Drilling permits at 89-year low in Michigan

Dec 20, 2016

2016 will soon close as the second slowest year in history for Michigan oil and gas development. State officials say so far, only 12 oil wells have been drilled, and six of those have been dry.

Data from the state show that last year, only 100 permits were issued for well drilling. That’s the lowest number since 1927. This year, that number’s plummeted to a mere 40.

A lot of factors are at play, including a growing market for alternative energy. But experts say the decline can be mostly attributed to an over-saturated global market.

Geologist Lee Jones has worked with the Michigan oil industry for more than 40 years. He says with oil prices so low, local energy producers have been forced to scale back.

“Because of the crash in prices, companies just don’t have any cash flow, or much cash flow to drill wells, so that’s been a negative for the local oil and gas industry,” he says.

But Jones says that once the market stabilizes, he’s confident Michigan will start producing again.

Support for this story comes from the Knight Center for Environmental Journalism at Michigan State University.