Oil & Gas Royalties for Parks – Or Roads?

  • Royalties from oil and gas development in Michigan currently go into the Natural Resources Trust Fund. That money is then used to buy land for parks, habitat, and create public access for recreation. (Photo by Rebecca Williams)

At the moment, oil and gas royalties in Michigan go into a trust fund for conservation. But that could change…

This is the Environment Report. I’m Rebecca Williams.

You might remember Governor Rick Snyder talking about something called the Natural Resources Trust Fund. Here he was in his State of the State address a couple weeks ago:

“I urge the prompt passage of a capital outlay bill that implements the recommendations of the Natural Resources Trust Fund.”

That trust fund has been around since 1976. It works like this: royalties from oil and gas development in Michigan go into the Natural Resources Trust Fund… and that money is used for improving wildlife habitat and parks, and it’s used to buy land for conservation. This year, more than $100 million is available for these projects.

But at a time when pretty much everything’s up on the chopping block… the future of that trust fund is in question.

More about the Natural Resources Trust Fund

An article in the Grand Rapids Press


Dave Agema is a Republican state representative from Grandville. He’s introduced legislation to divert oil and gas royalties away from the Trust Fund. In his proposal, 80% of oil and gas royalties would go into funds for the transportation sector… with the remaining 20% going into the Natural Resources Trust Fund.

James Clift is the policy director for the Michigan Environmental Council and he joins me now to talk about this.

First of all… the money in the Natural Resources Trust Fund is constitutionally protected, right? JC: It is. RW: So it would take a constitutional amendment to divert that royalty money away from the trust fund.

JC: Yes, this is a question that in theory would be placed on a future ballot so all the people of Michigan would have their say.

Okay so what’s the likelihood of Representative Agema’s proposal passing the Legislature?

JC: I think the likelihood is very small. I think the Trust Fund has provided for projects across the state, every corner of the state has obtained some of this trust fund money, either buying parkland or developing parkland, setting aside public land for hunting and fishing and other reasons. Providing public access for fishing access and things like that. It’s a very popular program and I think people are going to be very supportive of the way it’s spent currently.

RW: If this were to pass, if voters decided they wanted to change the way the money was rolling in from royalties, what would happen?

JC: The concept behind it to begin with was these are royalties from one-time, non-renewable resources in Michigan, and therefore they should be spent in a way that benefits future generations: our children, our grandchildren. So that they can see the benefits of these one-time monies. I think what this proposal would do is say, hey, we’re going to use 20% of it for those long-term projects, but the other 80% of it we’re going to spent on our short-term needs. We’re going to build roads that we all know are going to crumble 10, 20 years from now and have to be replaced anyway, so it starts using these long-term revenues that we think should benefit everybody for future generations for very short-term needs and that’s where I think it’ll start running into trouble.

RW: Where are some of the places around Michigan that’ve gotten this trust fund money?

JC: It’s everywhere. I mean literally, every single county in the state has had parks, the land purchased and those parks developed. I know that recently there’s been a lot of attention in the Saugatuck Dunes area and trying to buy some of the available private land in order to expand that recreational opportunity on the west side of the state. In the city of Detroit you have the Centennial Park down on the riverfront. Trust fund money has been used for the development of that park. So from one coast to the other, from the southernmost part of the state to the tips of the UP, this money has been spent.

James Clift is the policy director for the Michigan Environmental Council. Thank you very much!

JC: Thank you.

That’s the Environment Report. I’m Rebecca Williams.