Company looks to explore for oil, gas on Waterford land

An article by Leslie Shepard    3 Comments

Waterford Township officials will be tweaking language in a proposed oil and gas lease agreement submitted by Jordan Development Company, LLC, in order to execute an agreement for exploratory purposes on township property.

Jordan Development has been seeking the mineral rights on commercial and private properties in the township over the past several months.

“They are trying to approach (the owners of) larger tracts of private property, along with the schools and the township,” said Waterford Director of Public Works Terry Biederman. “The first step is to allow Jordan to put this lease together to study sub-surface conditions.”

Jordan Development is a Traverse City-based company, founded in 1996, that currently operates more than 450 oil and gas wells throughout Michigan, with the closest one being on Crooks Road in Troy.

The proposed lease agreement will identify which activities are permissible on the property surface and what materials can be removed from below the surface. It will also address how the property owner is compensated for granting mineral rights to Jordan.

“They are giving out signing bonuses of $100 per acre for the investigation,” said Waterford Director of Building and Engineering Doug Bradley.

Once drilling commences, the property owner would receive additional royalties.

“It depends on how much is produced. The royalties are one-eighth of that multiplied by what the open market is paying for oil,” Biederman said, adding that there is a minimum 40-acre tract of land requirement in order for a company to drill or develop.

Waterford officials outlined some concerns regarding the company’s proposed lease document, including Jordan Development’s authority to clear-cut trees and install roads, pumping facilities, or storage facilities on township-owned property.

The township Board of Trustees voted to retain the right to review and approve any surface disruption of property before drilling can commence.

“We’re letting them explore, but any drilling must come back to the board for approval,” said Waterford Township Treasurer Margaret Birch.

So far, 100 township homeowners have been contacted and some have agreed to sign a lease, Birch said.

Any plan for drilling must go to the Planning Commission for site approval and then to the township board.

The township initially had concerns about how drilling could impact the water supply, but officials no longer see that as an issue given state Department of Environmental Quality (DEQ) mandates.

“The DEQ has very strict design standards for wellheads,” Biederman said. “They are encapsulated four to five times, especially going through the first few thousand feet. My take is that there aren’t any guarantees, but the design standards are pretty stringent and we haven’t seen any wellhead that has caused groundwater contamination.”

Wells would be drilled at about 4,000 feet deep, according to Biederman.

“We’re putting in language in the lease that, in case something goes awry, the oil company is responsible for remediation,” Biederman said.

Jordan Development is interested in a large swath of property that cuts through the center of the township.

“It’s near Mott High School, travels toward the Township Hall and cuts to the edge of the (Oakland County International Airport), and then goes up through Andersonville Road and continues northwesterly out of the township,” Bradley said.

Jordan will be forwarding a list of project references for residents to review to the township Clerk’s Office within the next two weeks.