Michigan's energy consumption

Summary: Because of its industrial and manufacturing history, climate, and population distribution, Michigan ranks among the heaviest energy consumers in the United States, employing primarily coal but also natural gas and nuclear fuels for electric power.

Michigan has fairly significant deposits of natural gas, extracted from the state’s geological formations starting in the twentieth century. Many of these wells are found in and around Antrim and Otsego counties in the northern portion of the Lower Peninsula. Other prominent sites for natural gas production include the center of the Lower Peninsula (Clare, Isabella, Osceola, and Mecosta counties), southeast Michigan (St. Clair and Macomb Counties), and to a lesser extent in the western part of the Lower Peninsula (Allegan County). It is estimated that Michigan’s natural gas production accounts for about an eighth of all natural gas consumed in the state, as production numbers have been steadily declining since the 1990s. As of the 2020s, Michigan held about 1.5 percent of US natural gas reserves.

In areas where the natural gas has been depleted or has become too expensive to extract, utility companies have utilized the geological formations for natural gas storage. This has been of great benefit to the state, given its climate: natural gas can be purchased more cheaply in the summer, when demand is much lower, and then released to the marketplace in colder months, when demand is high. This is an important means of stabilizing natural gas prices, especially in the event of dramatic weather, because 75 percent of homes in Michigan were heated with natural gas in 2022. Natural gas both produced in and imported into Michigan represented an important input into the generation of electric power, accounting for about 34 percent of all electricity generated.

The state possesses very little in the way of coal or liquid petroleum. There have been numerous attempts to extract oil in Michigan throughout the twentieth century, focusing primarily on Midland, Bay, and Arenac Counties in the central Lower Peninsula; Kent and Ottawa Counties in the western part of the state; and Hillsdale and Calhoun Counties near the Ohio border. With that in mind, it is important to note that many oil wells have been sunk all over the state, most of them with very limited success. There are a few wells with very limited production, accounting for about 4.5 million barrels of oil in 2022, down from a high of 34.7 million barrels in 1979. The oil remaining in the state’s geological formations is estimated to account for under 0.1 percent of all the crude oil reserves in the United States.

Michigan has no coal mines; however, coal plays a very important role in the state’s energy system. About 92 percent of the coal consumed in the state is used to generate electricity. As might be expected, all the coal is imported, both from nearby states, such as West Virginia and Pennsylvania, and from more distant, western states, such as Wyoming and Montana. Nuclear power accounted for about 22 percent of all electricity generated in Michigan in 2022. There were three nuclear facilities in the state (all in the southern part of the Lower Peninsula) and one decommissioned nuclear facility (at Big Rock Point in the northern Lower Peninsula).

Although both energy experts and environmentalists agree that Michigan has great potential to utilize renewable resources, especially wind and wood biomass, using environmentally friendly technologies to generate electricity remains limited in the state, accounting for around 12 percent of all power production in 2022. In the twenty-first century, new attention is being paid to ways in which energy companies can capitalize on Michigan’s long lakeshore (for wind power) and significant, if underutilized, manufacturing base for the production of new energy technologies such as solar panels, wind turbines, and batteries for electric cars. Michigan also has a growing biofuels industry, with several plants producing biodiesel or ethanol.

Michigan enacted the Clean, Renewable, and Efficient Energy Act in 2008. The law required retailers of electricity in the state to source a minimum of 10 percent of their electricity from renewable sources by 2015. These goals could also be met in part by improving energy efficiency. The goal was met through direct sourcing and energy credits by the end of 2015.

Utilities and Transmission

In many ways, the story of electric power in Michigan is the story of the two major gas and electric utilities in the state, Consumers Energy (for most of its history called Consumers Power) and DTE Energy (for most of its history called Detroit Edison). These two companies have long been responsible for generating and supplying most of the state’s energy needs, together accounting for more than 80 percent of all electricity generated in the state today. They have also been the driving force behind the construction of most of Michigan’s power plants, adopting a range of fuels from water power in the 1900s to coal, nuclear, and, today, natural gas technologies.

Rural cooperatives have also played an important role in the state, especially in areas away from major population centers. The first rural cooperatives were funded by the United States’ federal government in the late 1930s. These pioneers brought electricity technology to the state’s farms and isolated settlements, especially in the remote Upper Peninsula. Although these small organizations connected people to new technologies, they often encountered difficulties in securing supplies of electric power. This prompted many cooperatives to connect their systems together and form Generation and Transmission (G+T) cooperatives, umbrella organizations under which the costs of new power plants and transmission lines could be shared to increase efficiency. By the 1960s, most of Michigan’s cooperatives were working with Consumers Power and Detroit Edison (in the Lower Peninsula) or utilities in Wisconsin (in the Upper Peninsula) to secure supplies of electricity. Today, many of Michigan’s cooperatives provide more than simple electric power to their customers, with some offering cable and Internet service and others selling natural gas as well as electricity.

There are still many communities in Michigan that are served neither by the "big two" nor by a cooperative. These are municipal, or city-owned, systems. Perhaps the largest municipal system in the state serves the capital city of Lansing. The Lansing Board of Water and Light, like most municipal systems in the United States, is supported primarily by city residents, who in turn are able to vote and directly involve themselves in utility company activities and planning.

Electricity transmission lines link the state’s utilities together and also tie Michigan’s electricity system to those of other states in the Midwest and parts of Canada (specifically Ontario, Quebec, and Manitoba) in a regional market where electricity can be bought and sold instantly. In addition to Michigan’s electric power transmission system, several natural gas and liquid petroleum pipelines cross the state, importing both types of hydrocarbons from Canada and the United States’ south, especially Oklahoma, Texas, and Louisiana.

Bibliography

"History of Michigan's Oil and Natural Gas Industry." Central Michigan University, www.cmich.edu/research/clarke-historical-library/explore-collection/explore-online/michigan-material/oil-gas-industry-michigan/history-of-michigan's-oil-and-natural-gas-industry. Accessed 6 Aug. 2024.

Howell, Jordan P. "Powering ‘Progress’: Regulation and the Development of Michigan’s Electricity Landscape." Annals of the Association of American Geographers 101, no. 4 (2011).

"Michigan." US Energy Information Administration, 17 Aug. 2023, www.eia.gov/state/?sid=MI. Accessed 6 Aug. 2024.

"Michigan Energy Appraisal." Michigan Public Service Commission, 17 June 2022, www.michigan.gov/mpsc/-/media/Project/Websites/mpsc/regulatory/reports/energy-appraisal/2022‗Summer‗Energy‗Appraisal.pdf. Accessed 6 Aug. 2024.