ROCHESTER HILLS — City officials are currently considering a request for leases for oil and gas exploration under city-owned lands.
Jordan Development Co., which owns West Bay Exploration Co., has contacted city officials and residents, seeking approved leases for exploration drilling and permission to extract gas or oil. If gas or oil were found and extracted, the property owner would be paid a royalty.
“Michigan is quite well known for its oil and gas production,” said Ben Brower, vice president of Jordan Management Co., based in Traverse City. “We are 17th out of 33 for oil and 10th for gas (in the country). My company operates about 450 wells in the state. Most are gas wells.”
Brower said Jordan Development opened a well in White Lake Township in August. “We are hoping to drill some new wells in the area in the future,” he said during an Oct. 22 presentation in Rochester Hills.
A 2003 well drilled on a 40-acre site near Crooks and Square Lake roads has generated $10 million in royalties, Brower said. “You have multiple properties that would fall in that category if we found oil,” he said. “We certainly can’t promise it, but this is an example close to your community.”
Jordan Development has identified three city-owned areas in Rochester Hills for oil and gas exploration, including two sites near Tienken and Adams roads and one site in Stoney Creek Cemetery, near Tienken and Sheldon roads. Jordan is offering the city a lease of $150 per mineral acre for five years with a one-sixth royalty for gas or oil extracted.
“We have targeted this area and we believe your properties are in the area that we would like to pursue,” Brower said.
Brower said many Rochester Hills residents have been contacted by Jordan Development and are receptive to gas and oil leases on their personal properties. “Hardly anybody is telling us no,” Brower said. “Most people are favorable.”
Rochester Hills Mayor Bryan Barnett said the city has heard from a number of concerned residents about the matter.
“Ultimately it is a private property decision that each person is going to make,” Barnett said. “We are trying to educate and look at concerns. We are comfortable at this point with the information and the limitations that we have.”
According to Brower, Jordan Development will not use high volume hydraulic fracturing to recover hydrocarbons. “We don’t have any intention of fracking,” Brower said. “We can put it in the lease.” Some environmentalists link fracking to the contamination of groundwater and risks to air quality.
The location of the drilling operation and subsequent pumps used for extraction has not been identified. City parks cannot be used for the drill or extraction purpose, according to city officials. All drills would be on adjacent property and would include fencing, Brower said.
Rochester Hills City Council tabled the request for leases for exploration drilling and permission to extract gas or oil under city-owned properties until the 7:30 p.m. Nov. 12 meeting at City Hall, on Avon Road.
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