The Detroit Free Press is reporting record sales for gas drilling rights on state-owned property.

Michigan oil and gas speculators bet the farm today on a newly developed natural gas field in the northern Lower Peninsula, paying well over $140 million for mineral rights at the halfway point of a record-breaking state auction.

The eye-popping auction results are a windfall for the state’s Natural Resources Trust Fund, which gets about 90% of the proceeds to buy recreational and environmentally sensitive property.

The oil and gas rush was apparently touched off by a single, deep well that went into Missaukee County over the winter. The well, owned by a Colorado-based company, has generated intense speculation on a possible boom in the Utica shale formation that underlies much of the northern Lower Peninsula. Utica shale and other deep shale formations have been productive in other states, but never before developed in Michigan.

Whether this is windfall is a long term or a bust remains to be determined.

Nonetheless, this is great news for the Trust Fund which should be able to provide more grant funding for items such as land acquisition and trail development. For example, the Trust Fund has paid for much of Milliken State Park, the RiverWalk, and Dequindre Cut — often through the DNR.

And, there may be a Trust Fund request in the near future for the Inner Circle Greenway — a trail that would combine with others and wrap around the city.

Until recently, the city of Detroit was not eligible for these funds since City Council had not endorsed a new recreation plan. As we reported earlier, Council endorsed the recreation plan which opens the door to more grant funding in Detroit.

Tags: Detroit, Funding, Inner Circle Greenway, Natural Resources Trust Fund

This entry was posted on Tuesday, May 4th, 2010 at 5:57 pm and is filed under Detroit, Funding. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.