LANSING, Mich. (AP) - State regulation of natural resources and the environment will be handled by one department again under a merger announced Thursday by Gov. Jennifer Granholm.

The Democratic governor issued an executive order combining the two departments, which were separated in 1995 under her predecessor, Republican Gov. John Engler.

The order takes effect Jan. 17. The new entity will be called the Department of Natural Resources and Environment. Bruce Rasher, director of operations for real estate services company CB Richard Ellis and a former utility company official, will be the transition director until then.

Granholm's executive order also gives the governor the right to appoint the new department's director, rather than the Natural Resources Commission, and to name the state agriculture director, who now is appointed by the Commission of Agriculture.

"Experience has shown us that conserving natural resources and protecting the environment go hand-in-hand," Granholm said in a statement. She noted the move will reduce then number of state departments to 16 and abolish several boards, councils and committees.

Michigan United Conservation Clubs executive director Erin McDonough said the group welcomed the merger. But it was less happy the governor will name the new department's director, rather than leaving it in the hands of a nonpartisan commission.

Several environmental groups put out a joint statement saying they were concerned the merger could lead to less money for environmental and natural resources oversight.

"Monetary resources for protecting Michigan's environment have fallen to a critically low, unsustainable level and resources are needed to ensure this new agency can do its job," said the Sierra Club Michigan Chapter, Clean Water Action, the Michigan Environmental Council and the League of Conservation Voters.

The groups support the merger, however, saying the new DNRE "can be a cutting-edge environmental protection agency for the 21st century that can serve as a model for other states and countries."

The Michigan Farm Bureau said it was relieved Granholm and Lt. Gov. John Cherry didn't roll the Agriculture Department in with the new entity. Cherry, at Granholm's request, is leading a broad review of state government aimed at reducing the number of departments, and there had been talk of combining the Agriculture Department with DNR and DEQ.

But the bureau blasted the governor for taking away the commission's right to appoint the director and for abolishing the Pesticide Advisory Council and the Agriculture Preservation Fund Board, and for transferring the Office of Racing Commissioner to the Michigan Gaming Control Board.

The bureau called on lawmakers to not give their approval to the executive order.