Research facility is information hub for oil, gas reps
May 21, 2010
KALAMAZOO--A record-breaking auction of oil and gas leases on state-owned lands in Michigan May 4 in Lansing surprised many people, but not a group of researchers in Western Michigan University's Department of Geosciences.
Weeks before the auction took place, oil and gas industry representatives were inundating faculty and staff members in WMU's Michigan Geological Repository for Research and Education with requests for information that would help them determine the best leases to bid on.
"During the May 4 auction, the state netted $178 million in bids to explore for oil and gas on state-owned lands," says William B. Harrison III, founder and curator of MGRRE's Michigan Basin Core Laboratory. "During the preceding 80 years, the cumulative amount paid at these auctions was $190 million--only $12 million less than was bid in just one day two weeks ago."
Harrison notes that interest in the state's oil and gas reserves is on the upswing, thanks to continued improvements in techniques for finding and safely extracting Michigan's hydrocarbon deposits and a successful natural-gas test well recently drilled in Missaukee County.
The test well tapped a mostly undeveloped formation called the Utica Shale that runs throughout the northern Lower Peninsula, sparking unprecedented bidding in the May 4 auction. The Michigan Department of Natural Resources and Environment, which administers the state's oil and gas program through its Forest Management Division, reports that leases have averaged $26 per acre the past few years but one lease alone this year went for $5,500 per acre.
"The 2010 auction resulted in companies securing leases to look for oil and gas in 22 counties in the northern Lower Peninsula," Harrison says. "They bid an all-time record of more than $1,500 per acre for 118,117 acres. And that's just for the right to explore for and produce natural gas and oil on state-owned lands."
Although the record high far exceeded most people's expectations, Harrison says as early as this past summer, he and other MGRRE faculty and staff members saw a marked increase in requests to review the geological data and samples stored in the Michigan Basin Core Laboratory.
"Requests to examine our 400,000 linear feet of solid rock core increased so rapidly that additional students were hired to help move the materials," Harrison says. "This calendar year has brought so many requests for information and data that we've routinely worked evenings and weekends just to keep up. Even the day before the auction, calls came in for more information."
Harrison says the core laboratory has a 30-year history of collecting and providing data about Michigan's geology to the oil and gas industry, and its collections of data and rock cores now constitute the largest resource of such materials in the state.
The archive contains tons of rock cores from oil, gas, water and environmental research wells and from glacial research and Lake Michigan bluff erosion studies. It also holds impressive collections of geologic maps, and thousands of drillers' reports, electrical/mechanical logs, mudlogs, porosity and permeability analyses, and related well data. Some of these materials date back to the mid-1920s and Michigan's first commercial oil wells.
Those materials have been key to the core laboratory's longstanding research and technology-transfer projects related to petroleum geology. But after the laboratory was incorporated into MGRRE in 2006, they are increasingly a mainstay of the larger facility's ever-broadening range of research, educational and public outreach activities.
"Our collections also support Michigan's minerals industry, applied research to store greenhouse gases underground, groundwater reservoir studies, and mapping aimed at sound, sustainable natural resource development," Harrison says. "In addition, these materials are the cornerstone of MGRRE's K-12 outreach program, several environmental research projects and WMU's efforts to train the next generation of earth scientists."
Michigan's natural resources are a significant part of the state economy, he adds, noting that MGRRE is dedicated to protecting and preserving these resources in addition to helping encourage development and efficient management of Michigan's energy resources.
"Drilling and production operations on state lands will positively impact Michigan's economy and add jobs, while increasing domestic energy production," Harrison says. "And money from leases will also enrich the Michigan Natural Resources Trust Fund, which provides money to local governments for public recreational property and facilities."
For more information, contact William Harrison at email@example.com or (269) 387-8691.
Media contact: Jeanne Baron, (269) 387-8400, firstname.lastname@example.org