Monday, August 11, 2008

Schauer Introduces Energy Plan in Michigan Senate

While Tim Walberg is staging a protest in Washington, D.C. and waving his energy plan around on television, Democratic challenger and state Senator Mark Schauer introduced a bill in the Michigan Senate to do what he can do to increase energy production and create jobs:
Highlights of Schauer’s “Drill Responsibly-Create New Energy Jobs” include:
  • Demand responsible oil production in currently leased land
  • If no production in five years, land goes back to state to be re-leased
  • Financial penalties for stockpiling land to profit from reserves without producing
  • No new leases unless current ones are used
  • Modernize lease system to make sure taxpayers and consumers benefit from production
  • Switch from the outdated 1/6 royalty system to a 50/50 "working interest" model - as the federal government and other countries are moving toward. Other states like Alaska, Colorado, Texas, Wyoming, Oklahoma, and Louisiana all make more compensation for their taxpayers from production
  • Create fund where additional revenue is used to transition to renewable energy projects and job creation

According to Legislative Service Bureau estimates, there are approximately 4,187 active leases in Michigan on which oil is not being produced, 1,667 pending leases on which oil is not being produced, and only 3,773 that are actually producing oil. This legislation would force companies to make use of the resources they have or allow them to go to companies who will.

As far as I can tell, the text of Schauer's bill isn't online yet. I'll add a link as soon as I can find it. We'll have to wait another day for more in-district media coverage, but the Chicago Tribune gives us this AP article:
LANSING, Mich. - Oil and gas companies would pay Michigan higher royalty fees when leasing government-owned land under a plan by a top Democrat who wants to spend the extra revenue on renewable energy projects.


The "use-it-or-lose-it" approach is needed because oil companies are claiming leases as assets but letting the land sit dormant, said the proposal's sponsor, Democratic state Sen. Mark Schauer of Battle Creek. There are more than 4,000 active leases in Michigan where oil or gas isn't being produced, he said.

"They're making money on Wall Street, but they're not generating oil and not increasing supplies to reduce the cost at the pump," Schauer said.
I don't know enough about the proposal yet to speak intelligently on it. Chris Gautz at the Citizen Patriot seems to think investing the money in environmentally-friendly energy research isn't allowed by the state constitution, but I'm not sure if that's true or not.

Even so, this is a good contrast to the Walberg energy plan, which is a "give everything to the oil companies" plan. It'll be interesting to see the coverage this gets moving forward.

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Hello. I love the blog.

I'm an outdoor rec./environment blogger and I follow park/open space funding pretty closely.

My problem with Schauer's proposal is the way it undercuts the voter-approved dedication of mineral extraction lease funds to the Michigan Natural Resources Trust Fund.

The state general fund has zero money for new parkland acquisition or much for park improvements, so the MNRTF has been just about the only way for communities to improve parks or add greenspace.

In Lenawee County, for example, the funds were used to construct a pedestrian bridge at Tate Park. In the past, funds have been used for projects like the acquisition of the tip of the Keweenaw Peninsula.

Would the size of Michigan's share under Schauer's proposal reduce the number of leases signed and decrease the size of the MNRTF? Would the use of MNRTF monies for "green" energy projects open the fund for future raids? Wouldn't an additional use for these funds ignore a voter-approved constitutional amendment?

Schauer's idea is a good way to differentiate himself from Walberg and his drill-offshore/build-nuke-plants-in-the-7th positions.

And Schauer is better than Walberg on conservation issues in the same way that Mother Theresa is better than Jeffrey Dahmer in feeding the poor.

But I don't think that it would be good public policy.

Here's a post about the subject on my blog:
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