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Michigan Oil and Gas Development: 2012 in Review

Michigan oil and gas drilling activity will likely end up at a similar level as last year, but interest still remains in the state’s potential going into 2013.

Oil and natural gas issues are still making headlines around the nation, although drilling activity in Michigan lags. After a slow start, Michigan oil and natural gas drilling activity this year will likely be on par with 2011, when 150 wells were completed, according to Michigan Oil and Gas News. That’s still dramatically fewer than before the 2008 financial crisis. To date, nearly one-half of all activity this year was in the south central part of the state, especially Lenawee and Jackson counties. Wells in those counties are targeting oil in the Trenton and Black River geological formations.

Despite lower drilling activity in the state for the past several years, there’s still substantial investment and interest in natural gas potential in the deep formations. New, high-tech drilling rigs were used for the first time in the state. One of those rigs drilled the longest well in Michigan history – 9,372 feet deep and then 10,300 feet horizontally. This broke the previous record set in 1975.

The Michigan Oil and Gas News predicts increased drilling activity in 2013, based on a survey of Michigan Oil and Gas Association members.

In November 2012, Gov. Snyder spoke about natural gas production during a major speech on energy and environment. He credited Michigan’s regulations for protecting water resources, stating that “never once” had groundwater pollution occurred in the state from hydraulic fracturing. He also announced the possibility of a strategic natural gas reserve for Michigan, which would allow the state to store and later sell gas it owns, on the private market. The goal would be to develop long-term contracts that create a favorable price for both ratepayers and taxpayers, according to the statement.

Oil and gas leasing on private and public land is still fairly active, despite modest drilling in the state. Leasing companies are seeking landowner agreements in many areas of the Michigan.

With increased national and statewide attention related to oil and gas development impacts, Michigan residents often seek information about activity in Michigan. An excellent free tool called GeoWebFace provides geologic, oil and gas, and natural resources information in online map format. The system includes one of the largest publically accessible information sets in Michigan, including oil and gas well and permit records.

Michigan State University Extension and partner organizations will continue to sponsor educational workshops during 2013 to help Michigan residents understand oil and gas leasing and other issues. Additional information is available on the MSU Extension oil and gas information web page.

(Article written by Dean Solomon, Michigan State University Extension)

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