Report urges more Michigan natural gas production
- By Karl Henkel
- The Detroit News
- 1 Comments
Michigan's natural gas industry injects $6 billion into the state's economy, supports 23,000 jobs and needs to be protected from a federal takeover of the state's regulatory role, according to state legislative report released Tuesday.
"The growth of natural gas means more energy independence and high-wage jobs," said Rep. Aric Nesbitt, R-Lawton, chair of the subcommittee on natural gas for the House Energy and Technology Committee, in a statement. "Michigan is a manufacturing state and nearly 98 percent of manufactured products come in contact with natural gas. Lower natural gas prices mean lower energy prices for America to compete and win in the 21st century."
The report, unveiled by Nesbitt on Tuesday, did not detail new job creation estimates.
Natural gas has assisted in the creation of nearly a quarter million manufacturing jobs nationwide in the past two years alone, according to Midland-based Dow Chemical Co., which participated in the report.
The report says Michigan imports nearly 80 percent of the natural gas it uses, but recommends increasing the amount of production in the state to reduce imports. Natural gas prices are near $2 per thousand cubic feet, the lowest price in about 10 years.
Natural gas is considered a plentiful, cleaner-burning fuel that could help replace America's energy dependence on oil and coal.
Natural gas production nationwide has soared during the past decade with the exploration of dry gas shale-plays in Pennsylvania and Texas. In Michigan, the Antrim Shale could produce 6 trillion to 8 trillion cubic feet of natural gas during the next 20 years, according to the report.
A test well in the Collingwood Shale, located in the northern third of the Lower Peninsula, showed promising results including the prospect of more profitable wet gas, the report said.
Gas is tapped using the controversial process known as horizontal hydraulic fracturing, or fracking, which is a process where water, chemicals and sand are blasted into rocks thousands of feet underground to unlock natural resources.
Michigan's Department of Environmental Quality, which oversees gas drilling, has not found any cases where fracking has caused adverse impacts to the environment or public health, according to the report.
James Clift, policy director at the Michigan Environmental Center, said the DEQ has done "pretty well" at regulating the oil and gas industry, but said the deeper, horizontal fracking method used on shale rock raises new concerns.
"We're talking about quantities where the small, vertical fracks used 50,000 to 80,000 gallons of water," Clift said. "These new operations can use 5 to 8 million gallons of water. There are more places along the line when you can have a potential accident."
The report said one horizontal well disturbs one-tenth the acreage of a vertical well.
In the report, the House subcommittee recommends protecting Michigan's role in regulating the drilling process for natural gas from what it calls a U.S. Environmental Protection Agency effort to take over the state's role in regulating the sand-water mixtures in well stimulation.
Clift also questioned the recommended "lease it or lose it" rule, which would force the state to lease all 5.3 million available acres of mineral rights.
"If you've got natural gas prices at near-record lows, why would Michigan dump all of its mineral rights on the market right now?" he said. "The state would lose billions of dollars if it went through with that recommendation."
From The Detroit News: http://www.detroitnews.com/article/20120424/BIZ/204240428#ixzz1tiLPCaqL