Are bonds required for test wells or mining operations?
Test wells that require a permit from the DEQ also require a bond to ensure conformance with drilling, operating, and plugging regulations. The amount of the bond is based on the predicted cost of plugging the well in the event the state must do the plugging. No bond is required for a well that does not require a permit. Mining operations may be required by the DEQ to be covered by a bond if it appears the operator does not have the financial ability to comply with the rules under Part 631. The DNR requires lease performance bonds for state of Michigan leases, which can be used for such things as site restoration, well plugging, and royalty payments. The bonding amount is based on the total number of acres and ranges from $10,000 to $50,000.
