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State unfolds evidence against energy giants this week in conspiracy case

A gas drilling rig in Wyoming.
Wyoming Upper Green River Valley
A gas drilling rig in Wyoming.

Today lawyers with Michigan’s Attorney General’s office will begin outlining the state’s case against energy giants Chesapeake Energy and Encana Oil & Gas USA.

The allegations stem from an auction for drilling leases on state land three years ago.

In May 2010 an auction of drilling leases brought in $178 million. That’s almost as much as all the revenue from all of Michigan’s leases of public land from 1929 to now, combined.

The state alleges Chesapeake and Encana then conspired to not bid against each other at the next auction. Prices plummeted that fall auction by 97%.

Both companies claim they're not guilty of conspiracy or anti-trust violations. They face up to a million dollar fine if convicted.

The state will start presenting its evidence and call on witnesses today at a district court in Cheboygan. Lawyers for the companies will get a chance to cross-examine the state’s witnesses and bring their own. The hearing could last through Friday.  

If a judge finds probable cause, the case will be bound over to circuit court for trial.

A federal investigation into similar allegations wrapped up last week. The Department of Justice declined to file charges.

In a written statement, an Encana representative said the company was “very pleased” with the outcome.

“The conclusion of their investigation is consistent with the findings of our independent investigation, and of our board of directors, that Encana did not engage in collusion with competitors in Michigan in 2010.”

Lindsey Smith helps lead the station'sAmplify Team. She previously served as Michigan Public's Morning News Editor, Investigative Reporter and West Michigan Reporter.
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