Michigan oil and gas development: 2013 in review

Michigan oil and gas drilling activity last year was still well-below pre-recession levels and industry experts predict more of the same in 2014.

Relatively low natural gas and oil prices continued to slow oil and gas exploration in Michigan, according to the Michigan Oil and Gas News. The publication projects that final totals will show seven percent fewer wells drilled in 2013 from the previous year. Activity in the state is still much below the most recent peak in 2008.

The clear winner in 2013 was oil exploration in the Trenton-Black River formation in Jackson, Lenawee and Washtenaw counties. Through mid-November of last year, 46 of 125 wells drilled in the state were located in those three counties. This is a huge change from 15 years ago, when a vast majority of activity was in northern Michigan’s Antrim Shale formation.

Michigan oil and gas development was still in the news, despite relatively modest drilling activity. High-volume hydraulic fracturing (often called “fracking”) continues to cause concern in some parts of the state, although just four wells were completed this year in the Utica-Collingwood formation where this technique is used. To help address concerns and information needs, the University of Michigan Graham Sustainability Institute published a series set of technical reports about hydraulic fracturing in September that are excellent resources for local leaders, landowners and residents wishing to better understand hydraulic fracturing issues and the policy framework. These technical reports are the first part of a project to identify key strategies and policy options for managing hydraulic fracturing in Michigan. The final integrated assessment will be published in mid-2014.

Also during 2013, the Michigan Department of Environmental Quality proposed additional rules to increase water use and quality monitoring and reporting, require water withdrawal impact assessment prior to drilling and require disclosure of chemical additives used in the hydraulic fracturing process.

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

So, what will 2014 bring for this industry in Michigan? The Michigan Oil and Gas News predicts that 150 wells will be drilled in the state – the same as their prediction for 2013. The authors also comment that drilling in the Utica-Collingwood may “expand significantly” based on the number of drilling permits that were issued in 2013, but where actual drilling has yet to begin.

Michigan State University Extension and partner organizations will continue to sponsor educational workshops during 2014 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.

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