When the state raised nearly $200 million by leasing public land to oil and gas companies for natural gas drilling it looked like Michigan was going to be the next state to see a huge explosion of hydrofracking, but so far the boom has failed to materialize.
The Detroit News reports:
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…
But somewhere along the way, that run on natural gas never materialized, and it seems unclear when, or if, it will.
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.”
New regulations from the DEQ may also have something to do with it.