Legal Milestone-- State Bar recognizes 1979 oil drilling case


By John Minnis

Legal News

The ongoing BP oil spill in the Gulf of Mexico could not have been foreseen when the State Bar of Michigan's Legal Milestones Subcommittee decided to make Michigan's 1979 landmark environmental, oil drilling case, West Michigan Environmental Action Group v. Natural Resources Commission, its 35th Legal Milestone, "Elk, Oil and the Environment."

Yet the dangers to the environment posed by oil drilling was very much on the minds of those gathered to acknowledge the landmark Michigan Supreme Court decision during a ceremony and luncheon, Wednesday, June 9, in Treetops' Wilderness Cabin outside of Gaylord.

"Our gathering today is very relevant when we are witnessing what is going on in the Gulf," said State Bar President Charles Toy, an environmental attorney who as an administrative law judge wrote in Re: Hobson Petroleum Corporation a 193-page history of the Pigeon River Country State Forest and its legal saga.

Along with Toy, panelists speaking at the commemoration were Roger L. Connor, former executive director of the West Michigan Environmental Action Council; Webb A. "Tony" Smith, senior attorney for Foster, Swift, Collins and Smith, who presented Shell Oil Co. in the 1970s case; former Ingham County Circuit Court Judge Thomas L. Brown, who handled the case; and Ken Glasser, past chair of the Pigeon River Advisory Council, which was formed out of the consent agreement forged by the court case.

In introducing Connor, now a professor at Vanderbilt, Toy said the young attorney was described at the time as described as a "long-haired, blue-jeaned environmentalist."

Connor said it was due to a "misunderstanding" that he became an environmental attorney. When he was in law school, he asked if environmental law was going to be taught. From then on he was pegged as an environmentalist.

He said the Michigan Environmental Protection Act, upon which the Michigan Supreme Court decision hinged, was made necessary when environmentalists realized that "the old way of doing things wasn't working. The environmental issues were always losing to the economic interests." The act also provided for the idea that there were always alternatives, he said.

"There is substantially less tension in the room today with this group than there was 30 years ago," said Smith, who represented Shell Oil for 30 years, beginning right out of law school. "With Shell, you ended up doing a lot of things you never learned in law school, and this case was one of them."

He explained that "this all started in 1968" when Shell and a handful of other companies bought leases in what would one day become the 91,000-acre Pigeon River Country State Forest, then home of the only elk herd east of the Mississippi. "Little did we know these leases would lead to years of litigation."

A major oil and gas discovery was made in 1973 in the lower Pigeon River area, at a time when the country was experiencing a domestic oil shortage. "But the West Michigan Environmental Action Group had different plans," Smith said.

After a decade of litigation, the Michigan Supreme Court ruled that Judge Brown had erred in deferring to the Department of Natural Resources on whether drilling would damage the environment. Rather the state's high court found that oil exploration would harm natural resources in the area and said the state's Environmental Protection Act requires independent, de novo determinations by the courts.

The court blocked drilling of 10 exploratory wells and sent the matter back to Judge Brown for settlement. That led to the extraordinary agreement between state government, the oil industry and environmental groups that allowed tightly regulated drilling in the southern one-third of the forest.

"What did we learn from all this?" the Shell Oil attorney asked. "One, it was a good experience from a legal point of view. From a lawyer's point of view, it was the case of a lifetime. Second, we learned that oil and elk can co-exist."

Glasser, who has served on the Pigeon River Advisory Council since 1984, is a lifelong Gaylord resident. His family settled in the area in the early 19th century. He said the Pigeon River area was once known as a "stumped wasteland" after it was all logged out.

"When I was a teenager was when this whole thing started," he said. "There was an oil well, and we wondered what is going on?"

He pointed out that while the council does not have a veto power over the former Department of Natural Resources, it does have the ear of its director.

"As you sit here today," he said, "you are just a few miles south of where all the controversy began. There is still controversy in the Pigeon River forest today."

The controversy arises out of competing demands for public use of the forest, Glasser said, ranging from horseback riding to off-road vehicles, which is not allowed.

In introducing Judge Brown, State Bar Executive Director Janet Welch said, "It was his courtroom that was the launching pad for why we are here today."

"When the case started," Brown said, "I was in the Legislature, and I voted against the environmental act." He objected to the act because it did not include a "reasonable and prudent" provision, something Connor and the environmentalists opposed.

The case "wasn't going well for Shell," Brown said, but he realized that a settlement had to be reached that allowed oil drilling but also met environmental concerns.

His thinking at the time, he said, was that "there is oil there, and someone somewhere somehow is going to get it. Someone is going to find a way to get it."

That way turned out to be the agreement hammered out in Brown's courtroom and affirmed by the Michigan Supreme Court and confirmed by enabling legislation.

In summing up the importance of the Pigeon River dispute, Toy quoted Dave Dempsey, author of "Ruin & Recovery: Michigan's Rise as a Conservation Leader": "Nobody won a clear victory--but neither had the forest suffered a loss."

"In closing," Toy said, "the Pigeon River Country State Forest compromise has performed much as it was intended. Drilling was confined to the southern one-third of the forest. Roads, pipelines and processing facilities were carefully laid out. Noise and industrial intrusions were minimized. Despite these restrictions, the forest yielded more than $700 million in oil and gas revenues.

"And the elk? As they're currently the largest free-range elk herd east of the Mississippi, they're doing just fine, as well as all the black bear, bobcats, deer, trout and other animals that live in the forest.

"Three decades later, it appears that it was a clear victory--for the environmental groups, for the oil industry and for the forest."

Published: Wed, Jun 16, 2010