OIL AND GAS ACTIVITY IN MICHIGAN

INTRODUCTION

The oil and gas industry in Michigan plays a very important role in the State's energy resources, natural environment, and economy. Cumulative Michigan oil production approached 1.3 billion barrels by 2007 and total gas production now exceeds 7.0 trillion cubic feet. This places Michigan in the top fifteen oil and gas producing states in the nation. With a few exceptions, Michigan's oil and gas operators have done a good job in developing our state's energy resources while maintaining the integrity of the natural environment. In many cases the oil and gas industry has been the leader in developing technologies to protect the environment and enhance oil and gas recovery at the least environmental risk. Development of the resources in the Pigeon River State Forest is a typical example. Economic benefit to the state cannot be denied. Total wellhead value of the oil and gas produced in 2006 is estimated at $345,892,066 for oil(ave. price@$60.73/barrel) and $1,306,815,891 for natural gas(ave. price@$7.49/MCF) Private royalty owners typically recieve 12.5% and the State of Michigan typically receives 16.7% of the net wellhead value. Over $80 million in taxes and fees were paid to the State of Michigan in 2006.

These benefits that the oil and gas industry brings to the State have been declining during the past several years. For instance, oil production has dropped from 27.8 million barrels in 1986 to just over 5.7 million barrels in 2006. This 70.5% decline in 20 years is mostly due to diminishing reserves and lack of incentive and knowledge for the exploration of new reserves. New reserves have been developed in natural gas resources during the last twenty years, mainly as a result of tax incentives and new knowledge developed through research and exploration. Michigan gas production has increased from 141 billion cubic feet in 1986 to 305 billion cubic feet in 1997. Declines have been seen since then, with 2006 gas production at about 174 billion cubic feet. This development has been beneficial to the economic health of the state.

R & D and legislative incentives have demonstrated that increased development of Michigan's energy resources can provide valuable economic benefit to the state. This repository and resource facility located in southwestern Michigan and associated with Western Michigan University provides technology transfer to help encourage development and efficient management of Michigan's valuable energy resources.

CORES, SAMPLES, DATA MATERIALS

We have compiled a list of STATE FACILITIES that currently have cores from Michigan. Total footage is At the MGRRE facility alone is approximately 250,000 linear feet. Additionally, tens of thousands of well samples are housed at the same repositories. Well drilling data, wireline logs and miscellaneous analytical data is also available for many or most of these wells. All of this data is very useful in evaluating increased recovery efficiency of existing reserves or developing new exploration opportunities for new reserves.

Last updated January 12, 2007