Michigan Oil & Gas Monthly – February 2016

Niagaran Flare Stack

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.

WordOfFaithOilWellComment1
This is an example of the bolierplate used by many of the people who submitted a comment in favor of the Word of Faith 16-27 well being permitted for drilling.  Click to enlarge.

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”

Michigan Oil & Gas Monthly – January 2016

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”

Michigan Oil & Gas Monthly – December 2015

marathon oil hvhf beaver creek

The December issue of RMP’s Michigan Oil & Gas Monthly (MOGM) marks our 12th edition, our first full year of publications, and the final edition for 2015. The story for 2015 was this: oil & gas exploration in Michigan is at its slowest ever. It was the all-time slowest year in Michigan’s oil & gas exploration history beating the record set in 1931 for lowest permitting & drilling activity.   While the predictions RMP made last year were spot on target for Michigan in 2015, some unexpected things happened also.

Half-way around the world, Saudi Arabia’s 2015 actions to increase their own crude oil production to stave off US shale production have had a deep cutting effect on American oil & gas producers across the nation as well as right here at home.  As long as we rely on crude oil as an energy source, the King of Saudi Arabia can significantly impact a large segment of our energy economy which effects our national security and causes Americans to lose jobs.  Switching from internal combustion engines to fuel cells would fundamentally change the balance of world power as it relates to energy.  America can end its reliance on Saudi Arabia & other OPEC countries by responsibly migrating away from crude oil as an energy source. We have seen American oil producing companies lose major percentages of their net financial worth and layoff tens of thousands of American workers in 2015 because of Saudi actions.

chesapeake stock value drops 70 percent in 2015
Chesapeake has lost nearly 70% of its value in 2015. More evidence with hard numbers that supports what RMP has been saying all along about the oil & gas bust because of actions taken in Saudi Arabia to hurt American companies.

Another large scale international event related to oil & gas that will impact Michigan happened this December when President Obama Continue reading “Michigan Oil & Gas Monthly – December 2015”

Michigan Oil & Gas Production Report January – June 2015

It’s time to review the first six month’s production of subsurface hydrocarbons in the Michigan Basin as most operators have now reported results.   The theme of this report is that things aren’t always as predictable as you think and that it’s important to always be diligent in measuring the data because the data can Continue reading “Michigan Oil & Gas Production Report January – June 2015”

Coal Use Forecasted To Rise – How We Can Mitigate Coal Pollution

Do you consider yourself as a person that cares about the environment?  Are you concerned about climate change?  Are you concerned about oil pipelines traversing our lakes and rivers threatening our fresh water resources?  Then you understand energy production from High Efficiency Low Emissions (HELE) coal is an important part of the plan for a better environment, right?  No?

If we ignore the fact that new coal powered capacity will continue to come online over the next twenty years, we bury our heads in the sand when it comes to reducing greenhouse gas emissions and other atmospheric pollution.  We need to change the way we use coal and start using thermolysis for gasification rather than combustion for burning.   By choosing thermolysis instead of combustion, we can produce energy without producing pollution that harms our air and water.  In order to foster renewable energy sources like solar and wind, we need to find a common denominator fuel to let renewables compete on a wide scale.  That common denominator fuel is hydrogen.  We can make hydrogen from coal with significantly reduced pollution while we wean ourselves off of fossil fuels.  We can also make hydrogen from water and create zero pollution.   We can increase our capacity to make hydrogen from water while we decrease our use of coal over the long term.  We can phase coal out of our energy mix, but it will take time and we must have a pragmatic approach.

RMP draws contrast between the common misunderstanding between what is combustion and what is a noncombustion chemical reaction.  Burning coal is not the same thing as thermolysis  or the thermal decomposition of matter without releasing particulate matter to atmosphere.   The byproducts of thermolysis are inert and saleable for road making material and other construction material.

Be it known to all within the sound of my voice, whosoever shall be found guilty of burning coal shall suffer the loss of his head.

-King Edward II of England, 1276

Coal has generally had three major knocks against it with regard to pollution and its negative effects on the environment:  1)  CO2 emissions,  2) Sulfur Dioxide emissions, & 3) Mercury emissions.   Other complaints about coal involve NOx’s and other particulate matter released to atmosphere.    So if we could produce cleaner energy from our abundance of US coal without releasing those types of Continue reading “Coal Use Forecasted To Rise – How We Can Mitigate Coal Pollution”

Michigan Oil & Gas Monthly – July 2015

Westerman 1-29HD1

The big news this month is the expiration of permits 60746-60750 & permits 60765-60767 for the State Excelsior extension pads just north of M-72 in Kalkaska Michigan. Calgary based EnCana Corporation originally received these permits in 2013 but they transferred to Houston, Texas based Marathon Oil Corporation when Marathon acquired EnCana’s Michigan assets in 2014.  Each of these 8 HVHF permits that expired were estimated to require 23,100,000 gallons of water per completion.   All told, that’s approximately 185,000,000 gallons of Michigan freshwater that will not be consumed because these wells will never be drilled.

The expiration of these 8 permits is significant because it’s more conclusive evidence that HVHF in Michigan’s Collingwood formation is not economical for operators between $3/mcf & $4/mcf selling prices. Even if natural gas prices were to return to their 2008 level of $7.97/mcf, the highest price in US history, Collingwood wells would not be profitable wells by a long shot. The energy produced from the 7 wells that did make it to production from the Collingwood formation have demonstrated themselves to be an uneconomical use of Michigan’s freshwater resources for energy production. But, the uneconomical use of Michigan freshwater has Continue reading “Michigan Oil & Gas Monthly – July 2015”