Michigan’s oil and natural gas industry plays an important role in Michigan’s economy creating tens of thousands of jobs and billions of dollars of income for Michigan residents. In 2014, 62 of Michigan’s 83 counties produced oil and/or natural gas, and historically, 65 of Michigan’s counties have had production. Of Michigan’s 83 counties, 82 have economic activity resulting from the presence of the oil and natural gas industry.
Oil and natural gas have a wide range of uses. Michigan natural gas is used to generate electricity and heat homes and businesses. Petroleum products are obviously used to power cars, but they are also used in the production of fertilizer, plastics, pharmaceuticals, dyes, detergents, and many other products.
Oil and natural gas economic activity generates hundreds of millions of tax dollars for Michigan governments including cities, villages, townships, and schools. Royalties paid on oil and natural gas extracted from state land help to support public outdoor recreation in Michigan through the purchase and development of land for outdoor recreation and by providing operating support for state parks. Royalty and lease payments relating to oil and natural gas on private lands are an important income source for thousands of Michiganders.
This report estimates the contributions of the oil and natural gas industry to Michigan’s economy. These estimates include the production of oil and natural gas from extraction, to transportation including pipelines, to refining. The estimates do not include broader definitions of oil and natural gas activities such as gasoline service stations and the many broader uses of the products such as power generation or the manufacturing of plastics. By focusing strictly on the production process of the oil and natural gas industry, we gain a better picture of how the economy is affected by the industry’s presence in Michigan. The direct employment estimates in this report represent the sectors that would be lost to the economy without the presence of the oil and natural gas production industry in Michigan.
A copy of the full report is available below.