Three Ways Shale and Fracking are Benefiting Michigan

As the issue of oil and gas development here in Michigan heats up, those who would like to see development cease altogether are constantly struggling to find legitimate arguments for their case. A recent story on gas prices in Michigan brings this to light.

While the benefits that shale gas have brought to our country have been documented over and over again, the reluctance of  many to acknowledge that fact is puzzling, hinting at a more ideological opposition than factual. Power plants, manufacturing, jobs, and greenhouse gas emissions reductions are all areas in which the oil and gas industry has made a hugely positive impact. But let’s take a look at just a few of the documented benefits of our energy boom here in Michigan specifically.

Lower Electricity Bills

The Holland city council, known for its frugal financial policies, recently made the decision to construct a new natural gas power plant. As Mayor Kurt Dykstra put it:

“On the one hand it was historic, but on the other hand all the due diligence that’s been put into this made the vote pretty straightforward and almost an easy one.”

Mayor Dykstra also cited lower electricity rates for consumers and reduce carbon emissions as specific benefits that will accrue to local residents.

DTE Energy CEO Gerard Anderson was blunt when describing the coming transformation of Michigan’s energy program, stating that natural gas, along with wind energy, will replace half or more of existing power plants.

Reviving Manufacturing

The University of Michigan recently sponsored a symposium that identified many of the benefits of the natural gas boom, including the re-shoring of manufacturing in Michigan and throughout the United States:

“More than 200 mostly U.S.-based companies have participated in onshoring during the past four years, a trend in part motivated by the availability of less expensive natural gas. One Fall 2013 survey of $1B-plus company executives stated that over half of those are either already planning for or actively considering moving production back to the U.S. from China – a figure double that from the same survey given the previous year. While not the only factor, the affordability of natural gas as both an energy source and a feedstock is a powerful motivator: natural gas and electricity account for just 2% of total manufacturing costs in U.S. manufacturing processes compared to 5-8% in Japan and 6% in China.” (pg. 14; emphasis added)

Job Growth

A study by PricewaterhouseCoopers found that the effect of oil and gas development in Michigan has blossomed into a phenomenal job creator:

“The survey shows that at least 295 businesses, located across all 14 of Michigan’s congressional districts, are part of the larger oil and natural gas supply chain.”

The same effect has been felt across the country with millions of jobs either directly or indirectly attributed to the energy boom. In Michigan alone, the oil and gas industry supports more than 180,000 jobs, with an average salary of about $75,000 per year.

Unfortunately, despite these clear benefits for our State and Country, there are still some who fail to acknowledge the facts, no matter how many different sources come to the same conclusion.

A recent article in the Advisor & Source newspaper from Macomb County illustrates this perfectly. Some local folks in Shelby Township are upset that they have a well drilled in their area. The temporary inconvenient activity has incited some (not all, since all leases were signed by landowners) into forming a group opposing any further development. One of their leaders, Jennifer Panos, made the following, narrowly-focused statement:

“I don’t believe for one minute that the activity by West Bay in Macomb County will lead us to energy independence or lower gas prices, and I know that it will not defeat terrorism in the Middle East.”

True, a single well – or even a dozen wells – may not materially impact our balance of trade with OPEC or cause energy prices to plummet. But that’s an incredibly short-sighted view of America’s energy landscape, and it ignores the fact that production as a whole is doing exactly what Ms. Panos says will not happen. It’s also worth noting that Ms. Panos is an opponent of drilling throughout Michigan, making her statements about one operator’s activity a bit disingenuous, to say the least.

It costs activists nothing to say they oppose “fracking” or that drilling should be restricted or even banned. But the average Michigander who worries about his or her weekly budget surely can appreciate the industry’s efforts to make life a little easier, whether it’s a steady paycheck to put food on the table or a lower home heating bill, which anyone in Michigan knows is important as winter approaches.

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