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Michigan Business & Economy

State on track to see fewest drilling permits since 1927

Under the Appeals Court's decision, companies would be allowed to drill for gas and oil underneath parks and cemeteries, as long as such a practice would not interfere with the normal surface-level operation of the properties. A rig like the one pictured here would be used to drill horizontally under the land's surface.
Under the Appeals Court's decision, companies would be allowed to drill for gas and oil underneath parks and cemeteries, as long as such a practice would not interfere with the normal surface-level operation of the properties. A rig like the one pictured here would be used to drill horizontally under the land's surface.

Our conversation with Phil Koro. He's with Riverside Energy Michigan.

Drilling for gas and oil in Michigan has just about stopped completely. As reported by the Detroit News, this year Michigan is on track to issue the fewest number of drilling permits since 1927.

No, it wasn’t anti-fracking environmentalists. It was the markets.

Oil prices dropped a couple of years ago and they’ve stayed down. The success of horizontal fracking across the nation has driven natural gas prices down.

Michigan does a fair amount of gas and oil production, particularly gas, but the market drop has killed a lot of jobs in the industry.

Phil Koro with Riverside Energy Michigan said this means people working in the industry have to work more efficiently.

“Certainly technology has helped us,” Koro said. “Instead of having to send people out to location 24 hours a day, you can do a lot of that and monitor things remotely.”

Riverside Energy Michigan has interest in more than  2,000 natural gas wells and Koro said in worst-case scenarios, the company may close some of those wells.

“There’s some wells that we may temporarily shut in during a low price environment,” he said. “We will continue to monitor those wells to make sure that they are safely shut in. But then as prices have recovered, people start turning some of those wells back on again.”

Koro said he thinks commodity prices in the oil and gas industry have already bottomed out. He said he thinks they’re beginning a slow, but steady, climb back up.

For the full conversation, listen above.

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