Gas Pipeline Safety
Michigan Oil and Gas Facts
Number of Michigan Counties with Oil and/or Gas Production
· 63 of 83 in the Lower Peninsula
Michigan's Estimated Average Daily Production
· 22,677 Barrels of Oil
· 790 Million Cubic Feet of Gas (MMCFG)
Michigan's Annual Hydrocarbon Production (2000 Data)
· 8,277,840 Barrels of Oil (4% of Demand)
· 289 Billion Cubic Feet of Gas
Total Oil and Gas Production Since 1920
· 1.34 Billion Barrels of Oil
· 5.9 Trillion Cubic Feet of Gas
Total Number of Wells Currently Operating in Michigan
· 4,673 Oil Wells
· 6,865 Gas Wells
Top Crude Oil Producing Counties
· Hillsdale - 123 Million Barrels of Oil
· Manistee - 102 Million Barrels of Oil
· Otsego - 100 Million Barrels of Oil
· Midland - 84 Million Barrels of Oil
Top Natural Gas Producing Counties
· Otsego - 860 Billion Cubic Feet
· Manistee - 600 Billion Cubic Feet
· Grand Traverse - 548 Billion Cubic Feet
· Kalkaska - 507 Billion Cubic Feet
Michigan's Oil & Gas Industry and the Economy
Michigan's underground industry significantly contributes to the
state's economy in a variety of ways:
· Providing more than 10,000 industry-related jobs.
· Paying 14,000 private mineral owners more than $80 million in
· Contributing nearly $1 billion in oil and gas income (royalties,
rentals, lease bonuses) to the State of Michigan since 1927.
· Paying more than $40 million in severance taxes and oil and
gas fees to the State of Michigan annually.
· Contributing millions of dollars in local property taxes on
oil and gas wells, pipelines and surface facilities each year.
· Providing about $7 million in privilege fees to the state annually.
These fees underwrite the activities of the Michigan Department
of Environmental Quality's Geological Survey Division, which is
responsible for monitoring and enforcing industry compliance with
state and federal laws.
· Producing a total of $17.6 billion in Michigan crude oil and
natural gas since 1925.
· Generating a total value of $865 million in Michigan crude oil
and natural gas production annually in recent years. This, in
turn, results in an additional $1.1 billion in business activity
in Michigan, making oil and gas production a $2 billion industry
· Michigan, with the largest underground working storage capacity
of any state, is a natural gas storehouse for the Northeastern
United States with 600 billion cubic feet of storage capacity.
· Michigan produces about 25 percent of the natural gas in the
Michigan's Oil & Gas Industry at a Glance
Crude oil and natural gas have been found in 63 counties in Michigan's
First Commercial Well Drilled: Saginaw Country, 1925.
Number of Wells: More than 47,300 wells drilled since 1925. 14,000
active oil and gas producing wells.
Well Depth: Ranges from a few hundred feet to approximately 12,000
Biggest Production Year: Oil production reached 38.5 million barrels
1979; gas production reached 305 Billion Cubic Feet (BCF) in 1997.
Barrels of Oil Produced: Currently producing 10 million annually;
1 billion since 1925
Cubic Feet of Natural Gas Produced: Currently producing more than
300 billion annually; more than 4 trillion since 1925.
Largest Mineral Rights Owner: State of Michigan, with 5.9 million
Michigan's Oil and Gas Industry and the Environment
Michigan's natural resources are a great source of pride to its
residents. To preserve and protect these resources, the oil and
gas industry works hard to minimize its impact on the environment.
However, getting oil and gas out of the ground and delivered to
customers sometimes means an inconvenience for a short period
of time. State-of-the-art technology has made current operations
quieter, cleaner and more efficient than a decade ago and improvements
continue to be made each year. Michigan's oil and gas industry
works to comply with industry regulations at all levels.
The Environmental Protection Agency stipulates specific rules
and regulations for all industries, including the oil and gas
industry. These areas of compliance include the Resource Conservation
and Recovery Act (RCRA), the Clean Air Act, the Clean Water Act
and the Comprehensive Environmental Response Compensations and
Liability Act (CERCLA). The U.S. Environmental Protection Agency
specifically regulates the disposal of production waste.
The Michigan oil and gas industry is directly regulated by the
Michigan Department of Environmental Quality's Geological Survey
Division, the department of Natural Resource and the Michigan
Public Service Commission. Specific rules regulating the oil and
gas industry are found in Act 451 of the public Acts of 1994 as
amended (Part 615 Supervisor of Wells and the Administrative Rules
of 1996), highlights of which include:
Permitting & Construction. Regulations cover every aspect
of our industry - permitting a well, well construction and completion,
facility construction, production operations, noise abatement,
pipelines and, finally, plugging a well and site restoration.
Waste. Almost all of the waste associated with oil and gas production
is salt water which is commonly produced with the petroleum. The
water, or brine, may contain high levels of non-hazardous chloride.
Once water is separated from the petroleum, brine is re-injected
into the ground) frequently into the zone from which it came,
or deeper to protect fresh water) in a state- and U.S. EPA-approved
Class II disposal well. Also, many country road commissions use
excess brine for dust and ice control on gravel roads.
Hydrogen Sulfide (H2S). Also known as sour gas, hydrogen sulfide
has a high content of sulfur and is a natural byproduct of many
industries, including agriculture, salt, paper-making, sewage
disposal, and oil and gas. The State of Michigan has stringent
rules and regulations that specifically address the handing of
hydrogen sulfide by the oil and gas industry.
Noise. Many new technologies and methodologies in noise abatement
have been developed, and regulations have been updated, to make
sure oil and gas operations are as quite as possible.
Uniform Regulatory Control
Because geological formations that produce oil and gas do not
conform to surface boundary lines, and due to the highly specialized
technical nature of the business, state rules and regulations
cover all oil and gas activities. However, as a matter of policy,
drilling permit applications are sent to township and country
governments by the state for their input. The oil and gas industry
also complies with a variety of local ordinances regarding pipeline
rights of way, local surface facility zoning in established municipalities,
and soil erosion and sedimentation control. In addition, the Michigan
Department of Transportation, along with Michigan's country road
commissions, regulate the movement of heavy equipment.
The Michigan Natural Resources Trust Fund:
Putting Michigan's Oil and Gas Revenues to Good Use
Michigan was the first state in the nation to establish a land
trust fund specifically funded by revenues generated from the
oil and gas industry. The 1976 landmark legislation created what
is now the Michigan Natural Resources Trust Fund. It was hailed
by oil and gas industry leaders, environmentalists, conservationists
and recreation groups as a significant investment in Michigan's
natural resource heritage.
This historic commitment to Michigan's natural resources was spearheaded
by the Michigan Oil And Gas Association (MOGA), the Michigan United
Conservation Clubs (MUCC) and the Michigan Department of Natural
Resources in the 1970s, and has drawn high praise form environmental
industry leaders across the nation.
Although the original purpose of the Fund was solely to preserve
and protect Michigan's natural resources through buying and/or
improving public parks and recreation lands, its financial success
made it a target to help balance the state budget. During its
first seven years, more than $100 million was diverted to the
Michigan Economic Development Authority and other programs outside
its original stated purpose.
In 1984 a statewide referendum called for an end to raids on the
Fund. The referendum resulted in the Michigan Natural Resources
Trust Fund amendment to the Michigan Constitution, specifying
that funds be used to support land acquisition and facility development
Since its inception, the Michigan Natural Resources Trust Fund
has received more than $550 million from oil, gas and mineral
easing and production on state lands. By law, a portion of these
annual revenues, plus earned interest, must be used to acquire
and improve Michigan's public recreation facilities.
The Michigan Natural Resources Trust Fund has purchased more than
135,000 acres of ecologically significant or recreational land,
including more than:
· 3,000 acres for the Pigeon River County State Forest;
· 14,000 acres for the state park system;
· 1,000 acres for boating access sites;
· 2,600 acres of water frontage for fishing access sites; and,
· 37,000 acres for state wildlife areas.
Gas and oil - chemical compounds of hydrogen and carbon - were
formed deep beneath the ground millions of years ago as part of
the earth's evolution. Usually buried thousands of feet deep and
locked in sandstone, limestone, or shale, oil and gas migrate
up through the earth until they are trapped by no-permeable rock
formations. Science and technology are required to identify and
locate these rock formations and extract the oil and gas.
Some of the most significant oil and gas formations in Michigan,
as shown in the accompanying maps, include:
1. Traverse, Dundee and Richfield Formations
Production from the Traverse, Dundee and Richfield Formations
has been found mostly in the central part of Michigan's Lower
Peninsula. Exploration and production in these areas dominated
the Michigan oil and gas industry in the 1930s and '40s.
2. Trenton/ Black River Formation
The Albion-Scipio Filed of the Trenton/Black River Formation produces
oil from a common source along a one-mile wide path in Calhoun,
Jackson and Hillsdale Counties. The single largest field in the
state, Albion-Scipio has produced 125 million barrels of oil since
its discovery in 1957.
3. Niagaran Reef Trend
Discovered in 1968, the Niagaran Reef Trend (actually as series
of fields) tripled Michigan's oil production and quintupled our
natural gas production in the 1970s. The Reef Trend is located
along a 12- to 15-mile wide pate from Oceana Country, through
Kalkaska and Otsego Counties, to Presque Isle County. It also
runs through southern lower Michigan, with production fields in
Eaton, Ingham, Livingston, Oakland, Calhoun, Macomb and St. Clair
4. Glenwood and Prairie du Chein Formations
The Glenwood and Prairie du Chein Formations are the deepest producing
gas formations discovered to date in Michigan. The wells are drilled
to depths reaching 11,500 feet. Exploration and development of
these fields, which are located in the central part of Michigan's
Lower Peninsula, was heavy in the 1980s. Counties with significant
Glenwood or Prairie du Chein discoveries include Newaygo, Bay,
Osceola, Ogemaw and Arenac.
5. Antrim Shale Formation
Drilling and development of this formation, which began significantly
in the late 1980s, has again doubled Michigan's annual natural
gas production. The Antrim formation, located throughout Michigan,
is presently only commercially productive in the northern part
of the State. To date, Antrim exploration and production has centered
on Otsego, Montmorency, Alpena, Alcona, Oscoda, Antrim and Manistee
Information provided by the Michigan Oil and Gas Association