Natural Gas is a naturally occurring mixture of hydrocarbons and non-hydrocarbon gases found in porous geological formations beneath the earth's surface. The principal ingredient of natural gas is methane, or CH4, which is lighter than air and flammable. Its flammability is the major reason why people and business buy natural gas.
Natural gas consumed in Michigan comes from gas and oil fields located primarily in Michigan's lower peninsula, the Texas-Oklahoma Panhandle, on and off-shore Louisiana, and Alberta, Canada. Gas producers use the knowledge gained in the United States over the past 150 years to explore for natural gas fields. They develop fields by drilling wells into them that are then connected to gathering pipelines that, after processing, connect to large pipelines for delivery to places like Michigan. Most gas fields are in geological formations that developed 150 to 200 million years ago.
All of Michigan's
natural gas production is located in the lower peninsula. Currently,
the Antrim "play" is the most active play in Michigan with about
9700 wells producing gas from the Antrim formation in 2010.
Current average daily gas production rate of the Antrim wells
is approximately 35 thousand cubic feet per day (mcfpd) per
well. MPSC records show that a handful of Antrim wells were producing
in northern lower Michigan and in the St. Clair and Jackson County
areas as far back as the 1940's. However, Antrim drilling activity
greatly increased in the late 1980's, peaked in 1993 with 1210
permits issued, and is now declining with 53 standard well
connection permits issued in 2010. At present, Michigan's Antrim
production is entirely located in the northern portion of the
Michigan produced about 148 billion cubic feet (4.2 billion
cubic meters) of natural gas. Most of Michigan's gas production
is purchased by Michigan utilities for their customers, but some
is also sold to gas marketing companies that sell gas outside
of Michigan. Natural gas produced in Michigan represents about
15 - 20% of the total gas consumed in Michigan.
Michigan's recorded production history began in the 1930's, when the MPSC issued its first Standard Well Connection Permit to a gas well in the Austin Field located in Mecosta County. This Michigan Stray field was discovered in 1933. Throughout the 1930's and 1940's, Michigan Stray was the dominant producing formation with some fields producing from the Detroit River, Berea, Dundee, Traverse, Salina, Sylvania, Antrim, Richfield, and Reed City formations.
In Southeastern Michigan, during the early 1960's several big Niagaran formation discoveries were made such as Belle River Mills and Ray fields (now natural gas storage fields). The proximity of these fields to utilities that serve large population centers was an added benefit. The early 1970's marked the start of northern Michigan's Niagaran Trend which extends across the northern lower peninsula from Manistee to Rogers City. The Niagaran Trend continued to be Michigan's hot spot for drilling throughout the 70's and early 80's.
Central Michigan became the exploration focal point in the mid-80's with the first well drilled in the Prairie du Chien (PdC) formation. The number of new PdC wells peaked in 1990, with 38 Standard Well Connection Permits issued for new PdC wells, and is now on the decline. Some PdC wells (also referred to as deep gas wells) are drilled to a depth of more than 10,000 feet (3,050 meters) making this formation an expensive and technically challenging exploratory target.
At the end of their productive lives, fields were abandoned. Some reservoirs (mostly Niagaran and Michigan Stray) were converted to gas storage fields, and play an important part in meeting Michigan's high winter demands for natural gas today (see Storage).
A gas well starts with a drilling permit from the Michigan Department of Environmental Quality (DEQ), Office of Geological Survey. The DEQ has jurisdiction over spacing, drilling, deepening, plugging, reworking and abandonment of all wells. After the well is drilled and before production begins the DEQ classifies each well as gas or oil. Natural gas well regulation is split between the DEQ and the Michigan Public Service Commission (MPSC). Before a gas well begins producing the producer, or operator, must apply to the MPSC for a Standard Wellhead Connection Permit (see Forms page) per rules and laws. An Allowable Withdrawal Order is issued with the permit for all non-Antrim gas wells. Gas wells producing from the Antrim formation are treated differently because they are low-producers and generally not individually metered. The Allowable Withdrawal Order contains 12-month, 6-month and 1-month allowable production limits. The allowable production limits are based on 17 1/2% of the calculated absolute open flow (the amount that could flow or vent from an unrestricted well) as determined by a well flow test. The Commission has approved allowable production limits up to 25% of the calculated absolute open flow on a case-by-case basis if it can be shown that the increased allowable will not create waste or damage the well.
The MPSC monitors the production of gas wells under its rules for Production and Transmission of Natural Gas (per Act 9 of 1929 and Act 3 of 1939). Well operators file monthly production reports with the MPSC for each gas well or unitized area. For Antrim gas fields where the production from the wells is commingled through a single meter for the field, the reports also include the number of wells producing which allows average per well production to be calculated. MPSC production records are available to the public at the MPSC office. A brief annual summary format and monthly gas production report formats are available for downloading,
Non-Antrim gas fields with more than one well are prorated by the MPSC. The purpose of proration is to protect correlative rights, provide for equitable purchasing and taking of natural gas from a common source of supply, ensure that each producer recovers production in proportion to the recoverable gas under his land and to prevent waste. Proration keeps each gas well in a field from producing more than its fair share of the total field production. MPSC Staff use field index rating percentages to monitor production imbalances for each well producing in a prorated field. Field index rating percentages are determined for each prorated well and are typically based on reserve estimates and well flow tests. If production imbalances for a prorated well become too large, production from wells within that field are restricted to bring the field back into balance.
Other information about Michigan's natural gas producing industry can be found at the DEQ Office of Geological Survey and the Michigan Oil and Gas Association. Information about geology, well locations and state mineral leases can be found at DNR's Online maps.
More general production data is also available from the Energy Information Administration's EIA Natural Gas Monthly, a federal government report that contains general statistics covering many areas of the U. S. gas industry.