Things Are Getting “Real” for Encana and Chesapeake

Following up on a column we posted in June, 2012 (To all of our “Contributors” to the MNRTF… “Say it ain’t so”), it now appears that it may have been “so.” In early March of this year, criminal indictments were announced by Michigan Attorney General Bill Schuette against Chesapeake Energy Corp. and Encana Corp. for allegedly fixing bids for Michigan oil and gas leases.GasWell

According to documentation which has been released by the AG’s office, Chesapeake and Encana Corporations have formally been charged with violating antitrust laws and stand accused of colluding on bids in 2010 for oil and gas leases for State of Michigan-owned mineral offerings. In a further statement from Schuette’s office, “In the five-month period following the state’s May 2010 auction, this alleged conspiracy may have been a key driver behind the state-held lease price in Michigan going from $1,510 per acre in May 2010 to less than $40 an acre at the October 2010 auction.”

These announcements have even more local relevance to Anglers of the Au Sable and others who have recently expressed significant concern about proposed oil and gas leases in environmentally sensitive areas such as the Au Sable River’s “Holy Waters.” According to media reports which have been confirmed by NMCN, both Encana and Chesapeake have been advised by Michigan Department of Natural Resources Director Keith Creagh that until all civil and criminal matters have been resolved, the state will not execute any pending leases, accept bids or recognize any lease assignments which originate from Encana or Chesapeake.

Both Encana and Chesapeake continue to deny the allegations and have publicly announced their intentions to fight the charges. This may actually be good news for those who would like to see further policy development as it relates to future mineral leasing in these areas. Because of the protracted time-line which will likely be necessary to secure resolution of both civil and criminal charges, a significant window of opportunity exists to have the broader environmental and economic issues addressed before Encana and Chesapeake are released from the “penalty box.”

P.A.R.

About Northern Michigan Conservation Network

The mission of the Northern Michigan Conservation Network is to "connect conservation-minded hunters, anglers, and outdoor enthusiasts to those issues affecting Michigan's forests, waters, and wildlife."

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