Michigan oil and gas laws can be found in Chapter 324 of Michigan Compiled Laws Service. Pursuant to MCLS § 324.61503, the supervisor of wells designates suitable assistants as are required to implement this statute. Further, the commission acts as an appeal board regarding the issuance, denial, suspension, revocation, annulment, withdrawal, recall, cancellation, or amendment of a permit.
Powers and Jurisdiction of the Supervisor
The supervisor has jurisdiction and authority over the administration and enforcement of this statute and all matters relating to the prevention of waste and to the conservation of oil and gas in the state of Michigan[i]. The supervisor also has jurisdiction and control of and over all persons and things necessary or proper to enforce effectively this statute and all matters relating to the prevention of waste and the conservation of oil and gas.
Regulation of Operation
If the supervisor determines that the owner or operator of a well has failed or neglected to properly obtain a permit, construct, operate, maintain, case, plug, or repair the well in accordance with this statute or the rules promulgated, the supervisor gives notice of this determination, in writing, to the owner and operator and to the surety executing the bond filed with the supervisor by the owner or operator in connection with the issuance of the permit authorizing the drilling of a well[ii].
Civil Actions
The circuit court of Ingham county has exclusive jurisdiction over all suits brought against the department, the supervisor, or any agent or employee of the department or supervisor, by or on account of any matter or thing arising under this part[iii]. A temporary restraining order or injunction will not be granted in any suit except after due notice and for good cause shown.
Penalties
A person who, for the purpose of evading this statute or of evading a rule promulgated or an order issued intentionally makes or causes to be made false entry or statement of fact in a report is guilty of a felony, punishable by imprisonment for not more than 3 years, or a fine of not more than $3,000.00, or both[iv].
A person who violates this statute or a rule or order promulgated or issued is subject to a penalty of not more than $1,000.00. Each day the violation continues constitutes a separate offense[v].
A person aiding in the violation is subject to the same penalties as are prescribed in this section for the person who committed the violation.
Leases
A person who has entered into a gas lease as a lessee should do all of the following[vi]:
- Provide the lessor who has an interest in the leased property with monthly revenue statements
- Prepare an annual accounting of gas sales from the leased property and any deductions taken from the lessor’s royalty during the calendar year or other 12-month accounting period.
[i] MCLS § 324.61505.
[ii] MCLS § 324.61519.
[iii] MCLS § 324.61517.
[iv] MCLS § 324.61521.
[v] MCLS § 324.61522.
[vi] MCLS § 324.61503a.
