductions by the oil, gas, and mineral industries from a private lessor's share of revenue unless it is expressly provided for in the signed lease. If deductions take place, the lease must contain the definition of the deduction, specific items eligible for deductions, a clear process enabling the lessor to monitor deductions, and a maximum percentage of costs to be deducted.
Attempts to ban exploration for oil, gas, and mineral deposits.
The State burdening private royalty owners with the deduction of post-production costs. Traditionally in Michigan, oil, gas, and mineral owners’ 1/8 interest was "free of costs" because owners and developers bore the expense from the wellhead.