A Michigan Oil History Primer

Feb. 5, 2016

People drilled for oil in Michigan before there were cars to fill up at gas stations. Prospectors drilled for oil in Port Huron in the 1880s. They cooked it and turned it into axel grease for wagons, said Dr. William Harrison, director of the Michigan Basin Core Research Laboratory at Western Michigan University.

Northern Michigan’s oil and gas boom started around 1970 with the discovery of the Niagara Reef that stretches in an arc from Manistee through southern Grand Traverse County to Rogers City.

In 1983, Inc. magazine called Traverse City an “oil boom town.” There were zero oil and gas companies in 1969 and there were more than a hundred by 1982.

Harrison said the Niagara Reef has produced about half of the oil and gas ever harvested in the state. It’s produced a half billion barrels of oil and 3 trillion cubic feet of natural gas.

Northern Michigan has also seen a small slice of the shale gas revolution of the past decade. It created a new source for oil and gas through exploration by way of the controversial hydraulic fracturing method.

That expansion across North America contributed to the problems the industry faces today. The exploration of new reserves helped the U.S. lessen its dependence on foreign oil by creating an explosion in domestic supply large enough that it lowered international oil prices.

“That’s been part of the problem, because a lot of these small companies have sprung up and are producing high volumes of natural gas or oil,” Harrison said. “OPEC always used to cut production when the price sagged, but this time they haven’t.”

Harrison said the history of booms and busts in the state goes back to the teens and 1920s. Just as the industry was attempting to establish itself, people found ways to drill for oil on the cheap, driving prices down and running others out of business.