Case Name: MICHIGAN OIL COMPANY v. NATURAL RESOURCES COMMISSION
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1979-03-01
Citations: 406 Mich. 1
Docket Number: Docket No. 59088
Parties: MICHIGAN OIL COMPANY v NATURAL RESOURCES COMMISSION
Judges: Williams and Fitzgerald, JJ., concurred with Blair Moody, Jr., J.
Reporter: Michigan Reports
Volume: 406
Pages: 1–64

Head Matter:
MICHIGAN OIL COMPANY v NATURAL RESOURCES COMMISSION
Docket No. 59088.
Argued May 3, 1978
(Calendar No. 5).
Decided March 1, 1979.
Rehearing denied post, p 1121.
Certiorari denied by the Supreme Court of the United States December 3, 1979.
The Supervisor of Wells denied Michigan Oil Company a drilling permit for certain property in the Pigeon River State Forest to which Michigan Oil had obtained oil and gas rights by assignment of an interest in a lease from the Department of Natural Resources. Michigan Oil appealed to the Natural Resources Commission, and the Pigeon River Association intervened. The Natural Resources Commission affirmed the denial after a hearing before an examiner. The Ingham Circuit Court, Thomas L. Brown, J., affirmed. The Court of Appeals, M. J. Kelly, P.J., and Bronson, J. (Peterson, J. dissenting), affirmed on the ground that the action constituted a statutorily permitted exercise of the authority of the Natural Resources Commission (Docket No. 24747). Plaintiff appeals. Held:
The judgment of the Court of Appeals is affirmed.
Justice Blair Moody, Jr., with Justices Williams and Fitzgerald concurring, wrote for affirmance:
The Court must determine whether the oil conservation act or the legislation creating the Department of Conservation provides sufficient statutory authority to justify the denial of a drilling permit on state-owned land. In addition, the Court is asked to determine whether the Michigan Environmental Protection Act should be read in pari materia with the oil conservation act.
References for Points in Headnotes
[1, 2, 4, 7] 61 Am Jur 2d, Pollution Control § 79.
38 Am Jur 2d, Gas and Oil §§ 100, 101, 154, 157.
[3, 9, 10, 13, 14, 20] 38 Am Jur 3d, Gas and Oil § 157.
[5, 25] 61 Am Jur 2d, Pollution Control §§ 11-13, 82.
[6, 10, 28] 38 Am Jur 2d, Gas and Oil § 283.
61 Am Jur 2d, Pollution Control § 79.
[8, 12, 26-28] 61 Am Jur 2d, Pollution Control §§ 15, 115.
[11, 12] 61 Am Jur 2d, Pollution Control § 119.
[15] 38 Am Jur 2d, Gas and Oil §§ 157, 298.
[16, 19, 21-24] 38 Am Jur 2d, Gas and Oil §§ 100, 101, 157, 283.
[17] 49 Am Jur 2d, Landlord and Tenant § 922.
[18] 38 Am Jur 2d, Gas and Oil §§ 116, 119.
Duty of oil or gas lessee to restore surface of leased premises. 65 ■ ALR2d 1356.
1. Michigan Oil claims that the clear import of the oil conservation act is not to conserve the environment in general but to conserve only oil and gas so that they are efficiently extracted. The oil conservation act should not be construed to permit oil and gas drilling unnecessarily detrimental to the other natural resources of this state. The letter which denied the application for a drilling permit referred to oil and gas operations at the Corwith 1-22 drilling site causing "serious damage to animal life” rather than the statutory language of "unnecessary damage to or destruction of animal life”. However, the statutory words, "unnecessary damage” or "destruction”, clearly apply to the facts of this case. The uncontradicted evidence established that the proposed drilling site is located in the midst of Michigan’s elk range, that the elk herd which inhabits this area is the last sizeable wild elk herd east of the Mississippi River, and that oil and gas operations would cause the elk to avoid the area surrounding such operations, resulting in the reduction in the range and habitat of the elk and a decline in the population of the herd. Oil and gas production would have the same effect on bear and bobcat.
2. Reading into the phrase "waste in * * * its ordinary meaning” the modifying language "as those words are generally understood in the oil business” clearly ignores the specific wording of the oil conservation act. When the Legislature defined "underground waste” and "surface waste” it specifically referred to the oil business. On the other hand, the Legislature omitted any reference to the oil business in defining ordinary "waste”. Therefore, the ordinary use of the term "waste” does not refer only to waste of oil or gas, but includes any spoliation or destruction of the land, including flora and fauna, by one lawfully in possession, to the prejudice of the estate or interest of another. Serious damage to the wildlife of the Corwith 1-22 drilling site resulting from oil drilling is spoliation or destruction that impairs state-owned lands and the estate therein of the people of Michigan.
3. Other statutory provisions show that the oil conservation act should be construed liberally to allow the Natural Resources Commission to prevent serious environmental damage. For example, the legislative declaration of policy in § 1 of the act makes it appear reasonable to ascribe a broad meaning to "conservation” as used in that section. Conservation should not be read to apply only to the efficient extraction of oil, but should include the efficient extraction of oil which simultaneously conserves the other natural resources (flora and fauna) of the state. The reference in § 23 to the Department of Natural Resources demonstrates that the Legislature did not draft this act in a vacuum, intending to sacrifice all other natural resources in an effort to discover and produce oil and gas. The oil conservation act requires a construction which allows the Natural Resources Commission to prevent serious environmental damage when reviewing drilling permit applications for state-owned land.
4. Section 6 of the oil conservation act requires the Supervisor of Wells to deny a drilling permit to prevent waste, including serious or unnecessary damage to or destruction of wildlife, even in the absence of specific rules and regulations. The proposed drilling at Corwith 1-22 poses such a threat to the survival of wildlife already found in limited numbers in a limited area of the state, and falls within the statutory definitions of ordinary waste and surface waste. Any other construction of the act would seriously undermine the statutory duty of the Department of Natural Resources and its predecessor the Conservation Department to protect and conserve the natural resources of Michigan.
5. The order of the Natural Resources Commission also refers to the conservation act of 1921 which specifically authorized the commission to purchase land on behalf of the people of the state, under which approximately 65% of the public lands in the Pigeon River Forest was purchased with fish and game protection funds. The commission decided that if the Department of Natural Resources had not opposed the plaintiff’s application for a drilling permit it would have failed to perform its statutory duty to protect and conserve natural resources and game under the conservation act of 1921. The denial was based upon specific policy guidelines for issuance of drilling permits, formulated by the Department of Natural Resources, adopted by the Natural Resources Commission pursuant to § 2 of the conservation act, and issued in an intra-agency directive from the Director of Natural Resources. Section 2, as opposed to § 3a, neither provided a criminal sanction nor required the Natural Resources Commission to promulgate rules and regulations. Section 2 creates licensing and leasing powers in the Natural Resources Commission and authorizes rulemaking within a policy-making setting. Section 3a is concerned with wrongful use and occupancy of state-owned land and is designed to provide sanctions against poachers and trespassers. Therefore, the Natural Resources Commission acted within its statutory-authority in denying the drilling permit under the specific guidelines adopted by it.
6. It is unnecessary to decide whether the Environmental Protection Act must be read in pari materia with the oil conservation act. However, if a decision on that issue were required, it is logical to conclude that the Environmental Protection Act should be read in pari materia with other statutes relating to natural resources because it specifically refers to "any alleged pollution, impairment or destruction of the air, water or other natural resources”.
Justice Kavanagh, writing for affirmance, would not subscribe to a construction of the oil conservation act which would limit the duty of the Department of Natural Resources to protect the whole environment as it is affected by the drilling of oil wells. There is adequate evidentiary support for the Natural Resources Commission’s determination that drilling the proposed well would result in damage to animal life. Its conclusion that this amounts to the waste included in the proscription of the statute comports with Justice Kavanagh’s understanding of the legislative intent in writing this law. While it is true that the express, primary concern of the oil conservation act is the prevention of waste of oil itself, the act cannot be read as ignoring, let alone approving, all incidental damage to other natural resources.
Affirmed.
Justice Levin, with Chief Justice Coleman concurring, would reverse the decision of the Court of Appeals, extend the lease, and remand to the Natural Resources Commission for a hearing under the Environmental Protection Act. The Department of Conservation act and the oil conservation act do not constitute sufficient statutory authority to justify the denial of a permit in this case. The oil conservation act is not to be read in pari materia with the Michigan Environmental Protection Act.
1. The Department of Natural Resources argues that the plaintiffs application for a drilling permit was denied primarily to allow the department sufficient time to develop a comprehensive scheme of management for oil drilling and exploration in the Pigeon River Country State Forest and, because such a plan has since been developed and agreed to by other lessees, that the controversy is moot and that the Court should direct the plaintiff to reapply for a drilling permit. The issue is whether the Department of Natural Resources had adequate grounds for denying the permit. If the grounds were made- quate, the plaintiff should be granted the permit sought in its application. The Department of Natural Resources management plan is, by its terms, an agreement entered into by the department and other owners of oil leases in the Pigeon River area. The plaintiff is not a party to that agreement and the agreement has no legal effect on its rights. The plaintiffs lease, by its terms, expired on October 31, 1978, because no oil or gas was produced. Therefore, the Court must, in all events, determine whether, if the plaintiff has been wrongfully denied a drilling permit, it should be granted an extended lease term in which to apply for a permit.
2. The provisions of the Department of Conservation act concerning the powers and duties of the Natural Resources Commission with respect to the use and occupancy of lands and property under its control grant the commission the power to promulgate appropriate rules and regulations in accordance with the Administrative Procedures Act. The commission’s "Policy Governing the Review of Applications for Permits to Drill for Oil and Gas in the State of Michigan” was not promulgated in accordance with the APA. The policy relates to "use or occupancy” and thus is required under § 3a of the Department of Conservation act to be promulgated pursuant to the APA. Furthermore, the adoption of any rule or regulation under § 2 of the Department of Conservation act is, by virtue of the provisions of the APA itself, subject to the APA. Therefore, whatever the authority the Natural Resources Commission may have under the Department of Conservation act to promulgate such rules and regulations, the authority has not been exercised in the manner required by the act, and denial of the permit cannot be premised on unpromulgated policy.
3. Even assuming that the oil conservation act, and the rules and regulations promulgated under it, empower the commission to deny a drilling permit in contemplation‘of anticipated waste, waste within the meaning of the act has not been established. The oil conservation act was not designed to insure balanced conservation of all natural resources but, rather, to insure conservation "with a view to the ultimate recovery of the maximum production” of oil and gas. The primary purpose of the act is to prevent waste of oil and gas so as to insure such maximum production. The damage or destruction which the commission found would occur can only constitute waste under the oil conservation act to the extent it is i) waste within the ordinary meaning of that term, ii) "surface waste” as those words are generally understood in the oil business, or iii) unnecessary damage to or destruction of the surface, soils, animal, fish or aquatic life or property from or by oil or gas operations.
The potential damage found by the Natural Resources Commission does not constitute waste within the ordinary meaning of that term. It is not use, but abuse, that is waste. Waste is a tort which may briefly and very generally be defined as the destruction, misuse, alteration, or neglect of premises by one lawfully in possession, to the prejudice of the estate or interest of another in the premises. The incidental and unpreventable effects of prudent and careful drilling are not abuse or waste of the remainder of the state’s proprietary interest since the state as owner of the estate has, by lease, granted the right to drill for oil to the plaintiff; the state cannot complain of damage to its proprietary interest resulting from anticipated conduct. It is of the nature of waste that it shall have been committed without legal right. A lessee has a right to use the leasehold in a manner reasonably necessary to effectuate the purposes of the lease, though damage may result. An oil and gas lease is said to carry within its implications, if not within its expression, such rights as to the surface as may be necessarily incident to performance of the objects of the contract, because a grant or reservation of minerals would be wholly worthless if the grantee or reserver could not enter upon the land in order to explore for and extract the minerals granted or reserved. Thus, an oil and gas lessee is entitled to use the surface of the premises embraced by his oil and gas lease without liability for surface damage caused by his operations on the leasehold, so long as such use and the manner of its exercise are reasonably necessary to effectuate the purposes for which the lease was made. The lease given to the plaintiff was made for "the sole and only purpose of drilling, boring, mining and operating for oil and gas”. Although use of the surface of the land by the lessee results in death and injury to wildlife belonging to the lessor, that use is not waste within the "ordinary meaning” of the term if it is reasonably necessary for oil and gas operations.
The potential damage found by the Natural Resources Commission does not constitute "surface waste” as those words are generally understood in the oil business. "Surface waste” as those words are generally understood in the oil business does not include "damage to or destruction of the surface, soils, animal, fish or aquatic life”. Rather, surface waste refers to waste of oil and gas that occurs when it is brought to the surface.
The potential damage found by the Natural Resources Commission does not constitute "unnecessary damage * * * or destruction” under the terms of the oil conservation act. A determination of necessity or lack of it must be made with respect to the purposes of the statute. The relevant provision of the oil conservation act is stripped of its meaning if the term "unnecessary” is to be defined solely by reference to the mere fact of damage to or destruction of the surface, soils, animal, fish or aquatic life or property from or by oil and gas operations. Rather, "unnecessary” must be interpreted in conjunction with the stated purpose of the oil conservation act to prevent waste of oil and gas and to "foster the development of the industry along the most favorable conditions and with a view to the ultimate recovery of the maximum production of these natural products”. Whether damage is unnecessary must be determined with respect to the legislatively mandated goal of maximum recovery of oil and gas through prevention of their waste. The act indicates an intention to differentiate unnecessary damage from mere damage, no matter how severe the latter may be. Whether oil and gas production is "necessary” was affirmatively answered by the act itself and by the various acts authorizing the Natural Resources Commission to select state lands for oil and gas leasing. In determining unnecessary damage to or destruction of the surface, soils, animal, fish or aquatic life or property from or by oil and gas operations it is not pertinent whether or not the oil is itself necessary. Whether damage is unnecessary must be determined in the context of the expressed purpose of the act to maximize the recovery of oil through prevention of its waste. The hearing examiner found that the plaintiff will conduct its drilling in a careful and prudent manner, so that no damage will be inflicted upon the environment except that necessarily caused by oil drilling, and that finding has not been disputed by the Natural Resources Commission, the intervenor, the circuit court, or the Court of Appeals; the Natural Resources Commission erred in its construction of the statute and, on the facts of this case, had no authority to deny a permit.
4. The Environmental Protection Act is substantively supplementary to existing administrative and regulatory procedures provided by law, and provides an independent procedural route available in all cases. Thus, the substantive and procedural deficiencies or limitations of other legislation notwithstanding, the Environmental Protection Act is, in itself and without any need for reading it in pari materia with other statutes, adequately protective of the environment. The act requires that if a violation is alleged the defendant be explicitly notified that its actions are being challenged under and pursuant to the act. This accords with ordinary notions of orderly procedures. The Supreme Court is not empowered to direct the Attorney General or the NRC to raise issues under the Environmental Protection Act, The provisions of the act authorizing other persons to intervene in administrative proceedings or to commence an independent action protect against official indifference.
5. The environmental issues were triable under the Environmental Protection Act. The intervenor inartfully sought to raise those issues in its petition to intervene, but did not state them in its pretrial statement, either because intervention was allowed on condition that no new issue would be raised or because it thought such issues could be raised under the oil conservation act or for other reasons. A more appropriate disposition of this case would be to reverse the decision of the Court of Appeals and remand to the NRC for consideration of the Environmental Protection Act claims.
6. In both this case and West Michigan Environmental Action Council v Natural Resources Commission, the oil companies took the position that the environmental issue was not raised and triable, and in both cases the trier of fact agreed with them on the triable issue and concluded that any impact of drilling pn the ecology was not a valid reason for refusing to permit the drilling to proceed. In both cases, on review, after the evidentiary record was closed, the trier of fact was reversed on the question of triable issue. As a consequence, the oil companies have not had an opportunity, after the ruling against them on triable issue, to offer rebuttal evidence on the question of environmental damage. The evidence in both cases is incomplete and imprecise, raising as many questions as it answers. In both cases, leasehold rights granted by the state and large expenditures of time and money by the oil companies in rejiance on those rights are dismantled without an adequate opportunity, after the triable issue has been definitively stated, to test the real worth of the environmental claims. The lease should be extended for the time that elapsed between the denial of the permit and the expiration of the lease, and the case remanded to the Natural Resources Commission for a hearing under the Environmental Protection Act. Justice Ryan agreed with Justice Levin’s conclusion that neither the Department of Conservation act nor the oil conservation act constitute sufficient statutory authority for denial pf the drilling permit in this case. He also agreed that Michigan Oil’s lease should be extended, but would remand the case to the circuif court fqr a hearing under the Environmental Protec tion Act. The Court in West Michigan Environmental Action Council has permanently enjoined the drilling of ten exploratory wells in the same area of the Pigeon River Country State Forest in which this plaintiff is seeking permission to drill. The basis for decision in West Michigan was that the evidence adduced demonstrated that the drilling of wells in this area of the forest would likely result in an impairment or destruction of the elk in violation of the Environmental Protection Act. Because of the decision in West Michigan the provisions of the Environmental Protection Act cannot be ignored in deciding this case. The apparent failure of the Department of Natural Resources to adequately discharge its statutory responsibility to the people to protect and conserve the natural resources of the state by its failure to raise the Environmental Protection Act in this case should not have precluded consideration of the act. He would agree with Justice Levin in extending plaintiffs lease and would remand this case to the circuit court for proceedings under the Environmental Protection Act.
71 Mich App 667; 249 NW2d 135 (1976) affirmed.
Opinion by Blair Moody, Jr., J.
1. Health and Environment — Oil Conservation Act — Oil and Gas Operations — Natural Resources.
The oil conservation act should not be construed to permit oil and gas drilling unnecessarily detrimental to the other natural resources of the state (MCL 319.1 et seq.; MSA 13.139[1] et seq.).
2. Health and Environment — Oil Conservation Act — Animals — Waste.
The words "unnecessary damage” or "destruction ” of animal life within the meaning of the oil conservation act clearly apply where the uncontradicted evidence established that a proposed drilling site in a state forest is located in the midst of Michigan’s elk range, that the elk herd which inhabits the area is the last sizable wild elk herd east of the Mississippi River, that oil and gas operations would cause the elk to avoid the area surrounding such operations, resulting in the reduction in the range and habitat of the elk and a decline in the population of the herd, and that oil and gas production would have the same effect on bear and bobcat (MCL 319.2; MSA 13.139[2]).
3. Health and Environment — Oil Conservation Act — Waste — Words and Phrases.
The Legislature defined "underground waste” and "surface waste” in the oil conservation act to speciñcally refer to the oil business, but omitted any reference to the oil business in referring to the "ordinary meaning” of waste; therefore, the ordinary use of the term "waste” does not refer only to waste of oil or gas, but includes any spoliation or destruction of the land, including ñora and fauna, by one lawfully in possession, to the prejudice of the estate or interest of another (MCL 319.2; MSA 13.139[2]).
4. Health and Environment — Oil Conservation Act — Public Lands — Waste — Words and Phrases.
Serious damage to the wildlife of a drilling site in a state forest resulting from oil drilling is spoliation or destruction that impairs state-owned lands and the estate therein of the people of Michigan within the meaning of the oil conservation act (MCL 319.2; MSA 13.139[2]).
5. Health and Environment — Oil Conservation Act — Conservation — Words and Phrases.
The oil conservation act should be construed liberally to allow the Natural Resources Commission to prevent serious environmental damage; the legislative declaration of policy in the act makes it appear reasonable that "conservation” should not be read to apply only to the efficient extraction of oil, but should include the efficient extraction of oil which simultaneously conserves the other natural resources (ffora and fauna) of the state (MCL 319.1; MSA 13.139[lj).
6. Health and Environment — Oil Conservation Act — Drilling Permits — Environmental Damage — Public Lands.
The Legislature did not draft the oil conservation act in a vacuum, intending to sacrifice all other natural resources in an effort to discover and produce oil and gas; the oil conservation act requires a construction which allows the Natural Resources Commission to prevent serious environmental damage when reviewing drilling permit applications for state-owned land (MCL 319.1 et seq.; MSA 13.139[1] et seq.).
7. Health and Environment — Oil Conservation Act — Drilling Permits — Waste.
The oil conservation act requires the Supervisor of Wells to deny a drilling permit to prevent waste, including serious or unnecessary damage to or destruction of wildlife, even in the absence of specific rules and regulations (MCL 319.6; MSA 13.139[6j).
8. Health and Environment — Oil Conservation Act — Environmental Protection Act — Statutes — Construction.
The Environmental Protection Act should be read in pari materia with all legislation relating to natural resources, e.g., the oil conservation act, because they relate to the same class of persons or things and have a common purpose (MCL 319.1 et seq., 691.1201 et seq.; MSA 13.139[1] et seq., 14.528.[201] et seq.).
Concurring Opinion by Kavanagh, J.
9. Health and Environment — Oil Conservation Act — Statutes — Construction — Drilling Permits.
The oil conservation act should not be construed to limit the duty ' of the Department of Natural Resources to protect the whole environment as it is affected by the drilling of oil wells; while it is true that the express, primary concern of the oil conservation act is the prevention of waste of oil itself, the act cannot be read as ignoring, let alone approving, all incidental damage to other natural resources (MCL 319.1 et seq.; MSA 13.139[1] et seq.).
10. Health and Environment — Oil Conservation Act — Drilling Permits — Waste — Animals.
A determination by the Natural Resources Commission that drilling a proposed oil well on public lands would result in damage to animal life, which has adequate evidentiary support, and that this amounts to the waste included in the proscription of the oil conservation act comports with the apparent legislative intent in writing the act (MCL 319.1 et seq.; MSA 13.139[1] et seq.).
Dissenting Opinion by Levin, J.
11. Health and Environment — Conservation Act of 1921 — Administrative Procedures Act — Drilling Permits.
The Natural Resources Commission’s policy concerning applications for drilling permits is not enforceable because it is a rule within the meaning of the Administrative Procedures Act but was not promulgated in accordance with that act (MCL 24.201 et seq., 299.2; MSA 3.560[101] et seq., 13.2).
12. Health and Environment — Conservation Act of 1921 — Administrative Procedures Act — Drilling Permits.
Denial of a permit to drill for oil on state-owned land cannot be premised on a policy of the Natural Resources Commission which was not promulgated under the Administrative Procedures Act; whatever authority the Natural Resources Commission has under the Department of Conservation act to promulgate rules and regulations for the prevention of damage to animals and forest ecosystems from oil drilling has not been exercised in the manner required by the act (MCL 24.201 et seq., 299.2; MSA 3.560[101] et seq., 13.2).
13. Health and Environment — Oil Conservation Act — Waste — Words and Phrases.
Damage or destruction can only constitute waste under the oil conservation act to the extent it is i) waste within the ordinary meaning of that term, ii) "surface waste” as those words are generally understood in the oil business, or iii) unnecessary damage to or destruction of the surface, soils, animal, ñsh or aquatic life or property from or by oil or gas operations (MCL 319.2; MSA 13.139[2]).
14. Health and Environment — Oil Conservation Act — Legislative Intent.
The oil conservation act was not designed to insure balanced conservation of all natural resources but, rather, to insure conservation "with a view to the ultimate recovery of the maximum production” of oil and gas; the primary purpose of the act is to prevent waste of oil and gas so as to insure maximum production (MCL 319.1 et seq.; MSA 13.139[1] et seq.).
15. Waste — Words and Phrases.
Waste is a tort which may brieñy and very generally be deñned as the destruction, misuse, alteration, or neglect of premises by one lawfully in possession, to the prejudice of the estate or interest of another in the premises; it is not use, but abuse, that is waste.
16. Health and Environment — Oil Conservation Act — Waste — Words and Phrases.
The incidental and unpreventable effects of prudent and careful drilling by an oil lessee on state-owned land are not abuse or waste of the remainder of the state’s proprietary interest within the meaning of the oil conservation act since the state as owner of the estate has, by lease, granted the right to drill for oil to the lessee; the state cannot complain of damage to its proprietary interest resulting from anticipated conduct (MCL 319.2; MSA 13.139[2]).
17. Waste — Landlord and Tenant.
It is of the nature of waste that it shall have been committed without legal right; a lessee has a right to use the leasehold in a manner reasonably necessary to effectuate the purposes of the lease, though damage may result.
18. Waste ■— Oil and Gas Leases.
An oil and gas lease is said to carry within its implications, if not within its expression, such rights as to the surface as may be necessarily incident to performance of the objects of the contract, because a grant or reservation of minerals would be wholly worthless if the grantee or reserver could not enter upon the land in order to explore for and extract the minerals granted or reserved; thus, an oil and gas lessee is entitled to use the surface of the premises embraced by his oil and gas lease without liability for surface damage caused by his operations on the leasehold, so long as such use and the manner of its exercise are reasonably necessary to effectuate the purposes for which the lease was made.
19. Health and Environment — Oil Conservation Act — Waste — Words and Phrases.
Use of the surface of public lands by an oil and gas lessee which results in death and injury to wildlife belonging to the lessor is not waste within the "ordinary meaning" of that term under the oil conservation act if it is reasonably necessary for oil and gas operations; a lessee does not abuse or misuse the estate granted when it carefully and prudently exercises the rights specifically granted to it (MCL 319.2; MSA 13.139[2j).
20. Health and Environment — Oil Conservation Act — Surface Waste — Words and Phrases.
"Surface waste" under the oil conservation act as those words are generally understood in the oil business does not include "damage to or destruction of the surface, soils, animal, ñsh or aquatic life”; rather, surface waste refers to waste of oil and gas that occurs when it is brought to the surface (MCL 319.2; MSA 13.139[2]X '
21. Health and Environment — Oil Conservation Act — Unnecessary Damage — Words and Phrases.
The prohibition of the oil conservation act of "unnecessary” damage must be interpreted in conjunction with the stated purpose of the oil conservation act to prevent waste of oil and gas and to "foster the development of the industry along the most favorable conditions and with a view to the ultimate recovery of the maximum production of these natural prod ucts”; whether damage is unnecessary must be determined with respect to the legislatively mandated goal of maximum recovery of oil and gas through prevention of their waste (MCL 319.2; MSA 13.139[2]).
22. Health and Environment — Oil Conservation Act — Unnecessary Damage — Words and Phrases.
The oil conservation act indicates an intention to differentiate unnecessary damage from mere damage, no matter how severe the latter may be; whether oil and gas production is "necessary" was affirmatively answered by the act itself and by the various acts authorizing the Natural Resources Commission to select state lands for oil and gas leasing (MCL 319.2; MSA 13.139[2]).
23. Health and Environment — Oil Conservation Act —■ Unnecessary Damage — Words and Phrases.
In determining under the oil conservation act whether unnecessary damage to or destruction of the surface, soils, animal, ffsh or aquatic life or property will result from or by oil and gas operations it is not material whether or not the oil is itself necessary; whether damage is unnecessary must be determined in the context of the expressed purpose of the act to maximize the recovery of oil through prevention of its waste (MCL 319.2; MSA 13.139[2]).
24. Health and Environment — Oil Conservation Act — Drilling Permits — Waste.
The Natural Resources Commission had no authority to deny a plaintiff a drilling permit under its lease of the oil rights on certain state-owned lands where the hearing examiner found that the plaintiff will conduct its drilling in a careful and prudent manner, so that no damage will be inflicted upon the environment except that necessarily caused by oil drilling, and that finding has not been disputed (MCL 319.2; MSA 13.139[2]).
25. Health and Environment — Environmental Protection Act — Statutes — Construction.
The Environmental Protection Act is substantively supplementary to existing administrative and regulatory procedures provided by law, and provides an independent procedural route available in all cases; thus, the substantive and procedural deffciencies or limitations of other legislation notwithstanding, the Environmental Protection Act is, in itself and without any need for reading it in pari materia with other statutes, ade quately protective of the environment (MCL 691.1201 et seq.; MSA 14.528[201] et seq.).
26. Health and Environment — Environmental Protection Act — Parties — Standing.
The Environmental Protection Act requires that if a violation is alleged the defendant be explicitly notiñed that its actions are being challenged under and pursuant to the act, which accords with ordinary notions of orderly procedures; the Supreme Court is not empowered to direct the Attorney General or the Natural Resources Commission to raise issues under the Environmental Protection Act because the act authorizes other persons to intervene in administrative proceedings or to commence an independent action should a governmental agency fail to raise environmental issues (MCL 691.1201 et seq.; MSA 14.528[201] et seq.).
27. Health and Environment — Environmental Protection Act — Public Lands — Oil and Gas Drilling.
The environmental issues of damages to state-owned lands and natural resources by permitting the holder of an oil and gas lease to drill for gas and oil on the land are triable under the Environmental Protection Act (MCL 691.1201 et seq.; MSA 14.528[201] et seq.).
Opinion Concurring in Part and Dissenting in Part by Ryan, J.
28. Health and Environment — Environmental Protection Act — Drilling Permits.
The apparent failure of the Department of Natural Resources to adequately discharge its statutory responsibility to the people to protect and conserve the natural resources of the state by its failure to raise the Environmental Protection Act in a case concerning an application for an oil and gas drilling permit on state-owned land should not have precluded consideration of the act; the provisions of the act cannot be ignored in deciding the case because the Supreme Court, in another case, has permanently enjoined the drilling of ten exploratory wells in the same area of the state-owned land in which the plaintiff is seeking permission to drill, and the basis for decision in the other case was that the evidence adduced demonstrated that the drilling of wells in this area would likely result in an impairment or destruction of the elk in violation of the Environmental Protection Act (MCL 299.1 et seq., 319.1 et seq., 691.1201 et seq.; MSA 13.1 et seq., 13.139[1] et seq., 14.528[201] et seq.).
Honigman, Miller, Schwartz & Cohn (by Jason L. Honigman and John Sklar; and Lynch, Gallagher & Lynch, of counsel) for plaintiff.
Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and Stewart H. Freeman and Thomas F. Schimpf, Assistants Attorney General, for defendants.
Berkey, Erickson, Rentrop & Martin (by Gary R. Rentrop and Samuel K. Hodgdon; and Philip Soper, of counsel) for intervening defendant Pigeon River Country Association.

Opinion:
Blair Moody, Jr., J.
The issue before the Court is whether the Natural Resources Commission (NRC) properly denied Michigan Oil's permit application for oil and gas drilling on a 40-acre site of state-owned land known as Corwith 1-22 in July of 1972. Beyond this apparently simple question are broad policy considerations; therefore, it is necessary to fully understand the factual setting of the instant case before addressing the legal issues set forth.
Background
Corwith 1-22, the 40-acre site involved in the instant controversy, is located in the Pigeon River Country State Forest (hereinafter the Pigeon River Forest or Forest) which consists of 92,872 acres of rolling hills, deep swamps, high forests, lakes and streams. Located in Otsego and Cheboygan Counties, the Pigeon River Forest is one of the largest remaining tracts of publicly owned, wild, undeveloped land in the lower peninsula. Two of the state's highest quality trout streams, the Pigeon and Black Rivers, flow through the Forest. The Pigeon River Forest provides one of the few remaining favorable habitats in the lower peninsula for wildlife, including bear, bobcat, beaver, woodcock, osprey, eagle, and many other birds and animals.
The Forest is also the home of the largest remaining elk herd east of the Mississippi River. In fact, Section 22, containing Corwith 1-22, is in the heart of a 25-square-mile area of semi-wilderness which is the favored habitat of the elk harem.
Another natural resource, oil, one which provides great opportunity for profit, has also been found in the Forest. Thus, in 1968, when the Department of Natural Resources (DNR) sold oil and gas leases covering more than one-half million acres of state-owned land in the northern lower peninsula, it is not surprising that more than 10% or 57,669 of those acres were located in the Pigeon River Forest. As a consequence, more than one-half of this special Forest was leased for gas and oil development. Prior to the sale of the leases, no environmental assessment was made of the property to be leased. In fact, the regional office of the DNR was given only nine days to review the almost 600,000 acres prior to the proposed sale. The DNR received $1,122,788 from the 1968 auction of oil and gas leases, or an average of $2.06 an acre.
The first permit to drill on state-owned land in the Pigeon River Forest, pursuant to a 1968 lease, was issued in May of 1970. On September 16, 1970, after only two drilling permits had been issued, Governor William G. Milliken urged the NRC to establish a moratorium on the issuance of drilling permits for state land because of his "great concern about potential environmental intrusion and encroachment from oil and gas drilling in this important scenic forest area". During this moratorium the NRC instructed the DNR to launch field studies to pinpoint areas of special wildlife significance and unusual natural value, in an effort to develop a comprehensive management plan for the Pigeon River Forest. Until a comprehensive plan could be developed, permit applications were reviewed on an individual basis to determine whether drilling would destroy natural resources. Subsequent to the moratorium, drilling permits were granted for state-owned land only in areas already damaged by oil development. During and subsequent to the moratorium, permits were issued for drilling on private land. Nevertheless, no drilling permit was issued within the 25-square-mile area surrounding Corwith 1-22, the proposed drilling site involved in the present controversy.
Corwith 1-22
State of Michigan Oil and Gas Leasé No. 9656, covering 1,760 acres of Corwith Township including the 160 acres comprising the southeast 1/4 of Section 22 was purchased by Pan American Petroleum Corporation. In December of 1968, Pan American assigned an undivided 50% interest in this lease to Northern Michigan Exploration Company and Amoco Production Company. In April of 1971, Northern Michigan Exploration and Amoco applied for a permit to drill a well on the southwest 1/4 of the southeast 1/4 of Section 22 of Corwith Township, a 40-acre site. On October 11, 1971, the Supervisor of Wells denied the application on the grounds that oil and gas drilling on the site would cause "serious and unnecessary damage" to various wildlife in the area, the swamp in the area would be affected, and the drilling would cause a "serious intrusion into a nearly solid block of semi-wilderness area of state lands". The denial specifically stated that no site in the 40 acres was acceptable. No appeal was made from this permit denial.
With full knowledge of this denial, because of his membership on the Oil and Gas Advisory Board of the Supervisor of Wells, Vance W. Orr, Vice President of McClure Oil Company and President of Michigan Oil Company, accepted on behalf of McClure Oil an assignment of the lease rights to this 40-acre site in Section 22 of Corwith Township. "[F]or and in consideration of the sum of One Dollar ($1.00) and other valuable considerations", Northern Michigan Exploration and Amoco assigned to McClure Oil Company their interest in Lease No. 9656 covering the 40-acre site in Section 22. Four months later, in May of 1972, McClure Oil entered into a contract with its wholly-owned subsidiary, Michigan Oil Company. Under the terms of the contract, Michigan Oil would receive assignment of the leasehold interest, if Michigan Oil could obtain a drilling permit and then drill a commercial producing well on the 40-acre site referred to as Corwith 1-22.
The Drilling Permit
Within two weeks of the contract agreement, Michigan Oil filed the second application for a permit to drill a well on Corwith 1-22. This second application was also denied by the Supervisor of Wells, in a letter dated July 21, 1972. In addition to noting the earlier denial of Northern Michigan Exploration and Amoco's application to drill on the same 40-acre site, the letter to Michigan Oil stated:
'Oil and gas operations at the above site cannot be conducted without causing or threatening to cause serious damage to animal life and molesting or spoiling state-owned lands.
"This area was originally leased on October 1, 1968. Due to our increased awareness of quality environment, and increased success in oil and gas exploration, I firmly believe this area would not have been offered for lease today.
"[T]he Natural Resources Commission has asked that we set up a forest management plan to preserve the special quality environment now present.
"Such a plan would establish a broad management policy for the area, identifying kinds of management programs and uses to be permitted. It would involve zoning of areas, each differing in intensity or type of use to be permitted. Preparation of this plan is under way at the present time and should be completed within six months, including time for public hearings. For this reason it is appropriate that the present application be denied. You may also expect me to direct denial of all other applications for drilling permits in the area under study, pending drafting of and action on the management plan.
"With reference to the present application I make the following specific points.
"The proposed drilling site is located in a 40-acre tract within a township about 93 percent state owned and hence almost entirely in a wild state. Similar conditions prevail in the townships to the north and south. This surrounding area is primitive in nature, largely wooded, with minimal development. The roads are narrow, winding, and highly scenic. The proposed site is near the center of the Michigan elk range. The area has substantial populations of game — white-tailed deer, ruffed grouse, and woodcock, and relict populations of wildlife requiring extensive little-disturbed, wild areas such as black bears, bobcats, bald eagles, pileated woodpeckers, and ravens. All of the latter are scarce or very local in occurrence in the Lower Peninsula.
"Development for oil or gas has not yet reached this secluded area. " (Emphasis added.)
With nothing to lose and everything to gain, Michigan Oil, the potential assignee of McClure Oil's leasehold interest, appealed the denial of its permit application to the NRC. The NRC appointed a hearing examiner to conduct the administrative hearing. The Pigeon River Country Association intervened under the Michigan Environmental Protection Act (MEPA), MCL 691.1205(1); MSA 14.528(205X1). The hearing examiner ruled, however, that the intervention was untimely and that the environmental protection act could not be raised. The examiner further ruled that the parties were limited to issues raised by the initial parties in their pretrial statements.
The hearing examiner filed a written report, adopting almost verbatim Michigan Oil's proposed findings of fact and conclusions of law, recommending that the drilling permit be issued. The NRC, after reviewing the record, the briefs and the proposed findings of fact, rejected the recommendations of the hearing examiner and upheld the denial of Michigan Oil's application for a drilling permit. On May 9, 1974, the NRC issued its decision specifically finding the following:
"Damage to the ecosystem and serious or unnecessary damage to animals would be caused by opening entrance roads, truck traffic, succession of wells and general activities encountered in all oil-gas production. Particularly, serious effects would be caused to elk, bear and bobcat and could cause their virtual removal from a portion of the Pigeon River area. The tendency of the animals would be to avoid the area. Such effect would be particularly noticeable in the case of elk who are a wide ranging animal (Moran, T-2142; Harger, T-2243; Black, T-1331, 1332, 1333, 1352; Moore, T-1710; John son, T-1782, 1784-1786, 1819, 1924; Strong, T-1823, 1824).
"The Pigeon River area is the last stronghold of the bear and bobcat. Places where bear and bobcat can live are limited. Section 22 is good bear habitat (Johnson, T-1786, 1823; Harger, T-2246).
'Elk would be particularly affected by an oil operation because of their fragile nervous system and even clearing one acre will affect them. In turn, many small animals would be affected (Johnson, T-1823; Strong, T-1888, 1889; Moran, T-2152).
"The above testimony from game biologists as to the effect of the drilling of a well in this area comes from the DNR presentation and the opinions of their experts are unrebutted on the record. On considering the foregoing testimony the Commission must And that damage to or destruction of the surface, soils, animals, fish or aquatic life will occur. " (Emphasis added.)
On appeal, the denial of the drilling permit for Corwith 1-22 was affirmed by the Ingham Circuit Court and by the Court of Appeals. Michigan Oil Co v Natural Resources Comm, 71 Mich App 667; 249 NW2d 135 (1976).
On April 20, 1977, this Court issued an order denying Michigan Oil leave to appeal. 399 Mich 892 (1977). Subsequently, on July 14, 1977, Michigan Oil received a third appeal of the drilling permit denial when this Court, on reconsideration, granted leave to appeal. 400 Mich 843 (1977).
Discussion
Thus, within this factual setting, the Court must determine whether the Natural Resources Commission had the statutory authority to deny Michigan Oil's application for a drilling permit on the 40-acre site known as Corwith 1-22 in the Pigeon River Forest. Specifically, we must decide whether the oil conservation act, 1939 PA 61, as amended, MCL 319.1 et seq.; MSA 13.139(1) et seq., or the legislation which created the Department of Conservation, the DNR's predecessor, 1921 PA 17, as amended, MCL 299.1 et seq.; MSA 13.1 et seq., provides sufficient statutory authority to justify the denial of a drilling permit in the instant case. Additionally, we are asked to determine whether the Michigan environmental protection act should be read in pari materia with the oil conservation act.
1939 PA 61
At the crux of this litigation is the question of the proper interpretation of the oil conservation act, 1939 PA 61, and the question of the nature of the authority granted to the Supervisor of Wells and the NRC to deny the issuance of a permit to drill on state-owned lands pursuant to oil and gas leases. Appellant, Michigan Oil, claims that 1939 PA 61 only empowers the Supervisor of Wells to withhold issuance of a drilling permit to prohibit waste which is unnecessary to the production of oil and gas. The statute, therefore, would impliedly protect any and all other waste, no matter how serious, if necessarily incidental to the production of oil and gas. According to the appellant, the clear import of 1939 PA 61 was not to conserve the environment in general but to conserve only oil and gas so that they are efficiently extracted.
Neither the circuit court nor the Court of Appeals would accept this exceedingly narrow construction of the statute. We also reject a construction of the oil conservation act which would permit oil and gas drilling unnecessarily detrimental to the other natural resources of this state.
Under the statute before amendment in 1973, waste is defined "in addition to its ordinary mean ing" to include "the unnecessary damage to or destruction of the surface, soils, animal, fish or aquatic life or property from or by oil and gas operations". MCL 319.2(1)(2)(2); MSA 13.139(2)(1)(2)(2). We are urged to find that the NRC exceeded its statutory authority because the letter denying Michigan Oil's application for a drilling permit referred to oil and gas operations at Corwith 1-22 causing "serious damage to animal life" rather than the statutory language of "unnecessary damage to or destruction of animal life".
We refuse to adopt this narrow, semantic analysis. Surely, if the Director of Natural Resources and the Supervisor of Wells in the denial letter dated July 21, 1972 had a crystal ball they would have used the statutory word "unnecessary" instead of "serious" to modify damage. The statutory words, "unnecessary damage" or "destruction", clearly apply to the correct findings of the Court of Appeals:
"The uncontradicted evidence below established that the proposed drill site is located in the midst of Michigan's elk range, that the elk herd which inhabits this area is the last sizeable wild elk herd east of the Mississippi River, and that oil and gas operations would cause the elk to avoid the area surrounding such operations, resulting in the reduction in the range and habitat of the elk and the decline in the population of the herd. Uncontradicted evidence established that oil and gas production activities would have the same effect on bear and bobcat, and that the area presently provides one of the few remaining favorable locations for bear and bobcat in lower Michigan. These factual findings are amply supported by the record and indicate that the proposed drilling poses a serious threat to the survival of wildlife already found only in limited numbers in a limited area of the state." Michigan Oil, supra, 686-687.
Furthermore, we agree with the Court of Appeals interpretation concerning the ordinary meaning of waste:
"We are not prepared to hold that the 'ordinary meaning' of the term waste cannot include even the most serious permanent damage to or destruction of any and all natural resources of the state incidental to the production of oil." Michigan Oil, supra, 685-686.
The definitional section of the act relative to waste provided in part:
"(1) As used in this act, the term 'waste' in addition to its ordinary meaning shall include:
"(1) 'Underground waste' as those words are generally understood in the oil business, and in any event to embrace (1) the inefficient, excessive, or improper use or dissipation of the reservoir energy, including gas energy and water drive, of any pool, and the locating, spacing, drilling, equipping, operating, or producing of any well or wells in a manner to reduce or tend to reduce the total quantity of oil or casing-head gas ultimately recoverable from any pool, and (2) unreasonable damage to underground fresh or mineral waters, natural brines, or other mineral deposits from operations for the discovery, development, and production and handling of oil or casing-head gas.
"(2) 'Surface waste,' as those words are generally understood in the oil business, and in any event to embrace (1) the unnecessary or excessive surface loss or destruction without beneficial use, however caused, of casing-head gas, oil, or other product thereof, but including the loss or destruction, without beneficial use, resulting from evaporation, seepage, leakage or fire, especially such loss or destruction incident to or resulting from the manner of spacing, equipping, operating, or producing well or wells, or incident to or resulting from inefficient storage or handling of oil, (2) the unnecessary damage to or destruction of the surface, soils, animal, fish or aquatic life or property from or by oil and gas operations; and (3) the drilling of unnecessary wells." MCL 319.2; MSA 13.139(2). (Emphasis added.)
Appellant would have us read into the phrase "waste in its ordinary meaning" the modifying language "as those words are generally understood in the oil business". Such interpretation clearly ignores the legislation's specific wording. When the Legislature defined "underground waste" and "surface waste" it specifically referred to the oil business. On the other hand, the Legislature omitted any reference to the oil business when including ordinary waste in the definitional section. Therefore, the ordinary use of the term "waste" does not refer only to waste of oil and gas, but includes any spoilation or destruction of the land, including flora and fauna, by one lawfully in possession, to the prejudice of the estate or interest of another. Serious damage to the wildlife of Corwith 1-22 resulting from oil drilling is spoilation or destruction that impairs state-owned lands and the people of Michigan's estate therein.
We would construe the oil conservation act liberally, to allow the NRC to prevent serious environmental damage, on the basis of additional statutory provisions. For example, although § 1, declaring the policy of the oil conservation act, addresses itself primarily to conservation of oil deposits, it clearly declares:
"Failure to adopt such a policy in the pioneer days of the state permitted the unwarranted slaughter and removal of magnificent timber abounding in the state, which resulted in an immeasurable loss and waste. To that end this act is to be construed liberally in order that effect may be given to sound policies of conservation and the prevention of waste and exploitation." MCL 319.1; MSA 13.139(1).
It appears reasonable that a broad meaning can be ascribed to a definition of conservation as used in the declaration of policy section. Conservation should not be read to apply only to the efficient extraction of oil, but should include the efficient extraction of oil which simultaneously conserves the other natural resources (flora and fauna) of the state. Support for this interpretation can be found in § 23 of the act which provided until its amendment by 1973 PA 61:
"[N]o permit shall be issued to any owner or his authorized representative who has not complied with or is in violation of this act, or any of the rules, regulations, requirements or orders issued by the supervisor, or the department of conservation." MCL 319.23; MSA 13.139(23). (Emphasis added.)
This specific reference to the DNR's predecessor in the oil conservation act demonstrates that the Legislature did not draft this act in a vacuum, intending to sacrifice all other natural resources in an effort to discover and produce oil and gas. To the contrary, this reference to the Department of Conservation implicitly mandates a statutory construction of the oil conservation act which allows the NRC to prevent serious environmental damage when reviewing drilling permit applications for state-owned land.
Despite this cross-referencing, appellant, Michigan Oil, contends that no rules and regulations existed in 1972 related to prevention of "unnecessary damage to or destruction of wildlife". However, § 6 of the oil conservation act indicates that the Supervisor of Wells has the authority to deny a drilling permit to prevent waste without the aid of specific rules and regulations:
"The supervisor shall prevent the waste prohibited by this act. To that end, acting directly or through his authorized representatives, the supervisor is spe-ciñcally empowered to do whatever may be necessary with respect to the subject matter stated herein to carry out the purposes of this act, whether or not indicated, specifíed, or enumerated in this or any other section hereof." MCL 319.6; MSA 13.139(6). (Emphasis added.)
Accordingly, we find, as did the NRC, the circuit court and the Court of Appeals, that: (1) the oil conservation act placed an aifirmative duty on the Supervisor of Wells to prevent waste, including serious or unnecessary damage to or destruction of wildlife, even in the absence of specifically promulgated rules and regulations; and (2) the proposed drilling at Corwith 1-22 poses a serious threat to the survival of wildlife already found only in limited numbers in a limited area of the state, and this serious threat falls within the statutory definitions of ordinary waste and surface waste which includes the unnecessary damage to or destruction of animal life. As indicated infra, any other finding would seriously undermine the affirmative statutory duty of the DNR and its predecessor the Conservation Department to "protect and conserve the natural resources of the State of Michigan". MCL 299.3; MSA 13,3.
1921 PA 17
In denying Michigan Oil's application for a drilling permit, the Natural Resources Commission did not rely solely on the authority of the oil conservation act of 1939. The order of the NRC also refers to the conservation act of 1921, 1921 PA 17 as amended, MCL 299.1 et seq.; MSA 13.1 et seq. Through this act, the Legislature established the predecessors of the NRC and the DNR to "provide for the protection and conservation of the natural resources of the state". Preamble, 1921 PA 17, as amended by 1927 PA 337. The commission (NRC) was specifically authorized to purchase land "on behalf of the people of the state" and the department (DNR) was given the affirmative duty to "protect and conserve the natural resources of the state of Michigan". MCL 299.3; MSA 13.3. Pursuant to this authority, the commission purchased approximately 65% of the now publicly-owned land in the Pigeon River Forest. The purchase and management of the Pigeon River Forest was funded by the fish and game protection fund pursuant to MCL 314.12; MSA 13.1361.
This background is necessary to understand why the NRC, in upholding the Supervisor of Wells denial of the permit, found that if the department had not opposed the application for permit it would have failed in the performance of its duty to protect and conserve natural resources and game pursuant to 1921 PA 17. This conservation act empowers the commission to enter into contracts for the taking of oil and gas and to make and enforce reasonable rules and regulations concerning the use and occupancy of lands and properties under its control. MCL 299.2; MSA 13.2. In this connection, § 23 of the oil conservation act, supra, becomes significant, by requiring that no permit be issued to any driller who has not complied with or is in violation of any "rules, regulations, requirements or orders" of the Supervisor or the Department of Conservation, the DNR.
The denial of a drilling permit by the NRC in the instant case was not based upon promulgated rules and regulations. The denial was based, however, upon specific guidelines formulated by the DNR and adopted by the Natural Resources Commission on June 11, 1971. These guidelines, entitled "Policy Governing the Review of Applications for Permits to Drill for Oil and Gas in State of Michigan", were issued in an intra-agency directive from the Director of Natural Resources to all supervisory personnel and specifically provided that:
"A drilling permit will be denied when the Supervisor of Wells fínds that oil and gas operations cannot be conducted without causing or threatening to cause serious or unnecessary damage to or destruction of the surface, soils, animal, fish or aquatic life or property." (Emphasis added.)
Therefore, pursuant to its power under MCL 299.2; MSA 13.2, and based upon § 23 of the oil conservation act, which mandated that no permit be issued in violation of "requirements", i.e., guidelines, of the DNR, the NRC refused to issue a drilling permit for Corwith 1-22 since such drilling would cause serious or unnecessary damage to or destruction of the elk, bear and bobcat populations.
Appellant Michigan Oil contends since MCL 299.3a; MSA 13.4, which grants to the NRC the power to promulgate appropriate rules and regulations, explicitly requires that such rules be promulgated in accordance with the Administrative Procedures Act, 1943 PA 88, as amended, the same requirement is applicable to § 2, MCL 299.2; MSA 13.2. This contention overlooks the basic differences between § 2 and 3a. Section 3a provides a criminal sanction in that:
"The commission of conservation shall make such rules for protection of the lands and property under its control against wrongful use or occupancy as will insure the carrying out of the intent of this act to protect the same from depredations and to preserve such lands and property from molestation, spoilation, destruction or any other improper use or occupancy. Nothing herein contained shall be deemed as allowing the commission of conservation to make any rule which applies to commercial fishing except as provided by law. Rules affecting the use and occupancy of such lands and property shall be promulgated in accordance with Act No. 88 of the Public Acts of 1943, as amended, being sections 24.71 to 24.80 of the Compiled Laws of 1948, and subject to Act No. 197 of the Public Acts of 1952, as amended, being sections 24.101 to 24.110 of the Compiled Laws of 1948. A violation of any such rule is a misdemeanor." 1968 PA 199, MCL 299.3a; MSA 13.4. (Emphasis added.)
The criminal sanction of § 3a mandates promulgated rules and regulations. Furthermore, the first sentence of § 3a uses the word "shall", thereby requiring the NRC to promulgate rules and regulations.
Section 2, on the other hand, neither provided a criminal sanction nor ordered the NRC to act:
"The commission hereby created may adopt such rules and regulations, not inconsistent with law, governing its organization and procedure, and the administration of the provisions of this act, as may be deemed expedient. Said commission may also make and enforce reasonable rules and regulations concerning the use and occupancy of lands and property under its control." 1963 PA 204, §1, MCL 299.2; MSA 13.2. (Emphasis added.)
Furthermore, the 1975 and 1976 amendments to § 2, inapplicable in the instant case, did not alter the previously mentioned differentiations. Finally, a distinction as to scope should be noted. Section 2 creates licensing and leasing powers in the NRC and authorizes rulemaking within a policy-making format. Section 3a is concerned with wrongful use and occupancy of state-owned land and is designed to provide sanctions against poachers and trespassers.
Based upon this analysis, we can only conclude that the NRC acted within its authority under § 2, MCL 299.2; MSA 13.2, in denying the drilling permit based upon the specific guidelines formulated by the DNR and adopted by the NRC in 1971.
Notwithstanding the foregoing reasoning, a 1970-71 promulgated rule did provide the Supervisor of Wells with authority to deny the drilling permit in the instant case.
MEPA
Having concluded that 1939 PA 61 and 1921 PA 17 provide statutory authority for denial of the drilling permit in the instant case, it is unnecessary to decide whether the Michigan environmen tal protection act, MCL 691.1201 et seq.; MSA 14.528(201) et seq., must be read in pari materia with the oil conservation act. Nevertheless, if an answer to this question were required, we would hold that the Michigan environmental protection act should be read in pari materia with all legislation relating to natural resources.
The rationale for such a holding can be found in Detroit v Michigan Bell Telephone Co, 374 Mich 543, 558; 132 NW2d 660 (1965); app dis and cert den 382 US 107; 86 S Ct 256; 15 L Ed 2d 191 (1965):
"Statutes in pari materia are those which relate to the same person or thing, or the same class of persons or things, or which have a common purpose. It is the rule that in construction of a particular statute, or in the interpretation of its provisions, all statutes relating to the same subject, or having the same general purpose, should be read in connection with it, as together constituting one law, although enacted at different times, and containing no reference one to the other."
See also State Highway Comm v Vanderkloot, 392 Mich 159, 182; 220 NW2d 416 (1974) (opinion by Williams, J.).
Since the MEPA specifically speaks to "any alleged pollution, impairment or destruction of the air, water or other natural resources", it is logical that the MEPA should be read in pari materia with other statutes relating to natural resources.
Conclusion
Having determined that in 1972 the Natural Resources Commission had statutory authority to properly deny Michigan Oil's request for a drilling permit in the Pigeon River Forest, we affirm the decisions of the circuit court and the Court of Appeals.
Williams and Fitzgerald, JJ., concurred with Blair Moody, Jr., J.
Kavanagh, J.
(to affirm). I would affirm the Court of Appeals.
I cannot subscribe to a construction of the oil conservation act which would limit the DNR's duty to protect the whole environment as it is affected by the drilling of oil wells.
There is adequate evidentiary support for the commission's determination that drilling the proposed well would result in damage to animal life.
Its conclusion that this amounts to the waste included in the proscription of the statute comports with my understanding of the legislative intent in writing this law. While it is true the express, primary concern of the oil conservation act is with the prevention of waste of oil itself, I cannot read the act as ignoring, let alone approving, all incidental damage to other natural resources.
Support for this position can be found in a 1970-71 rule promulgated under § 6 of the oil conservation act granting to the Supervisor of Wells authority to do whatever may be necessary, even when not specified in the act or specific rules and regulations. 1970-71 AACS R 299.2101 provides in relevant part:
"The supervisor, by virtue of section 6 of Act No. 61 of the Public Acts of 1939, as amended;
"(a) May enforce all rules and regulations, issue orders and instructions necessary to enforce such rules and regulations, and do whatever may be necessary with respect to the subject matter stated in the rules and regulations to carry out the purposes of the rules and regulations and of the act itself, whether or not such orders or instructions are indicated, specified or enumerated in the act or the rules and regulations."
Thus, this rule gave the Supervisor of Wells the power to deny the drilling permit based upon rationale appropriate under the act, without regard to. enumerated rules and regulations. See also 1963 AACS R 299.2101.
See footnote 1, supra.