In this month’s cover photo a buzzard flies past the flare stack at the Wessel et Al 2-6A oil well in Hillsdale, Michigan (PN#58992). Buzzards seem to love to congregate around oil wells as they await their next meal’s demise. A buzzard circling a Michigan oil well is a fitting analogy for the June 2016 edition of RMP’s MOGM as we have seen few vital signs in Michigan’s oil economy so far this year. RMP wrote throughout the year in 2015 how it turned out to be the slowest year in Michigan’s history for oil & gas well permitting. RMP also wrote in 2014 that the forecast of activity in the coming years for oil production in Michigan was bleak; and that’s when prices were over $100/bbl. As it turns out, the numbers continue to Continue reading Michigan Oil & Gas Monthly – June 2016
The big news in oil & gas this month was the Chapter 11 bankruptcy filings of Houston, Texas based Linn Energy and Los Angeles, California based Breitburn Energy Partners. Linn energy was the 3rd largest hydrocarbon producer in Michigan in 2015 bringing in approximately $45.1 million worth of Michigan petroleum revenue. Breitburn was Michigan’s 5th biggest producer in 2015 bringing in approximately $44.0 million. Now, the questions will come about how the Chapter 11 bankruptcy restructurings will impact these companies along with their Michigan assets. RMP published a summary of the 2015 top 25 producers in the Michigan Basin last month, you can read it here. Less than a month after publishing the top 25 producers, we learn that two of Michigan’s top five producers are bankrupt.
Hal Washburn, Chief Executive Officer of Breitburn Energy Partners, said Continue reading Michigan Oil & Gas Monthly – May 2016
It’s been a cold Spring. Winter came late this year in Michigan and Spring has been pushed back. The first four months ended April 30, 2016 have been freezing. But, we’ve finally turned the corner and it’s getting warmer. Sun’s out guns out for the next 5 or 6 months straight and a we are all looking forward to the warm weather. Free heat from the sun will reduce natural gas demand from consumers all across Michigan and the Midwest until next winter. Michiganders demand natural gas to stay warm for months on end through the cold season with a just a simple digital click of their thermostats. Nearly 80% of Michiganders heat their homes with natural gas as well as use natural gas to dry their laundry and heat their chicken noodle soup. Natural gas is poised to gain additional market share in 2016 around the world and to displace demand for oil similar to the way it has displaced demand for coal.
The first four months of 2016 rang in the first Liquified Natural Gas (LNG) export shipments from Cheniere’s Sabine Pass terminal in Lousiana with the very first export shipment of US natural gas occurring on Continue reading Michigan Oil & Gas Monthly – April 2016
2015 Michigan petroleum production numbers are approximately 98% reported as of today. RMP has always focused on the numbers as they are often greater than adjectives. Opinions are overrated. People want to hear the numbers and then decide for themselves. This is RMP’s fifth year studying, parsing, organizing, compiling, and reporting numbers related to Michigan petroleum production. The information RMP publishes will always be free access to the public. RMP has always followed three fundamental tenets as a research and reporting philosophy:
- It’s all about the rock. Always respect the geology.
- Follow the money. Money talks.
- Follow the wastewater. Waste means inefficiency and problems. Inefficiency and problems mean additional costs. With regard to costs, see point #2.
Following the money has proven to be difficult because of the voluminous and Continue reading Michigan Oil & Gas Production Report January – December 2015
Crickets. New oil & gas activity in the Michigan Basin is so slow through the first quarter of 2016 that the only thing you can hear at the OOGM permitting department is crickets. 2015 was the slowest year in Michigan oil & gas history for new permitting activity breaking the old record set in 1931. In the first three months of 2015, the slowest year in Michigan history, the Office of Oil, Gas, & Minerals (OOGM) had received 24 applications and had issued 28 permits. As of today, through the first three months of 2016, Michigan’s OOGM has received only two applications and issued only six permits. New oil & gas permitting activity in 2016 is on pace to set the bar substantially lower than last year’s record as the slowest year ever.
As always, however, there’s a lot going on in Michigan oil & gas even if the permitting department of the OOGM is Continue reading Michigan Oil & Gas Monthly – March 2016
The Detroit Free Press published an article March 10, 2016 written by Keith Matheny that raises awareness about groundwater contamination at Wurtsmith Air Force Base (WAFB) in Oscoda, Michigan. You can read the Freep article by clicking here. Keith’s article has current information and details about an upcoming “open house” being held by the MDEQ & US Air Force on March 23, 2016 in Oscoda in order to brief the public about groundwater contamination at WAFB. Each day thousands of gallons of Pure Michigan freshwater soak through Landfill #27 and become contaminated water that flows south through Clark’s Marsh to the Au Sable River and then out to Lake Huron. The extent of the contamination plume around WAFB is not fully understood but ongoing studies are underway to delineate the pollution. A “do not eat” fish advisory was issued immediately after data first became available on May 2, 2012 that showed contamination levels at WAFB above GSI criteria. It’s great to see Freep covering issues that raise awareness about important contamination “hot spots” in the Michigan Basin. RMP has been working on a list of contaminated hot spots in Michigan and WAFB is on our top 10 list. In this post, I will write a little bit about Continue reading Landfill #27 At Wurtsmith Air Force Base
Each month, RMP publishes a detailed recap of oil & gas activity in the Michigan Basin. This edition marks our 14th since our inaugural monthly edition was published in January of 2015. It’s time to follow up on a couple things we reported in 2015. One of the hot topics in our hometown Detroit newspapers and on our Detroit radio stations is the application for the Word of Faith 16-27 well targeting Michigan’s Silurian age Niagaran Reef. Jordan Development out of Traverse City, Michigan filed the application in October of 2015.
What makes the Word of Faith 16-27 oil well different than many other potential Michigan wells is that it’s within the city limits of Southfield, which has a population of nearly 75,000 people. Often times when an application is received for a well in a heavily populated Metro Detroit city, the MDEQ’s OOGM will extend the application review process to hear comments from the public. The MDEQ has sole legal authority to permit any Michigan oil well regardless of symbolic gestures like a moratorium enacted by the Southfield City Council in effect until April 28, 2016. Only a court ordered injunction via lawsuit can Continue reading Michigan Oil & Gas Monthly – February 2016
Understanding how a bill works its way through the Michigan legislature and becomes a law can be complicated if you don’t know where to start. The process can be broken down, however, so it’s at least easier to understand the 101 basics. By the time you’ve finished reading this post you will know the fundamentals of how an idea becomes a Michigan Bill, how that bill works its way through Michigan’s legislature, and how that bill becomes a law. This post will also show you some web-based tools that can help you easily track a bill’s lifecycle and how to find a bill’s actual written text. It’s important to read the sponsored legislation verbatim rather than relying solely on another person’s opinion or cliff notes about the bill. RMP has done a couple “101” posts for subjects including Michigan Petroleum Geology 101 and Michigan Petroleum Production 101 in past posts and now it’s time for Continue reading Michigan Law 101 – How A Bill Becomes A Law
The big story this month is the location of the Ensign #161 drilling rig. The lat/lon of Ensign #161 on the date of this post’s publication is 40.4293, -104.604 which is not a Michigan lat/lon. You can see a map of Ensign #161 along with 10 other active Ensign rigs in the same area of Colorado by clicking on this link (depending on when you read this, the location may have changed). With Ensign #161’s location in Greeley, Colorado, which is just north of Denver and just SE of Fort Collins, you might wonder: why is Ensign #161’s Colorado location the big story in Michigan in January of 2016?
The answer is that Marathon just Continue reading Michigan Oil & Gas Monthly – January 2016