Overview

Resources and Consumption

Michigan has substantial natural gas reserves — more than any other State in the Great Lakes region — but is relatively limited in other energy resources. The State’s Antrim natural gas fields in the northern portion of the Lower Peninsula are among the largest in the United States. Michigan has some renewable energy potential, particularly from wood and wood waste in the northern portion of the State, wind energy potential near the Great Lakes shoreline and in the Thumb region of the State, and corn grown in southern Michigan. Michigan’s total energy consumption is high due in part to its large population, northern climate, and active industrial sector. Energy-intensive activities in the State include durable goods manufacturing such as the automotive, glass, and metal-casting industries.

Petroleum

Michigan has some crude oil production from small wells scattered across the Lower Peninsula and a 102,000-barrel-per-day refinery in Detroit. Two major crude oil pipelines from western Canada, both part of the Lakehead Pipeline System, enter Michigan from the northwest and southwest and supply both Michigan and eastern Canada. Several petroleum product pipeline systems supply Michigan consumption markets, including the Wolverine Pipeline system, which runs from Chicago area refineries to the Detroit area. Michigan’s consumption of petroleum products, particularly liquefied petroleum gases (LPG), is high. Michigan has the largest residential LPG market in the Nation, and the State ranks in the top ten in the use of LPG as an alternative vehicle fuel. Although Michigan does not require the use of motor gasoline blended with ethanol as many States do, the Detroit area requires the use of gasoline blended to reduce evaporative emissions that contribute to ozone formation. As a major corn producer, Michigan also has substantial ethanol production capacity.

Natural Gas

Natural gas production in Michigan is substantial and supplies over three-tenths of State demand. Natural gas wells are concentrated in the Antrim fields in the northern portion of the Lower Peninsula. Several major pipelines, including the Vector Pipeline from Illinois and the ANR Pipeline from the Gulf of Mexico, Louisiana, and the panhandles of Texas and Oklahoma, satisfy the remainder of the State's natural gas demand as they cross Michigan on the way to markets in the U.S. Northeast and eastern Canada. With over one-tenth of U.S. capacity, Michigan has the most underground natural gas storage capacity in the Nation and supplies natural gas to neighboring States during high-demand winter months. Driven largely by the residential sector, Michigan’s natural gas consumption is high. Nearly four-fifths of Michigan households use natural gas as their primary energy source for home heating.

Coal, Electricity, and Renewables

Coal dominates electricity generation in Michigan, supplying nearly three-fifths of the market. Most of the State’s coal is supplied by Wyoming and Montana and transported by rail to the western end of Lake Superior and then by ship to power plants largely located along the Great Lakes shorelines. Michigan also obtains coal, principally by rail, from eastern sources, including West Virginia, Kentucky, and Pennsylvania. Michigan's three nuclear power plants supply more than one-fourth of the State's electricity generation, while natural gas fuels much of the remainder. Michigan is a substantial generator of electricity from wood and wood waste, with many small hydroelectric plants and several plants that generate electricity using methane recovered from landfills and anaerobic digesters. Overall, however, renewable power generation contributes only minimally to the State electricity grid. Electricity generation in Michigan is high, but per capita residential electricity use in Michigan is lower than the national average, in part due to low demand for air-conditioning during the mild summers and a reliance on natural gas for home heating. Less than one-tenth of Michigan households rely on electricity as their primary source of energy for home heating. Michigan currently has several ethanol and biodiesel production plants in operation.

Michigan adopted an Integrated Renewable Portfolio Standard (RPS) of 10 percent by 2015. Utilities can meet part of the standard by adopting emission reduction technologies at power plants fired by conventional fuels. Additionally, the State allows for the authorization of up to 15 Renewable Energy Renaissance Zones, which offer tax incentives to promote the development of renewable energy facilities. In September 2009, two renewable energy technology manufacturers bought an abandoned automobile factory in Wixom, Michigan. By the fall of 2011, this factory is slated to become the largest renewable energy park in the Nation, producing solar panels and large-scale batteries to store power for the electric grid.