Turns out, not so much.
A run on Michigan's underground stores of natural gas, which once seemed a sure thing, may not be coming anytime soon — or at all.
Just a year ago, Michigan appeared to be on the verge of a new era in natural gas exploration — one that would mean new investment and jobs in rural areas in dire need of both.
Early returns from a test well near Lake City indicated that the Collingwood Shale — a reserve of underground natural gas that runs across the upper third of the Lower Peninsula — could be a productive source of the fuel. And a May 2010 auction of oil and gas rights on state land produced a whopping $178.4 million, mostly from companies looking to a profitable future.
What happened? The market happened.
Dropping natural gas prices have been a major hurdle for the industry, with 2011 kicking off at $4.08 per cubic thousand feet — down from the $5.14 that began 2010. Declining performance from early test wells also has had companies waiting for more evidence.
"The industry is trying to see what they can really get from Collingwood," said Hal Fitch, head of the Geological Survey Division at Michigan's Department of Environmental Quality. "The first two test wells that were drilled have not been real promising so far."
While this DNews article goes on to focus on new regulations surrounding fracking, the real reason for the diminished exuberance pops up again pretty quick - and it all comes down to profit. If they thought they would make the money, you know they would find a way around the regulations. They aren't that restrictive. No, this is all about going for the gold, and right now that means liquids.
"Low natural gas prices certainly weigh as a factor in determining whether the plat is economic or not," said Doug Hock, a company spokesman, in a written response to questions. "With oil and natural gas liquids commanding significant energy price premium over natural gas, we've sharpened our focus on oil- and natural gas-liquids production."
This is probably just a bump in the road. As soon as the price on natural climbs again, they will make a bigger effort to get it out of the ground. At that point, the enviros better be ready to challenge the current techniques involved with fracking. Flaming water does not make for a Pure Michigan. If they can find a way to obtain the gas without the use of massive amounts of water and toxic chemicals, then by all means, go for it. But until then...