TPS Board studies energy company proposals

Supt. Mike McAran reported to the Tecumseh School Board on negotiations for mineral rights under Sutton Elementary School on Monday, July 9. Two companies are now vying for options on the 10-acre property. Several weeks ago, McAran was contacted by Savoy Energy of Traverse City about leasing the property at a tentative figure of $250 per acre per year and 1/8 of the profit from each unit of energy tapped (barrels of oil or cubic feet of natural gas). In the intervening time, the district was approached by Kosco Energy Group, also of Traverse City, which is also interested in the mineral rights and proposed leasing the property for $500 per acre per year, plus one-sixth of the profit from each unit of energy.McAran said that there would be no actual drilling on school property. Any drilling would be on other property. Drilling can be accomplished under the school by slant drilling, a technique that allows a company to drill down on one property and turn the drill bit horizontally to seek reserves under obstacles, public property, or difficult terrain.Monday night the school board had the opportunity to question Tom Rasmussen, a representative from Kosco. He was asked about the exploratory methods for determining whether there is gas or oil under the property. Both Kosco and Savoy have leased property in Raisin Township where the companies believe there are reserves of unspecified energy sources, most likely oil or natural gas. Some of the properties leased, such as the Lenawee Intermediate School District’s Milton C. Porter Center are adjacent to Sutton.Rasmussen said that his company has done 2-D seismic studies that have been promising and will soon be doing 3-D seismic testing that will more accurately assess possible energy reserves under the ground. Even if the areas in question are verified as containing minerals, he said that drilling would not begin for at least two years.“We’re very excited about what we have seen so far,” Rasmussen told the board. Trustees were concerned about environmental impact to school property, whether they approve the lease or not, in light of the likely drilling in adjacent property. Rasmussen said that his company, and all energy companies operating in Michigan, are under the jurisdiction of the Michigan Department of Environmental Quality. “In addition to that, we are also fully bonded and insured,” he said.With two companies competing for leases, the school board decided to table the matter pending further investigation and revisit the motion to approve a lease by one of the companies at a future meeting.